Fresh Loaf

Sorta-kinda optimistic Bloomberg Report from June about Georgia bank failures

And another bank bites the dust. The following comes from the FDIC, regarding the failure today of Atlanta-based Georgian Bank:

Georgian Bank, Atlanta, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Citizens Bank and Trust Company, Inc., Columbia, South Carolina, to assume all of the deposits of Georgian Bank.

(more…)

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We giggled when Gov. Sonny Perdue prayed for rain because, well, the whole affair was just silly. Everyone knows God is too busy fighting health care reform and strip clubs to care about a drought.

The Rev. Jesse Jackson, always one for a challenge, is gonna try and one-up Perdue. Tonight outside the Federal Reserve Bank of Atlanta in Midtown, the founder of the RainbowPUSH Coalition will hold a 6 p.m. prayer vigil. His wish to the heavens? Lord, convince banks to “restructure loans, not foreclose on homes.”

Jackson will be joined by Americans for Democratic Action and the Georgia Coalition for the People’s Agenda. An event organizer told CL that Jackson’s prepared, if need be, to practice some of that good ole fashioned civil disobedience to help raise awareness.

It’s a noble idea, especially here in hard-hit Georgia, home to some of the harshest foreclosure laws for homeowners. But good luck. You might find it’s a helluva lot easier convincing God to make it rain than it is bankers to restructure deals.

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The feds shut down five more failed banks over the weekend, two of which were in Georgia. 20 percent of U.S bank failures this year have been in Georgia, home to only four percent of the country’s banks.

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The AP’s Russ Bynum writes an excellent piece that helps explain why Georgia has found itself at the tippity top of a terrible list — the state with the highest number of bank failures:

Experts say it’s a combination of an antiquated state law that favored a plethora of smaller community banks over multi-branch giants; a population explosion in metro Atlanta that fueled massive suburban real estate development and a crush of new banks formed to cash in on the Atlanta boom shortly before the market tanked.

…

Georgia’s diversity of small banks was an asset when the economy was strong, with consumers benefiting from competitive rates and broader sources of credit, said James Verbrugge, a professor emeritus of finance at the University of Georgia’s Terry College of Business. It became a liability when the bottom fell out of the housing market and smaller banks had less capital to weather the crisis.

The excerpts don’t do the article justice. Give it a read for your daily dose of edumacation.

(Hat tip to Travis Fain)

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