Another southeast Georgia bank under an FDIC consent order

Here we go again. We’ve already seen several Savannah area banks be closed by the FDIC. Now another is under a consent order, which is essentially a list of requirements in areas like management practices and the amount of capital if the bank is going to continue to operate.

The Heritage Bank in Hinesville is now under FDIC scrutiny. You can read the actual consent order here. The order is dated December 21st, but it just became public this week.

Here is the unofficial problem bank list at Calculated Risk. There are a disproportionate number of Georgia banks on the list of over 900 banks nationwide, and with home values falling again (further hurting banks’ balance sheets), we’re going to be in for a bumpy couple of years.

To date, very few banks have gotten themselves out from under FDIC scrutiny without being closed or merging with another institution. As/if the economy improves, we might see a higher percentage of them survive than we have the last three years. Still, I think it’s a pretty safe bet that a clear majority of the 900+ institutions under special FDIC scrutiny will end up being closed over the next couple of years.