More details on Georgia banking crisis

I’ve written a number of times in this blog — and often in my column in the Savannah Morning News too — about the banking crisis in Georgia, which seems to have gotten more scrutiny from outside the state than from within.

But here’s a really good piece from the AJC: “Failed banks make mark in metro area”. If you’re looking for an overview of the Georgia crisis, that’s a good place to start.

Among the key points:

More than 60 percent of Georgia’s 57 bank failures, since the Great Recession began at the end of 2007, fell within 70 miles of Atlanta, according to an analysis by The Atlanta Journal-Constitution.

Georgia’s failed banks generally fell into three geographic categories:

● Metro Atlanta banks that largely funded residential and commercial development or land investment loans.

● Mountain banks that funded loans for vacation or retiree home development, land investment loans and tourism-related businesses.

● Coastal institutions that also lent to vacation and retiree homes, retail and tourism-related businesses, as well as developments for the influx of new industry lured by the state’s bustling ports.

Failed Georgia lenders generally had concentrations in real estate loans well beyond the national average and higher than regulator guidelines, the FDIC showed.

Around 120 new banks were chartered in the state during the 2000s, and at one time the state had around 350 institutions. Pressure to grow quickly pushed many to find deposits by paying out high interest or securing them from third-party sources.

So we’ve had 57 bank failures so far, and general trends would suggest we could see that many more in Georgia over the next couple of years, although it’s possible there could be far fewer if the economy continues to pick up. But it’s possible that by 2013 or 2014 the state might have about the same number of banks that it had in 2000.