Friday afternoon in Georgia often means a bank gets the final visit from the FDIC. Today, two were shut down.
The tally of closed Georgia banks is now at 14 for the last nine months. According to this article by Joe Rauch of the Atlanta Business Chronicle, we may see many more.
“They’re ramping up a little bit,” said Chip MacDonald, Atlanta-based Jones Day banking attorney. “With their efforts to staff up, raise money for the deposit insurance fund through the special assessments and the Treasury, I expect they’ll try to resolve these faster throughout the remainder of the year.”
The national deposit insurer, which backstops accounts to avoid customers pulling their money from a bank and hastening its demise, previously avoided seizing two banks in the same metro area during this crisis…
“This is a perpetuation of what we’ve been talking about for a while now,” said Brian Olasov, an Atlanta-based managing director at McKenna, Long & Aldridge LLP, who noted Georgia banks have an imbalance between fewer customer, or core, deposits and more outstanding loans.
“The numbers indicate Georgia banks got way out over their skis. This was a great place to lend in the boom, but now they’re paying the price,” Olasov says…
Georgia’s failure woes began in earnest in August 2008, when Alpharetta-based Integrity Bank, once the state’s fastest growing bank, collapsed under the weight of highly speculative real estate loans, concentrated amongst a small group of borrowers.