More Bank Failures in the Last Five Weeks Than in All of Last Year

More Bank Failures in the Last Five Weeks Than in All of Last Year - 7/27/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

More Bank Failures in the Last Five Weeks Than in All of Last Year
Kevin LaCroix

The D & O Diary. July 27, 2009
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EXCERPT: With the closure of a group of six interrelated Georgia banks this past Friday night, the state has now reclaimed the dubious distinction of as having the most failed banks of any state this year. With the addition of the most recent closures, there have now been 16 failed banks in Georgia this year, compared to 12 in Illinois, which had previously and for a brief period led Georgia in the number of failed banks. There were a total of seven bank closures on July 24, 2009, which brings the year to date total number of closures to 64. The pace of bank failures has definitely picked up in the last several weeks. There have been 27 bank closures just in the five-week period since June 19, which is more that the number of banks (25) that failed in all of 2008. The six Georgia banks that filed Friday were all subsidiaries of Security Bank Corp., which had been Georgia’s fourth-largest lender. The six units were technically six separate banks, although according to the Atlanta Business Chronicle, "the banks essentially operated as the same institution." The Atlanta Journal-Constitution described the rise and fall of the holding company (here) as "a stark symbol of the state’s banks woes." The bank made a "fatal push" into the Atlanta residential market in 2005 and 2006. The bank "tripled in size" between 2005 and 2009. The bank lost $243 million last year, and at the end of the first quarter of 2009 reported $277 in "severely delinquent loans that bank had given up hope of collecting on." There have now been 22 different states that have had at least one bank failure this year. Beyond Georgia and Illinois, the other states with high numbers of bank failures include California (8) and Florida (3).

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