Bank Failure Friday Marches Through Atlanta
On Friday, the FDIC announced the failure of Atlanta's Georgian Bank. It's the 95th failure for the year and the 19th in Georgia. During the current economic crisis, Georgia leads the nation in bank failures, with 24 since August 2008. Much of the carnage is the result of ill-advised lending into a real estate boom in the Atlanta area in recent years. During this period, Georgian Bank became the second largest lender in Atlanta.
Georgian's demise came quickly as regulators scrambled to react. The number of its nonperforming loans doubled from the third quarter to the fourth quarter of last year, reports the Atlanta Business Chronicle. As of this past June 30, it had $306.4 million in nonperforming loans, compared with only $28.4 at the end of 2008, according to Bloomberg. Regulators only signed a cease and desist order with the bank this past Aug. 31 (see ProPublica's failed bank list).
The FDIC estimates that the cost to its insurance fund from Georgian's failure will be $892 million. The agency entered into an agreement with First Citizens Bank and Trust Company of South Carolina to assume all of Georgian's deposits.