Last year was tough for many Georgia banks as the economic slowdown hammered profits and increased loan losses.
Only five community banks that operate in the four counties covered by MainStreet Newspapers turned a profit in 2008. Perhaps not coincidentally, all five are based farthest away from the high-growth housing bubble corridor that ensnared some other financial institutions in a tide of faltering loans.
Statewide, some 46 percent of banks were unprofitable in 2008, according to the FDIC. A number of banks in the state have been closed by regulators in early 2009, including Freedom Bank, which was based in Commerce and had branches in Jackson, Banks and Barrow counties. Deposits of the closed bank were acquired by Northeast Georgia Bank, which has other branches in the area as well.
Banks in the communities covered by MainStreet Newspapers that managed to make a profit in 2008 were: First Madison Banks & Trust (Madison County), Merchants & Farmers Bank (Madison County), Athens First Banks & Trust (Athens, with a branch in Madison County), Northeast Georgia Bank (Lavoina, with branches in Jackson, Banks and Barrow counties), and Pinnacle Bank (Elberton, with a branch in Commerce.)
In addition to the profit picture, other financial measures, such as loan default ratios, were troublesome for some area banks in 2008. In Barrow and Jackson counties where residential growth boomed earlier in the decade, a tide of foreclosures hurt several financial institutions in 2008.
A number of rating services evaluate banks based on balance sheet data, ratios and related market information, then assign a star, letter or numerical rating.
For more information, see the April 22 issue of The Jackson Herald, The Banks County News or the Barrow Journal.
