The beleaguered banking industry continues to struggle in Georgia, but there may be signs of some stability.

In the Barrow-Jackson County area, three community banks landed on a recently published list of troubled Georgia banks with high “Texas ratios” above 100. But a fourth local struggling bank fell off that list from a year ago, a sign that perhaps stability may be taking hold in the industry.

At Barrow’s The Peoples Bank, leaders are preparing a major stock offering to shore up the banks finances, according to CEO Chris Maddox.

“We are in the process of trying to get started to do a capital raise, a stock offering, which means we'll be looking for investors to help us get through this really hard time,” he said. Maddox said there are no plans to sell the bank, but that following the stock offering, his family’s long-time ownership of the bank could be diluted.

"We have a majority (of stock), but there are many others,” he said. “So we may not have a majority, but we will still be shareholders and we will be investing in the bank. We are going out to have new shareholders. We will have a stock offering and have existing and new shareholders."

This is the first time in the bank’s 84-year history that it has sought new stockowners.

"We never needed to in 84 years,” Maddox said of the offering. “Eighty-four years ago, everybody raised capital and started the bank. Since then, there hasn't been a stock offering."

The problems at Peoples Bank connect back to a sour real estate market in Northeast Georgia. The bank remained on the high Texas ratio list in March at 232 percent, up from 64 percent a year ago. With 44 percent of the local market, Maddox said the bank had been hit particularly hard by Barrow’s economic downturn.

"We didn't make loans outside our community in all these other places,” Maddox said. “We made loans in our community, and many of them went bad because of our market. That's important, and that's who we are."

While the bank has set aside nearly twice as much funds this year for loan losses than a year ago, it also saw its troubled assets climb to $55 million from $26.7 million in March 2009. The bank had a first quarter loss of $1.7 million, three times its loss in the first quarter of 2009.

For more on this story, see the June 30 edition of the Barrow Journal or click here to read the full story online when you sign up for a free trial of our new e-edition. Free trial offer ends July 13.

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