-Georgia's banking environment remained unusually challenging through the first half of 2009. The broad economic recession, continued weakness in the residential real estate sector and growing concerns about commercial real estate are causing continued stress on many Georgia Banks. Even so, a vast majority of Georgia's banks remain well capitalized.
-Much of the story is unchanged since earlier this year, and bank performance continues to struggle in the aftermath of the severe housing, real estate and credit market disruptions that began in 2007.
-Perhaps the most visible consequence of the economic downturn has been an increase in bank closures in Georgia. As of September 2, 18 banks have closed in 2009 out of 334 banks on Jan. 1, 2009 and 23 banks have closed out of 352 active banks at the beginning of 2008.
-Several key economic and regulatory issue continue to be of concern to many Georgia Banks:
- Real estate marketplace: continued weakness in broad housing construction and purchase market
- regulatory interpretations of accounting guidelines pertaining to the fair value of real estate
- downward pressure on asset prices caused by market forces and unintended consequences of government stability programs
If you would like to read the entire report, here is the link:
As always, the purpose of this blog is to promote conversation between bankers, other professionals and business owners. These are the thoughts from the GBA, I would welcome your constructive thoughts and comments
