Bank Failure Friday

In what has become all too familiar, another couple of Georgia Banks failed today.

First National Bank of Georgia in Carrollton and Community Bank and Trust in Cornelia, had large real-estate related losses.

First National lost $53.6 million through the first three quarters of the year and had another $127 million in delinquent loans on its books, most of which it had given up hope of collecting. The bank’s equity tumbled over the past year from $93 million to just $14 million as losses mounted.

Community Bank & Trust lost $64.5 million through the first three quarters of 2009 and had $211 million in troubled loans on its books through September, FDIC records show. Its failure will cost the FDIC’s insurance fund $354.5 million.

It looks like the Chernobyl of banking isn’t getting any less radioactive.

17 comments

  1. Dave Bearse says:

    Georgia bankers unfortunately didn’t know enough to collect origination and securitization fees then foist the inferior product on the unsuspecting.

    Too big to fail is too big to be permitted to exist. Goldman et. al ought to be dismantled along the lines of the AT&T dismantlement of a couple decades ago.

  2. Ludwig Von Beachbum says:

    Synovus loaned a pile of money to Sea Island Company and Sea Island announced this week that they are tits up.

  3. Baker says:

    Meanwhile, we still don’t have the requisite number of state bank examiners. We didn’t have enough before, now when we really need them, we don’t have them or the money to even attempt to get them.

    • Ken in Eastman says:

      I believe they are contracting out with private accounting groups to do some of the auditing. It seems to be a bandaid on a knicked artery.

  4. ByteMe says:

    It ain’t over either.

    Mortgage Reset Chart from Credit Suisse

    Note the lull in 2009 before the spikes in 2010-2012. Combine that with 10% unemployment that’s going to move up over the next year and you will see more foreclosures, which will mean more bank closures. Estimates I’ve seen are that well over 1000 banks are in trouble right now before the next wave hits.

  5. John Konop says:

    If jobs do not pick up the end the third or fourth quarter it could be rough for banks. The housing tax credit ends by April 1 and all must be closed by June 1 which had given real-estate a boost.

    I do agree too big to fail is bad idea on many levels ie anti-competition, too much exposure…..But the problem is the FED will push banks together if they keep failing to help boost balance sheets ie stronger banks taking over weaker banks.

    A real catch 22!

  6. IndyInjun says:

    Why doesn’t one of the candidates for governor run on creating a STATE BANK OF GEORGIA like North Dakota’s?

    We can cut Wall Street out of financing state and local projects thereby saving $billions while removing the greatest source of corruption in local government.

    Yeah, the banksters and attorneys will be pissed, but we will save $billions.

    • ByteMe says:

      Wouldn’t that kind of legislation run through the House/Senate Banking Committees… where most of the members are on the board of directors of a bank?

      • IndyInjun says:

        Oh I did not say it would be politically possible if the citizenry remains asleep and docilely continues to accept being financially raped during a depression.

        The pain that is here and that which comes will bring about all manner of change.

        It would remove the #1 source of corruption and thusly is the #1 source of funds for the political class.

        It would be doing the right thing for the people, though.

  7. homer_heretic says:

    Which state legislators were involved, indirectly, with that bank? (Hint: Habersham County) Perhaps the FBI investigation of CB&T will shed some light on this?

  8. ACLOCKWORKORANGE says:

    Many of these community banks need to make it through, cause if they don’t then that means we will be forced to bank with Wells Fargo, or BOA, etc. And that would be banking hell!!

    • IndyInjun says:

      Wells is suffering indigestion from swallowing Wachovia, who overdosed on toxic mortgages.

      It may be fatal.

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