Category: Economy

Dr. Roger Tutterow Offers 2016 Economic Predictions

When the Federal Reserve raises interest rates today for the first time in nine years, don’t panic. That’s the word from Dr. Roger Tutterow, economist and professor at Kennesaw State University. While TV talking heads may be fretting about the Fed tightening monetary policy, a 25 basis point increase in the Federal Funds rate means, “we are going from an insanely accommodative monetary policy to a very accommodative monetary policy,” that will likely leave the Fed Funds rate at 1.5% or lower. That translates to a 4.5% Prime Rate, which shouldn’t discourage borrowing.

Tutterow made his statement as part of a talk on the economic outlook for 2016 given to members of the American Council of Engineering Companies of Georgia on Tuesday.

A year ago Tutterow predicted 2015 economic growth of 2.4%. The country’s economic performance will fall slightly short of that for several reasons. Two of those were temporary: the extremely bad winter in the northeast, and labor issues at the Port of Long Beach. Both slowed down the economy for a time. However, the strong US dollar, while showing the relative strength of our economy–“We are the least dirty shirt in the hamper,” Tutterow said–also means that exports took a hit as prices of US manufactured goods became relatively more expensive overseas. The strong dollar probably took 1% off of GDP growth this year, according to Tutterow, and is a concern going forward.

Another ongoing concern for the economy is the low price of crude oil. While lower prices for energy help consumers and businesses alike, much of the progress the country has made in the recovery from the great recession has been in the energy sector. With oil prices being so low, it becomes difficult to make a profit extracting oil from the ground, much less expanding drilling capacity. Tutterow sees crude oil prices in the $40-$55 per barrel range for much of 2016.

While previous drops in oil prices have led to production cuts that eventually bring the price back up due to supply and demand, this time, Saudi Arabia and OPEC are acting differently. Tutterow has two theories for this: first, that the Arab countries don’t want United States oil production to become too dominant, and are keeping prices at a level where it’s impractical to expand energy production here. The other possible reason involves geopolitics. Middle Eastern extremists gain much of their cash through selling oil, and by keeping prices low, their access to cash drops. Meanwhile, low energy prices are no help for Russia, which is trying to increase its hegemony in the region. Read more

A Few Thoughts On Training A Skilled Technology Workforce In Georgia

Screenshot 2015-12-02 at 15.37.14
Codecademy: One of the many online tutorial sites to learn various programming languages and other IT skills
Screenshot by Nathan Smith

I wasn’t able to make the PolicyBEST breakfast this morning, but I did see a few highlights about the booming technology sector in Georgia. One in particular was from Jon Richards regarding Governor Nathan Deal’s statement on Georgia needing a skilled workforce to meet the needs of business:

Georgia is rich in the technology business, as I’ve said on here before, and there needs to be (and are) talented Georgians to fill positions within those businesses. We need a good education system to build a foundation on which people can learn on their own, but the burden of developing the technical workforce shouldn’t fall totally on the shoulders of our public education institutions.
Read more

Senator Perdue Talks About Potential Solutions for America’s Debt Crisis

Senator David Perdue talked about the relationship between national security and the national debt at the Atlanta Press Club.
Senator David Perdue talked about the relationship between national security and the national debt at the Atlanta Press Club.
Georgia Senator David Perdue addressed many of the same concerns he voiced in last week’s Senate speech during a Monday morning appearance at the Atlanta Press Club. Saying that the country was in a full blown crisis, Senator Perdue maintained that Washington was focused on the wrong priorities, partially because of a desire in Congress to demonstrate activity instead of results, and partially because the self interest of many in Congress takes precedence over the national interest. After almost a year as the Peach State’s junior Senator, Perdue remains optimistic that it is possible for the House and Senate to do the right thing in a non-partisan way.

Repeating the theme of his Senate floor speech, Perdue railed against the $18 trillion national debt and almost $100 trillion in unfunded liabilities the country will need to address at some point. Finding a solution will require a combination of changes in process, along with changes in policy in five areas: changing the way federal dollars are allocated and spent, growing the economy, finding a fix to Social Security and Medicare entitlements, cutting the cost of health care, and cutting other spending. Read more

Georgia Delegation Requests Federal Funding for Savannah Port Deepening Project

The Federal government’s Fiscal Year 2016 is less than a month old, but members of Georgia’s legislative delegation are already thinking about the Peach State’s needs for FY 2017. Georgia’s representatives and senators sent a letter to Office of Management and Budget director Shawn Donovan requesting at least $100 million in federal funds to support the Savannah Harbor Expansion Project.

We appreciate the assurance that you and others in the Executive Branch have given that you consider completion of SHEP to be a national priority. Accordingly, we would like to point out that the key to the success of this project will be whether the Administration’s budget proposal next year includes at least the approximately $100 million that USACE has identified as the level that would keep the project on the path to timely and cost-effective completion.

The $100 million-per-year schedule would not represent any special treatment or accelerated funding for SHEP; rather, it would be consistent with funding provided to similar projects of high national importance in recent years. It would simply allow use of standard contracting practices that provide normal cost efficiencies in channel dredging projects. In contrast, if federal funding in FY 2017 and beyond continued at the funding level recommended by the Administration for FY 2016 -and even if that amount were supplemented to approximately $50 million through use of additional funding provided to you by the Congress- the USACE calculates that the resulting five year delay in project completion would cost taxpayers almost $1 billion. This includes $100 million in additional construction costs as well as the unrecoverable loss of the $174 million in annual economic benefits to the nation that would begin upon project completion.

The lawmakers asked that OMB consider that $100 in annual funding is not unusual for a project like SHEP, citing similar funding levels to assist with the deepening of the Port of New York. They also point out that Savannah Harbor is the fastest growing container port in the United States, with a 17% increase in volume in FY15.

Prior to 2011, federal funding for projects like SHEP would have been done via an earmark from congress. After earmarks were banned in an effort to restore public trust, all funding requests are made through the executive branch. Most of the work done to date has been with funds provided by the state of Georgia, including $214 million as the state’s share of the project, and an additional $52 million in state expenses.

Cathy, Chick-Fil-A Move To Help ATL’s Westside

Last Thursday I attended the Council for Quality Growth’s annual dinner. They were honoring Chick-Fil-A’s Dan Cathy with their Four Pillars Award. Cathy accepted the award on the condition that he and others be allowed to talk about his latest effort, helping to revitalize Atlanta’s westside. Here is a video shown at the event:

As Maria Saporta reported yesterday Chick-Fil-A will be opening a restaurant in 2017 at the corner of Martin Luther King Jr. Drive and Joseph E. Lowery Boulevard.

At the Council for Quality Growth’s Four Pillar Award dinner on Oct. 1, Cathy also was to tell to attendees that the Chick-fil-A Foundation would be donating a total of $300,000 to the Westside Future Fund, an entity that has been established to serve as a focal point for corporate and philanthropic donors wanting to invest in the Vine City, English Avenue and surrounding communities.

“Individuals and businesses are going to have to be willing to prime the pump and get the fly wheels to start spinning again,” Cathy said in an interview a few days before the dinner. “We are going to try to stop this socio-economic divide that’s seen in so many urban markets. We are going to take a stand with others including the Arthur M. Blank Family Foundation.”

Among the groups spotlighted at the Four Pillars Tribute was City of Refuge, which Cathy has supported for several years now. Read more

Economic Development Drives Call for Regional Cooperation in Middle Georgia

Scanning the news this weekend, two stories out of middle Georgia caught my eye.

Macon’s WMAZ ran a story saying several communities just north of Perry want to band together to promote retail development along a six mile stretch of I-75 that lies mostly within Peach County. The move is a joint effort between cities, Peach County, and business interests.

The more we form a collaboration in that manner, the better of we are going to be, I think, in the future,” says Mayor Barbara Williams of Fort Valley.

She says this is the first time these governments have worked together like this.

“Middle Georgia…. it’s time for it to receive its piece of the pie as far as growth is concerned,” she says.

By forming a unified group, they plan to market the land to bring restaurants, shops, or lodging to the new corridor.

A little further north, Macon-Bibb County mayor Robert Reichert is trying to get cities between Macon and Jonesboro to work together to bring passenger rail back between Atlanta and Macon. Maggie Lee of the Macon Telegraph reports that Reichert brought several mayors along the proposed corridor to Atlanta recently to meet with state and federal officials about a potential project.

Even Reichert realizes that a 21st century version of the Nancy Hanks is expected to be a money loser on its own.

A 2010 study put the cost of building the system at $400 million at that time. Operations, including two round trips between Macon and Atlanta each morning and afternoon, would cost about $25 million in 2010 dollars.

But the study, commissioned by the nonprofit Georgians for Passenger Rail, also predicted walkable station areas would spawn millions of square feet in new office, home and apartment developments. It suggested that subsidizing a train could be a good buy for trackside cities.

At first glance these two stories don’t appear to be related to each other. One is about developing an alternative form of transportation, while the other deals with supporting retail along an existing travel corridor, I-75. A closer look shows that the stories are opposite sides of the same coin.

The effort to grow business along I-75 shows economic development occurring along the existing I-75 transportation corridor. The rail proposal is an effort to create a travel corridor in order to spur economic development. In both cases, transportation and the economy are linked.

The other similarity between the two stories is that in both cases, local governments are working as a region in order to improve the economic prospects of all. Rather than assuming there is a fixed-size pie for which each government must compete in order to get a share, there’s an understanding that making a larger pie means that each party can enjoy a bigger slice.

It’s a lesson that perhaps other regions in the state should remember.

The Arts as a Driver of Georgia’s Economy

Next week, Lawrenceville’s Aurora Theatre will open its 20th season with a production of the musical Memphis. The theatre, which was founded by Anthony Rodriguez and Ann-Carol Pence in 1996, moved from Duluth to to a renovated 100 year old church on the Lawrenceville town square in 2007. With half a dozen major shows each year, a separate smaller series on a more intimate stage, acting classes for students and adults, and an apprentice company, the venue hosted more than 600 events and attracted more than 76,000 visitors last season.

What many don’t know, however, is that the theatre is the single largest economic force in Lawrenceville. A March, 2014 study estimated that the theatre has a 3.244 million dollar impact on Gwinnett County.

Can an investment in the arts be a driving force in economic development? The Georgia Council on the Arts and the Georgia Municipal Association think so. The two groups teamed up in June to produce a research report titled Leveraging Public Investment in the Arts. The report uses case studies from cities as varied as Blue Ridge, Athens, Clarkston and Thomasville to illustrate how the arts are being used to drive economic development.

From the mid-1980s through 2008, state funding for the arts ranged between 2 and 4.5 million annually. That number dropped considerably as a result of recession belt tightening. The 2016 budget passed by the General Assembly increased arts funding from $600,000 to $900,000. But, that’s only six cents per person, compared to 63 cents per person in South Carolina and $1.07 pe4r person in Tennessee. That puts Georgia in last place.

In an 11 Alive story, State Senator P.K. Martin, whose district includes the Aurora, says he supports additional arts funding. “As Georgians, I don’t think that we should be last,” Martin said. “I don’t think you’ll see us leading the pack either, but I think we can be competitive, especially with the states around us.”

But Governor Deal wants to make sure there is a consistent source of funding. “The revenue of our state continues to grow. That’s one of the reason we put so much focus on job creation – that’s the way you get your revenue up. When you get your revenue up, you have the ability to put more money in things like the arts.”

One way to increase arts funding is the model used in a seven county region centered on Denver, Colorado. There, the Scientific & Cultural Facilities District assesses a one tenth of one percent sales tax to fund arts programs ranging from major museums to smaller districts. That voter-approved tax provides around $40 million annually in arts funding. The city of Atlanta pushed for such a measure during the 2013 legislative session, estimating that between $11 and $12 million per year could be raised to support the arts in the city.
 

Disclosure: I volunteer time maintaining portions of the Aurora’s website.

A Case for Business Involvement in Education

Georgia Power CEO and Georgia Chamber Board President Paul Bowers addressed Augusta business leaders earlier this week, and while talking up certain portions of the state’s educational system, lamented the fact that many prospective workers don’t have the education needed to enter the workforce.

According to the Augusta Chronicle, Bowers praised the educational programs offered at Georgia Regents University, along with programs offered at the state’s technical schools, noting that trained welders can make $80,000 per year working at one of the nuclear reactors under construction at Plant Vogtle. Despite these programs, Bowers said that not every prospective employee has what it takes to get a job at the company.

He pointed to recent Georgia Power hiring figures as an example of the state’s workforce being unequipped to fill those jobs. Out of several thousand applicants, about 4,600 employees are hired each year at the company, Bowers said.

“When they go through the basic employment test at Georgia Power, 50 percent of them fail,” he said. “That says we’ve got to be engaged. We’ve got to have leaders in the community, business leaders, that say, ‘I want to do something about this. I want to get engaged in the education system. I want to be in the classroom to give some type of mentoring or helping the kids understand.’ ”

As a Gwinnett County resident, I’ve seen how cooperation between the business community, county government, the elementary and secondary school system, the technical college system and the Board of Regents led to the development of programs in health care and bioscience viewed as promising careers. The state’s economic and workforce development divisions are also trying to bridge that gap.

How much should the business community get involved in ensuring that the new workers they hire tomorrow will possess the skills needed to succeed?

Georgia Kids Among Those Least Likely to Grow Up With Their Natural Parents

A new study of census data shows that only 39% of Peach State children are living with both of their natural parents. That puts Georgia tied with four other states for the lowest rate of two parent households, according to an analysis presented in the New York Times.

Mississippi is at the bottom, with only 32 of children living with their parents, followed by Louisiana, Arkansas and Alabama. The other states tied with Georgia in fifth are Nevada, New Mexico, Oklahoma and South Carolina. At the other end of the scale, Utah has the most kids living with their parents at 57%, followed by Minnesota, Nebraska, New Jersey, New Hampshire and North Dakota, all at above 50% of children living with their parents.

In general, children living in northern states are more likely to live in a traditional family setting than those living in the south. And while it might be convenient to attribute the difference to the red state / blue state model used in politics, the Times points out there could be more at play:

In the blue-state model, Americans get more education and earn higher income — and more educated, higher-earning people tend to marry and stay married. In Minnesota, New Jersey, Massachusetts and Connecticut, at least 51 percent of teenagers are being raised by both biological parents, among the highest rates in the nation. (That figure excludes families in which the two parents are together without being married; such arrangements are still rare — and less likely to last than marriages.)

In the red-state model, educational attainment is closer to average, but “residents are more likely to have deep normative and religious commitments to marriage and to raising children within marriage,” write Mr. Wilcox and Mr. Zill, in a paper for the Institute for Family Studies. This model applies across much of the Great Plains and Mountain West, including Nebraska and Utah.

The lowest rates of two-parent families tend to be in states that don’t fit either model: red states with the lowest levels of education or blue states with only average levels of education.

Although it is only drawn to the state level, the map of the country based on the family data tracks others presented by the Times, including counties with the least income mobility and the counties that are the hardest places in which to live.

This study, along with the others, points to a relationship between family status, income levels, and educational attainment. From a political standpoint, what can governments do to try to ameliorate the situation?

Here in Georgia, Governor Deal has worked to reform the criminal justice system to keep more people out of the prison system, and for those that remain, to provide an education. He and Lt. Governor Casey Cagle have tried to broaden educational opportunities beyond college preparatory classes to provide training in career paths in technical fields. Voters will decide in 2016 whether to move forward with an Opportunity School District that will attempt to improve some of the Peach State’s worst schools.

Are solutions like these going to make any difference, or are there other political approaches that might work better? Or, are these problems intractable because of the way the country was originally settled?

As Georgia continues to grow, compete for jobs, and improve the quality of life for its residents, it’s a discussion worth having.

Google Announces $300 Million Expansion In Georgia

Earlier this week, Google brokeGoogle DC Groundbreaking ground on a $300 million expansion of their data center in Douglas County.  The expansion will create 25 new jobs and will help with the increase in demand for Google services.  The new data center should be online by the end of 2016.

Governor Nathan Deal was on hand for the ground breaking:

“Google continues to play a significant role in making Georgia the No. 1 place in the nation in which to do business. We are pleased that one of the world’s premier technology companies continues to make strategic investments in our state, whether it is this data center expansion, providing jobs, enhancing our technology infrastructure with Google Fiber, or by providing educational programs and technology resources for nonprofits. We are proud that Google is growing in Georgia.”

The expansion is a boon to Georgia since Google recently announced plans to provide access to nine metro-area municipalities.  The data center is one of thirteen Google data centers in the world.  In an age where data and the reach of the Internet continues to grow at a rapid rate, this expansion is certainly needed.  Google’s Data Center Operations Manager Jason Wellman looks towards growth for Google:

“Data centers are the engines of the Internet, and as the Internet grows, our data centers are growing too. Douglas County and the state of Georgia have been excellent partners, enabling us to grow our presence in the state. This expansion will allow us to continue to provide fast and reliable service to millions of people around the clock.”

Of course, Douglas County is a huge benefactor with having such a large global company expanding in their backyard.  Douglas County Commission Chairman Tom Worthan talks about growth from a rural community to being connected to the world in such a big way:

“Much like Google, Douglas County continues to rapidly grow —evolving from a rural area to the economic hub of west Georgia. The expansion of Google’s data center demonstrates our commitment to growth and innovation. We are excited that the Google team has chosen to continue to invest in our community by expanding its home here with us.”

Georgia continues to show its potential at being a technology powerhouse.  Alpharetta, for example, is home to a number of data centers and Suwanee lays claim to one of two data centers used by AMD.  It’s good news for us.

Georgia Ranked Number 5 In List of Best States for Business

Georgia moved up five spots to fifth best in a survey of the best and worst states for business conducted by Chief Executive Magazine. The eleventh annual version of the poll of CEOs puts the Peach State behind Texas, Florida, North Carolina and Tennessee, in that order. Georgia and South Carolina switched positions in this year’s survey, with the Palmetto State dropping five positions to number 10. Georgia’s other neighboring state, Alabama comes in at number 24.

At the bottom of the list are Massachusetts, New Jersey, Illinois, New York and California.

Aside from a short blurb mentioning criteria favored by the CEOs participating in the poll, there isn’t a lot of information on how the states were ranked. Positive factors include progressive business development programs, low taxes and a quality living environment.

During the run up to the 2014 elections, Georgia’s ranking as the number one state to do business was a frequent talking point of Governor Deal while on the stump, despite some questioning the value and motives behind the rankings. Whether you believe the rankings are useful or not, it’s a plus to see that Georgia is ranked competitively with its neighboring states.

Progress on the Innovation Crescent?

In an effort to boost Georgia’s economic development prospects, the Governor’s Office of Workforce Development established the Innovation Crescent in 2007. Loosely modeled after North Carolina’s Research Triangle, the effort sought to tie together a number of the Peach State’s existing assets to promote research and development in the life sciences and bio medicine.

With its southern anchor at Hartsfield-Jackson Airport, and including the research facilities at Georgia Tech, Emory University, the Centers for Disease Control, promoters of the Innovation Crescent envisioned Georgia 316 starting with Gwinnett Technical College and Georgia Gwinnett College along Georgia 316 and extending to the University of Georgia in Athens as a place where companies involved in the biological sciences could locate research and development facilities.

The Great Recession, which began shortly after the initiative was announced, slowed but did not stop the progress of the initiative. In 2012, Georgia scored a major bio science win, with the announcement that Baxter International would build a plant to manufacture plasma based treatements. However, instead of being located on the I-85/316 corridor, the plant will be located near Covington, along I-20.

This spring, however, there are new signs that the Innovation Crescent might be getting ready to flourish.

Last week, Gwinnett County Commissioners heard a pitch to expand the research and development corridor area defined in the county’s development plan east from Dacula to the county line. The Gwinnett Daily Post has the story:

According to [Gwinnett Planning and Development Director Bryan] Lackey, the research corridor, which currently ends west of Dacula would be extended out to the Gwinnett-Barrow county line. The commission would have to rezone undeveloped property along Hwy. 316 that is currently zoned for residential and rural to research and development to extend the research corridor.

“We are prepared to bring this before the board,” he said. “If the board feels this is the right move to make these changes, then I’m happy to do that. All we have to do is advertise for about 45 days and then we can bring it before the board.”

The newly added areas could be used to attract business which do animal and agricultural research to tie into the proximity to the University of Georgia, Lackey told the commission. He also said the area could be used to attract medical device companies or third-party companies which create prototypes for other businesses.

At the Athens end of the corridor, Georgia Quick Start recently broke ground on a training center located near to the Classic City that will help in training the workforce of Baxter in Covington, along with other biotech companies in the Innovation Crescent. The Quick Start program is operated by the state’s Technical College system, and provides customized training programs for employers who need employees with special skills.

A recently signed memorandum of understanding between the Innovation Crescent Regional Partnership and Georgia Bio could be another sign that the initiative is ready to expand. According to a press release, with the signing of the MOU, “the ICRP will serve as one of Georgia Bio’s economic development partners and Georgia Bio will support the ICRP in marketing the region to recruit, retain and expand life science companies in Georgia.”

Driving through parts of Georgia outside metro Atlanta, there are plenty of signs labeling an area’s roads at High Tech Corridors. While it’s fair to say that giving a road or area a name doesn’t guarantee its future, there are signs pointing to the Innovation Crescent as beginning to bear fruit.

Senate Chicken Caucus Pecks Away at Restrictive Trade Practices

Not the mascot of the Chicken Caucus, mut modeled after Senator Claghorn, a Southern gentlemen.
Not the mascot of the Chicken Caucus, but modeled after Senator Claghorn, a Southern gentleman.

The U.S. Senate Chicken Caucus scored an eggciting victory this week as its co-chairman successfully sponsored an amendment to l’egg-islation passed by the Senate Finance Committee that will put pressure on South Africa to loosen its limits on American poultry imports. The underlying bill is the African Growth and Opportunity Act, which is a trade agreement between the United States and countries in Sub-Saharan African countries.

Members of the caucus cried fowl after South Africa began to impose anti-dumping duties on poultry products from the U.S., effectively banning American chicken imports. The amendment authorizes President Obama to put pressure on South Africa to remove the limits on poultry imports.

Senate Chicken Caucus co-chair Johnny Isakson clucked his approval of the legislation:

I am also glad this legislation contains provisions that would allow the U.S. Trade Representative to be responsive and flexible in its approach to addressing areas of concern by conducting out-of-cycle reviews and when necessary, having the authority to suspend, limit or withdraw benefits for any beneficiary country not in eligibility compliance. I believe passionately in AGOA’s value and support its long-term renewal, but I believe it unfair and inappropriate that the country that benefits from the law the most – South Africa – continues to maintain unreasonable tariffs on American poultry.

You didn’t know there was a Senate Chicken Caucus, much less that Senator Isakson was co-chair? Isakson and Delaware Democratic Sen. Chris Coons founded the caucus in 2013. It has a mission to “educate other senators and staff about the history, contributions, challenges and opportunities facing the U.S. chicken industry.” There is also a Congressional Chicken Caucus, which was founded in 2012 by Georgia Democratic Rep. Sanford Bishop and Republican Rep. Rick Crawford of Arkansas.

Poultry is an important industry in Georgia. According to a presentation from the University of Georgia, we produce more than $18 billion in poultry products annually, making poultry the largest segment of the Peach State’s agriculture industry. Some 100,000 people owe their employment to the poultry industry, and Georgia is the top producer of broilers in the United States.

Film Isn’t The Only Industry Boosting Georgia’s Economy

You hear a lot about Georgia’s growing film industry, but the tech industry in our great state is thriving and adding major benefits to Georgia’s economy as well. In the midst of the final few days of the first session of the Georgia General Assembly, the Technology Association of Georgia issued its 2015 State of the Industry report:

One cool aspect is the “Innovation Index” that further breaks down, by county, what the innovation capacity and activity is for that area. Cherokee, Forsyth, Fulton, Gwinnett and Oconee Counties exceeded the national Innovation Index average. As a state, Georgia ranks a little bit below the US average index of 100 at 92.3. We edge out Florida, who ranks with an index of 91.8, and well exceed South Carolina, Tennessee, and Alabama. The only neighboring state that exceeds us is North Carolina with an index of 95.0. Of course, both California and Massachusetts exceed the national average with 112.4 and 114.3, respectively.

Numbers! Great! So what? The numbers give us an idea of where we rank compared to other states in terms of technology innovation, but the devil is in the details. The tech industry here in Georgia has grown by 10% since 2010 and has added about 25,000 jobs to our state’s economy. However, a key finding in the report is that the top need for employers is talent with requisite knowledge. Which would mean a better emphasis on skills, like programming, in education. Of course, that also means finding teachers that could spark interest in technology. It might even be an opportunity for people in our industry to take an approach like Junior Achievement does with financial literacy and entrepreneurship. With mobile devices and an ever-increasing amount of data being generated, we will need skilled people to find innovative ways to sift through the data and present that data in a meaningful sense for decision-makers.

We’re making good progress, but there’s still room for improvement. Feel free to browse the report yourself over at the Technology Association of Georgia’s site.

It’s Back – Bank Failure Friday

It’s been a long while since we’ve had a Bank Failure Friday. Seems like during 2009 through 2011, it was happening every third or fourth week. Fortunately, the flood of failures stopped in 2013. But, if you were betting on the failure of Atlanta’s Capitol City Bank and Trust, your ship finally came in today. And on Friday the 13th to boot.

Capitol City Bank & Trust Company, Atlanta, Georgia, was closed today by the Georgia Department of Banking & Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Capitol City Bank & Trust Company.

The eight former branches of Capitol City Bank & Trust Company will reopen during normal business hours. The failed bank will operate as Capitol City Bank & Trust, a division of First-Citizens Bank & Trust Company. Depositors of Capitol City Bank & Trust Company will automatically become depositors of First-Citizens Bank & Trust Company. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Capitol City Bank & Trust Company should continue to use their current branch until they receive notice from First-Citizens Bank & Trust Company that systems conversions have been completed to allow full-service banking at all branches of First-Citizens Bank & Trust Company.

I guess we should be glad that the economy has improved enough that the rate of Georgia bank failures has slowed down to the point where it’s a rare occurrence. And if you happened to be a depositor at Capitol City, you can find out more details here.