After a rough 2009, the Georgia banking industry is seeing signs of improvement.
Two-thirds of the state’s banks saw better earnings last year over their 2009 performance and fewer institutions operated in the red, according to the fourth-quarter banking profile from the Federal Deposit Insurance Corporation.
Georgia banks also lost $1.6 billion in 2010, less the half the $3.4 billion they lost in 2009. But the state still lags the national recovery where banks, collectively, made more than $87 billion last year.
“There’s still some difficult quarters ahead for some banks as [they] continue to really deal with the historic problems within our real estate marketplace here in the state of Georgia. That’s really where the bulk of the issues have been centered,” said David Oliver, a senior vice president with the Georgia Bankers Association.
“But industry-wide, the trends are looking a lot more favorable here in the past few quarters,” he said.
Oliver said several factors contribute to his cautious optimism:
- More banks were profitable in 2010 – 48 percent compared to 34 percent in 2009.
- 64 percent of institutions saw earnings increases over 2009.
- Fewer people are behind on their loan payments – 5.48 percent of loans are not current, down from 6.28 percent.
- Overall deposits are up $7 billion.
“More customers are able to pay back their loan on time,” Oliver said. “The number of non-current loans decreased for the third consecutive quarter, and up until about the second quarter of this year, that number had been increasing since 2006. So for three quarters now it’s been going in a more positive direction.”
So far, six Georgia banks have failed in 2011. Regulators closed 21 banks in 2010.
Among the banks still hurting is Synovus Financial, based in Columbus. Reports surfaced this week in London’s Financial Times that Synovus Financial is exploring its future options, including a possible sale.
The Times, citing unnamed sources, reported no decision is imminent.
Synovus announced layoffs and branch closings in January as it tries to return to profitability.