I mentioned the large number bank failures in Georgia in April and the Wall Street Journal gives details today. Georgia has had more bank failures than any other state, and more failures are expected. This helps explain why there are so many Georgia bank failures:
Georgia had 334 banks at the end of 2008, not counting branches of banks based elsewhere, such as Bank of America Corp., of Charlotte, N.C., and Wells Fargo & Co., of San Francisco. Since 2000, 112 banks and thrifts were started in Georgia, the third-highest total in the U.S., after California and Florida.
Rob Braswell, commissioner of the Georgia Department of Banking and Finance, the top regulator of banks that have Georgia charters rather than federal ones, said that if most people with banking experience applied for permission to open a new bank, "it was hard to say no when they had such an abundance of capital." Mr. Braswell has 62 examiners to monitor more than 150 state-chartered banks.
Bad real estate has played a part, but Georgia did not have the price increases seen in places like Florida, Arizona, Nevada and California. A bad situation could be much worse.