Not Peachy In Georgia

I suppose it is a sign of the times that the FDIC’s Failed Bank List was updated with some new features. When I heard that the FDIC closed an astounding seven banks just on Friday, I had to take a closer look, and happily found that the list is now sortable, and has grown so long that it now has pagination.

The truly remarkable fact though, is that six of the seven banks closed on Friday were in the state of Georgia, although they are related subsidiaries of a larger corporation. But this isn’t the first time I wondered what was going on with banks in Georgia. On March 22nd, I blogged about the statistical curiosity of the number of failed banks in the peach state, and wondered if it would remain a curiosity, or if there was much more going on in Georgia than we were aware of.

Now that the information at the FDIC is a little bit easier to use (and we have a larger sample) let’s see what we can find by looking at the top 5 states with the most bank failures:

Top 5 Bank-Failure-States (100 total failures through July 27, 2009)

We all know that California, Florida, and Nevada have been devastated by the real estate collapse, since they had wildly inflated real estate prices. They are all, however, generally desirable (warm-climate) places to live, and while credit was easy, you might be able to see why people wanted to move to these states. Now that real estate is collapsing, regional banks making loans in the area are all in trouble.

Illinois is a little bit more difficult to explain, but with all of the crazy misadventures in this most corrupt state, you can just about explain anything away. For now, let’s just assume that the Chicago is having a problem or two.

Georgia has one of the highest bank failure rates in the country as a result of too much expansion and bad real estate bets during the past decade, which created an opportunity for banks to flourish and then fail.

NPR Story