Georgia’s state-based banks continued their post-recession recovery in 2013, posting a third year in the black and doling out more loans, according to year-end data from the Federal Deposit Insurance Corp.
The Peach State’s 223 banks earned $2 billion during 2013, about 8 percent less than in 2012, but overall it was a profitable year for most, according to the Georgia Bankers Association.
The GBA said more banks were profitable for the year, 85 percent compared to 74 percent in 2012, and noted more people and businesses were able to make loan payments on time.
“Any time you’re coming out of a recession, it may take a couple of years before there’s a consistent trend,” said David Oliver, senior vice president of communications for the GBA. “The real key, from our standpoint, is that more of the banks by number were profitable. To us, that’s a sign of more broad improvement in the economy.”
Total loans in 2013 were up by $3.8 billion, a 2 percent increase over 2012, while noncurrent or delinquent loans declined for a 15th consecutive quarter, below the national average.
A brief scan of FDIC data for some area banks saw a drop in total assets, but other factors mirrored statewide trends, namely a reduction of the number of liabilities and bad loans on bank balance sheets. A few banks also increased lending.
“Loans did increase for the year, and that’s an encouraging sign,” said Oliver. “It’s certainly not the level of growth we saw before the recession ... but there’s ample interest in making new loans to qualified borrowers. Banks are looking for that business.”
The Coastal Bank’s total loans and leases increased by about 3.5 percent over the year, a factor the bank’s president and CEO Jim LaHaise attributes to an improving economy.
“It did show the continued improvement of the overall market for us,” said LaHaise.
“In the second half of the year, we started to see some new projects on the commercial real estate side, some new projects verses the refinancing of existing projects,” he said. “That tells me there’s investor confidence there. There’s demand out there for commercial real estate.”
First Chatham saw a steep 34 percent drop in noncurrent loans over the year, a reflection of more customers and businesses keeping up with their payments. The value of the bank’s total loans and leases shrank by about 25 percent over the year.
“Real estate values are key to continued improvement by most community banks, and we have seen appraisals coming back higher consistently,” said First Chatham President and CEO Brian Foster. “The reason our balance sheet shrunk was due to the sale of our Quadrant Financial subsidiary.”
He said the bank has been able to pay off debt.
“We have now focused on lending in the Coastal area and doing Small Business Administration lending through First Chatham Bank instead of Quadrant. The smaller balance sheet means less capital is required and our Tier One capital ratio has now moved to the “‘well capitalized’ category.”
The GBA said statewide net charge-offs, also known as bad debt, went down by $1.7 billion, or 60 percent, compared to 2012.
Oliver noted that while the number of banks dropped from 228 to 223, only three were closures. The rest were part of out-of-state acquisitions and mergers, such as The Savannah Bank, which was acquired by South Carolina Bank and Trust.
“We were pleased. We went through a period where 87 banks closed since 2008 — that has stabilized and tailed off in 2013,” said Oliver. “We certainly hope that trend continues.”