Georgia Has Failed Banks on Its Mind

ATLANTA (TheStreet) -- Georgia has the unfortunate distinction of leading the U.S. with 21 bank failures this year and last. And many other banks in the state are suffering from very high levels of bad loans.

Most of the failed Georgia institutions made outsized bets during the real estate boom on residential and commercial construction projects in the Atlanta area. Since the quality of commercial real estate loans is declining sharply as the later stages of the banking crisis unfold, there are dozens of banks and thrifts in trouble.

Strongest Georgia Banks and Thrifts

Based on March 31 financial reports, 24 of Georgia's 322 banks and thrifts were rated B-plus (good) or above, down from 33 the previous quarter.

Georgia Banks and S&Ls Rated B+ or Higher

The ratings encompass a large number of data, placing the greatest weight on capital strength, credit quality and earnings stability. To be considered well-capitalized, most banks, and savings and loans need to maintain a total risk-based capital ratio of at least 10%.

Largest Georgia Institutions

The following table includes capital, earnings and asset quality for the 10 largest Georgia banks and thrifts.

10 Largest Georgia Banks and S&Ls

The highest-rated bank or thrift among Georgia's 10 largest institutions was BB&T Financial of Columbus, a relatively small subsidiary of BB&T Corp. (BBT Quote).

BB&T Financial focuses on credit card lending. Its financial strength rating has been C-plus (fair) for the past three quarters.

Wells Fargo(WFC Quote) also has a credit card subsidiary among the 10 largest Georgia banks, Wachovia Card Services of Atlanta. This institution was assigned a financial rating of C despite its increasing credit card charge-offs, because it's strongly capitalized. SunTrust Bank of Atlanta, Georgia's largest financial institution and the main subsidiary of SunTrust Banks Inc. (STI Quote), was downgraded to D-minus from D-plus the previous quarter because of a $783 million net loss and declining capital levels. The rating didn't reflect the $2.3 billion in common equity raised by the holding company in June or the holding company's narrower second-quarter loss.