A growing number of Peach State banks are the pits.

Few states have been hit harder by the economic crisis over the past seven months than Georgia, where many banks are now paying for large bets made on construction loans during the building boom in the Atlanta metropolitan area. Omni National Bank of Atlanta on Friday became the state's ninth since the beginning of 2008, the most in the nation during that time.

All nine Georgia bank failures have taken place since Aug. 29. The nine failed Georgia banks had $4.7 billion total assets and the estimated cost to the Federal Deposit Insurance Corp.'s insurance fund for the failures was $1.4 billion.

There's a lot more trouble ahead. TheStreet.com Ratings' analysis of Dec. 31 financial information for Georgia's 331 banks and thrifts shows that there are over 30 institutions in a weakened condition.

Three of the four Georgia banks that have failed so far during 2009 were undercapitalized under ordinary regulatory guidelines as of Dec. 31. Four other Georgia banks and thrifts were undercapitalized by regulatory standards as of Dec. 31 data. TheStreet.com Ratings has assigned E- (very weak) financial strength ratings to each of them.

Remaining Undercapitalized
Georgia Banks and Thrifts
-Dec. 31, 2008 ($Mil)
Highline Financial

All the bank and thrift ratings based on Dec. 31 financial reports will soon be updated on TheStreet.com's bank and thrift ratings screener.

All four undercapitalized Georgia institutions followed the pattern of high concentrations in residential construction and land development loans, and all four had very high overall levels of nonperforming assets as of Dec. 31.

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