NEW YORK ( TheStreet) -- Following three years of leading all states in the number of bank failures, only two Georgia banks have failed so far during 2012. But there continues to be tremendous pressure for the weaker players in the state to merge with stronger institutions as the state's banking system continues to rebuild following the financial crisis. As we discussed on our coverage of Illinois banks, consolidation will be a key theme for banks across the country over the next several years, with regulatory pressure and continued earnings weakness providing catalysts, as well as the rise in share prices this year. Regarding the slowing pace of bank failures across the U.S., Frank A. Mayer -- a partner in the Financial Services Practice Group of Pepper Hamilton LLP, in the firm's Philadelphia office -- says "there are macro trends that have resulted in 1,000 or so financial institutions disappearing since 2008," and that beyond the industry consolidation from bank failures, the rest have disappeared "through mergers, some of which were encouraged by regulators." At this stage of the economic recovery, a lot of Georgia banks continue to struggle to return to profitability. Of the over 240 banks in the state, over 40% posted fourth-quarter operating losses, according to data provided by HighlineFI. Going forward, community banks will be forced to rethink their bread-and-butter "free checking" business model, with the latest regulatory pressure on profits coming from the Consumer Financial Protection Bureau, which last Wednesday announced that it had "launched an inquiry into checking account overdraft programs to determine how these practices are impacting consumers," with Director Richard Cordray saying that "overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it." There are plenty of Georgia banks that need to sell quickly, or somehow arrange for major injections of new capital. According to data provided by HighlineFI, there were 29 undercapitalized Georgia banks and thrifts as of Dec. 30 -- which were included on TheStreet'sBank Watch List -- not including Central Bank of Georgia, which failed on Friday and was sold by the FDIC to Ameris Bank (held by Ameris Bancorp ( ABCB), and The First State Bank of Stockbridge, which was shuttered by state regulators on Jan. 20, and sold by the Federal Deposit Insurance Corp. to Hamilton State Bank of Hoschton, Ga.