Atlanta Fed Regulator Says Half of Region’s Banks Still Troubled
A majority of banks in the Southeast U.S. supervised by the Federal Reserve Bank of Atlanta remain troubled more than two and a half years after the recession ended, said Michael Johnson, senior vice president for supervision and regulation.
“We have over 600 bank holding companies in our district, and still to this day over 50 percent of them are in troubled or problem condition,” Johnson said at an Atlanta Fed banking conference. The Atlanta Fed district includes Alabama, Florida, Georgia, and portions of Louisiana, Mississippi, and Tennessee.
While that is “bad news,” profit trends have improved, and banks in the Atlanta Fed district were profitable overall in 2011 for the first time in several years, he said. That is “great news from my perspective,” Johnson said.
Credit quality trends such as the level of delinquent loans improved every quarter last year, the Atlanta Fed official said. “A little concerning is the pace of that improvement started to slow toward the end of the year,” he said.
The Atlanta Fed region has been “ground zero of the banking crisis,” and its community banks were highly concentrated in commercial real estate loans, Johnson said.
Georgia led the U.S. in bank failures between late 2007 and 2011’s third quarter with 75, followed by Florida’s 57, according to Trepp LLC, a provider of mortgage information.
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