“This means business and individuals are borrowing money and generating deposits, both of which are the lifeline of banks,” said economist Roger Tutterow with the Kennesaw State University’s Coles College of Business.
Borrowing in the state is high, but delinquency rates are low, according to the report. Nine out of 10 loans were reportedly paid on time, an indication of financial stability, said David Oliver, senior vice president of member solutions at the Georgia Bankers Association.
“We are in a period of good credit quality, when consumers are able to pay off their loans,” said Oliver.
Georgia’s banking institutions report $2.1 billion in earnings in first half of 2018.
Banks in the state have been doing quite well since the economic dip of 2008-2010, when a number of locally based banks failed due to speculative lending practices.
According to Oliver, no local bank failed in the reporting period. In Georgia, 95 percent of all banks were profitable, a 3 percent increase from the same period last year.
“It’s a continuation of what is now an extended period of general health and improvement in the overall banking industry,” said Oliver.
Tutterow expects growth in the banking sector to continue as the state's population continues to grow and demand for housing, financial and personal services increases. That provides an opportunity for more banks to be opened in the state. According to the Georgia Bankers Association report, the state has the highest number of banks in the southeast.
“Financial services is one of the sectors of the economy where it benefits to be in a fast growing part of the country,” said Tutterow.
Despite recent increases in interest rates by the Federal Reserve, Tutterow said, the economy is good, which is a great incentive for individuals and businesses to borrow and for banks to keep growing.
“Borrowing cost is low, and the demand for credit is firm. It’s an opportunity for banks to do quite well over the balance of the year,” said Tutterow.
Banking in Georgia
- Georgia-based banks employ more than 42,000 people.
- Georgia has the highest number of locally based banks in the southeast.
- Banks from 19 other states do business in Georgia