In the past year, Pinnacle Bank’s pool of problem loans nearly tripled to $27 million. Its income plunged by more than half.
But you won't find Pinnacle, based in the northeast Georgia town of Elberton, among Georgia’s long list of troubled financial institutions. In fact, it’s one of the state’s best-performing banks, earning $1.8 million in the third quarter -- more than all but two of Georgia’s more than 300 financial institutions.
Third-quarter figures recently released by the Federal Deposit Insurance Corp. continue to paint a grim portrait of Georgia’s banking industry.
More than 55 percent of the state’s banks lost money in the third quarter, compared with 63 percent in the previous quarter. The state’s banks lost a total of $889 million in the quarter ending Sept. 30, up from $783 million in the second quarter.
Most of the banks fortunate to finish in the black eked out profits of less than $500,000 – a relative pittance for an industry that until recently was hugely profitable.
The collapse of the real estate industry and deep recession have hammered the state’s banks. Since 2008, 26 Georgia banks have failed, more than any other state.
State banking leaders sought to put the third quarter in a better light. A spokesman with the Georgia Bankers Association noted that at the end of the third quarter, 86 percent of the state’s banks would be considered “well capitalized” according to traditional regulatory standards.
“It’s no secret that an unusually large number of Georgia banks continue to struggle in this economy,” said the spokesman, David Oliver. “However, it’s important to understand that a vast majority of our state’s banks and thrifts remain well capitalized and are weathering the economy relatively well.”
A close look at Pinnacle shows how difficult times are for even the state’s most-profitable banks.
Founded during the Great Depression, Pinnacle runs a meat-and-potatoes banking operation typical of many small-town banks.
Its balance sheet is stuffed with a diverse mix of loans to individuals and businesses, from small manufacturers to poultry farmers, said Jackson McConnell, Pinnacle’s president and CEO.
“Even though the economy is down, they still have cash flow,” McConnell said.
But McConnell is quick to say that his bank is not immune from the downturn. Pinnacle has been aggressively writing off troubled loans as the recession takes its toll on the bank’s customers.
“We’re struggling, also, and we’re dealing with it in our own way” he said. “We’re just trying to mind our own business and do the best we can, just like everybody else is."
More than 60 percent of Georgia banks failed to turn a profit in the third quarter. The following list shows the five banks that posted the largest profits and biggest losses of the quarter:
Biggest profits:
Bank total assets profit/(loss)
United Bank (Zebulon) $930 million $10.4 million
State Bank and Trust (Macon) $1.8 billion $7.8 million
Pinnacle Bank (Elberton) $611 million $1.8 million
First Bank of Georgia (Augusta) $478 million $1.5 million
First State Bank and Trust (Valdosta) $579 million $1.3 million
Largest losses:
Synovus (Columbus) $36.4 billion $696.7 million
SunTrust (Atlanta) $166 billion $358 million
United Community (Blairsville) $8.4 billion $67 million
Community Bank & Trust (Cornelia) $1.2 billion $59 million
Park Avenue Bank (Valdosta) $1.2 billion $19.7 million
Source: FDIC
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