The FDIC numbers provided plenty of grim news for Georgia banks. Problem loans at the state's banks nearly doubled over the past year to $10.2 billion. The percentage of noncurrent loans to total loans has nearly doubled to 4.77 percent.
On the positive side: Loan volume is holding steady, while deposits are growing as customers look for safe places to stash their money. And 55 percent of banks were profitable in the quarter, up from 38 percent in the fourth quarter.
The state's most profitable banks are in small cities and towns like Colquitt, Fitzgerald and Hinesville, areas that didn't experience a big run-up in real estate values.
But the profits pale in comparison to that earned by banks during the boom years in the middle of the decade. Northwest Georgia Bank in Ringgold earned $1.4 million in the first quarter, good enough to rank No. 4 in the state. Three years ago, a $1.4 million profit wouldn't have ranked among the state's top 50 banks.
Northwest Georgia's chairman and CEO, Wes Smith, said his bank is succeeding in part because the bank didn't lose its head during the real estate bubble. While competitors were offering developers 100 percent financing, Smith said his bank capped its lending at 75 percent, ensuring borrowers had enough skin in the game.
"During the times when people thought there'd be no end to the growing economy, they kind of lost their good judgment," Smith said.
Nationwide, the banking industry remains troubled with some glimmers of hope. The Federal Deposit Insurance Corp. said Wednesday that the nation's banks reported a net profit of $7.6 billion in the first quarter, compared with a $36.9 billion loss in the fourth quarter.
But the number of troubled banks continues to climb. The FDIC on Wednesday said it classified 305 U.S. banks as "problem" institutions, up 21 percent from the fourth quarter. The FDIC did not identify any of the banks.
The banking crisis has been particularly acute in Georgia. Eleven Georgia banks have failed in the past eight months, the most in the country, and experts say many more troubled institutions are in danger of being shut down.
The $1.2 billion loss reported by Georgia banks in the first quarter includes a $783 million loss from SunTrust and $95 million loss from Synovus, according to the FDIC. The state's banks lost $1.1 billion in the fourth quarter of 2008.
Some banks could take solace by taking a look at Cornerstone, which earned $629,000 in the first quarter to make it the most profitable Atlanta bank. That came on the heels of a $3.8 million fourth-quarter loss, the result of the bank's decision to pour money into its loan loss reserves.
Cornerstone's CEO, Chris Burnett, said the bank is going back to basics, such as boosting its lending to small businesses.
"We're not earning huge money, but right now in this environment, any amount of profitability is considered somewhat of a victory," he said.
— Bloomberg News Service contributed to this article.