Regulators tighten screws on five more Georgia banks

About one-third of Georgia’s more than 300 banks are facing increased regulatory scrutiny as the state’s banking crisis drags on.

The banks are: Decatur First Bank, Decatur; Central Bank of Georgia, Ellaville; Enterprise Banking Co., McDonough; Darby Bank & Trust, Vidalia; and The Peoples Bank, Winder.

The regulatory agreements were reached in December but made public on Friday by the Federal Deposit Insurance Corp. Changes required in the agreements, which typically run for more than a dozen pages, include improved oversight by bank board members and writing off bad loans.

The bank’s troubles follow a familiar pattern in Georgia: Real estate losses mounted in recent years after the housing bubble burst. Even locales far from Atlanta are reeling, said Phil Williams, a senior vice president at Darby Bank.

“The real estate economy across the state faces challenges,” said Williams. “The real estate boom was happening everywhere.”

Darby’s troubles include soured loans along the Georgia coast, Williams said.

Perhaps the biggest challenge for banks under consent orders is raising fresh capital. Experts say it’s not easy to find investors willing to sink their cash into troubled community banks.

Christopher Maddox, president and CEO at Peoples Bank, said his bank is “well down the road” with a capital raising plan, but he declined to offer specifics. He said his 84-year-old bank has a strong customer base and banking relationships that will help it through the crisis.

“We’re working our way through this,” he said.

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