Watch Out for Georgia's Worst Banks

As we move further through this credit cycle, a constant theme for banks is the fallout from overbuilding during the real estate boom -- and some of Georgia's financial institutions appear to be in bad shape.
We recently discussed loan quality problems at the nation's largest construction lenders, following an earlier discussion of Florida's most troubled banks.

A close look at Georgia's 358 banks and thrifts shows that for many, the home construction lending bust is even worse than it is in Florida. Here's a list of the 10 Georgia banks and S&Ls with the worst asset quality, as of March 31:

The four institutions in bold were considered below well-capitalized per regulatory guidelines, with leverage ratios below 5% and/or risk-based capital ratios below 10%. These four would be termed adequately-capitalized per regulatory guidelines, but when it comes to banks with high levels of problem loans, "adequate" translates to "pretty darn scary."

Integrity Bank had the worst asset quality on the list, along with the weakest capital ratios. It's also the largest institution in our "top 10," with total assets of $1.2 billion as of March 31. The bank is held by Integrity Bancshares, Inc. (ITYC), which has been trading on the Pink Sheets since being voluntarily delisted from the Nasdaq in late March.

One of the reasons the holding company delisted was a number of resignations from its board of directors, making it impossible to meet the Nasdaq requirement that the majority of directors qualify as "independent." Also, the stock was selling below $1 per share.