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2-16-09 Banks struggling – Local Banks on list of GA challenged banks

As a semi-retired stockholder, I hope both locally owned banks make it. I think they can. The fast profits of the last few years are over. However, the equity reserves are sound and in time, I believe, they will survive this downturn. We just won’t get dividends for a while and our net-worth balance sheets will show a diminished bottom line reflecting reduced value in the stock.

AVOC

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February 15, 2009

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Banks struggling – Local Banks on list of GA challenged banks

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By Wendell Dawson, Editor, AVOC, Inc

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Wall St, Bail-outs, Stimulus bills, Housing Boom, Housing Crash, tax assessments, banks failing etc.   The news is not good on our economy (Local, State, National and World).   Lots of ‘experts’ are trying to deal with the situation.   We all hope it turns around soon.    While serious, I do not think it is another “Great Depression”, politicians notwithstanding.

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The Great Depression

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I am a child of the Depression- born toward the end of it and grew up hearing about it almost every day of my childhood and youth.   It made an impression on most of us of who were born during the period of the Great Depression but before the Baby Boomers started.    The family farm was on a dirt road, had no telephone or indoor plumbing.    It did have electricity but no electric stoves and no televisions.   After the end of WWII we did get a refrigerator and in the 50’s we got indoor plumbing, television and much more- and eventually a paved road..   Much of our food was raised in the garden and on the farm.   Our cows provided milk and beef.   We had hogs and chickens and grew wheat and corn to be ground for flour and cornbread.

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Oconee State Bank established in 1960

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As the years went by, we had more and more ‘conveniences’ in Oconee County.   The Oconee State Bank was established by local folks in 1960.   It was a source of pride and many citizens bought stock- some in small amounts.   When it split in the late 60’s, I was able to acquire a few shares that have multiplied over the decades.   It always paid a stock dividend in January of each year and the check came in handy after Christmas and tax payments.    Some of the earlier stock holders received large dividends.   This year the Bank decided not to pay a dividend.   A letter to stockholders explained the reasons and expressed optimism in the future.

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OconeeStateBank.StHldr.Ltr.2.6.09.pdf x

Oconee State Bank 2009 Letter to Stockholders

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North GA Bank established in 2000

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In 2000, I bought a modest amount of stock in North GA Bank, our second locally owned bank.   Folks who were invested in the Bank of Georgia had made a sizable profit when the bank was sold to Athens First Bank and Trust.   Many of the same folks invested in the new bank.   Over the next several years, it did well and stock values went up and it also paid a January dividend.   North GA also decided not to pay a dividend this year.    A letter to stockholders explained the reasons and expressed optimism in the future.

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NoGA.Bank.Stkhldr.Ltr.1.22.09.pdf x

North GA Bank 2009 Letter to Stockholders

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Hope the Banks Survive

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As a semi-retired stockholder, I hope both locally owned banks make it.   I think they can.   The fast profits of the last few years are over.   However, the equity reserves are sound and in time, I believe, they will survive this downturn.   We just won’t get dividends for a while and our net-worth balance sheets will have a diminished bottom line reflecting reduced value in the stock.

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The news is not good these days.   We also acknowledge that many folks have made much money and moved on.   Others have failed and moved on.   The banks will eventually have to do something with the collateral from ‘problem loans”.    That too will impact Market Values of real estate.   There is always a silver lining in every cloud.    Maybe our tax assessments will go down!


2-16-09 List of Georgia banks with high misery index grows – local banks on list

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The Atlanta Journal-Constitution

http://www.ajc.com/news/content/business/stories/2009/02/13/georgia_failed_banks_list.html?cxntlid=homepage_tab_newstab

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February 15, 2009

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BANK FAILURES

Georgia banks with a high ‘misery index’

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The list of Georgia banks with a high misery index known as the “Texas ratio” got much longer in the fourth quarter due to mounting problem loans and other challenges.

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By the end of the year, Georgia had 42 banks with Texas ratios over 100, a measure that some industry analysts say indicates which financial institutions face a higher risk of insolvency. The listtotaled 30 institutions at the end of September………………..

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Atlanta bank consulting firm FIG Partners produced the updated list based on the fourth-quarter numbers.

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Bank Location             4 Qtr 3 Qtr

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First Piedmont Bank Winder 373% 189%

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Freedom Bank of Georgia Commerce 241% 175%

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United Security Bank Sparta 172% 118%

Habersham Bank Clarkesville 167% 115%

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McIntosh State Bank Jackson 117% 101%

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Oconee State Bank Watkinsville 105% 59%

North Georgia Bank Watkinsville 104% 43%

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1-11-09 Georgia bank woes ‘alarming’ – more failures coming

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The Atlanta Journal-Constitution

http://www.ajc.com/business/content/printedition/2009/01/11/banks.html

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Sunday, January 11, 2009

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Georgia bank woes ‘alarming,’ data show


2-14-09 The ‘Zombie’ Economy – dead banks walking

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NRO

http://article.nationalreview.com/print/?q=ZjFhYTExN2JkZTA3NjVlMTVkZTA2ODJmMDdkNTI0ZGE=

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February 13, 2009 By Rich Lowry

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Caution: Zombie Economy Ahead
The Japanese example must not be repeated.

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Members of the House Financial Services Committee flogged eight banking chief executive officers the other day, apparently without considering that some of them were already dead men walking. The CEOs were grilled about their lending practices and bonuses, when they should have been asked, “Why does your company still exist?”……………

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The awful truth is that the financial system has at least another $ 1 trillion hole in it. Either the U.S. government has to continue to try to patch it over with massive—and perhaps ever-escalating—injections of money à lá the Japanese in the 1990s, or it has to take the painful, risky step of letting some of the big, irreparably wounded financial players go down.  
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Neither choice is appealing, which is why
Treasury Secretary Timothy Geithner trotted out his muddle-through, we’ll-get-back-to-you-on-details rescue plan. Obama shows no appetite for grasping the nettle of a problem much more difficult technically and politically than asking Congress to shovel billions of dollars at its favorite priorities in a stimulus bill……………


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