The $6.6 Billion Question: Is your bank safe?

There is $6.6 billion deposited in banks and credit unions in the metropolitan area.


Take the stethoscope to the financial institutions that do business here: The prognosis is safe and sound and nothing to worry about, community bankers say.

The combination of earning profits, maintaining a healthy financial cushion and a history of stable conservative lending practices has kept the local banks and credit unions insulated from the problems plaguing some of the national institutions.

"We do the conventional. We don't do any investment banking, don't do any hedging, any funny stuff," said Remer Brinson III, the chief executive officer of First Bank of Georgia.

"The best way for a person to find out about their bank is to go in and talk to the banker," said Lloyd Hendricks, the president of the South Carolina Bankers Association.

Even the banks that don't have publicly traded stocks share their financial information with the Federal Deposit Insurance Corp., making it public information.

That information shows that all but one of the 31 banks doing business in the metro area maintained the highest designation of capitalization required by regulators. The exception, Atlanta-based Capitol City Bank & Trust, had a capitalization ratio placing it in the second-highest designation of "adequate" capitalization.

"Capitalization is the cushion against possible losses," Mr. Hendricks said. In other words, the better capitalized the bank, the more remote the possibility that the government will take it over because it failed.

Even Wachovia, which has been battered by losses stemming from its mortgage division, reported Wednesday in its third-quarter earnings that it had adequate capital. The ratios put it in the well-capitalized category, the highest designation recognized by banking industry regulators.

"We are well-capitalized, in South Carolina, North Carolina and into Georgia," Mr. Hendricks said.

David Oliver, spokesman for the Georgia Bankers Association, said that 95 percent of the state's banks met the requirements for being well-capitalized and that more than two-thirds are turning a profit, he added.

The only banks in the Augusta-Aiken area that have not turned a profit this year are three startups -- VistaBank and Southern Bank & Trust in Aiken County, and Savannah River Banking Co. in Richmond County -- that are less than 2 years old. They have the highest capitalization ratios of any banks operating in the area, though.

Despite having balance sheets that show financial health, local bankers are still dealing with some skittish customers.

"You can't look at the TV without getting a few goose bumps," said Ron Thigpen, the chief operating officer of Southeastern Bank Financial Corp., which runs Georgia Bank & Trust and Southern Bank & Trust.

Concerned customers started calling after California bank IndyMac failed, followed by investment firm Lehman Brothers.

Mr. Hendricks has been writing a lot lately to combat fear. One of the points he makes is that most of the turmoil involved large institutions -- Fannie Mae, Freddie Mac, Lehman Brothers and AIG -- that are not banks.

"We have had a lot of customers ask about FDIC insurance, so many that we had a seminar Oct. 2 just to cover it. People had a lot of misinformation," Mr. Brinson said.

Deposits are now FDIC-insured for up to $250,000. For all non-interest bearing accounts, the coverage is unlimited.

"The actions of the government last week should have taken a lot of the worry out of the consumer market place with the added FDIC protections," Mr. Oliver said recently.

Even for accounts that exceed $250,000, or the old $100,000 limit, there are ways to restructure the accounts so that they can be covered, Mr. Brinson said. Putting the accounts in other family members' names or a trust fund are two of those ways.

There is a way to protect money in accounts even beyond that, Mr. Brinson said. It is a program called Certificate of Deposit Account Registry System, in which participating banks can share blocks of the deposit to meet the insurance requirements.

"We swap CDs but the money never leaves the bank," Mr. Brinson said.

There is $6.62 billion deposited in banks in the metropolitan area, according to the FDIC. An additional $59.2 million is being held in the region's credit unions, according to National Credit Union Association.

Credit union deposits are protected in the same manner as bank deposits, but through the National Credit Union Share Insurance Fund instead of the FDIC. Those accounts are protected for up to $250,000.

"Banks are a direct reflection of the local economy," Mr. Oliver said.

Not all metro areas in Georgia are performing as well as Augusta, he said, listing Atlanta, in the North and along the coast, the places hit hard by the downturn in real estate.

"We haven't had the rampant appreciation in housing values, so that didn't feed these crazy mortgage products that you see in Vegas or California or metro Atlanta. We didn't get the up, so we really didn't get the down," Mr. Thigpen said of the Augusta area. "On a local scale, this is a normal credit cycle for us.

"We went through it in the '70s, we went through it in the mid-'80s, we went through it in the early '90s. You get over-built (in housing) to a degree and the market slows down until it can absorb what is it there."

Internet sites can aid consumers in determining the soundness of their financial institution.

"I refer people to, the leading aggregator of bank information," Mr. Hendricks said.

Reach Tim Rausch at (706) 823-3352 or


The capital ratio is a measure of cash versus debt. A ratio of 10 percent or higher is considered to be well-capitalized, the highest designation given by bank regulators.

Return on equity is an indicator of profitability, a measure of how well a company used reinvested earnings to generate additional earnings.


BankDepositsMarket share
Wachovia$1.6 billion24.5%
Georgia Bank & Trust$940.1 million14.1%
Bank of America$652.2 million9.8%
Regions Bank$640.1 million9.6%
SunTrust Bank$614.4 million9.2%
Security Federal Bank$497.8 million 7.5%
First Bank of Georgia$373.2 million5.6%
First Citizens Bank & Trust$358.7 million5.4%
Queensborough$275.7 million 4.1%
Fifth Third Bank$127.5 million 1.9%
Carolina First Bank$95.9 million 1.4%
Southern Bank & Trust$95.0 million 1.4%
Augusta First Bank & Trust$94.0 million 1.4%
Southern Bank$84.8 million 1.2%
First National Bank Waynesboro$75.8 million1.1%
Savannah River Banking Co.$37.8 million 0.5%
Capital City Bank$16.0 million0.2%
Capitol City Bank & Trust$11.6 million 0.1%
VistaBank$8.0 million0.1%
Woodforest Bank$755,000

Source: FDIC