Nearly $1 out of every $5 on Georgia banks' loan books bankrolled homebuilders and real estate developers — by far the highest proportion in the state in at least 30 years, according to federal regulators' data.
Even during the savings-and-loan crisis of the 1980s and 1990s, when thousands of banks and thrifts across the nation failed, Georgia banks were far less exposed to these higher-risk loans. Today, the banks have double the concentration of those loans, according to federal data on banks.
Such loans are considered higher-risk than mortgages or conventional business loans because of the boom-and-bust nature of the real estate development business and the uncertain value of assets such as raw land and unfinished projects.
Friday, July 4, 2008
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