Thursday, March 25, 2010

banks goes on

Well, it has been several days now since the two banks in Blue Ridge and Ellijay have failed. We have had a chance to catch our breaths and to know that the sky is not falling. Depositors are protected and business is going on as usual as always.

One hiccup in one of my closings though. It was a sale of a foreclosed property owned by Bank of Blue Ridge. Scheduled to close this Friday, one week after the FDIC take over, we were informed that the property was now owned by the FDIC and they would be contacting us about what procedures we would have to follow for this sale under the new circumstances.

The buyer had also arranged for financing through the Bank of Blue Ridge. Now, the bank is unable, under the new ownership, to offer the same terms on the loan. The buyer has to shop for new financing that had been previously in place.

Life goes on……….

Saturday, March 20, 2010

Two north Georgia Banks acquired by FDIC

Appalachian Community Bank (also operating as Gilmer County Bank) and Bank of Hiawassee (also operating as Bank of Blue Ridge and Bank of Blairsville) were acquired by the FDIC, Friday, March 19, 2010.

(Please note that the Bank of Ellijay was NOT part of the financial institutions involved with this action.)

Appalachian Bancshares, Inc., Ellijay, GA wholly owns Appalachian Community Bank F.S.B., McCaysville, GA, which has branch offices located in Murphy, NC and Ducktown, TN. were not subject to this transaction and will continue to operate as usual.

All deposit accounts for Appalachian Community Bank and Gilmer County Bank have been transferred to Community & Southern Bank of Carrollton, GA. For more information on Community & Southern Bank, you can visit their web site at They will open for business as usual Monday morning.

Bank of Hiawassee (Bank of Blue Ridge and Bank of Blairsville) was sold by the FDIC to Citizens South Bank of Gastonia NC. It too will open Monday morning under its new ownership. More information of Citizens South Bank can be found at

If you have questions about your deposits, you can call an FDIC representative at 1-800-508-8289. Lots more information about the consequences of a bank failure can be found at

Saturday, March 6, 2010

Ratajczak looks into the Future.....

I recently had the privilege to attend a seminar where economist Dr. Donald Ratajczak spoke on his insights into our economic future. Dr. Ratajczak is a noted economist, the former head of the Georgia State University economic forecasting center and a noted worldwide lecturer. His opinions are in demand by the media and he is often sought after by major television networks for his thoughts on the economy.

Below is a summary of what Dr. Ratajczak sees for our economy in the near future:

Banks are reeling from the bad loans that were made over the past few years. Many lenders are surprised to find out how bad their portfolios really are. The banks feel that federal regulators are looking over their shoulders. How do the banks keep the regulators at bay? How do they improve their loan portfolios? They need lend…to good qualified borrowers. Then the banks will have more good loans in their portfolios.

Are we in an economic recovery? Yes, but it is not the traditional recovery that is usually led by the housing sector. Housing, in this recession, is a laggard. We have a two to three year inventory of unoccupied residential houses. However, by 2013, the inventory should be back to “normal.”

The recovery is slow because the banks won’t lend. New loans are DOWN eight per cent (8%) from this time a year ago. However, deposits are UP eight per cent (8%) from last year. When lending is down and deposits are up, the banks have money. They have plenty of money to lend if they would do so.

The banks need to change their manner of lending in order to get better loans into their portfolios. With a required credit score of 700, only one-third of the population can qualify for a loan. If the criteria were lowered to 675, then forty-five per cent (45%) of the population could qualify for a loan.

The Jobs Report for February showed a loss of thirty thousand jobs. However, sixty-four thousand of those job losses were in construction and government. State governments are letting people go to save money; state governments are experiencing large deficits and the fastest and easiest way for government to save money is to cut jobs. If the construction industry and government jobs are removed from the report, we actually had an increase of thirty thousand jobs last month. This trend should continue into the future.

Temporary jobs have also been increasing for the last five months. This will lead to job growth as temps are hired and made permanent workers. We should see continued job growth in March, April, and May –JBW 3/5/10