What's The Matter With Georgia?

I was pondering this question last night, as they've had a lot of bank failures even though Georgia wasn't exactly housing bubble central. Some of these banks were offering high yields to attract out of state brokered deposits, allowing them to grow fast without actually doing the heavy lifting of growing a local retail banking business. Those deposits were, of course, FDIC guaranteed. There was also some funny stuff going on...

A more pointed Material Loss Review was issued about another Georgia bank --Haven Trust of Duluth GA --back in August. That one cost the FDIC deposit insurance fund $207 million. Among the interesting items in the FDIC OIG's Material Loss Review for $576 million Haven are dubious multi-million dollar loans to the school age children of one of the bank's owners. The review also contains a photo of a planned 238 townhouse project that the bank financed for $5.6 million in 2007 even as the real estate market was softening. By September 2008 about three quarters of the loan had been disbursed. The photo taken in 2009 shows an empty lot with no construction on it. The FDIC now appraises the property's value at $1 million.