Georgia Bankers Association Organizational Meetings

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Georgia Bankers AssociationOrganizational
Meetings

• The State of Banks in Georgia
• A Situation Analysis for Strategic Planning
• June 19, 2003

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5 Year History Number of GA Banks
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Georgia Banks by Asset Size
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Banking Demographics of Southeastern States
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Residents Deposits per Banking Office
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Growth in Number of GA Banking Offices
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Deposits Market Share in Georgia
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Deposits Market Share in Georgia
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5 Year Georgia De Novo Chartering Activity
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Recent Trends in the Georgia Economy

• Employment
• Loss of 133,000 jobs between cyclical peak of Jan
  2001 and Oct 2002
• 4th qtr 2002 employment down 2.2 over same qtr
  of prior year worst performance in the nation.

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Recent Trends in the Georgia Economy

• Economic Shocks
• Contractions in manufacturing by mid-1999,
  especially textiles and apparel.
• NASDAQ tech bubble bursts in 2000.
• Weakening absorption of office markets and
  construction in Atlanta MSA from 2000 on.
• 9/11/01 terrorism and aftermath on transportation
  tourism.

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Significant Balance Sheet Trends

• Hot loan / deposit ratios tight liquidity
• Higher risk profiles in assets
• More commercial real estate in portfolios
• More reliance on external noncore funding
• Slight lessening of capital ratios
• Reasonable credit quality so far

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Significant Income Statement Trends

• Declining profits, ROAs, ROEs
• The smaller the banks, the harder the fall
• Declining net interest margins
• More reliance on noninterest income
• Mortgage origination fees
• Overdraft fees
• Belt tightening on noninterest expense is not
  enough

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Interest Rate Environment
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Interest Rate Environment
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Profit Trends in Georgia Banks
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Profit Trends in Georgia Banks
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Profit Trends in Georgia Banks
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Profit Trends in Georgia Banks
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Profit Trends in Georgia Banks
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Net Interest Margin
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Net Interest Margin
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Net Interest Margin
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Net Interest Margin
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Net Interest Margin
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Noninterest Income
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Noninterest Expense
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Assets per Employee
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Efficiency Ratios
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Net Charge-Offs
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Loan / Deposit Ratios
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Loan Loss Reserves
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Tangible Capital Ratios
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Total Risk-Based Capital Ratios
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Current Issues for GA BanksFrom Preliminary
Board Questionnaire Responses

• Margin compression
• Funding / ALCO mgmt
• Liquidity pressures
• Recessionary economy
• Bottom of interest cycle
• Nonbank competition
• Fraud/security/tech risks
• Credit quality-losses to come?

• Corporate governance
• Integrity image of banks
• Staffing /compensation
• Evolving infrastructure
• Slowing mortgage cycle
• Replacing noninterest income
• Overhead controls

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Top Legislative Regulatory IssuesFrom
Preliminary Board Questionnaire Responses

• Credit Unions
• FDIC Insurance Reform
• Overdraft Protection Products
• Bankruptcy Reform
• Predatory Lending
• Payday Lending

• Real Estate Powers
• Dual Banking System
• Nonbank Regulation
• Intrastate Branching
• Interest on Corp Checking
• Subchapter S

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Strategic PlanningFor a New GBA Year

• Thanks for your attention.
• Please refer to committee agenda.