And they did it quickly. This was a bank set up by developers and builders to fund developers and builders. There have been a lot of them all the way back to Fayette State Bank (Joel and Floy) in the very beginning.

They would have been taken over by the Feds if they didn't pump that cash into the bank. Then some of the loans that the bank made to some developers and builders would have been scrutinized and possibly declared non-performing assets by the Feds. That's when the wheels really start to come off.

Since you seem to know, why was it under capitalized?

Too many non-producing loans maybe and about to go broke?

Why wasn't the capital inserted before it became insolvent?
Must everything wait until someone intervenes?

Now, the biggie
Aren't there many, so-called, developer loans in arrears? Way too much development not needed?

Ponzi scheme to make a buck quickly went too far, too quickly?

It's in this paper, you were for it. Why do you continually bring this up?

Yourself, like most everyone else, changed their minds when it came to bear what was planned for the Coweta Side. Somehow, you fail to mention this in any of your ramblings on this subject.

Let's get the facts straight first. I bank at six area banks, and what I can tell you is that this bank was the first to realize a problem and take active measures very early. In the first and second quarters of 2007 they took much of their revenue and placed in thier loan loss reserves to cover any anticipated losses which of course drastically lowered earnings. When that happened, many of surrounding banks whom I have vested interest said that this bank was in serious trouble and that the housing market wouldn't have much of an affect at all on them. You tell me, were they right, or "wrong"? I do think that they were under capitalized but "ALL" banks were under capitalized. I'll stick with the guy that saw this meltdown coming rather than the one who was blind sided and now playing catch up.

...call it what you may, since inception, this "little" bank has held true to its local investors. It did not ask for a hand out as so many others, it simply is reflecting the times. Should I offer any criticism, it would be that I would have preferred a public offering for additional shares.

Like the above poster, I also bank with small and large banks and much prefer to keep my business local, especially when they are proactive vice reactive.

Mr Brown, please direct your comments to that of running Peachtree City, for one to understand business one needs to appreciate the responsibility of meeting payroll.

A bank is required to have sufficient equity investment to cover bad mortgage loan reserves. Tier 1 bank capital requirements for mortgage loans (presumably the bulk of SCB's business) is 4% of portfolio.

If SCB was required to raise an additional $2 million, this means that they had potentially overextended their mortgage business by some $50 million dollars in excess of their Tier 1 capitalization requirements.

(I'm simplifying a bit here, the amount is adjusted by cash on hand and govt. backed securities).

I am not sure, Mike, what your last comment means. We all have to meet payroll or fail, not just banks. My comments were related to the TDK Extension and the prominent role the actors within the bank played.

I believe several local banks appeared on the Feds model (whether you agree with the model or not is another story) of what a bank would look like if it was in trouble (degree of trouble based upon the model).

The bailout cash is meant for the big boys and the small local banks probably will not see a dime.

Your added comment regarding how interesting it would be to see those bank records, at least to me, smelled of trying to stir the pot of controversy.

Yes, each of the banks showed signs of stress and one did something without a big brother stepping in.

I have no bone to pick in this fight about honest banks, but I do believe that the federals and state did step in and demand input of capital!

I suppose you mean that the government gave them a chance to do right or they would take over the bank, correct?
They chose to input the capital.

Mike, if I were you I wouldn't defend the way any bank has made loans or capitalized their banks in order to get richer!

What they have done to us is unforgivable and I am afraid when the time is right, the people in charge of all banks will have to answer in court.

It is absolutely shameful.

Also as to payrolls being made---weren't you on a government payroll instead of making one? There certainly is nothing wrong with serving your country honorably, but that is much different than making payrolls.
I have done both extensively.

It seems that every mayor we have had has had chicken to fry! Why would you want that job?

Not all finance institutions need be lumped into one. My point is that the bank and its board is attempting to do right without being directed from on high. Further, casting dispersion does no good at any time.

Like you I have had the pleasure of more than one career. I have not and will not seek another public office, therefore, the chicken I fry will be mine.

Haven't you noticed by now that these bloggers are looking for something sinister in every news article or comment?

If they knew the history of all the banks that have ever been started in Fayette County, they would know that the investors were local business people. So what, if some of them are developers!!

Fayette State Bank, Peachtree National Bank, Fayette County Bank, Bank of Georgia, etc.
Almost everyone except Steve Brown understood that the actual business of Peachtree City was growth - at least through the 1990's. All that time - since 1959, the only thing fueling the Peachtree City economic engine was growth - new people, new industry, new jobs.

That's why Steve has trouble painting all developers as evil because before he came along - everyone was a developer or worked for one.

Not everyone was a developer or worked for one before Steve came along. They were farmers and merchants. I guess that's why the first bank was named Farmers & Merchants Bank.