2023 Annual report / State of Georgia, Department of Banking and Finance.

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State of Georgia
Department of Banking and Finance
ANNUAL REPORT
For Year Ending December 31, 2023
Brian P. Kemp Governor
Kevin B. Hagler, CEM Commissioner

Table of Contents

Message from the Commissioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Financial Institution Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

State-Chartered Banking Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

State-Chartered Bank Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . .

6

State-Chartered Credit Union Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

State-Chartered Credit Union Financial Summary . . . . . . . . . . . . . . . . . . . . . .

8

Examination Districts and Work Areas (Map) . . . . . . . . . . . . . . . . . . . . . . . .

9

Non-Depository Financial Institution Supervision . . . . . . . . . . . . . . . . . . . . .

10

Mortgage Licensee Statistics . . . . . . . . . . . . . . . . . . . . . . . .

10

Money Service Businesses Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Installment Lender Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

Fiscal Year Receipts and Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . .

13

Summary of Activities for State-Chartered Financial Institutions and Other Entities . . .

14

Regulated by, Licensed by, or Registered with the Department of Banking and Finance

During 2023

Benefits of the State Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

Message from the
Commissioner
Shockwaves rippled throughout the overall banking environment in early 2023 when three of the largest bank failures in this country's history occurred in rapid succession. While all three failures occurred far from Georgia and involved unconventional banking models catering to fintech and venture capital firms, they highlighted liquidity and interest rate risks that had risen quickly throughout the banking system due in large part to aggressive interest rate hikes by the Federal Reserve which started roughly one year before the first failure. The failures also brought to the forefront the compounding, and in these cases devastating, effect social media can play on otherwise manageable risk exposures. Notwithstanding these national concerns, I am pleased to report that banking in Georgia continued to perform well throughout 2023, reflecting the robust economy of our state, and the stability of the traditional community banking model.
The number of state-chartered banks headquartered in Georgia declined slightly to 117 due to merger and acquisition activity, while total assets remained $134 billion. State-chartered credit unions also performed well throughout the year and saw a decline to 39 charters as a result of two intrastate mergers. Total assets in the credit union portfolio remained a robust $31 billion.
Relatively high interest rates and a limited supply of available housing drove a 21% decline in the total number of residential mortgage licenses after several years of unprecedented growth in a historically low-rate environment. The seller of payment instrument license was absorbed into an expanded money transmitter license in 2023, and the combined license showed a modest decline year-over-year due primarily to difficulties in the virtual currency space after several high-profile scandals and failures. The Department saw a slight increase in the number of installment lender licenses on a net basis; however, the traditional brick and mortar business model continues to show a consolidating trend with most new licensing activity driven by the online "buy now pay later" model. The check cashing industry continues an extended trend of fewer overall licenses.
The Department's collaborative efforts with representatives of the banking, credit union, and nondepository industry resulted in the enactment of the Department's housekeeping bill (HB 55, Bruce Williamson of the 115th) for the 2023 legislative session. The bill revised statutory provisions related to the majority of entities regulated by the Department banks, credit unions, trust companies, installment lenders, mortgage lenders and brokers, and money service businesses. Of particular interest, the bill significantly modernizes and updates the foreign bank law in Georgia to make the Georgia license competitive with the licenses offered by the Office of the Comptroller of the Currency and the various other states. In addition, a number of the changes in the bill for money service businesses were related to incorporating provisions from the Money Transmission

Page 1

2023 Annual Report

Message from the
Commissioner
Modernization Act ("Act") developed by the Conference of State Bank Supervisors and the money service business industry. The Act was put out in two phases and, after adopting provisions from the first phase last year, the bill incorporated the revisions proposed in the final phase involving primarily definitions, exemptions, and prudential standards. Adopting the provisions of the Act will increase harmonization and sharing between the various states as it relates to the regulation of money transmission.
Kevin B. Hagler, CEM Commissioner
The remainder of this page intentionally left blank.

2023 Annual Report

Page 2

Organizational Structure
The Department of Banking and Finance (Department) is the state agency that regulates and examines Georgia state-chartered banks, holding companies, credit unions, and trust companies. The Department also has responsibility for the supervision, regulation, and examination of merchant acquirer limited purpose banks (MALPBs) chartered in Georgia.
In addition, the Department has regulatory and/or licensing authority over mortgage lenders, mortgage brokers, mortgage processors, and mortgage loan originators, as well as installment lenders, check cashers, money transmitters, and foreign banking organizations conducting business in Georgia.
The Department is headed by a Commissioner who is appointed by the Governor to serve a fouryear term. Functionally, the Commissioner reports directly to the state's Chief Financial Officer, who reports to the Governor. Commissioner Kevin B. Hagler is assisted by Senior Deputy Commissioner Oscar "Bo" Fears. The Department's operations are divided along functional lines: Financial Institution Supervision, Non-Depository Financial Institution Supervision, Legal Affairs, and Administration. Each of these divisions is headed by a Deputy Commissioner.

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2023 Annual Report

Financial Institution Supervision
STATE-CHARTERED BANKING STATISTICS At the end of 2023, the number of Georgia state-chartered banks totaled 117, representing a net decrease of two banks from the previous year. The net decrease resulted from two state-chartered banks being merged or acquired out of existence. A five-year financial performance summary for Georgia state-chartered banks can be found on Page 6 of this Report.

BANK HOLDING COMPANIES A total of 101 bank holding companies were supervised by, or registered with, the Department at the end of 2023, representing a net change of 1 from 100 in the previous year.
TRUST COMPANIES
Trust activities continue to be conducted principally by bank trust departments. There is one statechartered non-depository trust company in Georgia that is an independent trust company (Reliance Trust Company, Atlanta).
FOREIGN BANKING ORGANIZATIONS
Five international representative offices were registered with the Department at the end of 2023. This number remained unchanged from the previous year.

2023 Annual Report

Page 4

Financial Institution Supervision
STATE-CHARTERED BANKING STATISTICS As shown in the table below, Georgia state-chartered commercial bank assets under supervision remained fifteenth in the country by the end of 2023 (savings banks not included in totals below). The table is sorted by total state charter assets and dollar figures are in millions.

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2023 Annual Report

Financial Institution Supervision
State-Chartered Bank Financial Summary

2023 Annual Report

Page 6

Financial Institution Supervision
STATE-CHARTERED CREDIT UNION STATISTICS
The number of Georgia state-chartered credit unions decreased by two to a total of 39. Through year-end 2023, state-chartered credit union assets declined by roughly $530 million to roughly $31 billion, as compared to approximately $4 billion in total assets for federally-chartered credit unions in Georgia. There are now two fewer state-chartered credit unions compared to federally-chartered credit unions in Georgia. A five-year financial performance summary for Georgia state-chartered credit unions can be found on Page 8 of this Report.

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2023 Annual Report

Financial Institution Supervision
State-Chartered Credit Union Financial Summary

(dollar amounts in millions) Number of institutions reporting

12/31/2023 12/31/2022 12/31/2021 12/31/2020 12/31/2019

39

41

45*

49

48

ASSETS
Cash & Equivalents Total Investments Total Loans (Allowance for Loan & Lease Losses) Land And Building Other Fixed Assets NCUSIF Deposit All Other Assets TOTAL ASSETS
LIABILITIES & CAPITAL
TOTAL LIABILITIES TOTAL SHARES & DEPOSITS Other Reserves Undivided Earnings TOTAL EQUITY TOTAL LIABILITIES, SHARES, & EQUITY

2,090 6,610 20,737 (197)
364 187 249 990 31,030

1,999 7,384 20,618 (136)
324 138 254 979 31,560

4,033 7,265 17,124 (154)
281 107 233 728 29,619

4,203 4,463 16,288 (165)
281 87 198 620 25,975

1,716 2,889 15,609 (118)
254 85 169 550 21,154

1,646 26,386
(504) 3,502 2,998 31,030

1,976 26,905
(630) 3,309 2,679 31,560

433 26,106
(38) 3,118 3,080 29,619

399 22,589
67 2,920 2,987 25,975

487 17,896
9 2,762 2,771 21,154

INCOME & EXPENSE
Loan Income Investment Income Non-interest Income Total Employee Compensation & Benefits Other Non-interest Expenses Provision for Loan/Lease Losses Cost of Funds
NET INCOME (LOSS)
*One state charter converted in 2022 but filed the 2021 yearend Call Report as a federal charter.
2023 Annual Report

1,025 202 408 (500) (453) (132) (340)
210

769 135 402 (460) (414) (39) (113)
280

677 61 380 (411) (379) (24) (89)
213

710 65 344 (390) (362) (128) (122)
116

695 92 332 (361) (350) (72) (128)
208

Source: NCUA Financial Performance Reports

Page 8

Financial Institution Supervision
Examination Districts and Work Areas

The above map is primarily for the purpose of exhibiting geographical district boundaries based on current institution assignments. However, some districts may have institutions assigned in other areas of the state due to multibank holding companies and/or district workload and scheduling issues. Note: District 3 was merged into Districts 1 and 2 on December 31, 2010.

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2023 Annual Report

Non-Depository Financial Institution Supervision
MORTGAGE LICENSEE AND REGISTRANT STATISTICS Article 13 of Chapter 1 of Title 7 of the Official Code of Georgia Annotated (O.C.G.A.) requires all persons who transact business as a residential mortgage lender, broker, processor or loan originator be licensed or registered with the Department, unless they are exempt. At the end of 2023, active mortgage licensees and registrants totaled 29,436, representing a net decrease of 7,776 or roughly 21 percent from the previous year. The decrease is largely due to the decrease in demand for mortgage loan originator licenses.

2023 Annual Report

Page 10

Non-Depository Financial Institution Supervision
MONEY SERVICE BUSINESSES STATISTICS Unless otherwise exempt, anyone that engages in the cashing of payment instruments for a fee must be licensed by the Department under Article 4A of Title 7 of the O.C.G.A. Unless otherwise exempt, anyone that engages in money transmission must be licensed by the Department under Article 4 of Chapter 1 of Title 7 of the O.C.G.A. At the end of 2023, the number of money service businesses (MSB) licensed by the Department totaled 989 a net decrease of 56 licensees from the previous year. The Sellers/Issuers of Payment Instruments license type was consolidated into Money Transmitters in 2023.

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2023 Annual Report

Non-Depository Financial Institution Supervision
INSTALLMENT LENDER STATISTICS Chapter 3 of Title 7 of the O.C.G.A. requires a person that makes consumer installment loans of $3,000 or less to be licensed with the Department unless such person is expressly exempt from licensure. At the end of 2023 the number of installment lenders licensed by the Department totaled 169, a net increase of 4 licensees from the previous year.

2023 Annual Report

Page 12

Administration
FISCAL YEAR 2023 RECEIPTS AND DISBURSEMENTS

NOTE: Revenues of the Department are collected and remitted to the Office of the State Treasurer. The level of the Department's expenditures is subject to the state's budgetary process.

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2023 Annual Report

SUMMARY OF ACTIVITIES
FOR STATE-CHARTERED FINANCIAL INSTITUTIONS AND OTHER ENTITIES REGULATED BY, LICENSED BY, OR REGISTERED
WITH THE DEPARTMENT OF BANKING AND FINANCE DURING 2023

FINANCIAL INSTITUTION, REGISTRANT, OR LICENSEE

Totals 12/31/2022

Opened Registered Licensed

Converted

Merged

Closed Liquidated Dereg-
istered

Totals 12/31/2023

BANKS

119

0

0

-2

0

117

TRUST COMPANIES

1

0

0

0

0

1

MALPBS

0

0

0

0

0

0

CREDIT UNIONS

41

0

0

-2

0

39

BANK HOLDING COMPANIES (Supervised and/or Registered)

100

3

0

0

SELLERS/ISSUERS OF PAYMENT INSTRUMENTS**

145

12

-138

0

MONEY TRANSMITTERS

129

18

138

0

-2

101

-19

0

-36

249

CHECK CASHERS

771

86

0

0

-117

740

FOREIGN BANK AGENCIES AND BRANCHES

0

0

0

0

0

0

DOMESTIC INTERNATIONAL BANKING FACILITIES

0

0

0

0

0

0

FOREIGN BANK REPRESENTATIVE OFFICES

5

0

0

0

0

5

INSTALLMENT LENDERS

165

21

0

MORTGAGE BROKERS OR REGISTRANTS

1,047

336

0

MORTGAGE LENDERS OR REGISTRANTS

899

125

0

0

-17

169

0

-246

1,137

0

-98

926

MORTGAGE LOAN ORIGINATORS

35,260

5,024

0

0

-12,911

27,373

** The Sellers/Issuers of Payment Instruments license type was consolidated into Money Transmitters in 2023. 2023 Annual Report

Page 14

Benefits of the State Charter
$ Local, Responsive, and Timely Decision Making
State-chartered financial institutions have access to local decision makers in Georgia who are familiar with their unique marketplace and competitive environment. Decision makers in our Atlanta office and in field offices located around the state are easily reached for timely responses to questions and concerns from state-chartered institutions.
$ Local Community and Market Knowledge
Examination staff live in the districts where they work and are familiar with the local markets and communities. The Department's culture promotes decision-making by staff that have first-hand knowledge of your financial institution but with quick access for escalation to the Commissioner, when necessary, to ensure responsive and timely action on issues of concern to you.
$ Effective Regulation and Supervision
The Commissioner believes that all financial institutions deserve right-sized regulation and supervision scaled to their size, complexity, and risk profile. The Department is nationally accredited through the Conference of State Bank Supervisors (CSBS) and the National Association of State Chartered Credit Union Supervisors (NASCUS) to ensure that "best practice" regulation and supervision principles are implemented. Supervisory activities of the Department are conducted in coordination with federal and other state regulators, as applicable, through joint examinations and interstate cooperative agreements to deliver a seamless supervisory experience that minimizes duplication and regulatory burden.
$ Efficient Regulation and Supervision
Annual regulatory fees and assessments to cover costs of the Department's regulation and supervision activities are typically far less than those charged to comparable federally-chartered financial institutions.
$ Powers Comparable or Superior to Federal Charters
State-chartered financial institutions frequently enjoy powers that equal or exceed those available to federally-chartered financial institutions. To maintain competitiveness of the state charter, the Department routinely assesses laws and regulations, in coordination with the industry and our federal regulatory peers, to identify opportunities to expand powers or reduce unnecessary regulatory burden. O.C.G.A. 7-1-296 and 7-1-671 provide that a state-chartered bank or credit union may exercise any power available to a similar federally-chartered financial institution so long as the bank or credit union provides advance notice and the Department offers no objection to the exercise of such power.
Firm, but fair, right-sized regulation and supervision are guiding principles for promoting safe, sound, competitive
financial services in Georgia.

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2023 Annual Report

Our Mission is to promote safe, sound, competitive financial services in Georgia through innovative,
responsive regulation and supervision.
Our Vision is to support vibrant economic growth and prosperity in Georgia.

2990 Brandywine Road, Suite 200 Atlanta, Georgia 30341-5565
Phone: (770) 986-1633 Toll-free: (888) 986-1633

DEPARTMENT OF BANKING AND FINANCE
Visit us on the web at: dbf.georgia.gov