Nearly 30 percent of all banks in Georgia failed a “stress test” conducted by New York-based analytics firm Trepp.
Of 210 Georgia banks tested by Trepp, 61 of the institutions failed the stress test. Banks that failed the stress test would need an additional $975.9 million in capital to weather economic downturn, the Atlanta Business Chronicle reports.
Georgia took second place in the nation in the third quarter of last year, with 29.2 percent of banks failing the test. Florida, however, took the top slot, with 31.8 percent of its banks failing the stress test.
Trepp analyzed banks based on whether the institutions could maintain minimum capital ratios during a period of economic distress. The controversial Dodd-Frank Act requires many banks to prepare for economic crises by retaining adequate capital cushions, according to the Atlanta Business Chronicle.
Other states with the highest fail rates include South Carolina, North Carolina, Washington, Tennessee, Illinois, Minnesota and Montana. States with the lowest fail rates include West Virginia, Indiana, Mississippi, Ohio, Massachusetts, South Dakota, Texas, Iowa and Louisiana.