Another Friday, another slew of Georgia banks seized by regulators.
Security Bank of Jones County in Gray, Ga.; Security Bank of Houston County, Perry; Security Bank of Bibb County, Macon; Security Bank of North Metro, Woodstock; Security Bank of North Fulton, Alpharetta; and Security Bank of Gwinnett County, Suwanee, were all seized by the Federal Deposit Insurance Corp.
While the six were subsidiaries of a single company, Security Bank of Macon, which combined was Georgia’s fourth-largest lender, they represent the latest in the wave of bank failures to hit the Peach State.
Since the beginning of last year, some 20 Georgia banks have failed, more than any other state. Most of the Georgia failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation.
Security Bank, which operated 20 branches in middle and north Georgia, will be taken over by three veteran Georgia bankers led by Joe Evans, former chief executive of Flag Financial Corp., The Atlanta Journal-Constitution reported.
More bad news for the unemployed, particularly the young and undereducated: the federal minimum wage increases from $6.55 to $7.25 today.
The boost will raise the income level of many Americans who are currently employed in minimum-wage, often entry-level positions, but unfortunately will also have several unintended consequences, according to the Heritage Foundation:
- Increased unemployment: As the price of labor increases, employer demand for labor decreases. The increase in the minimum wage will be felt most heavily in the fast food, hotel and independent retailing industries. “A 10 percent increase in the minimum wage is associated with a 1 percent decline in retail trade employment,” Heritage quotes Dr. Joseph J. Sabia, of American University.
- Reduced opportunity: Minimum wage jobs provide individuals the chance to gain work experience, which can eventually lead to increased productivity and higher wages. As minimum wage positions are reduced because employers can’t or won’t pay the higher rate, more entry-level workers go without opportunities. The majority of these are individuals under 25 years of age, according to Heritage.
“Raising the minimum wage will only decrease these workers access to entry-level positions, and deprive them of the opportunity to increase productivity and wages in the future,” Heritage writes.
About 6,000 people – mostly janitors, teenagers in fast-food jobs or unskilled laborers – in South Carolina earn minimum wage, according to the U.S. Bureau of Labor Statistics.
College of Charleston economist Frank Hefner told the Charleston Post and Courier that raising the minimum wage is more harmful than beneficial.
“Anytime you raise the minimum wage, you are going to create unemployment,” he said. “It drives other salaries up. Driving up salaries in the middle of a recession is not a good idea.”
Hefner told The Post and Courier that President Franklin D. Roosevelt tried it in the 1930s. “It drove the unemployment rate higher.”
By raising the minimum wage, employers also have to pay extra in federal taxes and workers’ compensation, he said.
“What if by raising the minimum wage, a person doesn’t get hired?” Hefner said. “It’s ambiguous as to how many people will lose their jobs. The theory tells us some will. …
“It’s feel-good legislation,” he added. “They think it’s a good idea. If it’s such a good idea, why don’t they raise it to $50,000?”
Former UCI Medical Affiliates Chief Financial Officer Jerry F. Wells Jr. pled guilty Thursday in federal court to criminal charges for falsifying eight of the company’s periodic reports filed with the US Securities and Exchange Commission.
During the plea hearing, Wells admitted he embezzled $2,967,382 between January 2003 and December 2008 from the Columbia, SC-based company.
He did so by using the company’s corporate credit card to pay personal expenses, preparing false expense reports and submitting them for reimbursement and submitting fraudulent check requests for non business expenses, such as construction work on his personal residences and payments on personal credit card accounts, according to information filed with the SEC.
Sentencing will take place after the US District Court reviews a report to be prepared by the US Probation Office.
Wells can receive up to five years imprisonment and a fine of $250,000 for each count. He will also be ordered to repay the money he stole from the company.
Wells’ misconduct was identified during an internal investigation conducted by the publicly traded company’s Audit Committee, beginning last December, after the company’s former independent registered accounting firm reported certain suspicious transactions.
On Dec. 17, 2008, the company’s board of directors terminated Wells.
Beach First National Bancshares lost nearly $4.9 million during the quarter ended June 30 and has posted a deficit of $9.8 million over the first six months of 2009.
That compares with a profit of $336,507 during the second quarter of 2008 and a $1.2 million gain during the first half of last year.
The Myrtle Beach, SC-based company’s provision for loan losses rose 34 percent between the first and second quarters of 2009, according to information filed with the US Securities and Exchange Commission.
Overall, provisions for loan losses were $14.9 million for the first six months of 2009, up from $6.4 million a year earlier.
Shares of Beach First rose 20 percent Thursday, up 40 cents to close at $2.41. The company’s 52-week high is $11.93 a share.