The widely expected increase in bank failures through the next year is going to bring a new investor to the industry: private equity.

As failures mount, the largely secretive investment capital better known for fueling enormous mergers and acquisitions in other sectors will begin moving into the beleaguered financial sector, according to bankers and people who work regularly on financial-sector deals.

Private equity firms—with billions in their coffers across the U.S.—have been considered one of the potential saviors of the banking sector, bringing capital that can stabilize the industry and, by extension, assist in speeding an economic recovery.

“There’s no question the demand for banking services is going to outlast this downturn,” said David Panton, a partner at Navigation Capital Partners Inc. “And there are going to be opportunities.”

The Atlanta-based private equity firm has begun searching for a bank investment to add to its current company portfolio that includes non-bank specialty finance companies.

But bankers and industry insiders are torn on the role private equity firms will play in acquiring distressed banks throughout Atlanta.

Some are hoping it will save the industry.

Others see it as the next group of vultures hovering over weakened institutions.

“The banks are looking to private equity, but I can’t describe them as the savior. They’re opportunists,” said Tom Powell, banking attorney with Troutman Sanders LLP, who works with Georgia community banks. “It’s some of the toughest and shrewdest money out there.”

Most expect a wave of private equity deals to begin later this summer, but gain speed throughout 2010 and beyond as bank failures accelerate.

The reason for the delay in deals, industry insiders said, is simple.

Failed banks are still cheaper to acquire, and less risky, than still-operating distressed institutions. Regulators are also looking at adopting new rules to allow private equity groups to become more involved in bidding for failed banks and capitalizing them as new institutions.

“They don’t move as speedily as you might think,” said Chip MacDonald, a Jones Day banking attorney based in Atlanta. MacDonald is working on several private equity deals for banks, but declined to provide specifics.

To date, only two private equity deals for failed institutions have been completed nationwide. Coral Gables, Florida-based BankUnited’s operations were acquired earlier this summer by a consortium of private equity buyers, and IndyMac Bank’s operations were bought last year under a similar deal.

Private equity firms have been poking at some Georgia banks during the past year.

The Carlyle Group, which was part of the BankUnited deal, was a bidder for Silverton Bank’s operations, before that bank failed this spring.

The Cumberland, Georgia-based correspondent bank continued operating under the Federal Deposit Insurance Corp.’s watch for two weeks as private equity bidding on the failed bank continued, but its operations were then shuttered when a deal couldn’t be struck.

Cincinnati-based FSI Group LLC invested roughly $40 million in Macon, Georgia-based Security Bank, which has significant operations throughout Atlanta’s northern suburbs.

On July 2, the FDIC released preliminary guidelines for any private equity acquisition of a failed bank.