Bank to auction $100 million in troubled assets - Atlanta Business Chronicle:

fixyruw.wordpress.com
The Alpharetta-based bank — one of the metro’s largest with $5.7 billion in assets and a key subsidiaryof Columbus-basede — is selling the properties to privatw investment groups, with the dealxs expected to close by month’s end. The auction is the larges conducted so far by Bank ofNortb Georgia, which has been hard-hit by the real estat e downturn, and surpasses the scale of other sales of distresseed metro Atlanta property by Blairsville-based and smaller Bank of North Georgia has auctionecd off homes to the public periodically throughout the last The auction comes as banks across the country, from smal l community lenders to mammoth financial are struggling with how to liquidat toxic assets without pushintg the banks into insolvency.
It also signals Synovus Financiapl is continuing its aggressive sales of problem loans andrepossessexd property, if the price is During the company’s first-quarter earnings call, CEO Richard Anthony said the auctionb process would accelerate companywide. “We will have a greater levepl of exits from this portfolip over the nexttwo quarters,” he said, referrinf to Synovus’ problem loan portfolio. Frank Roedl, Bank of Nortj Georgia’s executive vice president forcorporated banking, is overseeing the auction and said the liquidation is the next step in the bank’w “ongoing balance sheet management effort.
” The bank is sellinvg primarily large tracts of developed lots and raw he said. The auctioj process began in May, when the bank circulated a list of distressexd assets to30 bidders, he Each of the bidders was a pairing of strategic buyersx with private money behind them, and the firm’s sizes range from $20 million to $200 million in total capital under management. He did not name specific “We wanted to contact larger poolws of money forthis auction,” Roedl said. But after the initialp solicitation, interest in the auction exploded.
“Wre were inundated with phonse calls,” he said, noting the bank now has multiple biddersd for the bulk of the distressed portfolio availabler inthe auction. Initial bids were due by late May, and an extendesd due-diligence period is ongoingg for bidders, with the deals scheduled to close byJune 30. Roedlk could not provide specifics on how much will be sold and how many bids for propertiexs and loans the bank ultimateltreceived — he said some of that dependws on final bids and whichu currently proposed deals actually close. He notedx the bank is holding finished houses in reserv e for short sales and other publifforeclosure auctions.
“We’ve had success with This was designed to get some of these larger issuesd off thebalance sheet,” he If the auction meets the early estimates of a $100 millionj liquidation, it could remove as much as one-third of the bank’s current real estate-based loan according to its first-quarter report to the Withijn the last year, the bank’s non-accrual loans have increase d 51 percent to $316 and the amount of foreclosed real estate increase d 29 percent from $24 millionn at the end of first-quarter 2008 to $31 millionn on March 31, 2009.
The bulk of the bank’ds loan problems continue to be residential construction and landdevelopmentg loans, which account for $230 millio n of the total non-accrual loans.