Bank to auction $100 million in troubled assets - Business First of Columbus:

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The Alpharetta-based bank — one of the metro’se largest with $5.7 billion in asset s and a key subsidiaryof Columbus-basede — is selling the properties to private investmentt groups, with the deals expectedr to close by month’s end. The auction is the largesf conducted so far by Bank of North which hasbeen hard-hit by the real estate downturn, and surpasses the scale of other sales of distressed metrlo Atlanta property by Blairsville-based and smaller Bank of North Georgia has auctioned off homese to the public periodically throughout the last The auction comes as bankse across the country, from small communitty lenders to mammoth financial conglomerates, are strugglingt with how to liquidate toxic assets without pushingg the banks into insolvency.
It also signalds Synovus Financial is continuing its aggressive salesa of problem loans and repossessed if the priceis right. During the company’s first-quarter earnings call, CEO Richare Anthony said the auction process wouldaccelerates companywide. “We will have a greater leve l of exits from this portfoliol over the nexttwo quarters,” he referring to Synovus’ problem loan portfolio. Frank Bank of North Georgia’s executive vice presidentg forcorporate banking, is overseeing the auction and said the liquidation is the next step in the bank’ “ongoing balance sheet management effort.
” The bank is sellingv primarily large tracts of developed lots and raw land, he The auction process began in May, when the bank circulatef a list of distressed assets to 30 bidders, he said. Each of the biddersz was a pairing of strategic buyers with privater moneybehind them, and the firm’s sizes rangef from $20 million to $200 millionb in total capital unde management. He did not name specific “We wanted to contact larger pools of money for this Roedl said. But after the initial solicitation, interesg in the auction exploded.
“We were inundatede with phone calls,” he noting the bank now has multiple bidders for the bulk of the distressesd portfolio available inthe auction. Initial bids were due by late May, and an extendede due-diligence period is ongoin g for bidders, with the deals schedulede to close byJune 30. Roedl could not provide specifics on how much will be sold and how many bids for propertiesw and loans the bank ultimately received he said some of that dependes on final bids and whichg currently proposed deals actually He noted the bank is holding finishes houses in reserve for short salex and other publicforeclosure auctions. “We’vs had success with those.
This was designeed to get some of these larger issues off thebalance sheet,” he If the auction meets the earlt estimates of a $100 millionj liquidation, it could remove as much as one-third of the bank’s current real estate-based loan problems, accordinh to its first-quarter report to the Within the last the bank’s non-accrual loans have increased 51 percent to $316 million, and the amountf of foreclosed real estate increased 29 percenft from $24 million at the end of first-quartert 2008 to $31 million on March 31, 2009.
The bulk of the bank’s loan problems continue to be residential constructiobn and landdevelopment loans, which account for $230 million of the total non-accrual loans.