$10,000,000+ in problem assets resolved in 2014
Examples of why we were able to accomplish this number …
- Client owned 6 Office Condos (OREO) which had been on its books for 10 months. By the end of the first Quarter of 2014, all 6 had been sold, at or above par, with one achieving a slight gain on sale. NPA’s were reduced by over $600,000. The sales were enabled by AMG’s successful efforts to change the municipal zoning on the units, resulting in their increased marketability, and thus their sale.
- Client owned a Convenience Store (OREO) and had hired an outside company to manage the store for the bank’s benefit. At the time AMG took over this account, the store was costing the bank approximately $150,000 annually in operating losses and carrying costs. Within six months, AMG had arranged for the sale of the store at par ($950,000) to a buyer who qualified with the Client to purchase the store via an SBA-Guaranteed loan. The SBA loan was subsequently sold by the Client for a premium. Not only did the Client rid itself of a sizable problem asset, but the net change to the Client’s annual earnings as a result of this one transaction was over $300,000.
- Client had a non-performing loan relationship secured by 5+/- acres of commercial property in North Georgia. The bank had sustained substantial write-downs on the relationship, had placed it on non-accrual, and was beginning to bring a lawsuit against the borrower for non-payment. Negotiations led by AMG resulted instead of a sale of the underlying notes along with their collateral to an independent third party. The result was $600,000 of the asset was paid. A net Gain on Sale of approximately $175,000 was able to be accrued to the bank’s Capital. And the potentially extensive legal costs that could have been associated with a foreclosure were avoided.
- Client had a loan relationship totaling approximately $350,000, secured by a number of older, dilapidated rental houses. Obligor had ceased communication with the bank, and the bank was about to proceed with foreclosure which would have resulted in a minimum of $100,000 in write-downs and losses to the bank. Also, any deficiency amount remaining would be put on non-accrual. AMG was able to negotiate with the borrower to bring the majority of the relationship current, thus avoiding placing $250,000 on non-accrual.
Over the past year, AMG has been successful in helping our client banks to achieve over 51% NET reductions in Non-Performing Assets. 75% of the reduction was achieved via collections, pay-offs, OREO sales at or above par, and non-accruing loans returned to accrual.