The Terranova Group Launches Capital Development Solution to Assist Strained Community Financial Institutions

GREENVILLE, S.C.--(BUSINESS WIRE)--The Terranova Group, a leading provider of specialized asset management and disposition services, today launched a program to simultaneously purchase troubled assets from a community bank’s portfolio, while raising much needed capital to support the bank’s goal of continued stability and recovery.

Following a thorough analysis of the bank’s REO portfolio and nonperforming assets, The Terranova Group will advise and execute a disposition strategy in which the identified troubled assets are acquired from the bank’s portfolio. Terranova has established partnerships with members of the investment banking community to enhance the bank’s capital position, in conjunction with the purchase of distressed assets. The final result is an improved balance sheet, and a bank that is better positioned for growth.

The Terranova Group’s CEO, Rob Haney, said, “Troubled assets accrue massive costs associated with upkeep and overhead – about 1 ½ points per month. Physical deterioration alone from quarter to quarter results in diminishing returns and a decrease in capital ratios. Many community banks need to raise capital, but cannot do so until they have a clean balance sheet. Banks simply are not equipped or poised to move REO properties. It can take up to two years of continued management by the bank to move one troubled asset. Our capital injection program is designed to cleanse the bank’s balance sheet in a much more timely and efficient manner.”

To date, approximately 550,000 of the nation’s foreclosures have been processed. Analysts estimate there are approximately 2.5 million homes currently in the foreclosure process with an additional 2.5 million non-performing mortgages in which the borrower is 90 days or greater past due. With increasing regulatory pressure to convert non-performing loans into foreclosures, hundreds of community banks are facing a dismal set of circumstances in which downgraded values will result in an immediate need to raise capital to maintain appropriate ratios as established by the FDIC.

Haney continued, ”Unfortunately, in today’s market, it is increasingly difficult to raise capital if the bank has a disproportionate amount of distressed assets in its portfolio. As a result, most community banks have been forced to take a 'wait-and-see' approach. Time is of the essence and unless immediate action is taken, many community banks will face insurmountable capital constraints.”

About The Terranova Group

The Terranova Group is a full service third-party provider of outsourced asset management, stabilization, construction completion and disposition services designed to help lenders quickly dispose of distressed assets, while leveraging a ground-engaged team of real estate professionals to garner the highest possible value for the property. Additionally, Terranova has the capacity to leverage substantial access to private equity to the acquisition of surplus assets. The Terranova Group executive team brings more than 100 years of combined construction, development and real estate experience to its endeavors.