Terranova Assists Strained Community Banks with Distressed Assets

""The Terranova Group"":http://www.terranovagroup.com/, a Greenville, South Carolina-based provider of specialized asset management and disposition services, has launched a program to purchase troubled assets from the portfolios of community banks while raising capital to support the banks' stability and recovery.

After conducting an analysis of a bank's REO portfolio and nonperforming assets, Terranova will advise and execute a disposition strategy in which the troubled assets are acquired from the bank's portfolio.

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""Troubled assets accrue massive costs associated with upkeep and overhead-about 1.5 points per month,"" said Rob Haney, the Terranova Group's CEO. ""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.""

According to Haney, banks are not equipped to move REO properties, and it can take up to two years 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,"" Haney explained.

In conjunction with purchasing distressed assets, Terranova has established partnerships with members of the investment banking community to enhance the bank's capital position, the company explained in a statement.

""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,"" Haney said. ""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.""