Property auctioned across Northwest North Carolina for Yadkin Valley Financial
Jan 25, 2013 (Menafn - Winston-Salem Journal - McClatchy-Tribune Information Services via COMTEX) --The flushing of foreclosed real estate from the Yadkin Valley Financial Corp. loan portfolio will include the auctioning of 56 vacant residential lots or acreage in six northwest North Carolina counties.
The Elkin bank has hired Iron Horse Auction Co. Inc. to conduct auctions in three geographic areas in North Carolina, with some spillover into South Carolina.
The auction for the northwest N.C. properties, primarily residential mountain lots in developments, begins online at 8 a.m. Feb. 8 and concludes at 2 p.m. Feb. 15. Although bidding will take place at www.ironhorseauction.com, in-person bids can be made at Wilkesboro Civic Center beginning at 1 p.m. Feb. 15.
All properties will sell "as is" with no minimum price limitations, with the goal of completing the transactions by March 20. The lots are being sold free and clear of all liens, with the bank paying all owed taxes up to the clos-ing date.
"This is the largest auction we've done for a community bank," Sonny Weeks, an auctioneer with Iron Horse. Iron Horse also has held auctions for other banks serving North Carolina, including BB&T Corp.
Weeks said most of the properties are "pad ready" with utility hook-ups in place. Some lots within a city may have water and sewer hookups.
Weeks said most of the lots are being auctioned because either developers or real-estate investors could not keep up with loan payments to Yadkin Valley, with the bank eventually foreclosing on the properties. In many in-stances, the bank held the loans for several years before foreclosing.
"It's hard to say how much cents on the dollars the auctioning will yield because there are so many diverse properties in the mix, some of which are in relatively new developments," Weeks said. "The bank has written off all the properties to have the ability to sell them at any price."
Most banks, large and small, have struggled with similar real-estate development scenarios, whether residential or commercial, since the financial crisis began in late 2007.
In some instances, the inability to limit losses related to the nonperforming real-estate loans made banks vulner-able to financial collapse or left them in a position of not being able to turn down a purchase offer below a prop-erty's historic value.
The auction represents the latest financial step in Yadkin Valley's pursuit of remaining an independent bank.
The bank recently raised 45 million in capital from several institutional investors, as well as from members of its board of directors and management team, from a sale of Series A convertible preferred stock.
It said Thursday as part of its fourth-quarter earnings report that it set aside 31.5 million in its provision for loan losses to accelerate the disposal of nonperforming loans.
The 45 million is being used to help complete the disposition of 66.5 million in certain assets by March 31. The move is a dose of medicine to move 50 million in classified loans and 16.5 million in bank-owned real es-tate.
"We have successfully sold 49 million in problem loans and other real estate owned as of Dec. 31, and we have taken additional write downs of 14 million," Joseph Towell, the bank's chief executive and president, said Thurs-day.
"We achieved our internal goals relative to the reductions we took on these assets and the prices at which they were sold. This asset disposition yields dramatically improved credit metrics."
Chris Marinac, an analyst and research director for FIG Partners LLC of Atlanta, said Yadkin Valley's entire loan portfolio was marked to a 60 percent loss from its original value.
"The bank needed the new capital to not only take the asset write-down, but also to stay on track with TARP re-payment at a future date," Marinac said. "We think investors are looking for a 20 percent-plus return on their in-vestment."
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Up for auction
Wilkes County has the most lots for sale at 26 involving five developments, following by 14 in Ashe County within five developments, nine in Watauga County within four developments, five in Avery County within one development and one lot each in Alexander and Caldwell counties.
Included are vacant lots in Beech Mountain (5), Boone (4), Deep Gap (2), Ferguson (1), Fleetwood (10), Hidden Mountain (3), Millers Creek (2), Moravian Falls (18), North Wilkesboro (5), Peak Creek (2) and Todd (1).
Iron Horse also is auctioning for Yadkin Valley waterfront lots at Lake Norman, acreage and commercial properties in the Charlotte area, residential lots in the central and eastern parts of the state and residential and commercial lots in South Carolina.
Altogether, the auction involves 149 properties in 17 N.C. counties and 21 properties in three S.C. counties. Iron Horse said the current combined tax appraisal for the properties is more than 10 million.
Source: Iron Horse Auction Co.
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