presents presents Commercial Real Estate Loan Guaranty Enforcement y Maximizing Lender Recovery Upon Borrower Default A Live 90-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: Henry P. Lorber, Managing Director, Hays Financial Consulting , Atlanta Susan C. Tarnower, Counsel, Thompson Hine , Atlanta Stephen D. Peterson, Partner, McGuireWoods , Atlanta Kevin C Watters McGuireWoods Atlanta Kevin C. Watters, McGuireWoods , Atlanta Wednesday, August 18, 2010 The conference begins at: The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrations.
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Real Estate Finance: a ce I Is the Worst Yet th W t Y t to Come? Henry P. Lorber hlorber@haysconsulting.net 4
Mortgage Backed Securities Mortgage Backed Securities (CMBS) (CMBS) WWW.HAYSCONSULTING.NET 5
Estimated maturity profile of commercial mortgages in CMBS, bank and life company portfolios tf li CMBS - Fixed Rate CMBS - Floating Rate Insurance Company Bank/Thrift $350 $350 $300 Billions) $250 al Maturities ($ $200 $150 Annua $100 $50 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Deutsche Bank, Intex, Trepp Mortgage Bankers Association, Federal Reserve WWW.HAYSCONSULTING.NET 6
Why Special Servicers Look so Tired? 7 WWW.HAYSCONSULTING.NET Source: Trepp LLC
Short term fixed rate CMBS loans maturing through 2013 Amortizing Full IO Partial IO $30 ns ($bn) $25 Maturing Loan $20 $15 Balance of $10 $5 $0 2009 2010 2011 2012 2013 Source: Deutsche Bank, Intex, Trepp WWW.HAYSCONSULTING.NET 8
Estimated percentage of loans that do not qualify for refinancing: NOI Scenario 1 g Loans Maturing 2009-2012 Refinancing Requirement: LTV < 70 & DCSR > 1.3 % Not Qualifying % Not Qualifying Balance Loans Not Loans Not Property Type # Loans ($BB) Qualifying (#) Qualifying ($BB) (Loan Count) (Balance) Hotel 475 7.3 182 4.1 38.3 55.5 Industrial Industrial 1 189 1,189 5 8 5.8 330 330 2 2 2.2 27 8 27.8 37 9 37.9 Multi-family 3,793 24.4 2,220 18.9 58.5 77.3 Office 2,629 40.9 1,433 30.8 54.5 75.3 Retail 4,156 44.6 1,727 24.6 41.6 55.1 Multi Property 672 29.6 339 21.1 50.4 71.3 Other Other 1,545 1,545 12.0 12.0 639 639 8.7 8.7 41.4 41.4 71.9 71.9 Aggregate 14,459 164.7 6,870 110.3 47.5 66.9 * Maturity timing is estimated Source: Deutsche Bank, Intex, Trepp Mortgage Bankers Association, Federal Reserve WWW.HAYSCONSULTING.NET 9
The Banks The Banks WWW.HAYSCONSULTING.NET 10
Money Center Banks Concentration Ratios 8-26-09 Tot Lns & Lses Dom RE: Constr & Dom RE: Other Total Capital Const + Non- Over 300% Property Loans ($000) Owner CRE / (Incl Lns HFS) Land Dev is a problem Total R-B Cap ($000) ($000) ($000) 2010 Q1 2010 Q1 2010 Q1 2010 Q1 2010 Q1 Bank of America Corp. 1,024,966,633 34,134,100 36,151,906 219,907,662 32% BB&T Corp. 104,400,506 14,358,329 9,705,564 18,657,798 129% Bank of New York Mellon 45,503,000 246,000 653,000 17,399,000 5% Citigroup, Inc. 751,017,000 2,173,000 10,520,000 158,292,000 8% Comerica Incorporated 40,874,314 3,885,305 2,861,479 9,062,104 74% Capital One Financial Corp. 130,818,581 3,127,976 8,475,900 20,335,426 57% JPMorgan Chase & Co. 731,436,000 6,733,000 11,470,000 173,332,000 11% KeyCorp. 62,737,026 4,136,546 5,123,823 14,230,058 65% Marshall & Ilsley Corp 42,648,807 5,141,201 5,805,437 6,750,222 162% M&T Bank Corp. 51,444,041 4,788,091 8,644,787 7,982,167 168% PNC Financial Services Group 159,999,293 7,944,077 14,106,002 31,008,468 71% Regions Financial Corp 89,268,129 7,098,004 9,478,975 15,811,380 105% Synovus Financial Corp. 24,608,230 5,958,373 4,254,761 3,357,637 304% US Bancorp 191,140,000 12,257,000 17,227,000 30,858,000 96% Wells Fargo & Company 821,307,000 33,579,000 42,918,000 137,600,000 56% Average 90% WWW.HAYSCONSULTING.NET 11
Concentration Ratios by Banks over $1 Billion Over 300% is a problem 329% * Above $500 Million Assets Average: 329% 281% * Median: 281% TO TOTAL ASSE ASSETS 2Q-2010 -2010 CRE Conc ncen entr tration ation Bank Cha Ban Charter Cit ity ($000) ($000 as as a a % of capita % of capital SunTrust Bank Atlanta 160,508,913 64% Synovus Bank Columbus 31,990,604 285% United Community Bank Blairsville 7,640,739 270% State Bank and Trust Company Macon 2,597,324 157% Ameris Bank Moultrie 2,420,096 163% Community & Southern Bank Carrollton 1,881,660 139% Fidelity Bank Atlanta 1,880,785 133% Georgia Bank & Trust Company of Augusta Augusta 1,404,460 283% Brand Banking Company Lawrenceville 1,254,914 337% Colony Bank Fitzgerald 1,249,351 332% Park Avenue Bank Valdosta 1,111,667 685% * Without SunTrust WWW.HAYSCONSULTING.NET 12
Concentration Ratios by Asset Size - Continued Over 300% is a problem Above $500 Million Assets Average: 329%* 329%* Median: 281%* 281%* 2Q-2010 -2010 CRE Concentr tration ion Bank Charter Bank Charte Bank Charter Bank Charte City City City City Total Assets Total Assets ($00 Total Assets ($00 Total Assets ($000) ($000) as a % as a % of capita f f capital l l Atlantic Southern Bank Macon 911,771 936% First Georgia Banking Company Franklin 801,670 551% Atlantic Capital Bank Atlanta 800,233 157% Darby Bank & Trust Company Darby Bank & Trust Company Vidalia Vidalia 696 625 696,625 457% 457% Farmers & Merchants Bank Lakeland 632,767 360% First Chatham Bank Savannah 596,244 443% Pinnacle Bank Elberton 591,323 152% First State Bank Stockbridge 580,161 658% Northwest Georgia Bank Ringgold 574,777 342% PeoplesSouth Bank Colquitt 540,771 172% First Bank of Georgia Augusta 490,689 381% Gwinnett Community Bank Duluth 489,014 636% Coastal Bank Savannah 482,420 363% First American Bank and Trust Company Athens 473,309 176% Peoples Bank Winder 447,185 1056% Southeastern Bank Darien 435,843 231% PrimeSouth Bank PrimeSouth Bank Blackshear Blackshear 430,370 430,370 289% 289% WWW.HAYSCONSULTING.NET 13
Concentration Ratios by Asset Size - Continued Over 300% is a problem Below $500 Million Assets Average: 329%* Median: 281%* 2Q-2010 -2010 CRE Conc ncen entr tration ation Bank C nk Char arter ter City TOTAL OTAL A ASSETS TS ($000) $000) as a % of capital tal Northeast Georgia Bank Lavonia 425,459 168% Heritage Bank Jonesboro 410,316 501% Habersham Bank Clarkesville 409,927 899% Thomasville National Bank Thomasville 407,362 54% Citizens Trust Bank Atlanta 393,980 232% Bank of Georgia Peachtree City 380,002 611% Bartow County Bank Cartersville 379,911 521% McIntosh State Bank Jackson 378,866 651% Community Bank of the South Smyrna 376,319 363% Bank of Upson Thomaston 373,330 300% Peoples Bank & Trust Buford 372,400 472% Metro City Bank M t Cit B k D Doraville ill 357 087 357,087 253% 253% Piedmont Bank Lawrenceville 356,409 400% Douglas County Bank Douglasville 354,855 613% Atlanta Business Bank Atlanta 353,704 230% Quantum National Bank Quantum National Bank Suwanee Suwanee 351 168 351,168 192% 192% WWW.HAYSCONSULTING.NET 14
Contact Us Hays Financial Consulting, LLC Henry P. Lorber Director of Real Estate Practice E mail: E-mail: hlorber@haysconsulting.net Phone: (404) 926-0056 Address: Hays Financial Consulting LLC Hays Financial Consulting, LLC Atlanta Financial Center 3343 Peachtree Road NE Suite 200 Atl Atlanta, GA 30326-1420 t GA 30326 1420 WWW.HAYSCONSULTING.NET 15
Section I – Overview of Commercial Real Estate Loan Guaranties and Their Peculiarities i d h i li i i Please print and follow the PDF handout, “Tarnower – Guaranty Enforcement,” during this portion of the presentation. The handout is accessible under the “Handouts” tab in the “Conference Materials” section on the left panel of your screen and also at the following link: http://www.straffordpub.com/products/commercial ‐ real ‐ estate ‐ loan ‐ guaranty ‐ enforcement ‐ 2010 ‐ 08 ‐ 18. Presented by: Susan C. Tarnower Thompson Hine LLP 1201 West Peachtree Street 1201 West Peachtree Street Suite 2200 Atlanta, Georgia 30309-3449 T: 404.407.3651 F 404 541 2905 F: 404.541.2905 susan.tarnower@thompsonhine.com
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