Sevierville's Mountain National exploring strategic transactions - Knoxville News Sentinel
Under pressure from regulators, the parent company of Mountain National Bank is exploring potential deals to obtain additional capital.
Sevierville-based Mountain National Bancshares issued its latest quarterly report earlier this week, and it said the bank is considered undercapitalized because of losses in the second quarter.
The report went on to say that "the Company is actively exploring potential strategic transactions that could provide additional capital for the Bank, including private equity financing, issuance of shares to existing shareholders or other strategic transactions."
The president and CEO of Mountain National, Dwight Grizzell, said in an email that he couldn't provide additional comments about strategic options beyond what was in the quarterly report.
The report said that in 2010, the bank agreed to a minimum capital requirement from the Office of the Comptroller of the Currency, but said the bank was not in compliance with that requirement as of June 30. As a result, the report said the OCC may issue a consent order or capital directive against the bank.
Earlier this month, Grizzell indicated the company was making a major effort to clean up its balance sheet, saying the company had decided to "take a major write-down on the stuff that's not been performing and get rid of it."
"We've tried to work through these credits for the last two years. They cost us money to maintain them and keep them on the books," he said at the time. "We're just not going to do it anymore. We've got to get rid of them and get back to profitability."
Mountain National isn't the only local bank to wrestle with credit issues in recent months. Last year, BankEast said it had engaged a Louisville, Ky., firm to assist it in obtaining additional capital. Fred Lawson, the chairman of BankEast, said earlier this month that BankEast was still working with Ridley Capital Group but declined to give further details.
Earlier this year, the parent company of GreenBank announced a deal to sell a 90.1 percent stake to North American Financial Holdings. NAFH has since indicated that it plans to merge GreenBank into an entity that will eventually be called Capital Bank, N.A.
27 Aug, 2011--
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