HarVest Bancorp Inc. has reportedly been without a chief executive for several weeks as it finalizes a recapitalization plan that intended on the previous CEO staying.

Jack Hollerbach, who had been the company's CEO, resigned in January and HarVest has yet to fill the position as it waits for regualtory approvals, said Mesfin Ayenew, who is currently cosulting the bank.

HarVest, of Gaithersburg Md., had recently secured a capital commitment from a California investor, disclosing the arrangement in an October letter to shareholders, according to the Washington Business Journal.

HarVest is operating under a written agreement with the Federal Reserve and its $162 million-asset HarVest Bank of Maryland has a consent order with the Federal Deposit Insurance Corp. and its state regulator to raise its capital levels, among other things.

Because of these outstanding issues, any senior executive and board changes have to be approved by its regulators.

Ayenew, who is expected to become the company's executive chairman and chief operating officer when the recapitalization is completed, said that bank executives are set to meet with regulators soon to discuss the recapitalization plan.

Mehrdad Elie of American Integrity Capital would inject $5 million of the $15 million target to recapitalize the holding company and its bank.

John McDonnell, who would become vice chairman if the deal closes, is the interim CEO. McDonnell is the chairman and CEO of TraumaCure Inc., a wound-care company in Bethesda, Md., according to the bank's website.

(The website also lists Michael Steele, who recently stepped down as chairman of the Republican National Committee, as a director.)

With the company's succession plan unclear, Ayenew said he is interested in the position. He added that Charles Turnbaugh, a former state banking commissioner, had agreed to join the bank's board.

The bank was ordered in July to have a leverage ratio of 8% and a total risk-based capital ratio of 12%. At Dec. 31, it had a leverage ratio of 3.06% and total risk-based ratio of 5.72%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.