Green Bankshares Inc. in Greenville, Tenn., reported a net loss of $12.4 million for the second quarter as it prepares to sell to North American Financial Holdings Inc.
The company earned $1.6 million a year earlier but additional credit costs from writing off foreclosures and a bigger loan-loss provision have hurt the company this year. Green said late Thursday that it posted a $23.9 million net loss in the first six months compared with net income of $3.5 million over the same period in 2010.
In the second quarter, NAFH in Charlotte, N.C.,. agreed to recapitalize Green in exchange for a 90.1% stake in the company.
Green also said that it regulators had notified it in May that its GreenBank would be under a further, formal enforcement action requiring higher capital ratios than what had been previously ordered. The bank was initially instructed to have a minimum Tier 1 leverage ratio of 10% and a total risk-based capital ratio of 14%. At June 30, those ratios were 8.5% and 13.3%, respectively.
Green said it expects to close the capital infusion from NAFH during the third quarter, pending shareholder and regulatory approval.
In the meantime, the company cut 11% of its full-time workforce as part of a "right-sizing initiative," saving $807,000 during the second quarter.