North American Financial Holdings Inc. further cemented its reputation as a consolidator in the Southeast.
The Charlotte, N.C., company said Thursday that it would buy a 90.1% stake in the $2.4 billion-asset Green Bankshares Inc. in Greeneville, Tenn.
The acquisition would be North American's sixth since the holding company was created last year to buy failed or struggling banks. Green Bankshares, the parent of GreenBank, lost more than $240 million in the last two years due largely to elevated loan losses in its residential construction and development portfolio.
In November 2009, Green rejected a bid from several major investors to inject $25 million to $40 million into the company to help it absorb losses. The goal was to eventually turn the company into a buyer of failed banks.
Last November, Green disclosed that it had entered into an informal agreement with the Federal Reserve that included a suspension of dividend payments. That included dividends to the Treasury Department tied to the $72.3 million of preferred stock it received in late 2008 from the Troubled Asset Relief Program.
As it has done with past acquisitions, North American plans to merge GreenBank into its NAFH National Bank. Once the deal is completed, NAFH would have $7.3 billion of assets and 149 branches in states such as Florida, North Carolina, South Carolina and Tennessee.
"This investment helps define NAFH as a broad Southeastern franchise," Eugene Taylor, North American's chairman and chief executive, said in a press release. "The fast-growing Nashville and Knoxville markets serve as a natural extension of our western footprint."
Last week, North American merged TIB Bank in Naples, Fla., into its NAFH. North American bought a 97% stake in TIB Financial Corp., the bank's parent, in June. The company is also planning to merge Capital Bank of Raleigh, N.C., into its bank. North American bought a 83% in Capital Bank Corp. earlier this year.
North American has also said in regulatory filings that it could eventually combine the holding companies for all of the banks.
North American said it expects to complete the Green acquisition in the third quarter.
Paul Davis contributed to this story.