NT 10-Q 1 c21563nt10vq.htm NT 10-Q 12b25
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Washington, D.C. 20549
FORM 12b-25
(Check one):   o  Form 10-K o  Form 20-F o  Form 11-K þ  Form 10-Q o  Form 10-D o  Form N-SAR o  Form N-CSR
  For Period Ended:   June 30, 2011
    o   Transition Report on Form 10-K  
    o   Transition Report on Form 20-F  
    o   Transition Report on Form 11-K  
    o   Transition Report on Form 10-Q  
    o   Transition Report on Form N-SAR  
  For the Transition Period Ended:    

Read Instruction (on back page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:
Mountain National Bancshares, Inc.
Full Name of Registrant
Not Applicable
Former Name if Applicable
300 East Main Street
Address of Principal Executive Office (Street and Number)
Sevierville, Tennessee 37862
City, State and Zip Code
PART II — RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check box if appropriate)
    (a)   The reason described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense
    (b)   The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth calendar day following the prescribed due date; and
      (c)   The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if applicable.
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.
Mountain National Bancshares, Inc. (the “Company”) has determined it will be unable to file its Quarterly Report on Form 10-Q (the “Form 10-Q”) for the quarter ended June 30, 2011 by August 15, 2011, without unreasonable effort or expense because the Company is in the process of reviewing certain disclosures in the Form 10-Q in response to a comment letter received from the Securities and Exchange Commission (the “SEC”) on August 9, 2011, to the Company’s Form 10-K for the fiscal year ended December 31, 2010 and Form 10-K/A for the fiscal year ended December 31, 2010. Although these comments were made with respect to the Company’s 2010 Form 10-K, they may impact the presentation of the Company’s financial statements in the Form 10-Q. The completion of the Company’s Form 10-Q has required more time than in prior quarters due to issues related to the consideration of these comments and the drafting of appropriate disclosure in response to such comments. Therefore, the Company was not able to file the Form 10-Q by August 15, 2011. The Company expects to file the Form 10-Q on or prior to August 22, 2011.
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(Attach extra Sheets if Needed)
(1)   Name and telephone number of person to contact in regard to this notification
Richard A. Hubbs     (865)    428-7990 
  (Area Code)   (Telephone Number)
(2)   Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed? If answer is no, identify report(s).
    Yes þ     No o
(3)   Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?
    Yes þ     No o
    If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.

Although the Company’s final results of operations for the quarter and six months ended June 30, 2011 are not complete, the Company expects that its results of operations for the quarter and six months ended June 30, 2011 will be worse than its results of operations for the same periods in 2010. Specifically, the Company currently expects that it will recognize a net loss of approximately $21.9 million and $25.2 million for the quarter and six months ended June 30, 2011, respectively, compared to net income of $142,286 and $471,400 for the quarter and six months ended June 30, 2010, respectively. The primary factors contributing to the net loss in 2011 are an increase in the Company’s provision for loan losses from $334,400 and $546,700 for the three and six months ended June 30, 2010 to $17.4 million and $20.4 million for the same periods in 2011 and a decrease in the Company’s other real estate owned gains from $193,494 and $231,953 for the three and six months ended June 30, 2010, respectively, to losses of $4.7 million for each of the same periods in 2011. These results are preliminary and subject to adjustment.

Certain of the statements made herein are “forward-looking statements” within the meaning and subject to the protections of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “seek,” “attempt,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation, those set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, as updated in our quarterly report on Form 10-Q for the quarter ended March 31, 2011, and the following factors:

    the effects of greater than anticipated deterioration in economic and business conditions (including in the residential and commercial real estate construction and development segment of the economy) nationally and in our local market;

    deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses;

    lack of sustained growth in the economy in the Sevier County and Blount County, Tennessee area;

    government monetary and fiscal policies as well as legislative and regulatory changes, including changes in banking, securities and tax laws and regulations;

    the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities;

    the effects of competition from a wide variety of local, regional, national and other providers of financial, investment, and insurance services;

    the failure of assumptions underlying the establishment of reserves for possible loan losses and other estimates;

    the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and the possible failure to achieve expected gains, revenue growth and/or expense savings from such transactions;

    the effects of failing to comply with our regulatory commitments;

    changes in accounting policies, rules and practices;

    changes in technology or products that may be more difficult, or costly, or less effective, than anticipated;

    the effects of war or other conflicts, acts of terrorism or other catastrophic events that may affect general economic conditions;

    results of regulatory examinations;

    the remediation efforts related to the Company’s material weakness in internal control over financial reporting;

    the ability to raise additional capital;

    the prepayment of FDIC insurance premiums and higher FDIC assessment rates;

    the effects of negative publicity;

    the effectiveness of the Company’s activities in improving, resolving or liquidating lower quality assets;

    the Company’s recording of a further allowance related to its deferred tax asset; and

    other factors and information described herein and in any of our reports that we make with the Securities and Exchange Commission under the Exchange Act.

All forward-looking statements that are made by the Company herein are expressly qualified in their entirety by this cautionary notice. Except as required by the federal securities laws we do not undertake to update, revise or correct any of the forward-looking statements included herein after the date of this report.

Mountain National Bancshares, Inc. 
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.
  August 16, 2011   By   /s/ Richard A. Hubbs
          Richard A. Hubbs
          Senior Vice President and Chief Financial Officer