N@N

Nexity Financial Announces Restructuring Initiative and Capital Raise

^{Published on 2010-07-15 15:10:40 - Market Wire}
 

BIRMINGHAM, Ala.--([ BUSINESS WIRE ])--Nexity Financial Corporation (Pink Sheets:NXTY) (aNexity Financiala), one of the nationa™s leading providers of capital and support services to community banks and small businesses, has been working diligently over the past 18 months on a debt restructuring and recapitalization effort intended to return the company to its traditionally solid financial footing. As a part of its overall restructuring initiative, Nexity Financial has been working with certain of its creditors in an effort to restructure approximately $36 million worth of existing obligations. While a significant majority of these creditors (representing over 88% of the outstanding debt) agreed to an out-of-court market-based settlement, unfortunately the remaining 12% were not willing to agree. As a result, Nexity Financial will pursue a pre-packaged chapter 11 filing to effectuate its restructuring and recapitalization. This filing will not have a direct impact on the day-to-day operations or creditors of Nexity Bank, and depositors will remain insured up to the applicable limits offered by the FDIC.

The planned chapter 11 filing is part of an overall financial restructuring effort for Nexity Financial, Nexity Bank and their affiliates, which includes a private placement currently being conducted of approximately $175 million of Nexity Financial common stock. While the past 18 months have been difficult, it is encouraging to be on the doorstep of a restructuring and recapitalization that will enhance Nexity Financiala™s ability to support the small to medium sized business community and its correspondent bank customers. The recapitalization will allow Nexity Financial to emerge from its significant financial difficulties and be in full compliance with the capital provisions of the Cease and Desist Orders that have been put in place by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the State of Alabama Banking Department.

Nexity Financial, Nexity Bank and Nexity Financiala™s management team remain positive about the future of the enterprise and their ability to provide excellent service and advice to Nexity Financiala™s clients. The planned restructuring and recapitalization will ensure that Nexity Financial is a viable and vibrant company well into the future. Nexity Financiala™s focus has always been and will continue to be on the small to medium sized businesses and banks that have made our nation great.

This press release is not an offer to sell, or the solicitation of an offer to buy, any securities.Any securities that may be offered or sold in connection with the proposed prepackaged chapter 11 plan and the financial restructuring of Nexity Financial have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This press release contains certain statements that constitute "forward-looking statements" within the meaning of the "safe harbor" of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties, assumptions and other factors beyond Nexity Financiala™s control that could cause actual results to differ materially from the future results expressed, forecasted or implied by such forward-looking statements due to changes in global economic and business conditions, risks related to its financial restructuring, and risks related to its operations in general.