UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~October~~November 2822, 2011 (~~October~~November 2716, 2011)

MOUNTAIN NATIONAL BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


Tennessee	0-49912	75-3036312

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


300 East Main Street, Sevierville, Tennessee		37862

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (865) 428-7990

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On ~~October~~November 2722, 2011, ~~Mountain~~the ~~National~~Federal Reserve Bank of Atlanta (the “~~Bank~~FRB”), aannounced ~~wholly-owned~~that ~~subsidiary~~the ~~of bank~~FRB ~~holding~~and ~~company~~ Mountain National Bancshares, Inc. (the “Company”) entered into a Written Agreement (the “Agreement”), effective as of November 16, 2011. Among other things, the Company has agreed with the FRB that: (i) its board of directors shall take appropriate steps to fully utilize the Company’s financial and managerial resources to serve as a ~~Tennessee~~source ~~corporation~~of strength to Mountain National Bank (the “~~Company~~Bank”), including, but not limited to, taking steps to ensure that the Bank complies ~~accepted~~with athe ~~Stipulation~~Formal Agreement entered into with the Office of the Comptroller of the Currency (the “OCC”) on June 2, 2009 and ~~Consent~~any other supervisory action taken by the OCC; (ii) the Company shall not declare or pay any dividends without the prior written approval of the FRB and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System (the “~~Consent~~Director”); (iii) the Company shall not directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank towithout the ~~issuance~~prior written approval of athe ~~Consent~~FRB; ~~Order~~(iv) the Company and its nonbank subsidiaries shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the FRB and the Director; (v) the ~~“Order”~~Company and its nonbank subsidiaries shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the FRB; (vi) the byCompany shall not, directly or indirectly, purchase or redeem any shares of its stock without the ~~Office~~prior written approval of the ~~Comptroller~~FRB; and (vii) within 60 days of this Agreement, the ~~Currency~~Company shall submit to the FRB an acceptable written plan to maintain sufficient capital at the Company on a consolidated basis. The Company is also required to comply with certain notice and approval requirements in connection with director and senior executive officer appointments and is subject to certain restrictions on indemnification and severance payments. In addition, the Company must submit quarterly progress reports to the FRB. The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is attached as Exhibit 10.1 to this Form 8-K and is incorporated by reference herein.

The summary description of the Order set forth below in this Item 1.01 as well as the Consent is qualified in its entirety by reference to the Consent and the Order, copies of which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.

Under the terms of the Order, the Bank has agreed to, among other things, take the following actions:

• Maintain a Board committee to oversee the Bank’s compliance with the Order;

• Develop, within 60 days of the date of the Order, a strategic plan covering at least a three-year period that establishes objectives for the Bank’s overall risk profile, earnings performance, growth, balance sheet mix, off-balance sheet activities, liability structure, capital adequacy, reduction in volume of nonperforming assets, product line development, and market segments that the Bank intends to promote or develop, together with strategies to achieve those objectives;

• Develop and implement, within 60 days of the date of the Order, a capital plan that increases the Bank’s Total risk-based capital ratio and Tier 1 capital ratio to at least 12% and 9%, respectively, within 120 days of the date of the Order;

• Prepare and submit, within 90 days of the date of the Order, a written assessment of the capabilities of certain of the Bank’s officers and, if the Board determines an officer’s performance needs improvement, implement a written program to improve the officer’s performance, skills and abilities;

• Ensure adherence to the Bank’s written program to reduce and manage the high level of credit risk in the Bank, and at least quarterly prepare a written assessment of the Bank’s credit risk and the Bank’s adherence to the program;

• Implement and adhere to a written program designed to protect the Bank’s interest in those assets criticized as “doubtful”, “substandard” or “special mention”;

• Not extend, directly or indirectly, any additional credit to any borrower whose loans or other extensions of credit are criticized and whose aggregate loans and extensions of credit exceed $250,000, unless the Board makes certain determinations;

• Establish, within 60 days of the date of the Order, an effective independent and ongoing independent loan review program to review, at least semi-annually, the Bank’s loan portfolio, to assure timely identification and categorization of problem credits;

• Maintain and adhere to a written policy and procedures for the maintenance of an adequate Allowance for Loan and Lease Losses;

• Adopt, implement and ensure adherence to an independent, risk-based audit program of all Bank operations and ensure immediate actions are undertaken to remedy deficiencies cited in audit reports;

• Revise and maintain, within 60 days of the date of the Order, a comprehensive liability risk management program; and

• Agree to certain limitations on third party contracts.

Item 7.01 Regulation FD Disclosure.

On October 28, 2011, the Company issued the press release furnished herewith as Exhibit 99.1 announcing that the Bank had entered into the Consent and Order.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit
No.		Description
	10.1	~~Stipulation~~Written toagreement ~~the~~dated ~~Issuance~~as of aNovember ~~Consent Order~~16, ~~dated~~2011 ~~October~~by ~~27,~~and ~~2011~~between the Company and the FRB.
	10.2	Consent Order between Mountain National Bank and the Office of the Comptroller of the Currency, dated October 27, 2011.
	99.1	Press Release, dated October 28, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


MOUNTAIN NATIONAL BANCSHARES, INC.

By:	/s/ Dwight B. Grizzell

	Name:	Dwight B. Grizzell
	Title:	President and Chief Executive Officer

Date: ~~October~~November 2822, 2011

EXHIBIT INDEX

Exhibit
No.		Description
	10.1	~~Stipulation~~Written toagreement ~~the~~dated ~~Issuance~~as of aNovember ~~Consent Order~~16, ~~dated~~2011 ~~October~~by ~~27,~~and ~~2011~~between the Company and the FRB.
	10.2	Consent Order between Mountain National Bank and the Office of the Comptroller of the Currency, dated October 27, 2011.
	99.1	Press Release, dated October 28, 2011.

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