By Becky Yerak
| Midwest Bank, a $3 billion-asset lender on the verge of being seized by U.S. banking regulators, acknowledged in a Securities and Exchange Commission filing on Thursday that it’s unlikely to raise the capital it needs to stay afloat.
As recently as a week ago, Melrose Park-based Midwest Banc Holdings had a glimmer of hope that it still might be able to raise the money to meet the demands of a “prompt corrective action” order filed earlier this year by banking regulators.
“The company does not expect that it will be able to satisfy the capital
requirement set forth” in the order by the May 13 deadline, the SEC
filing said. “If the company is unable to satisfy such requirement by
the PCA deadline, the company believes it is likely its bank regulators
would place the bank into Federal Deposit Insurance Corporation
receivership.”
The company had been trying to raise $125 million to $250 million.
Separately, nearly two weeks ago, the FDIC said it would enable
potential bidders for the more desirable Midwest franchise to link bids to
ShoreBank, another ailing lender.
But now ShoreBank is kicking its fundraising into high gear, and if it
raises capital on its own then the FDIC could potentially not link the
bids.
To read Midwest’s filing, click
here.
the common stock MBHI and preferred stock MBHIP will likely be wiped out/worthless Friday.
Midwest Banc Holdings likely to fail Friday
http://www.marketwatch.com/story/midwest-banc-holdings-likely-to-fail-friday-2010-05-13
Midwest Banc Holdings Likely To Fail Friday
May 13 at 16:52
Midwest Banc Holdings Inc. (MBHI) will likely fail and be placed into
Federal Deposit Insurance Corp. receivership late Friday because of
undercapitalization, according to a Securities and Exchange Commission filing Thursday
from the bank holding company.
The bank, which has $3.18 billion in assets and $2.42 billion in deposits,
said that the Federal Reserve Bank rejected its capital plan March 25 and
that it does not expect to reach capital requirements by the May 13 Prompt
Corrective Action Directive deadline.
Shares of Midwest Bank fell 16% to 18 cents a share in after-hours
activity following a 17.3% decline on the day.
-Wallace Witkowski; 415-439-6400; _AskNewswires@dowjones.com_
(mailto:AskNewswires@dowjones.com)
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