24/7 Wall St.
09-17-2008, 02:21 PM
24/7 Wall St. Daily News
Midwest Banc Holdings Inc. (NASDAQ: MBHI) looks like it is taking somewhat of an about-face move from its comments just last week. Shares of the holding company for Midwest Bank and Trust Company are hitting new lows as a result of this and as a result of the panic selling in financial stocks. The company now is selling $110 million worth of preferred stock and is suspending dividends on the common stock. Without surprise it is also raising its loan loss reserves. This is meant to shore up the balance sheet.
The company says, "The successful completion of this offering,excluding the over-allotment option, would put MBHI's total risk basedcapital ratio at approximately 11.5%, among the highest of its Chicagopeers." While reserves are going up, these are still acceptable inhard times. Midwest expects to increase the allowance for loan lossesto approximately 1.6% of loans as of September 30, 2008, from 0.9% atJune 30, 2008. Its positions in Fannie/Freddie are being written downto ZERO. It is also taking a goodwill impairment charge of $80 million.
Just last week on September 8, 2008, the bank noted (http://www.247wallst.com/2008/09/midwest-bank-re.html)that it would remain well-capitalized even if the value of itspreferred stock investments in Freddie Mac and Fannie Mae were reducedto zero. The company also said the bank will monitor the situation andis committed stay well capitalized.
Shares were at $3.69 last week when we covered that piece. Thismorning shares are down about 30% at $3.06 on double the normalvolume. Its 52-week trading range is now going to be far lower. Wecan't tell if there is a Mr. Hyde hiding behind the face of Dr. Jeckyllor not. But Wall Street has taken away 80% of the value from its highsone year ago.
We'd be interested to know what happens if they didn't raise the cash at all. Back in 2006, this was a $25.00 stock. That feels like a long time ago.
Jon C. Ogg
September 17, 2008
http://feeds.feedburner.com/~f/typepad/RyNm?i=KM7yL</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=KM7yL) http://feeds.feedburner.com/~f/typepad/RyNm?i=qQIiL</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=qQIiL) http://feeds.feedburner.com/~f/typepad/RyNm?i=QdFYl</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=QdFYl)
complete story here... (http://www.247wallst.com/2008/09/midwest-banc-dr.html)
Midwest Banc Holdings Inc. (NASDAQ: MBHI) looks like it is taking somewhat of an about-face move from its comments just last week. Shares of the holding company for Midwest Bank and Trust Company are hitting new lows as a result of this and as a result of the panic selling in financial stocks. The company now is selling $110 million worth of preferred stock and is suspending dividends on the common stock. Without surprise it is also raising its loan loss reserves. This is meant to shore up the balance sheet.
The company says, "The successful completion of this offering,excluding the over-allotment option, would put MBHI's total risk basedcapital ratio at approximately 11.5%, among the highest of its Chicagopeers." While reserves are going up, these are still acceptable inhard times. Midwest expects to increase the allowance for loan lossesto approximately 1.6% of loans as of September 30, 2008, from 0.9% atJune 30, 2008. Its positions in Fannie/Freddie are being written downto ZERO. It is also taking a goodwill impairment charge of $80 million.
Just last week on September 8, 2008, the bank noted (http://www.247wallst.com/2008/09/midwest-bank-re.html)that it would remain well-capitalized even if the value of itspreferred stock investments in Freddie Mac and Fannie Mae were reducedto zero. The company also said the bank will monitor the situation andis committed stay well capitalized.
Shares were at $3.69 last week when we covered that piece. Thismorning shares are down about 30% at $3.06 on double the normalvolume. Its 52-week trading range is now going to be far lower. Wecan't tell if there is a Mr. Hyde hiding behind the face of Dr. Jeckyllor not. But Wall Street has taken away 80% of the value from its highsone year ago.
We'd be interested to know what happens if they didn't raise the cash at all. Back in 2006, this was a $25.00 stock. That feels like a long time ago.
Jon C. Ogg
September 17, 2008
http://feeds.feedburner.com/~f/typepad/RyNm?i=KM7yL</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=KM7yL) http://feeds.feedburner.com/~f/typepad/RyNm?i=qQIiL</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=qQIiL) http://feeds.feedburner.com/~f/typepad/RyNm?i=QdFYl</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=QdFYl)
complete story here... (http://www.247wallst.com/2008/09/midwest-banc-dr.html)