Midwest Bank failure imminent
Midwest Bank acknowledged on Thursday that it would miss a dead line to raise fund and suggested its failure could be imminent.
MIDWEST BANK acknowledged on Thursday that it would miss a dead line to raise fund and suggested its failure could be imminent. Midwest was amongst the first community bans to receive the federal bailout. Earlier, Midwest banks parent, Melrose Park based Midwest Banc Holdings, had a glimmer of hope that it still might be able to raise money to meet the higher-capital demands of a prompt corrective action order filed this year by banking regulator. But Thursday’s filing with the Securities and Exchange commission killed all those hope.
“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,” Midwest said in the filling. “If the company is unable to satisfy such requirement by the deadline, the company believes it is likely its bank regulators would place the bank into Federal Deposit Insurance Corp. receivership.
The company had been trying to raise $125 million to $250 million to stave off seizure.
The Federal Deposits Insurance Corp. could broker a deal in which Midwest’s asset and deposits would be sold to a competitive institution. In a long list of hopefuls, Ohio based FirstMerit is the frontrunner along with MB Financial in the line.
Earlier, FDIC said it would enable potential bidders for more desirable Midwest Bank franchise, which has about two dozen branches in the city and the suburbs. Midwest’s problem with capital management become evident in the fall of 2008, eventually suffered $82 million losses on its preferred shares in the government-sponsored n enterprises. In bailout measure, it received $85 million. However, constant effort to save the bank did not pay any dividend and the fall of this community bank is imminent.
Earlier, FDIC said it would enable potential bidders for more desirable Midwest Bank franchise, which has about two dozen branches in the city and the suburbs. Midwest’s problem with capital management become evident in the fall of 2008, eventually suffered $82 million losses on its preferred shares in the government-sponsored n enterprises. In bailout measure, it received $85 million. However, constant effort to save the bank did not pay any dividend and the fall of this community bank is imminent.
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