Midwest Bank can't raise capital required by government

Melrose-Park based Midwest Banc Holdings Inc., parent to Midwest Bank and Trust Co., could not meet its Thursday deadline to establish adequate capital, the company said in a filing with the U.S. Securities and Exchange Commission.

Midwest Banc said in the filing that "an equity raise of approximately $250 million together with an agreement by its primary lender to convert the amount outstanding under its credit agreements to equity capital is now required for the company and bank to become and remain well capitalized and continue to operate as a going concern."

It likely would be placed into receivership by bank regulators, the document said.

A spokesman for Midwest Banc Holdings declined to comment and a spokeswoman for the Federal Reserve could not provide further information.

Thursday's filing outlined Midwest's woes, saying it was examined by the Federal Reserve Bank and the Illinois Department of Financial and Professional Regulation's Division of Banking, and had signed an agreement last December to take steps to improve its operations and capitalization. While it accomplished many of its goals, it couldn't overcome many debts, it said.

By March, the bank agreed to work on capitalizing its system of 24 branches through a directive from the Board of Governors of the Federal Reserve System. The directive ordered the bank to meet a May 13 deadline. The document also gave the bank the option that if cannot meet its capitalization goal and deadline, then it could agree to be sold.

Midwest Bank has 24 branches, including those in Algonquin, Bensenville, Bloomingdale, Buffalo Grove, Des Plaines, Elgin, Inverness, Long Grove, McHenry, Mount Prospect, Naperville, Roselle, North Barrington. Accounts are insured by the FDIC.