Midwest Banc says it remains well capitalized

Chicago-area banker Midwest Banc Holdings Inc. on Monday said it remains well capitalized, after its stock fell more than 22 percent on the U.S. government's move to bail out mortgage companies Fannie Mae and Freddie Mac.

Officials announced Sunday that both Fannie Mae and Freddie Mac were being placed in a government conservatorship in a bid to help reverse a prolonged housing and credit crisis.

There has been concern that a government rescue of Fannie and Freddie could be costly for scores of investment, banking and insurance companies _ Midwest Banc Holdings among them _ that hold billions of dollars in their preferred shares.

However, Midwest Banc said in a statement Monday that it remains well capitalized under all regulatory guidelines.

"Midwest Bank would remain well capitalized even if the value of its preferred stock investments in Freddie Mac and Fannie Mae were reduced to zero," the company said in a statement.

The bank is monitoring the situation and is "committed to remaining well-capitalized and having sufficient capital to support its customers and for future growth," according to the statement.

Midwest Banc shares fell $1.46, or 24.6 percent, to $4.48 in Monday's trading. The stock earlier hit a year low of $3.69.