It's not every quarter that a community banking company issues a $15-a- share dividend.
But that's what Mid-City Financial Corp., headquartered on Chicago's West Side, will dole out to its exclusive shareholders next week.
Shares of the $1.5 billion-asset company, which owns three banks, trade at $3,300 each-when they are available.
"You can't really buy shares on the open market," said Stephen Skiba, a banking analyst at Chicago Corp. "The only time they're available is when someone dies."
Most other community banking companies split their stock to make it more attractive to investors; Mid-City wants to keep the price high. The goal- besides an immediate plan to expand southward-is to stay exclusive and independent despite mediocre returns.
But as other community banking companies adopt anti-takeover measures such as poison pills or do battle in prolonged proxy fights, Mid-City has little to worry about.
"I think those institutions that would like to acquire us know the ownership situation and understand our goals," said Kenneth A. Skopec, president of Mid-City Financial.
Bloodlines have made it easy to keep Mid-City shares among only about 170 investors. Its lead bank was founded in 1911 by the Edward Morris family, and family members and directors still hold well over 50% of the shares, Mr. Skopec said.
When shares do become available for sale on the over-the-counter bulletin board, Mr. Skiba, of said directors or other key players usually snatch them up when estates are liquidated. The stock, Mr. Skopec said, hasn't been split in two decades.
Few companies trade for thousands of dollars a share. A notable exception, along with Mid-City, is Berkshire Hathaway, which trades on the New York Stock Exchange for about $40,000.
But then "a $1.5 billion bank closely held by the founding family is pretty unusual," said John Carusone, president of Bank Analysis Center, Hartford, Conn.
There are several smaller banking operations in the country-such as $500 million-asset Grossmont Bank in La Mesa, Calif., and $150 million Adirondack Bank, Saranac Lake, N.Y., that are closely held like Mid-City- but none with share prices as high.
Despite the high price and dividends, Mid-City's performance has been lackluster. In 1996 its price/earnings ratio was 11.16% and it returned 0.98% on assets and 10.73% on equity.
Annualized, the dividend works out to only 1.8% of the share price-below average for a community bank of Mid-City's size, said Thomas E. Hitselberger, managing director of Professional Consulting Assoicates.
Without any worries of a takeover or unfriendly shareholders stressing shareholder value, Mid-City is able to operate much like a standard community bank, emphasizing personal service and conservative expansion, Mr. Skopec said.
Mid-City executives answer their own phones and return calls to concerned depositors. "We believe the difference between that and an '800' number is dramatic," Mr. Skopec said.
Mid-City also plans to grow. This week executives are expected to announce they're expanding operations in the Southwest. The company already operates a bank with several branches in Oklahoma City.
"I know we are a unique institution ... but we have grown markedly in the last several years," Mr. Skopec said. "We're a strong independent that can do well in community banking as opposed to folding into somebody else."
