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Midwest Banc is going down

Here's something you don't often see in a stock research note:  "FDIC Recievership Likely, Sell."

That's the subject line in a report Anthony Davis and Stephen Geyen of Stifel Nicolaus sent out this morning on Midwest Banc Holdings.

Davis and Geyen aren't exactly going out on a limb; Midwest disclosed in a regulatory filing yesterday that it didn't expect to meet the requirements of a Prompt Corrective Action agreement it entered into with the Fed in March to raise capital or sell itself by May 13. The company itself said it's likely that regulators will place the bank in FDIC receivership. 

Midwest incurred a net loss of $107.9 million, or $31.6 a share, for the three months ended March 31, 2010, or a loss of $3.16 per share. It finished the quarter with a negative capital position as measured by the tangible common equity, Tier 1 and TRBC ratios.

What's surprising is that any analyst would still be covering it when it's expected to fail.

"With FDIC receivership likely looming, our Sell rating remains in place," the analysts said in the research note. "We'll hold off on any changes to our model until further guidance is provided by the company."

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