Midwest Banc Holdings Inc. of Melrose Park, Ill., said continuing problems collecting from a single borrower would reduce its fourth-quarter net income by $4 million, or 16 cents per diluted share.
The $2.9 billion-asset company disclosed problems with this borrower, which it has not identified, in the second quarter. It added $5 million to its loan-loss provision in the second quarter as a result of the problem credit, which cut its net income by $3.1 million.
The company said late Thursday that it would charge off $7.5 million in the fourth quarter and take an additional $5.5 million loan-loss provision. It also said it would reverse $1 million of interest income already accrued.
Total nonaccrual loans relating to this borrower stood at $25.8 million at Dec. 31, Midwest said.
The company said that without the problem credit, it would have earned $6.9 million, or 28 cents per diluted share, in the fourth quarter but instead would earn about $2.9 million, or 12 cents a share.
In the fourth quarter of 2005 it earned $6.7 million, or 30 cents per diluted share.
The company said it plans to release earnings Jan. 29, when it is to hold a conference call to discuss the results.
Midwest's stock closed at $21.85 late Friday, down 0.59% from the previous day's close.
