MainSource in Ind. to Buy Back $15M of Preferred Stock

MainSource Financial Group (MSFG) in Greensburg, Ind., has been cleared to redeem the last of the preferred stock it had issued through the Troubled Asset Relief Program.

The $2.8 billion-asset company has been given regulatory approval to pay $15.3 million for the outstanding shares and accrued dividends, it said Monday in a regulatory filing. It expects the transaction to take place Aug. 12.

It will buy the shares back from investors who bought them at a Treasury Department auction last year and says they are the last of its remaining Tarp-related preferred shares. MainSource received $57 million through the program in January 2009. In December, MainStreet bought back nearly $20 million of shares from an investor who had purchased them at auction; details on any other purchases were not immediately available.

The Treasury separately had auctioned its Tarp warrants in MainSource and several other companies in June.

MainSource also announced Monday a quarterly profit of $7.3 million, a 5% increase from the second quarter of 2012. It lowered its loan-loss provision to $1 million, from $2.5 million a year earlier.Net interest income shrunk by 5%, to $22.5 million, while noninterest income rose 6%, to $11.4 million, as service charges increased.

Noninterest expense rose 2%, to $23.9 million, as compensation and occupancy costs rose.

The Federal Deposit Insurance Corp. terminated an informal enforcement action against MainSource last year. MainSource held Tier 1 capital of 16.7% and risk-based capital of 17.9% as of June 30, it said.