Midcity Financial Corp. of Chicago has hired the New York investment bank Donaldson, Lufkin & Jenrette Inc. to help it explore sale, merger, and other options. Though $1.8 billion-asset Midcity could stay independent, its president, Kenneth A. Skopec, said the multistate holding company may sell itself to boost shareholder value.
"We just want to get a reading from the market as to whether we're proceeding in the right direction as an independent," he said of the Donaldson Lufkin hiring, which was announced last week. "But we have no preconceived notions about how this will end. It may be that with the way bank stocks have been beaten up recently" Midcity should remain independent.
Midcity, which has banks in Illinois, Oklahoma, and Texas, is a closely held organization with a reputation of conservative management. Its thinly traded stock goes for about $6,000 a share and it had net income of $18.4 million in 1999, versus $9.8 million in 1998. It February 1999 Midcity bought Damen Financial Corp. of Schaumburg, Ill., for $51.9 million in cash to increase its commercial lending.
Mr. Skopec said bank deregulation and the labor shortage are two of the reasons behind Midcity's decision to explore its options. Another is the high cost of establishing on-line banking.
- Taran Provost