MCorp, Texas’ second-largest bank holding company and the last of the state’s major banks to avoid seeking outside help, said Friday that it is seeking a federal bailout in its proposed recapitalization.
The bank said it could not predict when or how much aid it would request.
The bank also announced that it expects to report a $525-million third-quarter loss.
MCorp, which has $20.1 billion in assets, said it would report the deficit because it was adding about $370 million to its provision for loan losses.
In the 1988 third quarter, MCorp expects its allowance for loan losses to total $690 million. Its expected third-quarter loss of $525 million represents a widening of the $73.7-million loss in the year-ago period.
“At this time it is not possible to determine the ultimate likelihood, amount, nature or timing of any FDIC (Federal Deposit Insurance Corp.) assistance for any recapitalization, nor is it possible to predict the impact of the transaction on MCorp’s stockholders and creditors,” the bank said in a statement attributed to Gene H. Bishop, chairman and chief executive, and John T. Cater, president and chief operating officer.
Steve Katsanos, a spokesman for FDIC in Washington, said the agency would not have any comment on the matter.
“Our standard practice is that we don’t comment on requests for assistance,” he said.
Stock Closes Lower
The bank’s third-quarter results, due out by Tuesday, are expected to show a bigger jump in non-performing assets than the $158-million increase posted in the second quarter, according to a report in the Wall Street Journal.
MCorp’s stock had dropped 50 cents to hit a new low of 75 cents a share Tuesday, but bounced back to $1.125 on Wednesday and Thursday. After Friday’s announcement, MCorp’s stock closed down 25 cents to 87.5 cents a share in New York Stock Exchange trading.
The request to be filed with FDIC will suggest that MCorp raise new capital from private investors, including current stockholders, to accompany FDIC assistance, the statement said.