1051379--3/11/2009--MIDWEST_BANC_HOLDINGS

related topics

{loss, insurance, financial}

{condition, economic, financial}

{capital, credit, financial}

{loan, real, estate}

{debt, indebtedness, cash}

{competitive, industry, competition}

{tax, income, asset}

{stock, price, share}

{product, liability, claim}

{system, service, information}

{personnel, key, retain}

{product, market, service}

{acquisition, growth, future}

{regulation, change, law}

The Company s allowance for loan losses may not be sufficient to cover actual loan losses, which could adversely affect its results of operations or its financial condition. While the Company attempts to manage the risk from changes in market interest rates, interest rate risk management techniques are not exact. In addition, the Company may not be able to economically hedge its interest rate risk. A rapid or substantial increase or decrease in interest rates could adversely affect its net interest income and results of operations. Conditions in the financial markets may limit the Company s access to additional funding to meet its liquidity needs. The Company s cost of funds for banking operations may increase as a result of general economic conditions, interest rates and competitive pressures. The Company is party to loan agreements that require it to observe certain covenants that limit its flexibility in operating its business. Markets have experienced, and may continue to experience, periods of high volatility accompanied by reduced liquidity. Concern of the Company s customers over deposit insurance may cause a decrease in deposits. The Company s deposit insurance premium could be substantially higher in the future, which could have a material adverse effect on our future earnings. Defaults by another financial institution could adversely affect financial markets generally. The widespread effect of falling housing prices on financial markets could adversely affect the Company s profitability, liquidity, and financial condition. The value of securities in the Company s investment securities portfolio may be negatively affected by continued disruptions in securities markets. If the Company is required to write down goodwill or other intangible assets or if it is required to mark-to-market certain of its assets or reduce its deferred tax assets by a valuation allowance, its financial condition and results of operations would be negatively affected. If the Company s investment in the common stock of the Federal Home Loan Bank of Chicago is other than temporarily impaired, its financial condition and results of operations could be materially impaired. As a bank holding company that conducts substantially all of the Company s operations through its subsidiaries, its ability to pay dividends, repurchase its shares, or to repay its indebtedness depends upon liquid assets held by the bank holding company as well as the results of operations of the Company s subsidiaries; the Company and its subsidiaries are subject to other restrictions. Future dividend payments and common stock repurchases are restricted by the terms of the U.S. Treasury s equity investment in the Company. The Company may elect or be compelled to seek additional capital in the future, but capital may not be available when it is needed. The Company s effective tax rates may be adversely affected by changes in federal and state tax laws. An interruption in or breach in security of the Company s information systems may result in a loss of customer business. The Company continually encounters technological change. The Company s business may be adversely affected by the highly regulated environment in which it operates. There can be no assurance that the recently enacted Emergency Economic Stabilization Act of 2008, the American Recovery and Reinvestment Act of 2009 and other recently enacted government programs will help stabilize the U.S. financial system. The limitations on incentive compensation contained in the ARRA may adversely affect the Company s ability to retain its highest performing employees. The Company is subject to claims and litigation pertaining to fiduciary responsibility.

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1051379--3/11/2009--MIDWEST_BANC_HOLDINGS_INC