A Case of Scalping Shareholders at the Fork in the Road
Here's one sad story I really hope doesn't repeat itself a third time, or in any other bank at a similar crossroads for that matter. The hit that Makinac's shareholders were forced to take in the bank's recent dilutive capital raise was entirely unnecessary and egregious. Bank management bought itself some cash to play with as they please without a strategic plan for putting it to good use, but only by materially injuring real people. Unconscionable.
Disclosure: As of this posting, I do not own shares of MFNC but may subsequently purchase them.
MFNC would make a nice acquisition target for any of the following banks, but by going forward with its recent dilutive capital raise, management missed the opportunity to obtain a great price for the bank.
Chemical Financial, Midland, MI (CHFC)
Fifth Third Bancorp, Cincinnati, OH (FITB)
(as of 06/30/2012)
Paul D. Tobias, Chairman and CEO
Kelly W. George, President
Ernie R. Krueger, CFO and Executive VP
THE "CRIME": MFNC under Tobias' leadership executed a rights offering that diluted shareholders and socked TBV by at least 15%.
THE CROSSROADS: MFNC faced three more responsible and humane options than the dilutive capital raise it chose: