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Bailout Banks Bid to Get Life Back

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MainSource Financial Group
Shares of MainSource Financial Group closed at $11.71 Tuesday, returning 33% year-to-date, following a 15% decline during 2011.

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The shares trade for 10 times the consensus 2013 EPS estimate of $1.15. The consensus 2012 EPS estimate is $1.06.

The company recently announced that an informal regulatory agreement requiring minimum capital ratios had been lifted, and KBW analyst Christopher McGratty said on Wednesday that his firm had "learned of" MainSource's "ability to upstream $46mm of dividends from its main banking subsidiary, MainSource Bank to the parent company without seeking prior regulatory approval (up to $50mm with approval)."

So, it would appear that MainSource's shareholders will avoid a dilution of their holdings as the company exits TARP.

Following MainSource's TARP auction purchase or full repayment, McGratty does not expect the company to raise its quarterly dividend beyond its current level of a penny a share.

McGratty rates MainSource "Market Perform," with an $11 price target, and estimates the company will earn $1.05 a share this year, followed by 2013 EPS of $1.25.

Interested in more on MainSource Financial Group? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

To submit a news tip, send an email to: tips@thestreet.com.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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