Settling a lawsuit, a small Illinois bank company has agreed to put two disgruntled shareholders on its board.
Real estate executives Barrett Rochman and David A. Burns had sued $66 million-asset Heartland Bancshares after it threw out proxy votes that would have given them the seats of president Roger O. Hileman and director Charles Stevens.
In a compromise the company agreed to expand board membership to nine and make the dissidents directors too. It also paid them $60,000.
Mr. Rochman, who owns 9.6% of outstanding shares, and Mr. Burns, who owns 0.6%, had complained that Herrin-based Heartland was underperforming.
Heartland Bancshares was formed in July 1996 as a vehicle for Heartland National Bank to go public.
Heartland National, which is nearly 50 years old, shed its thrift charter at the time.
The company is now struggling to become more bank-like, but profitability is still lagging. Home mortgages still make up more than 90% of its loan portfolio, and a $1,000 loss was posted for the first half, after a $113,000 profit a year earlier. (Third-quarter performance has not been reported.)
"This company has to get its act together," said Mr. Rochman, who has held accounts with the bank since 1969.
The expanded board is set to meet Dec. 17 for the first time. Mr. Rochman said he plans to propose suspending payments to directors-each gets $11,000 a year-until the company becomes profitable.
Mr. Hileman, who is also chief executive officer, said he was "glad this is over."
"I'm tired of spending time on the phone with attorneys," he said. "We're ready to get back to the business of banking."
Heartland is trying to develop a mix of commercial and consumer products, Mr. Hileman said, but the process could take three years.
