A gale of shareholder activism continues to buffet Windy City community banks.

In the latest instance, a minority stakeholder is pushing $250 million- asset Damen Financial Corp. to boost its stock price and add two new board members.

Paul Duggan, the investor, conceded in an interview that he may push for a sale if the bank doesn't start making substantial improvements.

"I think that I would either like them to manage the company smarter-get more help in terms of a quality board-or consider selling out," said Mr. Duggan, president of Jackson Boulevard Fund Ltd. Mr. Duggan represents owners of about 10% of the company's stock. It closed Tuesday at $14.62.

As local consolidation boosts the values of franchises, shareholders are challenging managers to perform to expectations.Last year stockholders of Cole Taylor Financial Group, Hinsdale Financial Corp., and Standard Financial Corp. all fought with management here over issues affecting shareholder value.

Mr. Duggan's battle began Feb. 3, when he sent a letter to Damen criticizing its stock performance. He suggested that Damen-which was then operating under a thrift charter-add board members, repurchase stock, and cut costs.

The stock opened in October 1995 around $11.75 per share. When Mr. Duggan wrote his letter, the stock had grown only 10%-low for the Chicago market.

But on Feb. 27 the thrift announced it was converting to a bank charter and initiating a modified Dutch auction tender, said Mary Beth Poronsky Stull, chief executive of the bank.

The bank plans to repurchase 850,000 shares, about 22.5% of shares outstanding, on Monday, Ms. Stull said. That should boost earnings and book value per share.

But Mr. Duggan said he doubted that many shares would move, because the tender offer-$14.75 per share-was too low.

"My feeling is few people will tender shares," he said.

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