Frederic G. Novy, the former president and chief executive of Cragin Financial Corp., has been named president and chief executive of Chicago's Liberty Bancorp and its subsidiary thrift.
The move comes shortly after $575 million-asset Liberty and an unidentified institution terminated merger talks.
Edward J. Burns will step down as president and chief executive but will remain chairman of both boards.
"I'm really stepping out a little bit early," said Mr. Burns, 64. He said he had planned to retire after he turned 65 next year, but feared losing the chance to hire Mr. Novy. Mr. Novy, 55, is to start at his new job on Monday.
Mr. Burns said he had spoken with Mr. Novy about joining Liberty before the company entered into negotiations to sell itself.
Mr. Novy was president and chief executive of $2.8 billion asset Cragin Financial Corp., Chicago, before it was acquired by ABN Amro North America earlier this year in a $500 million deal.
He previously was general counsel for Liberty Federal, as well as a member of its board of directors.
Daniel Westrope, an analyst at Howe Barnes Investments, Inc., Chicago, called Mr. Novy a "topnotch operator."
"I think it signifies that they realize they need to make some changes in terms of management succession," he said.
In mid July, Liberty said it had hired an investment adviser and was negotiating to sell itself to a third party. However, at the end of July, discussions broke off.
Mr. Burns would not discuss the offer, the identity of the third party, or why negotiations were terminated.
Mr. Westrope speculated on why the talks may have ceased: "Maybe when it came
down to it, the company wasn't worth as much as they may have thought." Now, Mr. Burns and Mr. Novy both say that Liberty is not for sale. "At this time, it's business as usual," Mr. Burns said. "We're not on the market."
Mr. Westrope said Liberty may be prepping to sell longer term.
"I don't think he'd take this for three months," he said of Mr. Novy. "This is probably more an intermediate term. I'd say maybe it takes them a year or two or three to maximize shareholder value?'
The company's earnings per share for the second quarter were 42 cents, down from 54 cents a year earlier.
Earnings per share for the first six months were 82 cents, down from $1.05 the previous year.
