The founder of an upscale bank in a wealthy Chicago suburb has been ousted by the bank's board.
Howard D. Adams, who formed Lake Forest Bank in 1991 and later created the holding company Wintrust Financial Corp., was removed from his position as Wintrust's chairman and chief executive officer late last month by a 20- 3 vote. Directors cited "fundamental disagreements" over the $1 billion- asset company's business strategy, said Bob Key, executive vice president of marketing for Wintrust.
Mr. Key said the company remains committed to growing by chartering new banks or buying institutions. Mr. Adams could not be reached for comment, but Mr. Key said Mr. Adams disagreed with that growth strategy.
John S. Lillard, a Wintrust director, now serves as chairman, and Edward J. Wehmer, president of Wintrust since its formation, has taken over as CEO.
Mr. Adams founded Lake Forest Bank in 1991 to target the tony Chicago suburb's affluent residents. Since then, the holding company has started five additional community banks in similar high-income communities.
Wintrust announced this spring that Mr. Adams, 65, would retire at the company's May annual meeting, but relations between Mr. Adams and the board have since soured, Mr. Key said.
Wintrust's growth plan has been an expensive one. The company posted earnings losses in 1994 and in 1996 due to high overhead from its start-up banks. Last year the company was in the black, but its return on assets was only 0.56%, and its return on equity was 7.88%, both well below industry averages.
Richard Soukup, a bank consultant at Grant Thornton LLP in Chicago, said that Wintrust's aggressive growth-first/profits-later strategy has been unique in Chicago, but that it is unclear whether the company ultimately will become as profitable as others its size.
"It isn't producing the kind of returns everyone expected, but the end of the chapter is still unwritten," he said.
Despite his ouster, Mr. Adams is unlikely to slip into the background: He has retained his seat on the board and his 6% ownership stake in the company. His son, Alan, also serves on the board and as executive vice president of commercial lending at Lake Forest Bank, while Alan Adams' wife works in the holding company's marketing department.