Under pressure from investors to improve its performance, HF Financial Corp. in Sioux Falls, S.D., announced Friday that it is replacing its longtime Chairman and Chief Executive Curtis L. Hage, effective immediately.
The $1.2 billion-asset company said that vice chairman Michael M. Vekich has been elected its new chairman and that Stephen M. Bianchi has been promoted to interim president and chief executive.
HF Financial also announced the nominations of current directors Christine E. Hamilton and Thomas L. Van Wyhe for reelection at the company's annual stockholder meeting on Dec. 13.
Vekich joined the board in October 2010 and has served as vice chair since November 2010. He is CEO of Vekich Associates Chartered, a Minneapolis-based management advisory firm. Bianchi joined HF Financial in April 2010 as president of its Twin Cities market in Minnesota. Prior to that, he worked at Associated Bank from 2006 to 2010.
Vekich and Bianchi are assuming roles formerly held by Hage, who had planned to retire on Dec. 31. The company said Friday that Hage will not stand for reelection to the company's board, but will serve as a special advisor until his official retirement. Hage had been president and CEO of the company and its subsidiary, Home Federal Bank, since 1991 and had been been its chairman since 1996.
The management shake-up comes roughly a month after the thrift company's largest shareholder, PL Capital Group, publicly expressed frustration with HF Financial's earnings and stock performance since the company raised $20 million of capital in 2009. PL Capital said last month that it was nominating its own board candidates to challenge the slate being backed by management.
And last week, Sandler O'Neill & Partners L.P. reduced earnings estimates for HF Financial amid concerns about weak loan demand and declining credit quality.
In the fiscal year that ended June 30, HF Financial reported $679,000 in earnings compared to $5.7 million for the previous fiscal year.
In a news release Friday, Vekich said that The HF Financial's board "is committed to positive change in the operational leadership and execution...as we focus on delivering value for all our shareholders. He added that Bianchi "is the right person" to lead the company until a permanent CEO is found.
HF Financial's shares rose nearly 5% Friday, to close at $9.32.