Investors in Ill. Bank Deny Intent to Force Sale

An investment group that recently bought thousands of shares of Lincolnshire, Ill.-based Success Bancshares Inc. says it will not try to force a sale of the company.

From July 8 to Sept. 8 of this year, the group -- which includes Inverness, Ill.-based Financial Institution Partners II and Hovde Capital in Washington -- has been on a buying spree, purchasing 45,800 shares of Success. It now owns a 5.2% stake, and additional purchases are a possibility, the group said.

The sudden move has led some market watchers to speculate that the group wants to influence the $458 million-asset company to pursue a sale. But Steven D. Hovde, a managing member of Hovde Capital, denied this. "This isn't unique," said Mr. Hovde. "This is just one of a number of companies our funds have positions in."

Mr. Hovde said the group was attracted to Success because it is poised to increase earnings after resolving recent management troubles. Since July 1998, when the company's dynamic chief executive officer, Saul D. Binder, died of a heart attack, Success has been considered vulnerable to takeover.

The company's current CEO, Wilbur G. Meinen Jr., joined it after leaving Bank One Corp. in December. Since his arrival, Success has posted solid numbers. For the six months through June, it reported $733,000 of net income, a 4.2% increase from a year earlier. "They've got a new management, and the new management is much more capable than the old," said Mr. Hovde. "We think they can produce the earnings that can make it a more valuable company."

Still, Mr. Hovde said, he believes Success eventually will be a takeover target. "I think every company of that size that is publicly traded is a possible sale candidate within the next couple of years," he said.

A version of this story originally appeared in American Banker Online.