Two dissidents who have been pushing a $324 million-asset Illinois thrift company to sell itself said they have failed to win seats on its board.

Shareholders of Bloomington-based Citizens First Financial Corp. voted Monday for two three-year terms on its eight-member board. The vote count is to be announced next Monday, but the dissidents, Lawrence Seidman and James D. Dickinson, quickly conceded that the incumbents had beaten them.

Mr. Dickinson said he and Mr. Seidman had made their point, though. "It's a positive thing we did," Mr. Dickinson said. "It shows them that they can't keep treating this thrift as if it's their own private company."

He said he does not intend to keep pushing for a sale, though he still thinks it would be in the shareholders' interests. Mr. Seidman could not be reached to discuss his plans.

Other thrifts companies may not be so fortunate this annual meeting season. Nearly a dozen of them are fighting for their independence as shareholders frustrated with earnings and stock prices aim to win seats on their boards. Many of those embattled companies will meet by the end of May

Some dissidents have recently succeeded.

o This month Haven Bancorp in Westbury, N.Y., relinquished two seats on its board to two shareholders who have been pushing for sale of the a $2.9 billion-asset company.

o And this week a judge ruled that two dissidents actually won an election at $470 million-asset Carver Bancorp in New York, which had declared its own candidates as winners. The suit dealt with whether several thousand votes were validly filed.

Dissidents at $122 million-asset PS Financial Inc. in Chicago say they have a strong shot at winning board seats at an annual meeting next week. Two candidates nominated by the Chicago investment firm of Jackson Boulevard Partners LP are running with the support of a banking-investment-research firm, Podesta & Co., also in Chicago. Together, Jackson Boulevard and Podesta have clients that hold almost a third of the outstanding shares.

"There's enough votes to get this done," said Christopher R. Raffo, a senior vice president at Podesta. "It's the right size shop for people to build a big enough position to act. If shops are too big, it gets difficult for activists to buy enough shares to control the process."

In general, however, dissidents face an "uphill battle" to win proxy fights, said Heather Rosenkoetter, an analyst with Friedman, Billings, Ramsey & Co. in Arlington, Va. Even those frustrated by low stock prices for thrifts and banks hesitate to push for sale now instead of waiting for prices to rise.

"Institutions like Citizens are well entrenched in the community and have a lot of local people who own the stock," Ms. Rosenkoetter said. "Investors in those situations are more likely to vote for their neighbor than for somebody from out of town."

At Citizens, Mr. Seidman - a well-known activist from New Jersey - and Mr. Dickinson complained of poor performance since the company went public in May 1996. Its stock, first offered at $10, was trading at $14.875 late Wednesday. Earnings dropped to 61 cents per share in 1999 from 79 cents in 1997, the first full year as a public company.

C. William Landefeld, Citizens First's president and chief executive officer, said that the proxy fight "wasn't a pleasant experience to go through" but that "it opened our eyes and made us realize we have work to do."

The company wants to cut expenses, reduce its dependence on residential loans from 70% of its portfolio to no more than 50% within two years, and possibly expand by building a seventh branch, he said.

"The biggest thing this did was put it on the radar screen for the management and the board that we're underperforming and that we need to make some changes," Mr. Landefeld said. "We need to start generating better returns."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.