Magazine article American Banker

Strategic Differences, Poor Stock Performance Likely Led to Firing of Kentucky Bank's CEO

Magazine article American Banker

Strategic Differences, Poor Stock Performance Likely Led to Firing of Kentucky Bank's CEO

Article excerpt

The firing of Trans Financial Inc.'s chairman and chief executive last week apparently was the culmination of dissatisfaction with his business strategies and the poor performance of the bank's stock.

"These things don't just happen in a day," said Michael J. Moser, senior vice president at the Bowling Green, Ky., banking company "It boiled down to the direction the company was taking, and the board had one idea of what would return shareholder value, and he had another - and they were not exactly in sync."

During his 12 years in charge, Douglas M. Lester built the bank into a $1.8 billion-asset multiservice company, nearly 10 times its original size. But its stock value has suffered, languishing in the mid-teens after reaching as high as $23 three years ago.

Mr. Lester could not be reached for comment.

Last Wednesday, a day after Mr. Lester's firing, the company's stock jumped by more than 10%, to $17.50 - its highest in six months. Morgan Keegan & Co.'s analyst, John Moore, immediately raised the bank's rating from "hold" to "buy" at the news and boosted his 1997 earnings estimate for the company by 15 cents, to $1.75.

"The real challenge for them right now is to find the right person who can quickly get the company back on the road again," Mr. Moore said.

Trans Financial said in a release that the board is forming a search committee that will consider candidates both inside and outside the company. In the meantime, Thomas R. Wallingford, a director, has stepped in as acting chairman, and executive vice president Vince A. …

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