Magazine article American Banker

Activist Stilwell Trying to Force Harvard Illinois to Sell

Magazine article American Banker

Activist Stilwell Trying to Force Harvard Illinois to Sell

Article excerpt

Byline: Robert Barba

Joseph Stilwell, an activist investor behind a number of proxy battles, is now causing a hullabaloo at Harvard Illinois Bancorp Inc. in Harvard, Ill.

Stilwell is looking to gain representation on the $170 million-asset mutual holding companyas board for his Stilwell Group, according to recent filings with the Securities and Exchange Commission. His intentions are singular: Stilwell believes Harvard Illinois should sell because it hasnat been able to reach normalized earnings.

Stilwell wrote in a March 2 letter to shareholders that the company, which is operating under a memorandum of understanding with regulators, has reported more than $2 million of losses in the last five years. Meanwhile, Duffield Seyller 3rd, Harvardas president and chief executive, earns $178,000 annually and has received salary increases for the past three years, the letter said.

aOver the past half-decade, the board and management have not been able to run a profitable bank. Banking in our country is changing, and some community banks as currently configured cannot earn a profit,a wrote Stilwell, who owns 80,000 shares, or a roughly 9.8% stake, in the company.A aWe believe [Harvard Illinois] should seek a stronger community bank as a merger partner. In the upcoming Board election, we will be running a strong, independent candidate who shares these beliefs.a

The companyas board responded Monday with a note entitled, aRe: New York Hedge Fund Attacking Your Bank. …

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