Heartland Financial USA has removed Lynn Fuller as chairman after the Dubuque, Iowa, company’s retired CEO openly questioned its strategic direction and pressed for the board to find a buyer.
The $19.3 billion-asset company said in a press release Wednesday that the board had appointed John Schmidt to serve as independent chairman. He joined the board in 2001.
The board determined that Fuller “was no longer best positioned to serve in the chairman role in light of his public disagreement with the company’s leadership and strategy, which was previously and unanimously approved by the board,” Schmidt said in the release.
“The board has full and complete confidence in management and the company’s strategic plan to drive growth and deliver long-term value to shareholders,” Schmidt added.
Fuller, who retired as CEO in 2018, is part of group that sent a letter to Heartland’s board on March 8 “expressing concerns” about management’s decisions tied to “performance, growth and prospects,” according to a regulatory filing.
“I would be remiss if I did not convey my extraordinary disappointment with Heartland’s recent performance and with management’s apparent inability to develop, articulate and follow a strategy that is designed to improve total return to stockholders.” Fuller said in a separate letter.
“Heartland has lost its ability to grow by becoming obsessively focused on internal restructuring, cost cutting and the adoption of practices of the very large banks,” the letter added.
The group, which owns about 6.1% of Heartland’s common stock, pressed the board to “thoroughly canvass … available acquisition partners” to maximize shareholder value.
“Our board takes its fiduciary responsibilities seriously and we will engage in appropriate discussion,” Thomas Flynn, Heartland’s vice chairman and lead independent director, said in a press release responding to the group’s letter.
“I am confident in our strategic plan,” Flynn added. “Mergers and acquisitions have been, and continue to be, part of our strategic plan. The company has momentum and is positioned for continued growth and progress against our goals in 2022.”
Flynn also noted that the board, which included Fuller, unanimously approved a plan to consolidate the company’s 11 bank charters.
Fuller informed the board on Feb. 15 that he planned to retire as executive chairman after this year’s annual meeting. Fuller also plans to step down from the board when his term ends in May 2024.
Fuller had a large role turning Heartland into the company it is today. He was the company’s CEO from 1999 to 2018. He was CEO of Dubuque Bank and Trust, the company’s Iowa bank, from 1986 to 1999.