Dubuque, Iowa-based Heartland Financial USA recently settled a months-long public dispute with board member Lynn Fuller after he publicly criticized the bank’s business practices last spring.
The agreement, announced in a Dec. 14 regulatory filing, includes Fuller resigning from his position on the company’s board of directors. Fuller had already been removed as executive chair last March, after he announced that he was leading a group of activist shareholders with 6.1 percent of the company’s stock. The group suggested that Heartland Financial had abandoned its core mission over the past several years and should sell “to another banking organization whose leadership would be better suited to serve the needs of Heartland employees, customers and communities while maximizing the value of the Heartland franchise for its shareholders.”
The group’s criticism came after the bank announced in February that it planned to consolidate its 11 bank charters into one for efficiency purposes. During his tenure as CEO from 1999-2018, Fuller promoted a decentralized, multi-charter business model that permitted subsidiaries to operate with a large degree of autonomy.
Each member of Fuller’s shareholder group agreed to not purchase or offer to buy any Heartland Financial equity or voting securities; solicit proxies; contest board appointments or instigate board member removals; seek board representation; propose mergers and acquisitions; and meet other requirements. The shareholders group and Heartland Financial agreed to non-disparagement and confidentiality covenants.