We urge Friendly Hills’ shareholders NOT to respond to solicitations made by the Company, its current management, or the Board until you have received our proxy material. Help us hold the Board leadership accountable at this critical juncture. Join us in creating a strong future for Friendly Hills Bank, its employees, and shareholders. The Bank needs leadership focused on creating value for Friendly Hills’ owners – its shareholders – we need a Board with a demonstrated track record of successfully building community banks. The CEO, Chairman, and Vice Chairman have not generated value for shareholders in over 15 years, and they have not been held accountable. With the departure of the CEO, the board will select the direction and leadership for the future. We believe Friendly Hills urgently needs new independent directors who will advocate for shareholder rights and interests. In total, since 2016 management and directors have rewarded themselves more than $5 million in compensation in a bank with approximately $19 million in equity. Management has granted options representing 7.0% of the bank to themselves at $6.89, significantly below net tangible book value. Over the past five years, the Company’s return on assets has been mired around 0.45% - for comparison, well-run banks typically return approximately 1.0-1.5%.įederal Home Loan Bank borrowings totaled $20.5 million and cost $491,000 in interest expense in 2020 – in our view, a waste of precious shareholder resources. June 2021, the Board approved a poorly conceived, strategically flawed merger that cost shareholders $0.66 per share in Q3 2021 alone, by reducing net tangible value to $9.56 while burying additional losses in a 10-year expense recognition.īloated, top-heavy management, with four executives earning more than $200,000 in base salary (with bonuses & expenses the annual amount is over $1 million). We urge you to consider the following recent failures of the Company’s management and Board, which we believe have destroyed tremendous value for shareholders: In our view, any change must start by refreshing the Board with the addition of new, independent members who understand the bank, its history and its mission, and who are committed to make Friendly Hills responsive to its stakeholders rather than a piggybank for its current Chairman, Vice Chairman, and CEO. Soon, you will receive proxy materials from us in which we outline our vision for a better future for the bank and its employees and customers.
While headquartered in a town of fewer than 900 people, Hills Bank is one of the largest independent banks in Iowa, with over 120,000 customers. We have long been concerned and dismayed by the inability of management and the Company’s board of directors (the "Board") to create value for shareholders, and we believe that it is time for that to change. Hills Bank is a bank based in Hills, Iowa, U.S.A., with more than 500 employees across 19 offices in three eastern Iowa counties and total assets over 4 billion. We are a group of shareholders that represent more than 25% of the outstanding shares of Friendly Hills Bank ("Friendly Hills" or "the Company").