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SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X]
Check the appropriate box:
Preliminary Proxy Statement []
Confidential, for Use
of the Commission Only (as permitted by Rule 14a-6(e) (2) [ ]
Definitive Proxy Statement [ ]
Definitive Additional Materials [ ]
Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12[X]
CITIZENS FIRST FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)
COMMITTEE TO PRESERVE SHAREHOLDER VALUE
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(Name of Person (s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14 (a)-6(i) (4) and
0-11.
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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CITIZENS FIRST FINANCIAL CORP. COMMITTEE
TO PRESERVE SHAREHOLDER VALUE
April 3, 2000
The Committee believes that Shareholders are presented with a clear
choice in connection with the election. Included with this letter is a copy of a
letter written by James Dierberg, a representative of the Company's largest
shareholder, except for the Company's ESOP. The opinions expressed in Mr.
Dierberg's letter are his own and he is not affiliated with any member of the
Committee.
Do you want a continuation of policies that have resulted in poor
earnings and disappointing stock prices? If so, vote for Management's Nominees.
Do you want new ideas from people with successful track records, who
only have one objective -- the maximization of our share value? If so, vote for
the Committee's Nominees.
Each Shareholder should read the letter dated March 20, 2000, which was
sent by President Landefeld and urges the re-election of Management's Nominees.
Nothing is mentioned in that letter to indicate that any of the actions taken by
Management will positively result in increased profits or a higher share price.
Management has not demonstrated that the actions it has undertaken are anything
more than experiments. Are we, the Shareholders, being asked to serve as guinea
pigs? Does Management have any practical experience with commercial real estate
joint ventures or insurance agency operations? Do we have any basis for
believing either of these enterprises will be profitable or beneficial to the
Shareholders? It must not be forgotten that unsuccessful real estate joint
ventures caused the failure of numerous financial institutions less than a
decade ago.
One thing Mr. Landefeld did not mention in his letter of March 20, 2000
was that the Company owns a 20% ownership interest in Websoft, Inc. ("Websoft")
, a company that builds and markets internet portals. The Company also made a
loan to Websoft. As of December 31, 1999 Websoft had assets of $159,137, total
liabilities of $902,216 and total equity of ($743,079). The Company therefore
recorded a loss of $441,087 as of December 31, 1999. This is proof that
experiments can be risky and as Shareholders we can only hope that any
additional new experiments will not have the same result as Websoft. A sale of
the Company would eliminate this risk.
On the other hand, the Committee has plans and objectives that its
nominees will bring to the Board of Directors. These plans have worked well at
other institutions. (See, Chart below and prior proxy materials.) The
Committee's nominees will not unilaterally propose prices or actions; rather,
they will propose the retention of a nationally-recognized Investment Banking
Firm to make recommendations and to provide guidance to the Board of Directors.
As some of the largest Shareholders and Committee members we will advocate an
orderly process to maximize value for all Shareholders and are opposed to any
forced sale of the Company.
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Date Price
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Feb-99 15 3/8
Mar-99 15 1/2
Apr-99 14 1/16 4/26/99 Last Annual Meeting
May-99 14 3/8
Jun-99 14 1/2
Jul-99 15
Aug-99 14 1/2
Sep-99 12 1/2
Oct-99 12 1/4
Nov-99 12 1/2
Dec-99 12
Jan-00 12
Feb-00 15 3/4 4/26/99 - Last Annual Meeting
Mar-00 15.6
Date Price
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Feb-99 10 11/16 2/16/99 Seidman makes initial purchase of SJFC at $10.87
Mar-99 11 7/16
Apr-99 11 5/8 4/29/99 Seidman files 13D, disclosing ownership of 203,000
shares (5.35%)
May-99 12 11/16 5/18/99 Seidman files for 236,100 shares (6.223%)
Jun-99 14
Jul-99 13 7/8 7/10/99 - Seidman files Proxy Statement for Annual Meeting
disclosing 350,000 shares and seeking election of two nominees to SFJC Board
of Director.
Aug-99 14 1/2 8/13/99 = Seidman wins proxy contest.
Sept-99 14 7/16
Oct-99 13 1/2
Nov-99 13 7/8
Dec-99 15 5/8
Jan-00 15 3/16
Feb-00 15 3/4
Mar-00 16 11/16 RCBK announces to buy SJFC for $20 share.
WE WANT THE HIGHEST PRICE FOR OUR STOCK!
PROOF THAT THE COMMITTEE'S STRATEGY WORKS
One of the Committee's nominees, Lawrence B. Seidman ("Seidman")
successfully applied the strategies endorsed by the Committee at South Jersey
Financial Corp. (Nasdaq: "SJFC"). The chart set forth below illustrates what was
accomplished at SJFC and compares those results with stock prices being realized
by our Shareholders, during approximately the same period.
South Jersey Financial Corp. Citizens First Financial Corp.
Of course, no assurance can be given that the Committee's nominees, who
include Seidman, will be able to duplicate the results achieved at SJFC.
However, election of the Committee's nominees will provide an opportunity for
successful results and an opportunity for change.
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Management says: "Now is not the time to sell." The Committee asks: How
can you reject a sale without knowing the price a buyer is willing to pay? Isn't
everything for sale "at the right price?" Why should our shares in the Company
be any different? The Committee believes these are self-answering questions and
states that those in control of our Company are acting irresponsibly when they
refuse to even consider a course of action that could be financially beneficial
for all Shareholders.
DIVIDENDS
It is insulting to Shareholders for President Landefeld to remind us
about the Company's dividends paid in his letter, since it equates to a return
of only 1.28% on the March 24, 2000 stock price of $15.625. During the almost
four (4) years the Company has been public the dividends that have been paid to
all Shareholders have totaled approximately $300,000, while the "other
compensation" paid to Mr. Landefeld during the last three (3) years totaled
approximately $202,826 (this is in excess of his regular salary of $650,900 and
bonus of $27,675)! Who is benefiting from the continued operations of the
Company -- the Shareholders or Mr.
Landefeld? During this same period each Shareholder's stock went up a paltry $2
per share.
THE COMPANY'S 1999 POOR FINANCIAL PERFORMANCE
The Company's net income declined $822,000 or 40.8%, from $2,014,000
for the twelve (12) months ending December 31, 1998 to $1,192,000 for the twelve
(12) months ending December 31, 1999. The diluted earnings per share declined
during the same period from $.84 to $.58 or 30.95%. Non-interest expenses went
up for the same period from $7,426,000 to $8,826,000 or 18.9%. The Company's
efficiency ratio (general and administrative expenses/net interest income, plus
loan fees, gains on sale of loans and other income) for the period ending
September 30, 1999 was 76.43% while the average efficiency ratio for the 14
publicly traded Illinois thrifts was 57.59% (national average 50.47%).1
The Management that is recommending that you support its nominees is
the same Management that is responsible for the significantly lower income and
diluted earnings per share. This poor performance was accomplished in part
because of the inefficient and costly operations of the Company.
A vote for the Committee's Nominees will also perhaps bring new ideas
to the Board of Directors with regard to taking more cost-effective actions.
Witness the fact that Management estimates it will spend an extra $125,000 in
connection with this proxy contest, while the Committee is only expending
approximately $35,000.
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1 SNL Quarterly Thrift Digest for December 1999.
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The Company included a Performance Graph in the original proxy material
dated March 8, 2000 (See, page 18). This Graph shows that $100 invested in the
Company's stock, at the time of its initial public offering, was worth $115.14
on December 31, 1999. During the same period, $100 invested for the S&P 500
Index was worth $238.14 and $100 invested in the SNL AMEX Thrift Index was worth
$152.89.
Mr. Landefeld in his March 20, 2000 letter, eludes to the fact that the
Company's stock price is down but so is the stock price of many other financial
institutions. Mr. Landefeld is missing the point. Management of any company
cannot be responsible for how the market values the worth of a company. However,
they must take sole responsibility for the earnings performance of their
company. As shown above, the financial performance of the Company has not been
satisfactory and the blame for this poor performance rests solely with the
present Board and Management.
It should be noted that the stock was initially offered in May 1996 at
$10.00 per share. By December 1999, it was only trading at $12.00 per share. The
stock price has increased to approximately $15.50, since the Committee disclosed
its request for representation on the Board.
YOUR VOTE IS EXTREMELY IMPORTANT
1. If you have already voted for the Committee's Nominees, we thank
you. If you have not voted or have not voted for the Committee's Nominees, we
recommend that you read our material carefully.
2. Please SIGN. MARK, DATE and MAIL your WHITE proxy card in the
enclosed postage-paid envelope. If you wish to vote for our Nominees, you must
submit the enclosed WHITE proxy card and must NOT submit management's proxy
card.
3. IF you have already voted for the current Board, you have every
legal right to change your mind and vote FOR our Nominees on the WHITE proxy
card. Only your latest dated proxy card will count.
4. If your shares are held for you by a bank, brokerage firm or other
nominee, only your bank, broker or nominee can vote your shares and only after
receiving your instructions. Please sign, date and return the enclosed WHITE
proxy card in the postage-paid envelope provided or call your bank, broker or
nominee and instruct your representative to vote FOR our Nominees on the WHITE
proxy card.
5. Time is short. PLEASE VOTE TODAY!
If you have any questions or need assistance in voting your shares or
in changing your vote, please contact Beacon Hill Partners, Inc. at the toll
free number listed below.
BEACON HILL PARTNERS, INC.
(212) 843-8500 (Call Collect)
or Call toll-free (800) 755-5001
Sincerely,
/s/ Lawrence B. Seidman /s/ James D. Dickinson
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Lawrence B. Seidman James D. Dickinson
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Investors of America
1504 Highway, #395 N #8-00508
Gardnerville, Nevada 89410
March 27, 2000
C. William Landefeld
President And Chief Executive Officer
Citizens First Financial
2101 North Veterans Parkway
Bloomington, IL 61704
Dear Mr. Landefeld:
This Partnership is the largest shareholder, except for your ESOP, of shares in
Citizens First Financial Corp., having invested more than $1,700,000.00 in the
company. We are long term investors and have bought and held significant
investments in the banking and thrift industries over the past ten years. It is
generally our policy to support the management of the companies in which we
invest, relying on management and especially the Board of Directors to build
value for the benefit of the shareholders.
The performance of the Board of Citizens has been so unsatisfactory that we have
decided to change that policy in this case, and we are voting in favor of the
nominees proposed by The Committee to Preserve Shareholder Value. Citizen's
recent performance as demonstrated by declining earnings and the loss in
shareholder value shown on page 18 of your Proxy Statement should awaken the
Board from its slumber and lead to immediate and decisive action to improve the
situation. Instead, the Board has apparently chosen to circle the wagons, resist
any change and pretend that all is well.
All is not well for your shareholders, especially those of us who have used our
own money to buy our shares and watched the investment founder while
opportunities pass by. While your compensation and stock ownership continues to
swell through grants and options (as shown on pages 14 and 15 of your Proxy
Statement), the interests of ordinary shareholders have declined, rebounding
only upon the news of the Committee's proposals for action. What, exactly, did
you do in 1999 to deserve total compensation of almost $400,000? Is there anyone
on the Board of Directors willing to ask that question?
We have been shareholders in other companies energized by Mr. Seidman and other
members of the Committee, and the shareholders of those companies have realized
impressive gains from Mr. Seidman's efforts. Citizens urgently needs the
perspective of directors who have invested substantially, who bring independent
perspective and financial expertise to the Board, and whose interests are
aligned with ordinary shareholders. We believe that Messrs. Seidman and
Dickinson will bring exciting potential to the Board, whether the company is
ultimately sold or becomes more aggressive in managing its opportunities. We
urge the Board of Directors to recognize its fiduciary responsibilities,
reconsider opposition to change and welcome new initiatives for Citizens and all
of its shareholders.
Sincerely,
Investors of America
Limited Partnership
First Securities America, General Partner
By: /s/James Dierberg
James Dierberg, President
