BARRETT R. ROCHMAN
P.O. BOX 3074
CARBONDALE, ILLINOIS 62902
(618) 457-4334 OR (800) 529-3515
March ___, 1998
Dear Fellow Shareholder:
Now that almost a year has passed since Heartland's first Annual Meeting
of Shareholders, I wanted to write to you and give you my thoughts on the
progress of our company in 1997.
I believe that Heartland Bancshares' recent financial performance has
been very disappointing. Based upon the financial information contained in
Heartland's most recent quarterly report filed with the Securities and
Exchange Commission, Heartland had a return on total assets of less than 0.3%
and had a return on shareholders' equity of less than 4.50%, on an annualized
and undiluted basis for the first nine months in 1997. I feel these results
are unacceptable, and I have been unhappy with Heartland's performance since
it became a public company in June, 1996. I believe that a bank should earn a
return on total assets of at least 1% annually. On January 20, 1998, the
Chicago Sun Times reported that, as of September 30, 1997, the national
average return on assets for banks in the United States was 1.24%. Further,
the Office of the Comptroller of the Currency ("OCC"), the agency that
regulates national banks such as Heartland National Bank, reported that the
return on assets for FDIC-insured national banks for the second quarter of
1997 was 1.32%. Additionally, I believe that Heartland should be providing
shareholders with a return on total equity of between 10% and 15% per year.
The OCC also reported that the return on equity for FDIC-insured national
banks for the second quarter of 1997 was 15.27%. While I understand that
Heartland may need some time to achieve these benchmarks, the bank is
nevertheless significantly below these thresholds.
On another note, I would like the opportunity to set the record straight
on a few matters because Heartland, in a letter to you last year, made
statements about my shareholder proposal and about me that were untrue. As
you probably recall, I suggested a proposal for shareholders to consider at
Heartland's Annual Meeting of Shareholders held in April, 1997. The proposal
recommended that the Board of Directors examine whether a sale of Heartland
was feasible and in the best interests of all shareholders and then report its
findings to shareholders. At no time did I indicate that my only interest was
in selling Heartland, nor did I ever suggest that Heartland should consider
hanging out a "For Sale" sign in front of the bank. In my view, that would be
ridiculous and not good for the shareholders of Heartland.
As you may know, I am the largest shareholder of Heartland outside of the
Employee Stock Ownership Plan and am very much interested in the business of
Heartland and Heartland National Bank, since the value of my investment, as
well as yours, is directly affected by the success of Heartland and Heartland
National Bank. I intend to continue to monitor Heartland's performance and to
report my findings to you from time to time. Everything I am doing is in an
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Heartland Shareholders
March ___, 1998
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effort to further the best interests of all Heartland shareholders. For this
reason, I intend to nominate myself for election as a director at the 1998
Annual Meeting of Shareholders. I will be sending you additional materials
relating to this in the near future.
With your support and involvement, we can make a difference at
Heartland. If you have any questions or would like to discuss my concerns
further, please do not hesitate to call me at (618) 457-4334 or (800)
529-3513.
Sincerely,
/s/ Barrett R. Rochman
Barrett R. Rochman
SS-117283-3
