DEFIANCE - In what appeared to be the upshot of a dispute, the chief executive of Rurban Financial Corp. resigned suddenly yesterday.
The departure of Thomas Williams, 53, which Rurban called a resignation, occurred less than a month after the Defiance company restated its 2001 annual earnings, cutting its profit in half as it boosted its allowances for bad loans by 300 percent from the previous year and double the amount it initially reported five weeks earlier.
Rurban, the parent of State Bank & Trust Co. and other businesses, provided no details Mr. Williams' departure or his reason for quitting. It was unclear whether the Rurban board asked him to leave or whether he chose to leave because of a disagreement, but his departure clearly was not planned.
Just this week, Rurban mailed annual reports with a shareholders' letter from Mr. Williams and proxy statements for the May 30 annual meeting listing him as CEO and a board member.
Mr. Williams, who also resigned as a board member, could not be reached for comment.
Rurban, which has assets of $750 million, said it was temporarily installing a retired bank executive, Richard Burrows, as CEO and had named a search committee to find a permanent leader.
Steven VanDemark, board chairman, who also could not be reached for comment, issued a statement that praised Mr. Burrows but didn't mention Mr. Williams. Mr. VanDemark is general manager of Defiance Publishing Co., publisher of Defiance's newspaper, the Crescent-News.
The announcement did not seem to scare investors. Rurban's stock closed yesterday at $12.85, up 35 cents a share, in Nasdaq trading.
Mr. Burrows, whose banking career spanned 40 years, had been president of Rurban and its main subsidiary, State Bank and Trust Co., from 1985 to 1995 - when Mr. Williams took his place - and continued on the board until a year ago.
The company said it plans a comprehensive search for a new CEO. It did not disclose who was on the search panel or how quickly it hoped to find an executive.
Bank officials declined to comment on questions on whether the resignation was related to Rurban's recent restatement of its 2001 earnings. The firm originally said it has a profit of $4.1 million, but cut that number to $2.3 million after boosting its bad-loan allowance to $8.7 million from $4.4 million originally reported and from $2.1 million a year earlier. It cited “severe weaknesses in several commercial loans” as the reason, but explained the change by saying only that the numbers were reassessed.
The company has not released its earnings report for the first quarter of this year.
Rurban's State Bank and Trust subsidiary recently took over most assets of the former Oakwood Deposit Bank Co. in Paulding County, an institution that failed because of a fraud that could total $40 million to more than $60 million.
Other banks owned by Rurban are Peoples Banking Co. in Findlay and McComb, the first Bank of Ottawa, and Citizens Savings Bank Co. in Pemberville. It also owns Rurbanc Data Services, Inc., a data-processing unit, and Reliance Financial Services, which offers trusts and other financial services.