Cheviot Savings CEO out as investors buy in

Cheviot Savings Bank's parent company announced Tuesday its CEO, Thomas Linneman, 60, will retire Friday after 16 years at the helm.

Bank officials said Wednesday they are working on finding Linneman's permanent successor, but wouldn't comment on any further potential changes at Cheviot Savings.

Linneman's abrupt retirement comes days before his employment agreement was up for renewal and after months of institutional investors increasing their stakes in the community bank with 12 branches in Hamilton County.

In October, Cheviot Financial Corp., the bank's parent company, announced an agreement with New Jersey activist investor Lawrence Seidman to expand its board of directors to include a local attorney he recommended: David Rosenberg, a partner at Keating, Muething & Klekamp.

In return, Seidman – who is the fourth-largest shareholder with an 8 percent stake – agreed not to "propose or seek to effect a merger or sale of the company or initiate litigation against the company."

Replacing Linneman on an interim basis is Mark Reitzes, a Huntington Bank veteran and another recent addition to the board of directors. Reitzes was appointed to the board in July.

No timetable has been established for determining a permanent successor. Linneman did not provide a statement marking his departure. Linneman could not be reached for comment.

On Wednesday, Reitzes said he was filling in until Linneman was replaced, but brushed aside questions about the big changes in Cheviot Financial stock in the last year.

"We're happy when any investors show interest in our stock," Reitzes said, declining to comment whether the board of directors might be considering seeking a buyer for the company.

Reitzes also declined to say whether he's seeking to stay on as CEO.

Cheviot Financial Corp. reported its profits doubled in 2014 to $3.1 million, while total revenues climbed 6.2 percent to $18.8 million.

Cheviot's stock recently peaked at $14.25 on Jan. 2 as large investors took more interest in the community bank. The stock jumped 3.7 percent or 50 cents to close at $13.90 on Wednesday.

Danish pension fund BankInvest Asset Management disclosed in December it purchased more than 15 percent of Cheviot Financial – making it the company's largest investor.

Naperville, Illinois-based P.L. Capital Advisors, an investment adviser fund, increased its Cheviot stake 15 times last summer to make it the company's No. 6 investor with a nearly 5 percent stake.

All the interest in Cheviot Savings Bank comes as dealmaking for banks in Greater Cincinnati has heated up.

Three local banks have been acquired in the last nine months: Crestview Hills-based Bank of Kentucky signed a $363 million deal with North Carolina's BB&T in September; Wilmington's National Bank and Trust Co. consented to a $109 million takeover by Marietta, Ohio-based Peoples Bank; and last May regulators closed and sold Clifton's Columbia Savings Bank to Evansville, Indiana's United Fidelity Bank.

Cheviot Savings Bank is Greater Cincinnati's No. 12 bank in terms of deposit market share, according to FDIC data. As of June 30, the bank held $473.2 million in local deposits.

Greater Cincinnati is a tempting target. It has an unusual concentration of more than 40 banks serving the region's nearly $120 billion economy – the fourth-fastest-growing major city in the Midwest.

Linneman began his career at Cheviot Savings Bank in 1980 as controller. He was named vice president and chief operating officer in January 1998 before being elected president and chief executive officer in December 1998.

Since Linneman first became CEO, Cheviot Savings has gone from being a mutual savings and loan with four branches and $220 million in assets to becoming a publicly traded community bank with 12 offices throughout Hamilton County and $570 million in assets.

Reitzes joined the board of directors of Cheviot in July 2014 after a 22-year career with Huntington National Bank, where he had served most recently as president of the Southern Ohio/Kentucky Region.

Prior to his Huntington tenure, Reitzes served with KPMG LLP, the Office of Thrift Supervision and Sunrise Savings Bank.

, "We thank Tom for his 35 years of leadership with Cheviot Savings Bank, including over 16 years as president and chief executive officer," said Robert L. Thomas, lead director of Cheviot Financial Corp. "We wish him well in his retirement and appreciate the assistance he will provide in this transition period."