A status update posted on the Bank of Fayetteville’s Facebook page on Monday addressed recent talk that the bank had been sold to First National Bank of Fort Smith parent company First Bank Corp.
The message: “We thought you would like to know that your community bank, The Bank of Fayetteville, is staying just that … your community bank. We are proud to continue this tradition and proud to be your bank.”
First National Bank officials last month told the Fort Smith Times Record that no deal had been finalized, but until now, the Bank of Fayetteville had been quiet about the issue, leaving many to wonder what was going on.
Bank president Mary Beth Brooks could not be reached for comment Monday, but spokesperson Lindsay Ramsey confirmed that the Facebook update was intended to calm concerns among current customers.
Ramsey said the the bank has not been sold, and that there are no plans to do so at this time.
“As a publicly-traded company, we cannot say that we are not entertaining offers, because if one came to us, our board would be required to consider it,” said Ramsey. “There are currently no offers on the table.”
The Bank of Fayetteville opened in 1987, and currently operates eight branch locations in Northwest Arkansas.
“As a publicly-traded company, we cannot say that we are not entertaining offers, because if one came to us, our board would be required to consider it…”
And that folks is what is wrong with our system, even if a publicly traded company wanted to do what was best for their customers, and society in general, they are legally prohibited from doing so.
Scott, that’s not true. The board is required to “consider it”. That means the board is duty-bound to entertain an offer and weigh it against the interest of its shareholders. In other words, if this would benefit the shareholders, the board would approve it. This is similar to a lawyer being offered a deal for her client. Even if she thinks the deal isn’t great, she is required to present it to her client.
I think you’re confused. You wrote “…that’s not true” and then went on to write how is is, in fact, true.
Care to enlighten us?
To expand on what the other commenters wrote… There is currently no evidence that BOF being sold would do anything to affect customer experience. So, I believe your statement was premature and, of course, factually incorrect. The board makes decisions that, in theory, balance the needs of the shareholders, institution and customers. I am the biggest PinkoCommieBleedingheartSocialist I know, and even I understand that the bank is not a non-profit and I don’t begrudge the BOF or its shareholders turning a profit.
As a BOF customer, I am very pleased with all the services I get through the bank. If the bank is sold, or otherwise changes its terms of service, I can choose other banks.
Scott–
You wrote “And that folks is what is wrong with our system, even if a publicly traded company wanted to do what was best for their customers, and society in general, they are legally prohibited from doing so.”
There is no legal prohibition against doing what is best for customers and society in general. Rather, there is fiduciary responsibility to shareholders that supersedes– up to a point– the interests of customers and society. If the shareholders’ best interest coincides with the best interests of customers and society, then the interests of customers and society are addressed. Most companies will not operate directly against the best interests of their customers; it’s bad business. It is, of course, incumbent upon customers (and, as an aggregate of customers and other interested parties, society) to be aware of and protect their best interests.
Shareholders own the bank. Their interests ultimately supercede those of customers. Just like if you owned a hotdog stand. It might be in the customer’s best interest for you to give away free hot dogs. But as the owner, it would not be in your best interests to do so.
As the owner you might think your interests are best served by selling hotdogs for $100 each, but your customers would move on.
Its pretty cool how in the free market a lot of these things tend to work themselves out.
OK, I understand taking examples to the extreme to convey a point but I was coming from the point that the Board is beholden to whatever makes the shareholders the most money regardless if that decision is the best for the customer *or* the bank.
My general point is that the system is broken because now days everything is focused on increasing shareholder value at any cost, and this “fiduciary responsibility” is sometimes not in the best interests of the business *or* the customer.
That may be your perception, but as with all businesses, the consumer ultimately decides who will survive (except when the government bails them out). Bank of America proposed fees for various things, for example. Consumers got upset, and other banks seized the opportunity to advertise their lack of fees. I’d wager that B of A lost a lot of accounts over that proposition, and so while it may have been designed to maximize profits, it failed due to consumer choice.