BNA Bank officials made a presentation to Union County supervisors Monday concerning the importance of hometown banking versus dealing with out-of-town institutions.
At their past meeting, the county board voted to move an $8.5-million certificate of deposit from BNA Bank to BancorpSouth, based on the Tupelo bank’s submitting the highest interest rate.
The money represents a health care fund established when the Baptist Health Care system formally leased what had been Union County General Hospital. The purpose of the fund is to provide a financial reserve in case the county ever has to take back operation of the hospital and cannot be spent for any other purpose. Part of the interest on the fund can be spent on indigent health care, but that’s all.
The CD in question has been with BNA since the origin of the lease arraignment according to BNA President Bo Collins.
Collins asked the board to, in the future, consider other factors beside the bid amount, especially when the difference is negligible.
While BNA’s bid was lower than BancorpSouth’s, Collins noted that the difference was five basis points and gave several examples. One was that the difference amounted to $5 out of $10,000.
He went on to provide examples of BNA’s giving to the community as compared to contributions by other banks.
“We all believe in shopping at home,” Collins said. “That’s a fairly easy thing to argue on.”
“Money with a local bank is deployed locally,” he said. “With out-of-town banks their footprint is much larger and not as big a part of spent locally.”
BNA is home operated and owned with most of the 850 stockholders living here, he said. “We pay much more property tax at $87,000 a year and have a $7 million payroll with 100 employees. That’s even though we receive no incentive from the county.”
He went on to list contributions to or support of the Union County Historical Society, Tanglefoot Trail, Union County Development Association, New Albany Main Street Association, Magnolia Civic Center, BNA Bank Park and the various schools, not counting smaller contributions.
Collins said this amounts to about $153,000 a year, in contrast to the next highest bank which gives less than $20,000 a year.
He said state officials confirmed that bid laws allow a body to accept the lowest or highest, and the best, bid, which does not restrict a decision to price.
“My point is that there is more to community than just price…We’re just looking for local support,” he said. He added that he wanted to get this information on the record because even though bank officials and elected officials are friends, the average person may not have the same access to information.
Later, some of the board members said they understood the bank’s position but offered the view that if the board always awards a bid to any one entity there will be no reason for others to bid or the bids would not be competitive. And of course a local bidder could simply be more competitive.
The vote on the CD is question approved an interest rate for one year only.