Stuttgart bank set to purchase Bank of Fayetteville

Farmers and Merchants Bankshares of Stuttgart has agreed to acquire Bankshares of Fayetteville, the two banks said Thursday.

Shareholders of Bankshares of Fayetteville, the parent company of Bank of Fayetteville, will receive all cash in the deal. The price paid for the bank was not disclosed.

The transaction is expected to close by the end of the year.

Bank of Fayetteville will retain its name and will continue to operate in all existing branch locations.

"This is an important event for our bank," Mary Beth Brooks, chief executive officer of Bank of Fayetteville, said in a prepared statement.

With the purchase, Bank of Fayetteville's customers will have access to more products, services and improved technology, Brooks said.

Gary Hudson, Farmers and Merchants' chief executive officer, said the two banks have similar business philosophies that include community involvement and commitment.

This is the third acquisition for Farmers and Merchants since 2008, said Donna Kimes, the bank's senior vice president and director of marketing. In 2008, Farmers and Merchants bought Chart Bank of Perryville. In 2009, it acquired First National Bank of Marianna.

Farmers and Merchants has branches in Stuttgart, DeWitt, Marianna, Hazen, Des Arc, Perryville and Morrilton.

Farmers and Merchants agreed to acquire Bank of Fayetteville because Northwest Arkansas is such a high growth market, Kimes said.

"We are not in communities that are growing," Kimes said. "I wish we were. Our other markets are strong in agriculture, but that's not what Northwest Arkansas is. This gives us a good opportunity to diversify our lines of business. And in this regulatory environment, it makes it very difficult if you're not $1 billion [in assets] or greater."

Farmers and Merchants has about $700 million in assets and will have assets of $1.04 billion if the purchase is approved by regulators.

The Northwest Arkansas market is very competitive, said Lindsay Ramsey, Bank of Fayetteville's marketing director.

"The [purchase] with [Farmers and Merchants] will allow us to offer some technology and other things we don't have," Ramsey said.

With the purchase, Bank of Fayetteville will be able to offer mortgage lending, have a higher lending limit than it currently does and will have access to improved technology, Ramsey said.

Bank of Fayetteville was founded in 1987 by John Lewis.

The bank has five branches in Fayetteville, as well as offices in Farmington, Prairie Grove and West Fork.

Business on 07/31/2015

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