Though many issues in my daily work as a bank analyst can be vexing, undoubtedly the most frustrating is having to deal with companies whose management teams have no idea what it means to run a publicly traded entity. To be blunt, most small- and mid-cap bank and thrift managements simply do not understand - or do not care - that their primary job is to maximize shareholder value.

I cannot count the times I have questioned the CEO of a poorly performing community bank about why he has not sold the company, only to be met with various forms of the following: "We are a community institution and want to retain a community focus," or "We are concerned about our employees and worry about jobs that might be sacrificed in a sale." When asked where the shareholders fit in, these CEOs often respond, "Shareholders can sell their stock if they're not happy with the way we run things."

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