Editorial: Losing Mountain National sad, but welcome to town the new owner

Jun. 11, 2013 @ 09:41 AM

The country has learned a lot about bank failures in the last five or six years. It’s nothing like it was in the Depression. These days the closing of a bank and its reopening under new ownership is practically seamless, if a bit jarring to customers and the upsetting to the employees who fear for their jobs.

It came as no surprise to insiders and others who understand the banking industry that Mountain National was closed by federal officials last Friday. It was a matter of when, not if, say those who follow such things. The bank had been under a consent degree for months with the FDIC to build up capital and get more money invested. Try as they might, the management team of the bank and its board couldn’t do it.

That didn’t make last Friday’s actions at closing time any less stressful. To have a team of strangers walk in, flanked by law enforcement, to take over a bank held dear by customers and employees was disturbing to all involved. Yet things went smoothly. Those who were involved in this action had done this before. They follow a virtual script, a procedure designed to make the transaction from Mountain National to First Tennessee.

Today all locations of Mountain National are branches of First Tennessee, a Memphis-based corporation that until last weekend had no presence in Sevier County. That’s a name change. The real question is whether customers will lose any deposits. To date no customer in an FDIC-insured bank has lost deposits when a bank failed. That’s remarkable record, considering the number of bank failures in recent years.

It seems unlikely every employee of Mountain National will be retained. That’s too bad. These are good people, our friends and neighbors, and they helped a lot of folks over the last 15 years or so. First Tennessee would be wise to keep as many as they can. These loyal staff members know banking and they know this community.

There are no villains here. It serves no purpose to ascribe blame or fault. It is just an unfortunate, even sad, set of circumstances. So let’s try to move on from it. Welcome to town, First Tennessee. This is a big company with close to 5,000 employees and billions in assets. Mountain National customers are in good hands.