Letter: What's in bank's name change?

Dear Editor:

There are inaccuracies in the Dec. 24 article, “Bank to operate under state charter.”

Originally the bank in Libby was chartered as a state bank, First State Bank of Libby. In 1963, it was changed to a federally chartered bank – First National Bank in Libby, not First National Bank of Montana.

This change brought the bank under the regulatory authority of the Office of the Comptroller of Currency. It wasn’t until 1997 that the name was changed to First National Bank Of Montana Inc.

Now comes the announcement of the change back to a state charter under another new name, First Montana Bank. This brings the bank back under the regulatory authority of the state’s Division of Banking and Financial Institutions. This is all very curious and somewhat familiar.

I’d question the stated motives for this recent change to “better reflect the bank’s Montana heritage.” What does that have to do with anything? The safety and soundness of a bank has nothing to do with its “Montana heritage” – whatever that is.

Another issue cited for the change was reducing costs. This has always been the case, so why change again, and now? Does the word “spin” come to anyone’s mind?

Many years ago I worked at FNB – for 19 years. I was a senior/executive officer and a shareholder. Over the ensuing years I have watched this bank’s performance falter. My bet is the bank was getting pressure from OCC regulators over how they were operating the bank and its resulting condition.

Rather than running a decent bank, the board of directors apparently decided to “dumb it down” by changing back to a state charter, thereby reducing the level of regulatory oversight.

This approach has been used before in Libby. Many of you will remember when, in 1985, United National Bank converted to a state charter to escape OCC oversight. By May 1987 that bank failed.

My friends, I don’t claim to know if this bank is doomed to a similar fate. I can tell you they can’t change the condition of a bank by changing its name.

Jim Eickhoff

Boquete, Panama