Nov. 1--Jack Briner brings more than 40 years of banking experience to his CEO position at First Mountain Bancorp, the small Big Bear Lake-based holding company behind First Mountain Bank.

But the boom-and-bust business cycle that banks rode over the past few years has provided the most valuable insight.

"When you get greedy in this business, you're in trouble," said Briner, whose first job in the industry was with Wells Fargo in 1968. "You've got to have humility when you're a bank."

Future growth for First Mountain probably means opening branches in Lake Arrowhead and Crestline and eventually expanding into the High Desert, he said.

"I'd love to be right next to a big institutional bank," Briner said. "Competition makes us all better."

First Mountain Bank is feeling the brunt of commercial real estate loans gone sour, but it is still well capitalized by regulatory standards.

We talked to Briner about the future of small community banks in the Inland Empire, the number of banks that could still fail nationwide, and the economic downturn that many economists are saying has ended.

Question: You've mentioned your discussions with other bankers about future community bank failures across the nation. What are they saying?

Briner: We're predicting there's going to be 400 failures next year or more. A lot of these little banks are in trouble. They're really, really struggling.

The regulatory environment has become

very black and white. The little banks are feeling the stress that the FDIC is feeling from Congress to make sure there are no more failures in the banking system.

Our (FDIC) special assessment cost us $62,000. Now they're talking about having banks prepay three years worth of premiums to restore the FDIC fund.

We're OK. We have the money. But with the special assessments, too many of them could send some banks -- the ones that are floundering -- over the edge.

In three to five years, we could see as many as 1,000 banks go out the hard way by the FDIC.

Q: You've mentioned that First Mountain Bank sees future growth in the mountain communities, but what about the High Desert?

Briner: It's not inconceivable we could open branches in Apple Valley or Hesperia. I think the area is underbanked from the standpoint of community banking.

When a good bank sells out (and gets acquired), it often creates a vacuum. The customers usually get frustrated.

They experience changes, and nobody likes those changes when it comes from larger institutional banks that are inflexible.

That only happens so long before a group of businessmen are sitting around a table and saying, 'Boy, I wish our community bank was still around.'

Q: You've said that it's hard to believe an economic recovery is taking shape. Can you explain?

Briner: The three months that produced this 3.5percent GDP -- you're not going to see that in this current (fourth quarter) period. What I'm concerned about most is retail sales. We haven't seen them improve.

I think this community and other mountain communities haven't felt the recession as much as the rest of San Bernardino County. We rely heavily on tourism. Our chamber does a tremendous amount of work promoting how close we are to Los Angeles for snowboarding and skiing.

It's different up here. These people know how to operate in a resort community. You take someone from off the hill to come up here to compete, and it's harder for them to understand how to compete in this economy.

Q: How is First Mountain Bancorp able to keep putting money into its loan loss reserves and still stay well capitalized?

Briner: We have a strong capital position because our directors haven't paid out (cash) dividends to shareholders.

matthew.wrye@inlandnewspapers.com, (909) 483-9391

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