What's in a Name? The Intersection of Brand and Community

Bank name changes go beyond charter conversions

What's in a (bank) name? It's branding, but so much more. Competition, growth and expanding markets, local history, M&A, relationship with the community… An inexhaustible list of influences can impact an institution's strategy for its name. Changing names is not a decision made lightly for any business, but when approached strategically it can be an effective way for banks to retain or gain target customers or to deepen its connection with a wider community.

A bank's motivation to change its name could range from compliance (i.e. a charter conversion), to significant changes in corporate strategy, product/service mix, or the bank's target market, to differentiating or refreshing the bank's current brand, according to John Verre, president and CEO, Leap Strategic Marketing. Regardless of the reason behind the name change, more and more banks are choosing creative, non-traditional names. "What we see reflects banks recognizing the value of a brand and trademark," explained Jason Hunt, attorney at Boardman & Clark, LLP. "Traditionally, many banks picked names reflective of their local geographic community or descriptive of their position in the community, but as they expand they want to have more of a unique trade name or brand."

Fortifi Bank, formerly known as 1st National Bank of Berlin, is a perfect example. The bank is 142 years old and originally chartered in Berlin, Wis. Over the past two decades, however, it expanded its footprint well beyond its name. "We now reach from Waunakee to Green Bay," said President/CEO Eric Cerbins. "We were being confused with a few other First National Banks within that footprint." The bank rebranded a few years ago in order to differentiate, but the market confusion continued. "It used to be there was just one First National Bank in each community, but as we grew our territories started to overlap," explained SVP – Marketing Loni Meiborg. When the bank decided to convert from a national to a state charter, it also used the opportunity to change its name in order to achieve the market differentiation it was looking for.

Another bank that recently moved beyond geographic names is Bluff View Bank, formerly Bank of Galesville (as well as Seven Bridges Bank, Holmen and Bank of Trempealeau). "The name change is a larger rebranding of the bank and the result of several years of strategic planning and consultation with our marketing agency," said President/CEO Scott Kopp. "When we first went into new communities we wanted to be part of that community, including the name." However, maintaining separate entities for each community the bank served presented problems. "We found it was difficult to market three different entities with different names and logos," Kopp explained. "It was cumbersome, and some of our customers weren't aware that we were affiliated with our different locations."

4 Steps to a New Name

While changing a bank's name is not a small undertaking, there are several steps you can take to make the transition smoother.

1. Generate a list of possible names. First, make sure you understand the regulatory constraints on your name. "DFI's Division of Banking interprets Wisconsin law to require a state-chartered Wisconsin bank to include the word 'bank' in its name," explained Patrick Neuman, attorney at Boardman & Clark, LLP. It's also important to keep in mind how important differentiation is to your institution when you begin brainstorming. "Most banks want to use words that reflect their values, but oftentimes banks have similar values," Hunt pointed out. "Banks have to start thinking outside the box." Banks should consider formal research into how its new name or brand can differentiate it from competitors. "Some changes require research involving customers, prospects, and employees," said Verre. "Think of it as a gap analysis. Look at banking in your community and ask what's missing."

The name "Fortifi Bank" began at a facilitated session with 16 bank staff members of different demographics and backgrounds who focused on the bank's present and future identity. From there, they generated a list of 200 different words that the bank's marketing department filtered, combined, and narrowed down. "We got really creative and reviewed everything that was generated," said Meiborg. "We could have stuck with a more traditional name, but we took the opportunity to evaluate our target market and deliver a name that is better aligned." Bluff View Bank used a similar approach, seeking employee opinions very early on. "I asked all of our employees to give us suggestions, and they, along with our marketing agency, really came up with some outstanding names," said Kopp. "We then had to get them vetted and trademarked. We narrowed it down to three, and then had a voting process to get input from employees again."

2. Conduct an initial screening. As Kopp stated, it is critical to vet the list of potential names before investing any time or money in the new brand or name. "Banks get very far down the road and very excited about a new name before doing an initial screening, and then are disappointed if it's not available," Hunt cautioned. "I highly recommend doing that initial screening first. It's inexpensive to do an initial trademark screening through a law firm and it's better to do it at the beginning than to spend a lot of money creating a new name and brand only to discover a problem down the road." If the bank has plans to expand its market area in the future, Hunt strongly recommends registering the new name with the U.S. Trademark Office. "Assuming the name is available, a U.S. trademark registration will give the bank constructive rights to use that name even in areas where the bank has not yet started doing business or using the name," he explained. "The advantage is, as the bank expands, it can continue to use the name and won't be forced to change."

3. File with the Wisconsin Department of Financial Institutions' Division of Banking. This is the step where the bank formally adopts its new name. "The way a bank changes its name in Wisconsin is to file an amendment to its articles of incorporation," Neuman explained. "That requires a majority vote of the bank's shareholders." Since most Wisconsin banks have a holding company, this requirement is simpler to accomplish than some banks assume, since the holding company board can vote on behalf of its shareholders. Banks also have the option of delaying the effective date of the change up to 90 days, if that fits their rollout strategy better.

4. Communicate, communicate, communicate! Of the dozens of action steps involved in launching a renaming/rebranding campaign, the most essential is clear, effective, and timely communication with regulators and vendors, customer/clients, and the community. "Make sure you work with your core data processor to have your new legal name on all of your contracts," Neuman advised. Other important considerations include correspondent debt held at the holding company level and the bank's insurance policies. "A legal name change should not affect the validity of your contracts, but it's still a good idea to let all of your vendors and providers know ahead of time," he continued. "Name changes are mostly a state-driven issue. However, the state-chartered banks do need to file a FRY-10 with the Fed and should notify the FDIC in writing of the name change."

Bluff View Bank and Fortifi were both pleasantly surprised by how positively their customers and clients reacted to their bank's new name. One thing that likely influenced that reaction: both institutions also had board members and/or staff, including loan officers, reach out to clients in advance to notify them of the upcoming name change. If the name change is not the result of a merger, Verre strongly recommends over-communicating that to your customers. "Take the same steps to communicate to customers and employees as you would if it were a merger, so you ensure they know it's not a change in ownership," he said. "Many consumers will assume when you change your name there might be M&A involved, so you need to communicate that it's the same ownership, locations, employees, and products and services."

The key, according to Meiborg, is to make sure your customers and community know only the bank's name is changing, not its commitment to them. "We work very hard for our communities to know we're part of them," she explained. "Throughout the process it's important to remind the community that you're not changing what you stand for or interrupting your service. You're changing so you can be around longer and stronger to keep serving the community."