How much do bank names matter? What prompts them to sometimes make a name change? And why are so many bank names so ... similar? We dive deep on the topic of bank naming/branding in this episode of The Purposeful Banker.
Helpful Links
Bank Name Frequency Chart (Janney Montgomery Scott, via Kiah Haslett)
Most Bank Names Are Meaningless (Chris Skinner)
"Beyond Truist" A Brief History of Unusual Bank Names (American Banker)
Why Synovus Is Ditching Its Local Bank Names (American Banker)
What's in a Name? One Bank Found Out (Bank Director)
Transcript:
Maria Abbe: Hi and welcome to the Purposeful Banker, the podcast brought to you by PrecisionLender, where we discuss the big topics on the minds of today's best bankers. I'm Maria Abbe, senior communications manager here at PrecisionLender and today's show features Dallas Wells, PrecisionLender's EVP of strategic initiatives, and Jim Young, our director of content. After a heavy conversation about yield curves in our last episode, Dallas and Jim are going to tackle a lighter topic today, bank names. How much do they matter to banks? What prompts them to sometimes make a name change and why are so many of them so similar? We'll have links in the episode notes to relevant articles and information. Now, onto the show. Enjoy.
Jim Young: Dallas, I have to admit, I am maybe a little strangely excited for this podcast. It may be because, as Maria mentioned, all that inverted yield talk from the last episode got me down a little bit, but I also think it's because this topic, bank names, is one that I'm again probably a little weirdly fascinated by. So to go back to the genesis of this podcast, it goes back to a tweet you actually directed to me back in mid July, and I'll have a link to it in the show notes. And it was actually a tweet by Kiah Haslett from Bank Director, and she was sharing it from the financial firm Janney Montgomery Scott, and I'm not sure, I still haven't figured out where they got it from. There's this great plot where, and I don't know exactly what you call those type of charts, Dallas, but it's got the spread of ... Well let me have you describe to it exactly what this chart is and why I was so excited that you found it.
Dallas Wells: Yeah. So it's got bubbles with the size of the bubble showing the how common wording is in a bank name. And I sent it to you since this has been one of your complaints since the day you started here is you're like, "Wait, which union bank is this? Which community bank is this?" So this one shows just how common some of those names really are. It's a great graphic of it.
Jim Young: Yes. And just in case you're wondering, because I'm sure you are, State Bank is the leader, at least in the clubhouse right now, among most common phrases in there. I really thought community would be a little bit higher on there, but it's up there. Yeah anyways, it illustrates a point, which is that banks, when it comes to their naming, they're not the most creative when it comes to that. And I've been thinking about that though, about why they have such similar names and that sort of thing, and why it's as Homer Simpson would say, "It's funny because it's true." Why is it that if I said, "Hey I work for First State Community Peoples' Merchant Farmers Bank," a banker would laugh because they would get where you're coming from on it.
My theory is, is that, well, I mean banks are about being reliable and stability, and when you get that sort of name, something with first state and community and whatever in it, you know what you're getting versus Silicon Valley sort of names that have "io" in them or some dot in the middle of them or strangely capitalization or punctuation in it and that sort of thing. So what do you think, is that agree, disagree?
Dallas Wells: I think that's a large part of it. So I think there's an antiquated holdover from the way bank charters used to work, where banks were pretty restricted geographically to what they could do. And most banks of course originally were a one location kind of thing. So they served one town, one neighborhood, and so the names would end up overlapping a lot. The names that were consistent winners would get used over and over again, and that was okay because a state away it made no difference. You would never come across them. And I think though that you are right, that safety, reliability, consistency, bankers feel that that stuff's really important. So you know, go to any community bank website, and they'll say, "We've been around for a hundred years and we've been around since the civil war," and they're proud of that heritage. Even though it might be an unrecognizable version of that original charter, they can trace it back through time. And actually you see sometimes where banks will merge and they'll keep the older charter just for that reason, to be able to say that it goes back so many years.
And so then a lot of times they keep those names too. And here in my hometown, a small town in Missouri for example, we have a First Community National Bank and we have a First State Community Bank. I know bankers at both. They're convinced that everyone knows the difference. Of course they do know the difference. The reality is much different. And I found some articles as you spent, I'm guessing 10 times as much time as you needed researching this.
Jim Young: This is really a rabbit hole.
Dallas Wells: Yeah, you really got into this one, but you found a great example in there of why does this matter? Well now in the age of the internet, if I'm trying to go to First State Community Bank and I forget that it's state instead of national, I end up on the wrong bank's website, and sometimes people are actually opening an account at a bank that they think is a different one. That's now a problem where the naming is an issue where it never was before.
Jim Young: Yeah. And boy, way to just go all the way through like questions four, five and six of this podcast. But.
Dallas Wells: Yeah, we're done here, right?
Jim Young: Thanks. I will reel this back in, because this is, obviously again-
Dallas Wells: Thank you.
Jim Young: ... a podcast I am determined that we were going to talk about this, but actually talking about that stability and all that sort of thing and kind of knowing what you're getting and in which you raised was a really interesting point too because particularly for those of us in the Southeast with Protestant churches in every single town you go in, do you have a First Baptist, a First Presbyterian, and I suppose it's probably a similar sort of dynamic there. But Chris Skinner, and of course this is Chris Skinner is a professional bomb thrower when it comes to traditional banking. But he raises that point that when you have that First State, First National Community Bank of etc., nowadays maybe that's not that image of solidity and reliability is not, but maybe you're projecting an image of living in the past basically and bland corporate doesn't get me sort of bank. What do you think? Is that Skinner just agitating, or do you think he's onto something there?
Dallas Wells: No, I think he is onto something. And you know, branding is a thing that bankers struggle with, right? It's hard to measure an ROI on branding. I mean-
Jim Young: And full disclosure, so do bank software companies, as well. But go ahead. Yes.
Dallas Wells: Fair enough. Yeah. But I remember sitting in multiple management meetings and us grilling the poor marketing guy, what is this for? How do we know if this works or not? And I think that happens in every bank board room around the world probably. But this is where that stuff starts to matter. If you are First Community Bank, how much of a brand do you really have?
And especially with the 20 somethings that are your future customers, they don't care that your charter went back to 1850. They care that your website is awful, right? And that the picture they get in their head is that, oh, they're going to make me go in that stuffy old branch where it's dark and there's cobwebs in the corner. So, that's what they're picturing with that name. And that's what a lot of the Fintech challengers and really it's not just Fintech, it's you know, Marcus by Goldman, right? It's Marcus is not First Community Bank. It's a different spin on it from branding, from naming, from colors. Everything is different. And that's the reason. It's brand image and it's not just the technology, but it's trying to get away from that kind of old fuddy duddy image that people get in their brain from names like that.
Jim Young: Yeah, yeah. You know, but on the flip side of this, and it is the reason why if I'm a bank, I might just be fine with going with the bland name is you look at the, at least the social media response when SunTrust and BB&T got when they rolled out Truist. Sometimes I have the idea, well that's just the nature of social media. You try to roll out something new, it's going to get killed. Sometimes though I feel like it's also like I'm a father of two, drive a minivan, I am not cool. Who am I kidding? And if I show up to carpool with a car from the set of Fast and the Furious, people are going to look at me like, "What are you doing?" You know?
So I don't know. I feel banks' pain on this. You sit one way and they go, "Gosh, you're just kind of old and plain." You try to use the kind of, you know, you get that branding, you come up with a name, you have a backstory for it and people say, "Oh, come on man, who are you kidding? You're not this." So, I don't know. Should they just stay in the slow lane and just accept their lot? Or is there, maybe that's just one example and maybe I'm being a little bit too fatalistic.
Dallas Wells: So let me sum this up of how you just described our clients. They're basically minivans, and they should just own it. Is that a fair summary?
Jim Young: Maybe I should go walk that part back a little bit, but I feel like a fair amount of bankers are in my demographic. All right. That's all I'm saying. Let's say that.
Dallas Wells: Yeah, no, I think I get what you're saying. And I think that was the reaction to Truist. It was like, "Hey, there was nothing wrong with SunTrust or BB&T," right. Those had solid brands. They had good recognition, good following. What was wrong with just picking one of those two names? And instead you went with this odd thing. And so it did feel out of character, and I think struck people a little bit. I think time will tell whether or not they got that right or not. I'm sure they spent plenty of money to come to that decision, that it wasn't taken lightly. But I think that is the risk.
And I think people just feel, look, this is, it's a lot of time and effort and we're not sure about the ROI anyway. So if it ain't broke, don't fix it. And I think that's kind of where Skinner's going is, it's hard to measure ROI. It's probably hard to measure if it's broken too. So don't just pretend that all is well here. So it's a tricky thing and it's ... I don't know that there's an easy answer to it, but I think it is worth talking about. And that's what a lot of bankers are not willing to do. They're just like, "Nope, we're First Community Bank and that's that. Always will be." And I don't think that's the right approach.
Jim Young: Yeah. And I would say on the flip side of that, I think a bank like Synovus has actually come up with a name that I think has worked pretty well and they've got, again, a little backstory about synergy and novus in that, new and that sort of thing, and melding them together. And I think that one's worked. I would say it has worked pretty well. And who knows, a year from now, Truist may be fine too. But that point though about SunTrust and BB&T is that shows is that one of the things that forces your hand on having to, not being able to just go with status quo is M and A, right? I mean sometimes it's, hey, which one of these two are we going to take?
Jim Young: A lot of times, and this gets into something you referred to a little bit earlier, when you get the bigger banks acquiring smaller banks and we see that a lot, particularly in the Southeast Eastern area, or I guess it's all over, but I've seen a lot of it in the Southeast of these banks moving up in the regional space by acquiring multiple community banks and now they have to make this decision of do we let those banks keep their names and we become sort of this holding thing above them or should we absorb them all and become this one bigger name? Outline the pros and cons of each of those approaches.
Dallas Wells: Yeah, the decision typically goes something like this. So the pros are that you have some recognition in a local market. You bought it because of those relationships and that recognition, right? You want the business that they built there to be ... the value of that's what you're buying. So you want that to stay intact, however possible. You don't want to just come in and squash them and now you're just another out of town bank that bought them and came in and changed the logo, like everybody's seen dozens of times over the years. And they want to try to avoid that.
The cons are that, man, it's just a real pain. Now you've got multiple branding things to deal with and simple things like printing business cards and letterhead and websites and radio ads and billboards. You have an inconsistent brand, so any brand awareness that you do, you only get good out of it in that small local community where that name is that, and you don't get any kind of scale, which is part of the reason for doing M and A. Why would you combine two banks? So that you do get a little benefit from that scale and you remove a lot of that benefit by doing it that way. So I've seen it done both ways.
I think the trend seems to be a lot less of the leaving the name intact just because, like we've talked about, I think there's less loyalty there than those who founded those banks, who have been running those banks for awhile would care to admit. So a purchaser comes in and says, "Yeah, I think it's probably easier just to go ahead and rip the bandaid off, make the change. A few customers won't like it. They'll leave and then we'll be on our way." So that seems to be the trend is to just change it and get the benefit of the scale, and one branding effort going forward.
Jim Young: Yeah, and I mentioned Synovus, I think they're an example of doing that, but it is interesting though. I think as a bank, you've got to really do your due diligence of the markets that you're taking over basically, and what is the relationship that the bank you're acquiring, what does it have? Is it the bank that people say, "That's my bank. This is my community and if you change that name, then I don't have any reason to stay with you." Or is it the, on the flip side and I think one of the ones in, we're going to have links to all these articles. I found a lot of them, I will admit.
But one of the articles where the guy said basically like, "Look, people here in this area, they want to know that they're dealing with a bigger bank actually." And my guess is he's probably talking about it from the commercial side, just a hunch, moreso than retail. But it was the, they want to know that they're getting the scale and they're getting the ability, the product set etc. So no, we're not going to stay with this name. We want that bigger name. Which I thought was an interesting argument. I think a lot of times it's phrased more in the Main Street sort of, almost Starbucks versus local coffee shop sort of thing. But sometimes it's the other way around where actually no, we want the big name, we want that recognition.
Finally, the scenario again, you mentioned a little bit of this too, where you don't have a choice actually. You have to, and this goes back to bank names having a lot of similarity. You had to change your name because you've expanded, you've moved into a territory where a bank there pretty much already has your name and it operates there. Bank Director put a story out there about the name change of Atlantic Union, which was formerly Union Bank. And actually I will, full confession, I actually did not realize until reading this article that the Union Bank that I have driven by multiple times was not the same Union Bank. So, case in point. I was like, "Oh. Oh, that isn't that Union Bank." I mean, the logos were similar, etc.
And it has a quote from John Asbury, the CEO there, basically saying, he said, "This is the cost." He said, "You have to understand. This is a cost of doing business. The brand confusion, the inability to use its name in North Carolina, it all hindered the bank strategy. We did what we needed to be done," and that was again, they were Union Bank. They moved into North Carolina. There already is a Union Bank here. So they changed their name to Atlantic Union, which I think actually works really well. It's got a geographic, you've got a connection to what it was before.
Dallas Wells: It's a nice compromise.
Jim Young: Yeah, yeah. So do you think that sort of brand confusion and because you mentioned a little bit of the digital aspect to this too, will spur more banks down a similar path?
Dallas Wells: I think it will. As more and more of your customers come from, as you trace those lead sources back for whatever business you're doing and they go back to Google searches. There's a lot of opportunity for confusion there and Atlantic Union is a whole lot easier to find the right spot than just Union Bank because there's multiple Union Banks. Just about every state has one. So that I think is a big deal becoming a bigger deal and especially as we have some generation changes at the helm of some of these banks. I think they're going to be willing to get rid of some of the sacred cows and that might just include redecorating the bank lobby and it might just include a new name out front.
So, banks are slow and cautious with these things, like they are with lots of things. But I think it's coming and you can see it from places like Atlantic Union. You see it with Truist, where banks have the opportunity. They're saying, "Hey, we have to do this anyway. Let's put some thought into it and not just do what's been done a thousand times over."
Jim Young: Yeah. And I guess the final takeaway on this too is it, you know, I'm a marketing guy, but this pains me a little bit to say, but the branding aspect is important and it needs to be addressed, but eventually you're going to have to put that performance behind it. And if you do, I think people become much more comfortable as time goes by.
A final sort of example for me is, again I'm based in North Carolina, is Wachovia and Wells Fargo. Now there's a whole other aspect to that story beyond just name change. But Wachovia has a specific historic name in the Moravian community around Winston Salem, etc. And Wells Fargo has a great historic name too, which is actually so well recognized to me. I immediately associate it with stagecoaches out West, which in the Southeast to sort of, "Oh wait." I mean there was definitely a sense I remember of these are kind of interlopers. We actually know who these guys are and we know they're not from here. So, but as time goes by you get used to it, and this is who they are, is Wells Fargo, and nowadays Wells is pretty much what people call them around here.
Dallas Wells: And I think that's important, right, is if you're going to execute on these things and you're going to have a great brand and you're going to serve your customers well, get full credit for it, right? Don't just be another Union bank or another community bank that it's hard for people to know which one is standing out. Wells Fargo stands out. And so when people go and talk about that bank to someone else, they know exactly who you mean.
Jim Young: Yep, absolutely.
Maria Abbe: And that'll do it for this week's show. Now, for a few friendly reminders. If you want to listen to more podcasts or check out more of our content, you can visit explore.precisionlender.com or you can just head over to our homepage to learn more about the company behind this content. Finally, if you like what you've been hearing, make sure to subscribe to the feed in iTunes, Google Play or Stitcher, and we would love to get ratings and feedback on any of those platforms. Until next time, this has been Maria Abbe for Jim Young and Dallas Wells, and you've been listening to the Purposeful Banker.
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