Bank of the Ozarks (OZRK) is expanding across the South, but is sticking with its roots for the sign out front.
The Little Rock, Ark., company would gain 14 branches west of Charlotte, N.C., in its $67.8 million deal for First National Bank of Shelby announced last week. Bank of the Ozarks, with assets of $4 billion, has had a loan production office in the vicinity for more than a decade and has a branch in Wilmington.
Chairman and Chief Executive George Gleason sees no reason to rebrand Bank of the Ozarks even though for years it has been buying open and failed banks outside the mountain region that straddles Missouri and Arkansas.
"People care about the quality of service, the quality of products — so if we've got great products and great service nobody really cares about the name on the bank," Gleason says. "They want to work with hometown bankers who will call them and interact with them."
His attitude differs from growth-minded bankers who ditched regional names as they moved into new markets.
First Michigan Bank and Trust in Troy changed its name to Talmer Bank and Trust in 2011. A lawsuit by a similarly named credit union prompted the switch, but the company opted for name without a geographic tie partly because it had acquired a failed bank in Wisconsin six months earlier and wants to build a Midwest franchise.
North Jersey Community Bancorp in Englewood Cliffs, N.J., announced this month that it would change its name to ConnectOne Bancorp. The move could be a signal that the company intends to expand outside of the Garden State, its observers have said.
The cities and towns served by First National Bank of Shelby are about the same size as Bank of Ozarks' markets, making it a good fit, Gleason says.
First National Bank of Shelby's "largest market is Gastonia, which is about 70,000 people, and most of our markets are in that 50,000 to 80,000 size," Gleason says. "At that size, the local bank is an important part of the economic engine of the economy."
Steve Reider, the president of Birmingham, Ala., consulting firm Bancography, says the name "Bank of the Ozarks" would be easier to use in other communities than a bank named after a large city.
"I tend to agree with [Gleason] — geographic names can transcend their actual geography," Reider says.
"That would likely be different if the name was Bank of Chicago or Los Angeles. That would likely register pictures of the big city and corporate banking."
The Bank of the Ozarks name could have the same effect as consumer goods with regionally specific names, Reider says.
"Rocky Mountain Chocolate is not just for people in the Rockies," Reider says. "Those names are just evocative of the company's history and values."
Joseph Fenech — an analyst at Sandler O'Neill, which represented First National Bank in the deal — agrees. Bank of the Ozarks' strength in Texas supports Gleason's thesis that customers are more interested in the products and services than the name, Fenech says. Bank of the Ozarks has 14 branches in the Lone Star State.
"They've had tremendous success going into Texas as Bank of the Ozarks," Fenech says. "It is a fiercely competitive state and it has been a good source of loan growth for them."