Multibank holding companies usually tailor the branding of their subsidiaries to geography, but one based in northern California is using a different tack by making its banks' names reflect their target audience.
Next month the Yolo Community Bank subsidiary of North Valley Bancorp in Redding will become NVB Business Bank.
Also in March, all seven branches with the name Six Rivers Bank will take the name of the lead subsidiary, North Valley Bank, and will continue to concentrate on retail customers in northern California.
Edward J. Czajka, the holding company's executive vice president and chief financial officer, said the NVB Business Bank name will more closely link Yolo to the lead bank. Its logo and color scheme will be similar to North Valley's, but are different enough to send the message that it is not actively seeking retail business.
Yolo Community "is almost exclusively a business bank, and we didn't want a name that would attract a lot of retail customers," Mr. Czajka said. "We don't want our business customers to come in and have to wait in a line, or be disturbed by a lot of traffic and noise when they sit down at personal banking stations and make large deposits or do loan work."
Moreover, $866 million-asset North Valley wants the subsidiary to expand outside of Yolo County.
Yolo, based in the Sacramento suburb of Woodland, was acquired by North Valley last year. While North Valley pushes consumer loans, mortgages, and free checking, Yolo focuses on commercial loans, business checking accounts, and cash management services in its three branches. (North Valley does have two Redding-area branches that cater mostly to businesses. Each will retain the name North Valley Bank/Business Banking Center.)
Richard A. Soukup, a partner with the Chicago accounting and consulting firm Grant Thornton LLP, said he knew of no other multibank company that branded its subsidiaries this way.
"A lot of companies create separate names for community identification, but this is taking it a step further and really segmenting its branches to the customer base," Mr. Soukup said. He said business customers might like the idea of branches designed especially for them.
A handful of thrift companies in New York have established separately branded commercial subsidiaries, but only so that they could accept municipal, state, and other government deposits (under New York law thrifts cannot accept such deposits themselves). For example, the $7.8 billion-asset First Niagara Financial Group in Lockport, which owns the federally chartered thrift First Niagara Bank, also has a state-chartered First Niagara Commercial Bank. All of the commercial bank's deposits come from government entities, and it has no loans on its books.
Mr. Czajka said North Valley wants to add NVB Business Bank branches in the counties surrounding Sacramento and farther west along the Interstate 80 corridor to communities outside San Francisco.
Some of the state's fastest-growing counties surround Sacramento County, according to the U.S. Census Bureau. North Valley wants NVB Business Bank to open at least seven more branches there within five years, Mr. Czajka said.
For now the holding company does not plan to expand North Valley Bank in these markets. It believes it is more cost-effective to enter markets by opening smaller business branches that can book more lucrative loans, Mr. Czajka said. The soon-to-be NVB Business Bank already has a team of commercial bankers who know these markets well.
Nor does the company plan to expand North Valley Bank in the Redding area, Mr. Czajka said. It is already No. 1 in market share there.
