With mergers, takeover, and buyouts still going strong, the question that regularly comes up is what to name the merged entity.

This is often difficult to resolve. In fact, there have been several mergers that fell apart solely because of the inability of the two sides to agree on a name, with each insisting its name be the one to continue.

In other cases, compromises that have been worked out, like the name of Fifth Third Bank in Cincinnati, look unusual to outsiders but solved a major potential problem.

In a similar vein, it is hard to avoid smiling as I did upon receiving the following notice with a dividend check: "Important notice: First Chicago Trust Company of New York has moved its shareholder services and related operations to Jersey City, N.J."

Another compromise, reported by Gerry Lipkin, chief executive officer of New Jersey's Valley Bank, was to choose the name "Valley" because every town has a valley somewhere. This is far superior to keeping the old name - Bank of Passaic and Clifton - as the operation expanded. For in New Jersey, as Gerry explained it, no one would keep money in a bank named after a community that might beat them in football.

But name changes are still a tough call.

The Outsider Image

The Bank of New York, for example, made the choice of changing the name of New Jersey's National Community Bank to Bank of New York, National Community Division, upon acquiring it earlier this year.

Many competitors felt that this gave the bank an image as an outsider, a carpetbagger. But the other view is that this gives the bank an opportunity to do joint marketing and promotion across the two states.

Evidence shows that attention to customer service can erase any ill will provoked by a name change.

I remember, as long as 20 or more years ago, when North Carolina was of the few states that allowed statewide branching and in which smaller banks had begun to be consolidated into larger ones. People there would say, "I don't bank with a big impersonal bank, I bank with my local bank, the Wachovia."

Does It Matter?

One can also wonder whether names of banks are becoming irrelevant anyway.

How can I make such an outrageous statement?

Because more and more, people look only for the name of the ATM network, or the Plus or Cirrus label, rather than the name of the bank in determining where they do their banking.

Bankers report that the attitude toward ATMs often depends on the customer's age.

"People over 60 avoid ATMs. People between 40 ad 60 use them for withdrawals, but don't trust them for deposits. And people under 40 use them for everything."

To show how far matters have progressed, one bank president told me, "I'd love to get my son to open an account with us now that he works in town, but we don't have any ATMs, and he doesn't know how to handle his banking with a live teller."

In sum, recognition of your bank and getting people to choose a bank because of its name has always been a tough marketing job. We still live in an environment in which many people can't tell you how a bank, a savings institution, and a small loan company differ. To them, all are "banks."

Above All, Convenience

Maybe this helps explain why the No. 1 reason for choosing a bank is not rate, promotion, or services, but convenient location.

But look at it from the public's point of view. Here is an organization that takes money and then charges to return it.

So management's job in merger and acquisition is to try to determine just how valuable the current name is, how much it has been damaged if the acquisition is government assisted, and whether a new name would help, hurt, or do nothing.

And the CEO must realize that whatever is done in this sensitive area of name change, there will be hoards of people, both inside the banking industry and outside it, who will tell your: "Your're wrong."

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