As National City Corp. prepares to convert a pair of recently acquired Florida thrift companies, it faces two tests.
Not only is the Cleveland company making its retail-banking debut in the market, but for the first time in its history it is doing two conversions weeks apart.
It plans to convert the systems and branches of the $3.2 billion-asset Harbor Florida Bancshares Inc. of Fort Pierce on March 17, and it is converting the $4.2 billion-asset Fidelity Bankshares Inc. of West Palm Beach on April 14. In all, the $140 billion-asset Nat City is converting 94 branches in a state where it had none before the acquisitions.
Peter E. Raskind, its president, said he realizes it has its work cut out.
"We're not a household name in that market, but not completely unknown, because migration north to south helps in terms of some awareness," he said in an interview Thursday. "But we've got work to do to improve our awareness both with potential customers and potential employees."
Before and after the conversions, Nat City plans to keep "a close thumb on the pulse of the customer base" by phoning customers to keep them informed and to get their feedback, Mr. Raskind said. He would not say whether he expects any customer attrition.
After finishing the conversions, the company plans to introduce itself to Floridians with a television and billboard advertising campaign. A spokeswoman would not disclose how much it plans to spend, but said it's "a substantial amount" more than either Harbor or Fidelity had budgeted for marketing.
Nat City, which bought Harbor on Dec. 1 and Fidelity on Jan. 5, is part of a parade of banking companies that have entered markets in the South recently. Not all have received a warm welcome.
This week Superior Bancorp of Birmingham, Ala., put up billboards reading "Sweet Home Canada," with Canada struck out and replaced with Alabama. The billboards' target is RBC Centura Banks Inc. of Raleigh, which is set to enter the market by buying 39 Alabama branches from Regions Financial Corp. RBC Centura is the U.S. banking unit of Royal Bank of Canada.
Commerce Bancorp Inc. of Cherry Hill, N.J., entered the Florida market at the end of 2005 and had a head-to-head battle with BankAtlantic Bancorp Inc. of Fort Lauderdale for deposit market share. The companies had previously tussled over similar marketing tag lines.
However, several of Nat City's Midwest competitors appear to have successfully made the leap to Florida, including Fifth Third Bancorp of Cincinnati and Marshall & Ilsley Corp. of Milwaukee, which has a pending deal in Orlando.
Richard X. Bove, an analyst with Punk, Ziegel & Co., said Nat City's identity problem in a new state is obvious, but buying small institutions compounds the problem.
"Nobody outside Fort Pierce knows who Harbor is, and nobody outside West Palm Beach County knows who Fidelity is, so the net effect is that brand awareness is going to be one of the big challenges they face," Mr. Bove said.
That's why Nat City plans to remain in touch with customers during the conversion process, Mr. Raskind said.
"We've learned from experience that if customers don't understand and then feel surprised, that's not good," he said. "If we find that negative attitudes are beginning to surface we could attempt to deal with that. The good news is that has not been the case."
Some Floridians should be familiar with the Nat City name, since the company has mortgage and commercial real estate offices in the state. There's also "a story to tell about our value proposition for potential employees," Mr. Raskind said. Nat City has disclosed plans to lay off 173 of the two thrifts' workers, but on Thursday Mr. Raskind reiterated its intention to retain all "front-line personnel."
To date the company has only rolled out credit cards to customers at Harbor and Fidelity, but it plans to offer its full product lineup once the conversions are complete.
In an interview with American Banker in late January, Nat City's chairman, David A. Daberko, said branch employees at the Florida outfits were "really champing at the bit to be able to offer our products and services."
On Thursday Mr. Raskind would not disclose Nat City's goals for product sales in Florida or its budget for the conversion and integration.
Analysts said Nat City will have its hands full.
It will be "a difficult and tough job," said Mr. Bove, though he said entering Florida was a good decision.
Betsy L. Graseck of Merrill Lynch & Co. Inc. downgraded Nat City's shares to "underweight" from "equal weight" on Monday, and described Florida as its lone growth market.
"We expect that significant management time will be required to ensure a smooth transition and to plan for growth in the Florida market," Ms. Graseck wrote.
