What's in a name? Plenty, according to Minneapolis' First Bank System Inc., which is suing $21 million-asset Bankfirst Minnesota for sounding too much like its own moniker.
The regional giant wants Bankfirst to stop using its name at its downtown Minneapolis location because it confuses customers and deceives them into thinking First Bank is behind Bankfirst services, according to a lawsuit filed last month in U.S. district court there.
In a counterclaim filed last week, Bankfirst contends that its name and logo are "not confusingly similar" to First Bank. Bankfirst said if it is prevented from using its name, it will suffer damages and expenses of more than $50,000 and wants those costs paid for.
However, "I do not anticipate losing this case," said Michael Berens of the Minneapolis law firm Kelly & Berens, which represents Bankfirst. "It is an astonishing lawsuit that a responsible organization should not be bothering themselves with."
First Bank initially protested the name during Bankfirst's application for a Minnesota charter, but did not appeal the bank commissioner's decision that the name wasn't a problem, said George Lund, Bankfirst's chairman and chief executive.
Bankfirst opened in Minneapolis in February not far from a First Bank location. Its Sioux Falls, S.D.-based holding company has about $90 million in assets.
"This is a community bank," Mr. Lund said. "We aren't even after the same customers" as $26 billion-asset First Bank, whose $15 billion-asset Minneapolis-based bank seeks large corporate customers. Bankfirst targets small business and entrepreneurial customers, he said.
However, in its complaint, First Bank said it had commissioned a survey in May that found "a significant degree of confusion" between Bankfirst and First Bank and that it is aware of "other instances of actual confusion between Bankfirst and First Bank."
But, because the survey will be submitted as evidence in court, First Bank cannot release it, said spokeswoman Wendy Raway.
Bankfirst and other observers are unsure why First Bank has singled out Bankfirst's Minneapolis location when it has not targeted Bankfirst in Sioux Falls, where the two companies have competed under those names since 1989. Ms. Raway said, however, that First Bank has "taken steps over the years to protect our name interests," but would not elaborate on what those steps were.
Some speculate the suit is related to due diligence for a possible takeover of First Bank. "We don't comment on such rumors," Ms. Raway said. She said she wondered why name would be an issue, because an acquired company would be likely to change its own name.
First Bank probably just wants to protect its trademark in the future, said Ben Crabtree, a bank analyst with Dain Bosworth Inc. in Minneapolis.
"It doesn't really relate to the threat this bank [Bankfirst] offers," he said. "If they don't protect their trademark, someone could make a bigger inroad on it."