Virginia bank sues North Carolina de novo over name
American National Bankshares in Danville, Va., has filed a lawsuit against a proposed North Carolina de novo, claiming their names are too similar.
American National wants the organizers of American Bank & Trust in Monroe, N.C., to change the name of their bank. While the lawsuit was filed in the U.S. District Court for the Western District of North Carolina on Jan. 16, it has greater relevance now that American Bank has received approval for deposit insurance.
American National, which has nine North Carolina branches, said in the lawsuit that it sent a letter to American Bank’s organizers last summer after learning about the group's plans in a newspaper article. The letter claimed that American National had longstanding rights to its name and that it would create confusion if the de novo bank didn't make a change.
American National said in the lawsuit that it registered a design mark tied to its name in 2008. The company renewed the registration last April.
Randy Adcock, American Bank's proposed CEO, said his group reserved its name last March when it first considered opening a bank in Monroe. He noted that another American Bank & Trust opened in Monroe in 1930, though its name went away when it was sold.
"It’s a name people in Union County still revere," Adcock said in an interview. "I started my career at American Bank & Trust in the late 1970s. It's come full circle that the name is available again."
Adcock said he has offered to meet with American National's management team but they are unwilling to change their position. Adcock noted that Monroe is about 90 miles away American National's closest branch, so he doesn't believe that there would be much overlap.
"It’s un-American that we can't use the word 'American,' " Adcock said. "They don’t have a monopoly on that word. It's a common name. We will get before a judge in the Western District of North Carolina and see what happens."
American National also argues that American Bank & Trust’s logo is similar to its own. The Virginia bank feels that the de novo will raise capital and earn revenue because of American National’s advertising and branding efforts.
American Bank’s “use and proposed use of the confusingly similar [name] to raise startup capital and to promote and offer the same products and services ... to the same consumers as American National is likely to cause a substantial number of relevant consumers to be mistaken, confused or deceived into thinking that defendant’s products and services may be related to, affiliated with, sponsored by or authorized by American National,” the lawsuit claimed.
American Bank is in the process of raising $20 million in initial capital. Adcock said the group is about 85% of the way to its goal. He added that this lawsuit is a "bump in the road." The group hopes to open the bank later this year.
American National did not respond to a request for comment.