Jay Sidhu wanted a name conveying that his Pennsylvania bank puts "customers first." But a local rival had the phrase … first.

A federal judge last week sided with the competitor, Alliance Bancorp Inc. of Pennsylvania, and barred Sidhu's New Century Bank in Phoenixville from rebranding itself Customers 1st Bank. The judge said that name infringed on Alliance's trademark-protected Customer First products.

Perhaps, in the end, the judge's decision was for the best for both parties. "Getting confused with another bank is just one of the consequences of not having a unique name," said Jeffry Pilcher, publisher of The Financial Brand, a marketing website for financial institutions. "If you've picked a generic-bank-sounding name, you are not doing your brand any favors, and you are opening yourself up to trademark litigation."

There's no shortage of generically named banks fighting to distinguish themselves from one another. With so many banks struggling, experts said, no one wants a case of mistaken identity, locally or otherwise.

Although the battle between New Century and Alliance is a local issue, branding experts said the Internet age has taken the politics of bank-naming onto the national stage.

Other banks have run into similar problems to Sidhu's in the past few years. In June, American Principle Bank in San Luis Obispo, Calif., changed its name to American Perspective Bank after it settled a trademark infringement case. And in August 2009, Guaranty Bancorp Inc. in Denver sprung to action when a local media report warned of the imminent failure of similarly named bank in Austin, Texas.

Sidhu said in an interview Tuesday that New Century began searching for a new name earlier this year to reflect the changes at the bank. Sidhu, the former chairman and chief executive officer of Sovereign Bancorp, took the reins of New Century in June 2009 and has since brought in $70 million of capital to the $600 million-asset bank.

He has redefined the culture of New Century, making representatives of the company available to customers seven days a week, 12 hours a day, he said, and the bank's existing name didn't reflect that.

New Century also happens to be the name of a subprime lender in Irvine, Calif., that filed for bankruptcy protection in 2007 and a Chicago bank that failed this year.

"It is a name associated with failed institutions, and it doesn't do anything for our strategy," Sidhu said.

To Sidhu, a name "should be memorable, distinguishable and should help the customers understand what is different." The Customers 1st moniker accomplished that, he said.

Sidhu said he and his team were aware of Alliance's trademark of the term "Customer First" for its products, but didn't see it as a conflict as it wasn't the name of the bank.

While it was different enough for Sidhu, that wasn't the case for Alliance, based in Broomall. Alliance CEO Dennis Cirucci said his $450 million-asset bank has a bus-stop billboard ad pitching its Customer First products "right across the street" from a New Century branch that until recently had a cloth "Customers 1st" sign outside.

"Customers see our ad and then see their bank and suddenly it diminishes the power of the mark we have," he said in an interview.

Despite the court fight, Cirucci said he can empathize with Sidhu. In the mid-1990s, what was then Greater Delaware Valley Savings and Loan Association changed its name to Compass Bank.

That lasted a week, until Compass Bancshares Inc. served the bank with orders to cease and desist. It became Alliance Bank.

Cirucci also understands the potential damage of being associated with a failed bank. In February 2009, an unaffiliated Alliance Bank in Culver City, Calif., failed. Although the two were on opposite coasts, an incorrect story on the Internet tied the failed bank to Cirucci's company's ticker symbol.

"We are sensitive to their concerns. We had to put out a similar fire," Cirucci said. "But we got out ahead of that immediately and once we broadcasted that it wasn't us, it went away."

Sidhu said he does not plan to appeal the ruling. And though he is motivated to distance his bank from the failed New Century, the front-runner for the new name, Customers USA Bank, happens to be a variation of the failed USA Bank in Port Chester, N.Y., that New Century picked up from the Federal Deposit Insurance Corp. in June.

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