Who says managing interest rate risk or underwriting are the hard parts of banking? Just try changing your bank's name.
Chuck Boulier, president and chief executive of Naugatuck Savings Bank, found this out recently. Management and directors of the $976 million-asset mutual thrift in Connecticut spent two years planning its upcoming name change. That included the process of sifting down the choices from an original list of 200, to a short list of eight, to the three finalists. The winner: Ion Bank.
"You would not believe how hard it is to come up with a name," Boulier says.
Boulier previously worked for American Savings Bank, in New Britain, Conn., before it was acquired in 2003 by a TD Bank predecessor. In those days, Boulier says, "There were probably 40 American Savings Banks in the country," spread across many states. "You can't do that now, because of the Internet."
In other words, Naugatuck Savings repeatedly had to reject candidates after discovering online that there was a bank with a similar or identical name elsewhere. Boulier declined to disclose the other name choices.
Boulier acknowledges the confusion in his own backyard. Naugatuck Savings shares its hometown of Naugatuck, Conn., with Naugatuck Valley Savings and Loan (NVSL), a $528 million-asset thrift that Boulier describes as a "friendly competitor." The similarly named rival "wasn't the primary reason" for Naugatuck Savings' name change, "but there is brand confusion [with Naugatuck Valley Savings and Loan], especially if you move out of the Naugatuck area."
Which is what Naugatuck Savings wants to do accelerate its growth outside Naugatuck. The thrift has opened, or acquired, six new offices since June 2011 and it wants to keep up that pace, if not go faster, Boulier says.
"The market research was showing we'd be able to grow at a higher rate with a different name," he says.
So why Ion?
"We wanted [the name] to be distinct, relevant, repeatable, short and something that people could remember," Boulier said. "We wanted it to reflect that we are customer-centric. The 'i' in Ion means that everything is centered around the customer."
Naugatuck Savings is going whole hog all business units are adopting the Ion moniker, from its insurance agency to its community foundation. Even Naugatuck Savings' mutual holding company, Nutmeg Financial, will morph into Ion Financial.
Boulier says the bank's employees are enthused about the name change, which he estimates will cost the company about $700,000 to complete. But not everyone is excited.
"People are parochial," Boulier says. "They live in Naugatuck and grew up in Naugatuck. You don't want to see your bank's name changed to anything."