Is the Dallas-Fort Worth area big enough for two banks with similar names?
No, says SWB Bancshares Inc. in Fort Worth, which operates the 41-year-old Southwest Bank there. It is trying to stop the former First Savings Bank in nearby Arlington from calling itself Southwest Securities Bank.
The Arlington bank changed its name in June. SWS Group Inc., the Dallas financial firm that bought it in the spring of 2000, also owns Southwest Securities Inc.
But Southwest Bank claims the change is "certain to cause confusion, mistake, or deception" among customers and potential customers of its own bank.
Though they have no branches in the same cities, the $260 million-asset Southwest Bank had its lawyers send the $622 million-asset Southwest Securities Bank a letter July 14 asking it to stop using the name.
The letter asked for a response by Aug. 13. The response was a suit filed Aug. 10 in the Northern District of Texas U.S. District Court asking a judge to grant Southwest Securities Bank permission to keep using that name.
The case has not yet gone to trial. A spokesman for Southwest Securities Bank said it does not comment on cases in litigation.
Southwest Bank's attorney in the dispute, Donald E. Herr-mann, said it has a registered trademark and sent the original letter in hope of reaching a reasonable solution. He said the goal was not to provoke a lawsuit but to protect a name that Southwest Bank has been using since 1963.
"We are disappointed that they chose to file a lawsuit rather than talk to us about the circumstances," Mr. Herrmann said. The letter and pending case do not prevent Southwest Securities Bank from operating under that name, he noted.
There are almost 70 banks in the Fort Worth-Arlington metropolitan statistical area, and more than that in Dallas, according to the Federal Deposit Insurance Corp., but this is not the first time Southwest Bank has worked to protect its brand in the greater Dallas-Fort Worth area.
In October of last year the $6.3 billion-asset Southwest Bank of Texas, which is based in Houston, bought Lone Star Bank of Dallas. Darren Craig, a spokesman for the Houston bank, said it agreed to operate under the Lone Star name in the Dallas market, but he would not say how that market was defined, how the deal was reached, or what other terms it entailed.
Some naming disputes have ended up in court.
In 2001, Citizens National Bank of Evans City, Pa., sued Citizens Financial Group of Providence, R.I., to prevent it from doing business under their shared name in the Pittsburgh area. (Citizens Financial, a unit of the Royal Bank of Scotland, entered Pittsburgh when it bought Mellon Financial Corp.'s retail business in 2001.)
In June 2003 a U.S. District Court judge ruled against the plaintiff and said that to avoid confusion the local Citizens National must use the word "National" in first reference in its advertisements and marketing materials.
Rockwell F. Clancy 2d, a director of planning and development for the consulting company Alex Sheshunoff Management Services LP, said that because banks offer many of the same products and services, those with similar names can cause confusion in a market. Banks should therefore be aggressive about defending their brands, he said.
