Banks and credit unions in Utah, aiming to make the most of customer dislocation in a wave of merger activity there, have stepped up a yearlong advertising war employing sarcasm, xenophobia, scare tactics, humor, and gentle reassurance - sometimes all at once.

The ads have intensified in recent weeks because next month the branches of Salt Lake City's First Security Corp. will be taking the brand of Wells Fargo Corp., the San Francisco banking company that bought it in October.

Last week the Utah League of Credit Unions aired the latest battle ad: a television spot in which a puzzled credit union manager eyes the bank next door as it flips rapid-fire through nameplates like "Piggy Bank," "Blankety Blank Bank," and "First Gargantuan Bank."

First Security has joined the fray with its own radio spots. These are humorous takes on customer/employee exchanges, but with a message meant to seriously reassure - that the bank's decision-making is not moving to California.

Zions Bancorp, also of Salt Lake City, was engaged early last year in ultimately unsuccessful merger negotiations with First Security. Now $22 billion-asset Zions is using television spots to capitalize on its main competitor's struggles. In them Wells Fargo is never named, but local employees describe business relationships they might not have secured had they worked for an "out-of-state bank."

And several Utah community banks and credit unions, which before shied away from costlier television spots, have emerged as bulldogs - not forfeiting the chance to get their names out and poke fun at bigger institutions.

The result of all this is that banks are spending more ad dollars than ever before, observers say. And their television and radio ads, once focused on specific products, are now tirelessly promoting brands.

"As a result of the consolidation, all the institutions are taking a hard look at their presence and expanding their customer base, so they've been somewhat aggressive," said Joel Morris, president of Salt Lake City-based MediaMax LLC, a firm that buys media spots for companies.

The surge in television ads began last year, when Utah's two largest banks - First Security and Zions - were trying to finalize a merger agreement penned in June 1999. Seeing opportunity in the image of a giant, impersonal bank, a few community banks ran ads emphasizing their local roots. Zions began developing its own campaign to highlight the benefits of the union and play up the fact that decision-making there would remain at the community level.

The deal fell through last March, but Zions went ahead with a similar campaign. By the time the television ads aired, the First Security-Wells Fargo deal had brought a new urgency to Zions' touting of its local contacts and management.

Zions' new ads, in a change for the company, feature employees instead of actors or well-known sports figures.

In recent Zions spot, loan officer Mike Brough describes his relationship with a Salt Lake City mountaineering supply company that had just completed an employee buyout when it approached the bank for a loan. "I don't think a larger out-of-state bank would have appreciated this company's potential," he says earnestly. "I could - because I was here, and I was local."

Mr. Brough, who said he had never done any acting before, said the response from customers and friends has been much greater than he expected.

"I've gained certain amount of notoriety in my own community," he said. "I've heard from people that I haven't talked to for 20 years. The advertising has also brought in some new customers."

Other institutions have been far less subtle in exploiting the home-state angle.

Mountain America Credit Union, the state's second largest, with $800 million of assets, rolled out a television and radio campaign in October. In it a customer walks into a branch, asks for a bank loan, and is told that he'll have to call the main office in San Francisco - a long-distance number! - to apply for the loan.

The ad cuts to Mountain America's logo; a voice-over says that if "recent bank mergers" have you confused, "try calling Mountain America."

Brent Lawrence, a senior vice president in marketing for the Salt Lake City credit union, says that Mountain America has used television advertising for several years - but this is the first campaign emphasizing its in-state virtues.

It did not go unnoticed, or uncopied.

In mid-December, First Security started airing radio ads in Utah that featured a disgruntled customer calling a First Security customer service representative. He needs a loan - but is convinced the woman on the phone will have to call some city in California - San Francisco, San Diego, San Luis Obispo? - first. She tells him that no, this can be handled in the Utah city of Sandy.

"But I heard all your decisions would be made out-of-state," says the customer.

"Well, maybe you should check your sources," the representative replies.

Jackelin Slack, a spokeswoman for First Security, said the ad was not a direct response to competitors' ads making sport of the merger. The rationale behind the ad, which stopped running in mid-February, was that "with the market as it's been with other banks, it's been important to reassure customers that they'll be dealing with the same people," she said.

But other institutions view the situation differently.

"We think they knew our ad was out there," said Mountain America's Mr. Lawrence.

Far West Bancorp, a $212-million asset Provo bank, is another small institution using the merger mayhem to promote its name.

A relative newcomer to television advertising, Far West greatly increased its use of it over the last year. "In the next few months many of you will be changing banks - whether or not you like it," says president and chief executive H. Don Norton in one ad, which goes on to depict Far West as a stable alternative to the big, ever-morphing banks. "Don't let someone else make that decision for you," Mr. Norton says. The Wells-First Security conversion will probably not mean the end of the bank-ad high jinks, say observers. Wells Fargo is expected to weigh in with a strong brand-focused campaign soon after the conversion - which should further intensify the crossfire. MediaMax's Mr. Morris predicts another 12 to 18 months of new ads, counter-ads, and counter-counter ads.

"These guys are not passive - they need to retain and get new customers," he said.

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