Why Synovus is ditching its local bank names
The Cohutta Banking Company is a revered banking brand in north Georgia, but in neighboring Chattanooga, Tenn., a market it entered in 2005, it struggles to compete against regional and national players. That explains why Cohutta’s president, Mike Sarvis, has no qualms about the bank ditching its century-old name and taking on that of its owner, Synovus Bank.
“Where we really battle is by name. We’re perceived as a smaller community bank,” Sarvis said. “The perception is that we can’t provide private wealth or capital markets or trust services, but we can through Synovus. So to better position ourselves from a competitive standpoint in the market, we’ve really leveraged Synovus more than we have Cohutta.”
Cohutta is one of 28 individually named banks owned by Synovus and its parent, the $30.7 billion-asset Synovus Financial in Columbus, Ga., that by the end of 2018 will be rebranded under the Synovus banner. Synovus has already folded the banks into a single charter and Chairman and CEO Kessel Stelling said the time has finally come to merge the brands into one to better leverage the Synovus name and reputation throughout its five-state footprint.
“I don’t mean for a minute to underestimate the importance and history and emotional attachment to the existing brand. We have several brands within our system that are over 100 years old,” Stelling said. But, he added, “We believe it’s a lot more important what’s inside our buildings than what’s outside. If we have the same local leadership and local decision making, then our customers and prospects will quickly adapt to the new Synovus name.”
There are some risks associated with ditching the local brands, especially in smaller markets, where local banks can have outsized influence. In Statesboro, Ga., for example, Synovus’ Sea Island Bank has been the driving force behind the revitalization of the city’s historic downtown.
But Stelling said that most customers know by now that their bank is part of a larger holding company because Synovus has been incorporating its name and logo into its’ banks’ branding for several years. Recent advertising campaigns have also emphasized the Synovus name over the local brands.
“Rather than a rebranding, it’s a common branding,” Stelling said. “We’ve been featuring the Synovus name and logo, and quite frankly, we think the Synovus brand is recognized throughout our market.”
Though leadership had been considering combining its banks for years, it wasn’t until 2013 that the company began to actively test how a name change might play in its markets. Through surveys and focus groups, executives found that in many cases the Synovus name was better known than the local brand. And since local banks have been using the Synovus name for years now on specialty business lines, like corporate or treasury services, Stelling isn’t too concerned that the change will come as a shock to anybody. If anything, the name change should reduce customer confusion, he said.
“We didn’t just decide to make the switch. We did a lot of in-market testing and surveys with customers and prospects in markets throughout our footprint to test the power of the local brand as well as the common brand,” Stelling said. “And it was clear that the common brand of Synovus would lead us to better opportunities to execute on our growth strategy.”
Bill Douglas, the president and CEO of Athens First Bank & Trust, is another local market leader who shares Stelling’s enthusiasm for the brand transition. With about $1.6 billion of assets, Athens First is one of Synovus’ larger local brands, and Douglas said that some of his larger business clients end up banking with Synovus under two or three different local brands in their own markets. Though Synovus merged its charters in 2010, a customer of one Synovus bank brand can’t seamlessly deposit funds at a branch and withdraw them from another Synovus bank. The single bank conversion, which is expected to wrap up this year, will address that issue.
“The comment I hear most is, well, it’s about time,” Douglas said.
Synovus began the operational conversion associated with the brand transition in 2015 and expects to complete that by the year end. Next year, Synovus will begin changing over its signage and external marketing and aims to complete the process by the end of 2018. CB&T Bank in Georgia and Alabama will be among the first transition to the Synovus name, while NBSC in South Carolina and the Bank of Nashville in Tennessee will be some of the last to make the change.
Christopher Marinac, the director of research at FIG Partners in Atlanta, said the brand transition was a natural next step for Synovus following its decision to merge the charters as a way to cut expenses and improve efficiency. It wouldn’t have made sense to do this in 2011 or 2012, when Synovus was still cleaning up from the financial crisis, he said.
“In some communities they serve, there is a longing to have the independent brand, but I think Synovus has done a good job of trying to establish Synovus as a company brand so this is not a surprise to them,” Marinac said. “It’s not as if this is a new label on a Coca-Cola can.”
Synovus is hardly the first bank to consolidate multiple brands into one. While multiple charters can better foster local decision making, they can also be tough for the parent company to manage, particularly when it comes to regulatory compliance. The economic downturn only increased those difficulties.
United Community Banks in Blairsville, Ga. merged its 16 charters in 2008, and FirstBank Holding Co. in Lakewood, Co. merged more than two dozen charters together in 2010. Others have chosen to merge their separate bank charters but retain the local or regional branding. Zions Bancorp. in Salt Lake City, for example, consolidated its individual bank charters into one back in 2015, but kept names like California National Bank and Amegy Bank.
“It’s critical to the executive team and the board of directors at Zions that we maintain the local branding, as long as it continues to be a competitive advantage,” said James Abbott, Zions' director of investor relations.
Keeping decision making local has been key for Zions, and its individual brands have earned accolades and tested among the best known brands in their respective markets, he said. Though merging its charters made sense from an operational standpoint, the Zions name just would not resonate in California the way it does in Utah. Abbott said,
Dave Martin, a retail banking consultant in Sugar Land, Texas, said that the difficult part of any brand transition is dealing with the emotional attachment people have to their local brands. Some of those employees have worked for those local banks for many years, and when Synovus acquired them, part of the deal was that they got to keep their name and identity, he said.
“People buy into that,” Martin said. “To me, that’s one of the tougher things about it, is getting people to understand the greater good. That’s why so much of management is about communicating and having them understand why decisions are made.”
The company’s leadership seems to be mindful of that. Both Douglas and Sarvis described the transition and the communication from the top as “thoughtful.” The company also ramped up its advertising of the Synovus brand during the Super Bowl and plans to support the transition with additional marketing and advertising throughout 2018.
“I’ve been with banks that got merged and lost their identity,” Stelling said in explaining the outreach efforts. “I know how that feels.”