Saturday, March 23, 2002
Firstar to fly new name, colors
It'll be U.S. Bank in red, white and blue
By Jeff McKinney
The Cincinnati Enquirer
For the second time in three years, Firstar will get a new name and face-lift.
First vice chairman Richard Davis (center) stands under the bank's new colors and logo with VPs Terry Crilley, Roger Watson, Wayne Shircliff and Kathy Beechem.
(Glenn Hartong photo)
| ZOOM |
By late June, the banking company one of the Tristate's largest will shed its neon green and adopt the patriotic-looking emblem of U.S. Bank, its latest moniker. The company was created first by Star Banc Corp.'s $8 billion purchase of Firstar in 1999 and then Firstar's $23 billion acquisition of U.S. Bancorp in February 2001.
But the name change one that will debut U.S. Bank's red, white and blue logo on everything from Cincinnati's skyline to local sports and entertainment complexes to automated-teller machines to billboards also will usher in another era of Tristate banking.
The new identity is more than a symbol of a prominent company changing its name, marketing experts say. It also points to how multibillion-dollar mergers and acquisitions are being used by banks and other financial-services companies to please shareholders rather than consumers.
A name change means a merger, and a merger means a loss of continuity, said Charlene Stern, senior vice president of New Ground Resources Inc. in Berkley, Calif., a branding and consulting firm that works with financial entities. This signals to the customer the potential of some major, and minor, changes in the way the bank does business.
The name change, to officially occur June 28, comes a year after Firstar completed its purchase of Minneapolis' U.S. Bancorp, creating the nation's eighth-largest bank with $171 billion in assets and about 2,200 branches and offices stretching from the Tristate to the West Coast.
Firstar executives are giddy about the latest face-lift. They say having already done it successfully, the company is better prepared than ever to make the move. They are confident that they won't lose any customers in the process and are excited about what they say will be the bank's final name change.
Moreover, U.S. Bank plans to invest $17 million including $3.5 million locally as part of its biggest marketing blitz ever to:
Tout its new name and promote itself in 24 states stretching from Ohio to California.
Change almost 1,000 signs throughout the region.
Show that it's a national financial-services powerhouse instead of a traditional community bank.
The merged bank has moved its headquarters to U.S. Bank's hometown, Minneapolis, but its bread-and-butter consumer-banking operations are based in Cincinnati, where it employs 3,500 people.
We're excited because it gives us a chance to talk about ourselves and tell people who we are, said Richard Davis, a U.S. Bank vice chairman who runs the company's consumer banking unit.
This (name change) is not just another step, but the final step for us.
Part of the enthusiasm from Mr. Davis who is U.S. Bancorp's vice chairman and its third highest ranking officer stems just from the U.S. Bank name itself, arguably one of the nation's most recognized, along with Bank of America patriotic and national in scope. Bank of America, which kept that name after merging with NationsBank, is based in Charlotte, N.C.
Mr. Davis, who is based in Cincinnati, said the U.S. Bank name is more significant than any other name the bank had before, putting the company in the major leagues with the likes of major corporate titans in other industries, such as General Electric and Procter & Gamble.
Tristate Firstar/U.S. Bank customers will see few changes, executives say. The new bank will use U.S. Bank products and services, but their accounts will not be affected during the transition. They also will pick up some perks that could not before.
For example, Cincinnati customers visiting such cities as Los Angeles, Denver and Seattle will be able to use U.S. Bank ATMs in those places as if they were in Anderson Township, Cheviot or Hyde Park.
In fact, the company's Cincinnati banking operations are being used as the model at other U.S. Bank operations across the country.
For instance, U.S. Bank branches on the West Coast in cities such as Los Angeles, Portland and Salt Lake City by late summer will begin offering products and services that they don't have now. Among them: access to the company's consumer finance unit, mortgage services, small-business lending experts and the ability to buy stocks and mutual funds.
In the Tristate, the bank will change signs and banners on branches and ATMs. In addition, local landmarks will take on the new name:
Firstar Tower will be U.S. Bank Tower, changing the look of Cincinnati's skyline with the new banner.
Firstar Center will become U.S. Bank Arena.
The Firstar IMAX Theater in Newport will become the U.S. Bank IMAX Theater.
Firstar signage at the Kentucky Motor Speedway will eventually adopt the new blue-white-red logo.
U.S. Bank plans to mail notices to 400,000 to 500,000 customers and potential customers in Greater Cincinnati to promote the name change and round up new business.
By the time we do this, we would have spent so much time, money and energy on this, anyone would have had to be in a cave to not know we're not U.S. Bank, Mr. Davis said. We want people to focus on who we are and what we offer, not the name change.
Mr. Davis also doesn't anticipate the new company to have deposit runoff something common in bank mergers.
Indeed, Star-Firstar actually gained deposits between 1998, when that deal was announced, and 2000. During that period, Firstar's deposits rose 44 percent to $5.2 billion, while rival Provident's jumped 62 percent to $6.5 billion and Fifth Third's climbed about 8 percent to $5.9 billion, according to the Federal Deposit Insurance Corp. Those numbers include the banks' main Cincinnati branch office deposits, which sometimes include deposits from out-of-town customers.
Minus that office, and looking at core branches, Provident's deposits rose 39.3 percent to $2.7 billion, Fifth Third's rose about 21 percent to $4.3 billion, and Firstar's climbed 2.7 percent to $2.45 bilion, according to FDIC data.
This will be seamless for the customer, Mr. Davis said. We did not lose any depositors last time. In fact, we grew deposits. We don't see this as a problem because we've done this before and we know how to do it.
Still, branding experts said the new U.S. Bank could face some challenges with the transition.
Dean Bonham, chairman and CEO of the Bonham Group, a consulting firm that works in the sports entertainment industry, has worked with several major companies on such things as name changes. He said quickly building brand recognition and credibility is important.
For example, he said existing and new customers might recognize the U.S. Bank name but question whether they're getting the same products and services. They'll also wonder about new fees and whether it's basically still the same bank with a new name, he said.
He said it helps that U.S. Bank has successfully changed its name before and was in the community for years under a different name.
A bank that has been in the community for 100 years that has not changed its name would have a higher brand credibility quotient than one that's changed its name a few times in the past few years, Mr. Bonham said. That will be a challenge for them.
But he said U.S. Bank's biggest test might be convincing customers that it won't change its name again, something he says creates consumer confusion.
If they use the same strategy they successfully used before, it will be a much easier process for them, he said. But it can still create confusion when it happens every few years.
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