Overcoming Legal Risk From Brand Identity

Legal Risk for Brand Identity at a Glance:

• As banks plan for expansion opportunities, they must consider the legal impact of their name as they enter new markets
• When one Texas community bank wanted to increase their influence, they realized their name couldn’t adequately communicate their unique culture and exceptional experience
• Rebranding offers a legally ownable and usable name so when the bank enters into any new market, they have a distinctive name and brand identity to help pave the way

Banking mergers and acquisitions got a boost in April, when the second largest deal of the year was announced. As of April 2024, there have been 28 banking M&A announcements in the U.S. worth $1.59 billion. In addition to merger momentum, financial institutions are making moves with their retail networks, as well, with banks like Chase and PNC planning to build hundreds of new branches and renovating thousands more. As banks plan for expansion opportunities and M&A – especially community financial institutions that make up the vast majority of deals – they must consider the impact of their name as they enter a new market. 

When one Texas-based community bank wanted to increase their influence, they realized that their name – Citizens National Bank – couldn’t adequately communicate the unique culture and exceptional experience their customers had come to love. The bank’s CEO Brad Tidwell, who had returned to his hometown after a stint with Chase, wanted to spur more growth. While he knew the Citizens name lacked distinction and that could be a problem in the future, he was absolutely certain his branch operations were a more immediate issue. So, he focused first on upgrading the branch experience in their core East Texas markets, and it was working.

But when Citizens National Bank bought Union State Bank out of Austin, TX, the need for differentiation came into much sharper focus. In the past, the bank had been operating in close proximity to 20 other Citizens Banks in Texas, with several of them dotted around their network. However, for the time being, they thought they could just peacefully coexist. Sharing a similar name to another bank was a little irritating, but they’d just make their marketing work a little harder. So, the naming problem was on their radar, but it wasn’t a flashing red light. That is, until they bought the bank to move to Austin.

As soon as Citizens National Bank announced the Austin acquisition, one of the other competitor banks said, “No, you can’t come here.” They had legal standing for use of the Citizens name in the market, so keeping the current name was no longer an option. This legal risk certainly intensified the need to address that branding issue, but despite being in a reactive stance, they took the time to do it right. Rebranding as VeraBank, the name is inspired by truth and is legally ownable and usable. Now when the bank enters into any new market, they have a distinctive name and brand identity to help pave the way.

Given the bank knew about the possibility of naming issues, the branch updates they’d been making prior to the rename were designed so that any future updates to the bank’s branding would be efficient and cost effective to implement. From an investment standpoint, no dollars were wasted by not looking ahead and anticipating that risk. A branch is a bank’s best billboard and every dollar counts. So, not only was VeraBank able to build a brand that people would remember and associate with distinct and positive feelings and experiences, their branches were able to be easily retrofitted to the new identity for maximum impact. 

VeraBank’s new name and brand:

• Enabled entry into multiple new markets
• Accelerated growth from $3.8B in 2018 to $4.5B in 2023, a 95% increase in assets
• Created a new currency of brand equity

To learn more brand and marketing strategies that can get your bank or credit union ready for growth, or to speak with one of Adrenaline’s experts, contact us today.

Adrenaline is an end-to-end brand experience company serving the financial industry. We move brands and businesses ahead by delivering on every aspect of their experience across digital and physical channels, from strategy through implementation. Our multi-disciplinary team works with leadership to advise on purpose, position, culture, and retail growth strategies. We create brands people love and engage audiences from employees to customers with story-led design and insights-driven marketing; and we design and build transformative brand experiences across branch networks, leading the construction and implementation of physical spaces that drive business advantage and make the brand experience real.