What's in a bank name? That which shareholders call the
Peoples First Community American Exchange Bank of Security by any
other name would earn income just as speedily.
The preceding twist on Shakespeare's famous quotation was
inspired by the Oklahoma State Banking Board meeting last week.
The board adopted a new rule which specifies that banks with
what I call generic names must clearly identify their place of
origin when they branch into new territory.
With all the talk about franchise value, one might think that
a bank would want to clearly identify itself apart from all
others in its marketing. But that is not necessarily the case.
The name of a bank is an important means in which to convey
the institution's strength, stability and longevity. In the
banking industry perhaps more than in others, the name also
conveys community. And as far as community goes, nobody knows the
community like the hometown folks.
Most of the 393 banks in Oklahoma are in small towns. Most of
those banks are small, even by Oklahoma standards. In fact, only
50 banks in the state have more than $100 million in assets. The
business these small banks are competing for comes from within
their communities _ from the people with whom the bankers go to
church, sit on school boards and plan events like rodeos and
Another fact of the banking industry is that consolidation is
happening, especially among those smaller banks where it makes
less and less sense to hire more people just to keep up with
Bank mergers and acquisitions mean that new institutions with
different ownership are moving into old community banks and
trying to take up where the previous group left off. One of the
first things they want to stress to existing customers is how
much the same the institution is, even though it has new owners
and a new name.
This desire to retain the community feel of the previous
locally based institution while seeking to convey a sense that
nothing has changed can combine to encourage banks to dance
around their identity and where they are based.
That is the problem the state board sought to address with its
rule forcing banks to own up to who they are. It prohibits banks
in Oklahoma from obscuring the location of their main office in
their advertising and signs.
The rule was directed at those banks that have "confusingly
similar" names, a problem that arises more often that one might
The Oklahoma Legislature defined "confusingly similar names"
as those which are identical to other bank names or those which
include one of 16 specific words I call "generic bank names"
because of how frequently they appear in the monikers of banks.
They are: American, Central, Citizens, City, Commerce,
Commercial, Community, Exchange, Farmers Merchants, First,
Guaranty, Oklahoma, Peoples, Security and United.
According to my count, 217 of the 393 banks in Oklahoma use
these words to identify their institutions. My count doesn't even
include those institutions seeking to be completely generic and
doing business simply as "The Bank of (town name)."
Not surprisingly, the most common word used in Oklahoma bank
names is First. It is the main identification of 108 banks _
ironically 54 of them are national banks and 54 are state banks. …