In its continuing effort to position itself as a national player, First Tennessee
National Corp. is planning to change its name. But the name change likely
will only apply to the $27.9 billion asset holding company - not the company's
banks in Tennessee.
"We will not be changing the First Tennessee Bank name," company CEO Ken
Glass said after stepping off a plane from California where he and two other
executives met with the bank's marketing consultant. "It's well-recognized,
we're proud of it and we're glad we've got it."
But Glass said changing the holding company's name - a move aimed at investors
and shareholders, not customers - is necessary to change national perceptions.
The First Tennessee moniker "keeps the markets where we have to raise our
capital and sell our debt thinking of us as a regional bank as opposed to
a national financial service company that is well-diversified," he said.
Although officials haven't decided on a new name for the company or exactly
when it will get a new moniker, Glass said it will be done within 12 months.
And it's unlikely the new name for the company will be that of either of
the firm's other subsidiaries, First Horizon or FTN Financial. First Horizon
is
First Tennessee's mortgage company and the name it uses for its banks outside
Tennessee; FTN Financial is what it calls the capital markets group, which
includes brokerage and investment-related businesses.
Glass said the first questions from investors and analysts who don't follow
the company are how the Tennessee economy is doing and how that affects the
company.
"The health of the national economy is more important to us today than the
Tennessee economy," he said.
But Joseph Stieven, analyst for Stifel Nicolaus & Co., a St. Louis investment
firm, said professional investors get past the name in about 30 seconds.
"Most professional investors live in a world that comes down to three words:
earnings per share," he said. "Maybe in the short term, (stock price) will
be driven by the name, but long term it's driven by growth in earnings per
share."
He points to Fifth Third, the name of the Cincinnati-based bank holding company
formed by the merger of Fifth National Bank and Third National Bank.
Banking is an "execution business," and if First Tennessee doesn't continue
to carry out it business strategy well, it doesn't matter what its name is
going to be, Stieven said.
However, SB Master, president of Master-McNeil Inc., a brand consulting
firm in Berkeley, Calif., said names make a difference for banking firms.
Before she founded her firm, Masters said she worked with Industrial Commercial
Bank, known as Inbank, in Rhode Island.
In the 1980s, that company was looking for a new name to reflect its growth
and she helped come up with the name Fleet, playing on Rhode Island's maritime
heritage and the message of swiftness.
"Wall Street loved it, the customers loved it and their acquisitions loved
it," Master said.
While the business reason for the decision is clear, most people don't care
about company names, said Danny Altman, creative director of A Hundred Monkeys,
a brand consulting firm in Mill Valley, Calif.
Often, companies "come up with names that have no personality and no character
whatever," he said.
"You're trading something you know and are comfortable with for something
nobody knows and that you have to invest a lot of money in telling them about,"
Altman said. "It would be much more interesting for them to do a marketing
campaign that First Tennessee can see beyond the borders of Tennessee."
Glass said the holding company needs a new name because things have changed
from just four years ago when First Tennessee changed its logo, put the First
Horizon name on branches outside the state and renamed the old bond division
FTN Financial.
Now, the company brings in more revenue and earns more profit from outside
Tennessee than from within the state. Tennessee is still the firm's primary
location for banking, but Glass said a new name will help send the message
that the bank is more than Tennessee.
