Bank Mergers: Want to know the secrets for a masterful name change?

You’ve closed on the merger.

Legal counsel has communicated that everything is done.

Documents have been exchanged, and the deal has closed.

The paying agent has the funds for distributing the cash merger consideration when shares are surrendered, according to the instructions the shareholders will receive in their letter of transmittal.

It is important to remind you that your bank’s internal accounts go away at closing—they now belong to the buyer—an important consideration and reminder for getting expense reimbursements submitted prior to closing.

As such, payments were wired earlier in the day to both legal counsel and the investment bankers.

It’s time to communicate this milestone with everybody.

Employees, customers, and shareholders.

Everybody is finally on board.

By now, the employees have been exposed to so much activity since the announcement, this news is met with relief that communication will begin in earnest and directly with their new employer.

A strange mixture of melancholy and excitement clings to those involved.

The employees have been given instructions about the new payroll system to use beginning Monday.

Customers have also been hearing about the combination for about 90 days and, to a great degree, are looking to what the future holds.

If Step 1 (see The Savvy Banker newsletter #048) has been executed properly, they are comfortable with the fact that other than branding, their business has not been disrupted in much of any way and the closing is a non-event.

Shareholders are made aware of the closing and understand they will be receiving instructions as to how they collect their merger consideration.

The website has been updated to announce the merger has been closed.

The branding has changed on the site to the new logo.

The colors of the website have changed to match the buyer’s brand palette.

Online banking login reflects that it is the legacy online banking link.

The press release and frequently asked questions (FAQs) from the announcement remain on the site and now joining those documents is a welcome message from the buyer’s CEO.

The legacy website can either be used, or the legacy domain could point to the buyer’s website, depending on the buyer’s preference.

I would recommend to buyers out there reading this that if the legacy bank domain is not going to be used, at least forward the domain to the new site.

If the domain is taken down, either at closing or later, it appears to the customer that the bank is no longer in business.

Similarly, Apple maps or Google maps need to be transitioned to the new name from the existing listings as opposed to stopping the existing listing and creating new ones.

Customers (or prospects), who may not be familiar with the transaction or remember the buyer’s name, could get a business closed message when searching using the legacy name.

Social media sites have been updated to spread the word the merger has closed and encourage followers to follow the new brand’s social media sites.

The legacy social media sites will remain through conversion, with no further posts being made beyond the posts pointing to the buyer’s social media sites.

Stay disciplined and on message.

The announcement talking points should be as relevant today as they were during the announcement.

What about the old brand?

What happens with all the items carrying the legacy brand?

It may not be as clear cut as you think.

All your employees left Friday under your brand.

They will be arriving on Monday as employees of the new brand.

There is a great deal of work that needs to be done by the buyer over the weekend to prepare for that change.

The sign company needs to be ready to change out signs over the weekend at all your locations.

That could mean full sign change outs or banners being placed over your existing signs.

New letterhead, envelopes, product materials, interior signage, etc., all need to be brought in and organized.

There are buyers who prefer to wipe the old brand and start new.

Everything goes to the dumpster.

Other buyers gather all the materials, letterhead, envelopes, corporate apparel, logoed items, branded pictures, etc., and are respectful of the old brand while incorporating the new.

They understand the emotional attachment the seller’s employees have had in building the brand.

It varies by buyer.

As a buyer, you have paid for the right to do as you please.

However, you may want to consider the latter rather than the former.

Again, you have made a large investment in the purchase of the bank.

You have hopes and dreams of the talent staying on and being fantastic contributors to your organization going forward.

You want the talent to communicate to the customers their excitement for the new bank, so your odds rise of retaining those customers through the change.

Why risk starting off on the wrong foot on day one?

Gather the legacy branded items in one location and give the employees an opportunity to help themselves to it.

Just ask that they take the former logoed items home in return.

Think of a goodwill message that could let them know they have done a wonderful job of building a valued brand and that you want that to be a part of their legacy.

Then let them know you want them to carry that same desire to build the new brand.

In fact, you’re counting on it!

It’s a small gesture but it makes a huge statement to the employees.

You’re honoring their past contributions and showing respect as they are welcomed in. It’s asking them for their support.

Business is hard.

As the buyer, you need all the easy wins you can get.

It’s an easy win if done well.

If done incorrectly, the buyer will overdraw their goodwill account with employees right from the start and will have to work very hard to get the “balance” back in positive territory.

There are similar considerations that may apply to the Change-In-Control (CIC) payments and Stay-Puts, if you have them.

We’ll cover that in next week’s newsletter.

Action Plan:

• If it is not already catalogued, have somebody put together a complete listing of any place your bank’s logo is being used. You will be amazed by the list. Review it annually.
• As a part of the list, keep track of who has the ability to change things and who has the credentials. Keep track of the credentials in a shared, secure password manager (should be part of your Business Continuity Plan too and possibly your Management Succession Plan).
• Think about your voicemail attendant recording – make plans in advance of closing to have those re-recorded to reflect the new brand on Day 1. Every detail communicates. If these details are managed correctly, it kills chaos before it starts. It signals a well-planned integration is ahead. There may be bumps along the way but even those are better received when it appears as though all is under control from the beginning. The opposite has the opposite effect.

Your path will:

• Inform your strategic plan.
• Guide your annual business plan and budget.
• Clarify priorities.
• Define your message so it can be communicated with confidence.

This is how savvy bankers navigate.

They build smart and valuable banks and choose the best time to sell – serving the needs of the shareholders and the board.

I hope you found this short lesson helpful.

What are your thoughts?

I’ll see you next week.