Saturday, September 27, 2008
On the surface, Washington Mutual's seizure and sale on Thursday didn't seem to hurt business at the failed thrift's 34 Sacramento-area branches.
Customers on Friday made deposits and took money from ATMs that spit out receipts bearing the failed bank's name. WaMu signs still hung on the buildings. At one Elk Grove branch, an early morning customer filled out forms for new accounts.
But local community and small regional banks and credit unions say the meltdown of Seattle-based WaMu, one of the nation's biggest mortgage lenders, has pushed more business their way. And some have seized on the crisis gripping Wall Street to sharpen their conservative, safe and service-oriented image.
"We've benefited," said Terry Halleck, president and chief executive of The Golden 1 Credit Union. "We've had new people coming in because of what's happened."
WaMu's seizure by the Federal Deposit Insurance Corp. and subsequent $1.9 billion sale to JPMorgan Chase & Co. added to the troubled financial landscape and fed rhetoric on Capitol Hill about a multibillion-dollar plan to stem losses.
The federal government in recent weeks has seized mortgage giants Fannie Mae and Freddie Mac and taken control of global insurance firm American International Group. Several large mortgage companies have been sold. The five largest independent investment banks have changed business models or shut down.
WaMu's failure, however, was the first during the current crisis for a large bank funded mostly by deposits.
Many customers at Washington Mutual's Kiefer Boulevard branch treated Friday as just another day, despite the news.
"As long as the money's there, I'm fine. I couldn't tell any difference," said Derrick Weaver, a tour bus driver from Elk Grove and a Washington Mutual customer for four years. "I go to this branch, Elk Grove and Carmichael, and it's no different."
Macellina Amonoo, a 23-year-old student at California State University, Sacramento, stopped at the Kiefer Boulevard branch to check on her account and deposit her paycheck.
"So far, everything's the same," she said. "I was afraid I'd have to rush over and pull my money out."
At the thrift's El Camino Avenue branch, customer Michelle Jenkins said she's worried less about her money's safety than about how service will change under the new ownership.
"It's too early to tell," she said.
The uncertainty in the banking industry will probably continue. Wachovia Corp. is reportedly in sales talks with several banks. The Charlotte, N.C.-based firm has 10 offices in the Sacramento area.
Unlike their bigger rivals, small banks didn't get into the kind of risky home lending and mortgage securities investments dragging down Wall Street, said Keith Leggett, chief economist for the American Bankers Association in Washington, D.C.
"Regional and community banks and credit unions in Sacramento and elsewhere are the bedrock of their communities," Leggett said. "Many have been around for a very long time, they've seen a number of cycles and they know their customers and cities intimately."
Personal service and safety are powerful marketing messages for small banks in good times, Leggett said, made stronger when consumers see some big banks in crisis.
"We've run some ads that address this situation," said Lani Hayward, spokeswoman for Portland, Ore.-based Umpqua Bank.
One example hung Friday in the window at Umpqua's Elk Grove office on Bruceville Road and Elk Grove Boulevard: "Safe and sound for over 50 years. It's time to change. Come by and talk to an associate today."
Hayward said Friday that the bank, which operates on the West Coast, has "had close to triple the account openings last week and into this week." Umpqua has eight branches in the Sacramento area.
Golden 1's Halleck said that the 600,000-member credit union is targeting consumers looking for a new home for their money with promotions like a free first check order with new checking accounts.
"We are definitely making an effort to capture more of the market," she said.
River City Bank, also based in Sacramento, is highlighting its stability. Visitors to its Web site, www.rcbank.com, can click on links to a government-produced video about federal deposit insurance and read specifics on the bank's stability.
"We're trying to inform the public of our strengths," River City President and Chief Executive Stephen Fleming said Friday, "so that they'll be comfortable moving their money to our bank."
Monday, September 08, 2008
Faced with competition from two of the country's largest banks, Harris Bank looks to attract customers in its local market of Chicago with a new advertising campaign playing off the company's "We're here to help" message, and its first television advertising in two years.
The campaign, from Element 79 in Chicago, extends the bank's year-old effort into television, marking the first time Harris has created such advertising in two years.
One television spot shows several situations in which Harris Bank helps people, and not just financially. As a woman searches through her purse for a ringing cell phone, a Harris Bank outdoor ad tells her: "Purse, side pocket." As a couple is haggling with a car dealer over the price of a new car, a Harris taxi-top ad says: "Dealer paid $1,000 less." As a woman is about to board Chicago's El train, a Harris outdoor board tells her: "Mr. Wonderful is one car down."
"We had to feel confident the message was going to carry over," Justine Fedak, senior vice president of marketing at Harris, tells Marketing Daily, about the extension into television. "It has all the power and energy of the print work. [Element 79] actually incorporated the print campaign as part of the television commercials."
The television campaign began airing in Chicago Sunday night during coverage of the Chicago Bears/Indianapolis Colts season-opening football game. The campaign will also air 60 to 90 times a week on CBS, ABC, NBC, Fox and WGN broadcasts, as well as on cable pods of national programming.
The bank expects to reach 95% of its core audience through the campaign, which will also include print, radio, outdoor and online advertising.
Harris Bank is the third-largest bank in the Chicago market, after Bank of America acquired LaSalle Bank last year. According to FDIC data from June 2007 (the most recent period for which information is available), Bank of America (when including LaSalle data) and JP Morgan Chase each have about a 14.5% market share in the Chicago metropolitan area, while Harris has an 11% market share.
Fedak says "market disruption" contributed to the bank's decision to expand into television. "[Consumers] are looking for a bank that's going to help them," she says. "We felt we had a strong positioning that could be expanded at this time."
While unable to comment on the specific campaign, Carol Kaplan, the director of public relations for the American Bankers Association, says the national banking market--with 8,500 banks and 97,000 locations--is "ultra-competitive," and banks look very hard to find a defining characteristic that will appeal to consumers.
"What some banks try to do is carve out a niche," Kaplan says. "The banks often try to segment themselves in order to service a particular category of customer."
