First Citizens Bank's new ad campaign stresses the bank has been around for more than a century and boasts that its current finances are ranked “superior” by an independent rating service.
Similarly, a current BB&T radio ad notes that the bank opened its doors in 1872 and proclaims: “What we do isn't based on financial fads or market situations, but rather on what we believe is the right thing to do.”
“I think it's about time the banking industry started to stand up and say, ‘We're not all subprime lenders,'” said Tony Plath, a finance professor at UNC Charlotte. “I think that is what some of the banks like BB&T and First Citizens are trying to accomplish in their ads.”
It helps that Raleigh-based First Citizens and BB&T, headquartered in Winston-Salem, are faring relatively well despite the turmoil rocking the banking industry. They remain profitable at a time when national banks such as Charlotte-based Wachovia and Bank of America are racking up billions of dollars in losses.
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First Citizens' corporate parent, First Citizens BancShares, posted a $26.2 million profit in the second quarter – a 15 percent decline from a year ago, but strong enough to garner praise from analysts in the current environment. BB&T's second quarter profit was down a mere 7 percent.
So it's no wonder that First Citizens' new ad campaign, which began appearing last week in newspapers in the markets it serves, touts its five-star rating from BauerFinancial Inc.
Founded in 1898, First Citizens has 340 branches in five states. The ad campaign, created by Winston-Salem's Cassels Caywood Love, marks the first time First Citizens has mentioned its rating in an ad.
“We know a lot of consumers look to these rating services when deciding on a financial institution,” said First Citizens spokeswoman Barbara Thompson.
Well, yes and no. In the past, consumers haven't paid any attention to bank ratings, Plath said, because they felt comfortable knowing their deposits are federally insured. But the failure of California-based IndyMac Bancorp, which seized by regulators last month, has made consumers wary.
Ron Denny, senior vice president at BB&T, which has more than 1,500 branches in 11 states, said of the campaign launched in May: “Given all that was going on in the industry, we really felt it was time to reassure our clients, our shareholders, our employees and the community that BB&T is a very sound, very stable, well-respected bank.”