A legal dispute alleging trademark infringement and unfair competition pits two lenders with markedly different profiles that share similar names.
The plaintiffs: the $6 billion-asset ConnectOne Bank of Englewood Cliffs, New Jersey, and its publicly traded parent company, ConnectOne Bancorp Inc. Ranked by total assets ConnectOne is the eighth-largest lender among banks and credit unions based in New Jersey, with 74,383 customer accounts and 352 staffers.
The defendants: the $96 million-asset Connect Bank of Star City and its holding company, Star City Bancshares Inc. Based on total assets, Connect Bank is the 78th-largest lender among banks and credit unions headquartered in Arkansas, with 4,861 customer accounts and 31 staffers.
ConnectOne claims first dibs on the "Connect" name and wants the former Bank of Star City to abandon the moniker it adopted on March 25, 2019.
ConnectOne traces its "Connect" lineage back to Feb. 11, 2013, when the company rebranded just ahead of its $44.8 million initial public stock offering. The lender was established as North Jersey Community Bank on Jan. 15, 2005.
ConnectOne fired two warning shots before making its grievance a federal case 13 months ago. The dispute began last year with ConnectOne sending a cease and desist letter on March 29. That demand to stop using the Connect Bank name went unanswered.
ConnectOne then mailed a proposed lawsuit on April 22 and threatened to file it if an April 30 deadline for responding went unheeded.
Connect Bank denies its name infringes on any trademarks or presents unfair competition. A jury trial is set for Nov. 2 in Little Rock’s U.S. District Court before Judge Lee Rudofsky.
ConnectOne essentially claims that its trademarked name extends to "Connect" and the Star City bank shouldn’t be allowed to cause confusion in the marketplace and unfairly use the Connect name.
The marketplace in question isn’t geographic in the sense of terra firma.
From its headquarters across the Hudson River from New York, ConnectOne operates a full-service branch network of 20 offices in New Jersey and 10 in New York.
There’s certainly no overlap with Connect Bank’s five-branch network in southeast Arkansas. The marketplace in contention comes courtesy of the Internet, according to ConnectOne.
The New Jersey bank initially claimed it had 43 Arkansas residents among its national clientele when the lawsuit was filed May 6, 2019. According to more recent court filings, that number has since fallen to 15.
Two other banks deploy "Connect" derivations as the first name in their commercial identity, which haven’t drawn the ire of ConnectOne. The $89 million-asset Connections Bank in Kirksville, Missouri, is a renaming of American Trust Bank that occurred on Dec. 1, 2018. The $319 million-asset Connection Bank in Fort Madison, Iowa, is a recasting of Fort Madison Bank & Trust that dates to Sept. 16, 2016.
Among credit unions, there are five lenders sporting "Connect," "Connects," "Connected," "Connection" or "Connections" as their corporate forename.
Connect Bank, Star City
Total Assets: $97.5 million
Net Income: $284,000
Efficiency Ratio: 73.9%
Five full-service locations: Two in Pine Bluff and one each in Star City, White Hall and Dumas
(As of March 31)
|Total Assets*||Net Income*||Efficiency Ratio|