Elvis -- Schmiedekamp, that is -- has left the building.
Citigroup Inc. has given the folksy California Federal Bank pitchman the boot, pulling ads off the radio, thinning the ranks of Elvis-emblazoned billboards around the Southland and shutting down CalFed's Schmiedekamp Web site.
The decline in Elvis sightings is the most visible sign so far of a promised makeover of the 350-branch savings-and-loan network that Citigroup acquired when it bought CalFed's parent, San Francisco-based Golden State Bancorp, last year for $5.8 billion.
As part of CalFed's transformation, Citigroup's Citibank unit is expected to offer customers a much wider range of personal and business checking accounts and other full-service financial products, including private-banking services for the wealthy. It also is expected to push life insurance and annuities, investments and financial advice from its many subsidiaries and affiliates. Among them: Travelers Property Casualty Corp. and brokerage Salomon Smith Barney.
The bank's effort will be backed by a post-Elvis marketing blitz. As the signs on CalFed branches change to Citibank in February and March, Californians will be treated to a barrage of Citibank's offbeat "live richly" ads. One already being printed touts Citibank's "staggering array" of rewards cards, featuring a bulldog that grins madly thanks to a full set of dentures. "You must have been awfully good in another life," the caption reads.
Yet analysts say it will take far more than substituting one quirky marketing campaign with another for Citibank to truly establish itself in the competitive California banking market. Citigroup, the nation's largest financial services company, has long had a retail banking presence in the Golden State, but it has been a bit player until now with only 77 Citibank branches.
CalFed has remained a thrift at heart, built on certificates of deposit and home loans, and Citibank is destined to bump heads with the full-service duopoly that has long dominated the California retail banking scene: Bank of America Corp. and Wells Fargo & Co.
Beyond those two big players, Citibank must tussle with rivals ranging from the big savings and loan Washington Mutual Inc. to brokerage giant Merrill Lynch & Co. Merrill is promoting its capabilities as a bank by offering checking, ATM access and other such services to its retail brokerage clientele.
Citibank has other challenges as well. For starters, the company must battle its image as a distant behemoth, based in New York. Its parent company also has been involved in a series of recent scandals and controversies that have done little to foster consumer confidence:
* Citigroup and Salomon Smith Barney paid the highest fine, $400 million, of any Wall Street firm last month to settle charges of analyst conflicts of interest.
* Over the opposition of consumer groups, Citigroup helped lead the legal challenge to a California law requiring issuers of credit cards -- a huge business for Citibank -- to warn customers of the consequences of making only minimum monthly payments on their bills. A federal judge invalidated the law last month.
* The buyout of Golden State was stalled for months by complaints about abuses in Citigroup's sub-prime lending operations. The deal was completed only after the company reached a $215-million settlement -- a record for a mainstream banking institution -- in a predatory lending case brought by the Federal Trade Commission.
"We're going to keep watching them closely," says Robert Gnaizda, general counsel for an advocacy group called the Greenlining Coalition, which opposed the takeover. The organization had expressed concerns that Citigroup's real goal in acquiring Golden State was to market high-interest loan products to California's vast minority communities without doing enough to "mainstream" those customers.
Clearly sensitive to the criticisms, Citibank's top California officials, along with high-ranking retail banking experts from headquarters, last month attended a celebration marking the halfway point in construction of a huge community center the company had helped fund in Fruitvale, a district of ethnic markets and payday loan shops in Oakland.
At the ceremony, Oakland Mayor Jerry Brown praised the development for bringing in investment. Community leaders thanked Citigroup for supporting the center. And bank officials says Salomon Smith Barney's underwriting of bonds for the project and Citibank's providing of the main loans demonstrated how the company's economic muscles can be a positive force.
"Having a physical presence is really important," Marge Magner, chief operating officer of Citigroup's Global Consumer Group, told those attending the event. "You can want to do lots of things, but when you have a very small presence, as Citibank had before, it really limits your ability to do things that are meaningful -- participate both at a community level and at a business level in any significant way."
Specifically, bank officials says, purchasing CalFed's retail branch network will help them become leaders in affordable housing and lending to minority businesses.
For their part, competitors are watching warily to see what moves Citibank will make. Citigroup last year acquired Banamex, Mexico's largest bank, and executives say the Latino market on both sides of the border is a big reason it wanted a bigger retail footprint in California. But so far, Citibank has revealed few details about its plans to court the Latino community, which also has been targeted by Wells Fargo, Bank of America, Union Bank and others.
Magner and Mike Weitzman, Citibank's president for California and Nevada operations, say the company also hopes to attract business from California's huge Asian population. Citibank is a well-known brand in many Asian countries, they point out, and the company recently bought a small stake in a Chinese bank.
But Dominic Ng, chief executive of San Marino-based East West Bancorp, a powerhouse in California's Asian community, says he has seen no signs -- not yet anyway -- of Citibank trying to steal customers. If Citibank had started advertising in the Chinese community, "I think we'd be aware of it," Ng says.
At UnionBanCal Corp., the San Francisco parent of Union Bank, officials already are responding to Citibank's arrival. They decided to test-market free checking programs through mailed offers and in branches in areas including Fillmore and Santa Clarita. "The challenge for us is clearly to distinguish ourselves" from what will now be a trio of huge, full-service institutions in California, says Union Bank Vice Chairman Richard Hartnack.
Other banks are expected to claim that their personal touch is better than Citibank's, which in the East is known for the convenience of having many branches and providing an array of financial products, "but not necessarily the level of service you'd get at some of the smaller institutions," says Joseph K. Morford, an industry analyst with RBC Capital Markets.
Meanwhile, for Citibank, which has successfully marketed its credit cards and mortgages in California without a large branch network, CalFed's existing checking accounts are, in Morford's eyes, "the best product to build sales of additional services on."
One possible strategy is for Citibank to heavily discount charges on a range of deposit accounts to gain market share, noted Adam Compton, a Keefe, Bruyette & Woods bank analyst. Citibank officials says they already have decided that CalFed customers who had free checking with direct deposit of paychecks will get the same treatment from Citibank, an arrangement not available to Citibank's customers outside California and Nevada, where CalFed had branches.
"California is the best deposit market in the country," Compton says. "And if it's market share you're after, you price aggressively."
Company officials regard their software for planning and managing personal finances as the best in the business -- and a huge benefit to customers who use it. The company also is well-known for providing free online bill paying. Analysts say the service is being used by increasing numbers of customers, who become addicted to its convenience, cementing their relationship to the bank.
Just don't expect to see Elvis hawking Citibank's offerings.
The native Texan, who aside from his role as pitchman had been CalFed's senior vice president for customer service since 1998, turned down a chance to run a San Antonio call center for Citibank. Instead, Schmiedekamp last week moved from Sacramento to Alabama, where he'll head customer service for AmSouth Bank, a 600-branch institution based in Birmingham.
Citibank had been phasing him out as an advertising icon during the last few months. He recalls taking a call from a co-worker asking about a billboard that showed him with a paper bag over his head and the caption: "Elvis Schmiedekamp on overexposure."
Schmiedekamp, who hadn't been told about the ad, says he was told that Citibank marketers "took the liberty" of changing the billboard as the firm prepared for him to make his exit.
A healthy batch of stock options has eased Schmiedekamp's departure, though not enough to make him independently wealthy. "If that was the case," he says, "I wouldn't be moving on to the next bank. I'd be on a yacht somewhere."
And are there Elvis billboards in Alabama's future?
"You never know," Schmiedekamp says.