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Wednesday, February 3rd, 2010
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History of Top 10 Banks of the United States

History of Top 10 Banks of the United States

History of Top 10 Banks of the United States

The year 2009 was not a very promising one as the global recession wounded the financial conditions of the world. The economic slowdown of the advanced countries that began as a result of sub-prime crisis in U.S.A., soon spread over across the globe. The banking sector was bound to be hit hard as the cash liquidity became stagnant and banks made less or no profits at all.

But amidst the whole rise and fall of the economy there were certain banks who managed to keep their feet firm on the ground. Yes the Troubled Assets Relief Program (TARP) by the U.S. government did come to rescue the financial institutions from the subprime mortgage crisis and the banks someway succeeded to keep the ratio of share price to book value satisfactory. So lets have a look into a brief history of such top Banks of America who have grown tremendously over years in size as well business.

Bank of America Corp.:

BOA2.25 trillion of total assets make Bank of America Corp. the largest bank holding company in U.S. It operates in 50 states, the District of Columbia and more than 40 foreign countries and has 6,100 banking centers worldwide.

Following few mergers since 1922 when it was known as Bank Of America and Italy , Bank of America was finally established in the year 1929. It grew through an aggressive series of acquisitions. In 1967, BankAmerica Corporation was established for the purpose of owning Bank of America and its subsidiaries. BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation of Seattle, Washington. In 1992, the company acquired Security Pacific Corporation and its subsidiary in California and other banks in Arizona, Idaho, Oregon, and Washington. This acquisition was marked as the largest bank acquisition in history. Few mergers and acquisitions in the time that followed helped the company to establish as the largest U.S. bank holding company in terms of deposits.

But in 1998 the BankAmerica Corp. was purchased by the NationsBank Corporation in US$64.8 billion and was renamed as Bank Of America Corp. The subsequent years saw the company growing through major acquisitions. However in early 2009, Bank of America paid some $29.1 billion in stock for Merrill Lynch, which was crippled by the ongoing credit crisis. It received $45 billion from TARP, plus $118 billion in guarantees against Merrill Lynch’s assets. As the credit crisis eased, losses at Merrill Lynch subsided, and the subsidiary generated 3.7 billion of Bank of America’s 4.2 billion in profit by the end of first quarter of 2009, and over 25 percent in the third quarter. Brian Moynihan is the current CEO of Bank Of America.

JPMorgan Chase & Co.:

One of the oldest financial services in the world, JPMorgan is a solid company with significant holdings. They serve as achase_logo global financial services firm in more than 60 countries. With total assets amounting to 2.2trillion, it is a close competitor to top banks of U.S that include Bank Of America, Citigroup and Wells Fargo. Listed by Global Finance as the best bank in the United States, JPMorgan has a market cap of approximately $173 billion. The bank’s commercial arm provides infrastructure for corporations, municipalities, financial institutions and not-for-profit entities.

JPMorgan Chase was formed by the combination of several large banking companies of U.S. It all began in the 19th century when Chemical Bank of New York was established in the year 1824. The bank merged with other notable banks and was the largest bank in the United States during that time. However in 1996, Chemical Bank acquired the Chase Manhattan Corporation and 4 years later, the combined company acquired J.P. Morgan & Co. and began to be known as what is today JPMorgan Chase & Co. (J.P. Morgan & Co. was a commercial and investment banking institution based in the United States founded by J. Pierpont Morgan and commonly known as the House of Morgan). With further acquisitions that included Bank One, Bear Stearns and Washington Mutual and few others, the company continued to grow and expand through years. JPMorgan received a $25 billion TARP investment Oct 28,2008 and paid hundreds of millions of dollars in bonuses to more than 1826 of its employees from the amount.

Citigroup Inc.:

Citigroup is the third largest bank holding company in the U.S. with $1.9 trillion in assets. It has the world’s largest financial services network, across 140 countries with approximately 16,000 offices worldwide. Citigroup was formed on October 8, 1998, following the $140 billion merger of Citicorp and Travelers Group.

Going a little deeper into the history, the company owns its roots to 1812, with the City Bank of New York that went through a series of name transitions. After it joined the new U.S. national banking system in 1865, the company’s name was changed to The National City Bank of New York. It became the first contributor to the Federal Reserve Bank of New York in 1913 and then there was no looking back. The bank changed its name to The First National City Bank of New York in 1955, which was shortened in 1962 to First National City Bank. Finally in 1976 it was was renamed as Citibank, N.A. and its holding company First National City Corporation was called Citicorp. Citibank was one of the first U.S. banks to introduce automatic teller machines in the 1970s.

Citi is over many different brands, including Citibank, CitiFinancial, CitiMortgage and Smith Barney. During the subprime mortgage crisis, Citi lost $8.3 billion in the fourth quarter of 2008 and $18.7 billion for the whole year. It was finally forced to sell control over its Smith Barney brokerage operation to Morgan Stanley in January. It received a $45 billion TARP investment, plus guarantees on $301 billion of assets.

Wells Fargo & Co.:

Wells Fargo is a long held and widely known name in financial matters. It has $1.3 trillion in assets and is the fourthwells-fargo-042309largest bank in the US by assets and the third largest bank by market capital. Wells Fargo has over 48 million customers and 276,000 employees at its 6,650 retail branches.

Wells Fargo & Co. was established in the year 1998 by merger between Minneapolis-based Norwest Corporation and the original Wells Fargo, which was formed on March 18, 1852, as a joint-stock association with an initial capitalization of $300,000. The company like its counterparts grew with some major acquisitions and expanded rapidly under its President Lloyd Tevis’s management. During the 2008 financial crisis, Wells Fargo garnered a $25 billion TARP investment. After much controversy Wells Fargo acquired Wachovia Corporation on December 31, 2008 superseding the plans by Citigroup.

HSBC Bank USA, N.A

HSBC North America Holdings Inc. is one of the top ten largest financial services companies in the United States. HSBC – North America comprises all of HSBC’s U.S. and Canadian businesses with assets totaling $396 billion at 30 November 2009. The bank operates more than 470 bank branches throughout the United States, with over 375 in New York State in addition to some 20 to 25 branches in other states.

HSBC initially operated under the name of Marine Midland Bank until 1998. HSBC had acquired the bank in 1980 with 51% shares with complete holdings by 1987. In 1998, the branch offices were rebranded as HSBC Bank USA in line with the worldwide corporate identity of HSBC.

U.S. Bancorp:

This regional banking firm based in Minneapolis is the parent company of US Bank, the sixth-largest commercial bankusbank3 in the United States with a total of $281 billion assets. U.S. Bancorp operates four main lines of business that include payment and wealth management services and wholesale and consumer banking.

The origin of the bank traces back to the history of United States National Bank of Portland established in 1891. That corporation was acquired in 1997 by First Bank System, Inc. and changed its name to U.S. Bancorp. It received $6.6 billion in TARP funding in the form of a preferred stock and related warrants. It further expanded by purchasing Downey Savings & Loan Assn FA, Pomona First Fed Bk & Tr and others. On October 20, 2009 US Bancorp completed a transaction to purchase FBOP Corporation’s nine subsidiary banks from the FDIC. ( Source)

PNC Financial Services:

The Pittsburgh-based PNC has $279 billion in assets, after buying the slightly larger National City Corp in October, 08. PNC is America’s 6th largest bank by deposits and is the third largest bank off-premise ATM provider in the country.

PNC evolved in 1959 from a series of mergers ever since 1952. Between 1991 and 1996 PNC purchased over ten smaller banks and financial institutions that broadened its market base. Following years saw more acquisitions with finally Cleveland based National City Bank in 2008 for 5.2 billion dollars in PNC Stock. This helped PNC to double in size making it fifth largest bank in the United States by deposit and fourth largest by branches. It also received a $7.6 billion TARP investment.

The Bank of New York Mellon Corp.:

Formed on 1 July 2007 as result of the merger of The Bank of New York and Mellon Financial Corporation, it has overMellon $200 billion of assets and $1.2 trillion of assets under management. The company operates in six primary financial services sectors including asset management, asset servicing, wealth management, broker-dealer and advisory services, issuance services, and treasury services.

BNY Mellon Corp. is the oldest Banking Corporation in the United States. That is because it roots back to 1784 when The Bank of New York was founded by Alexander Hamilton. The Bank was able to obtain a charter in 1791 and was the first company to be traded on the Exchange. 1900s saw company expanding as it established a holding company in 1969 that further enhanced its growth outside Ney York City. In 2007, t then merged with Mellon Financial that again was an old bank from 1869. During the global financial crisis, it received $3 billion in TARP funding from the U.S. treasury which it returned back in June, 2009.

SunTrust Banks Inc.:

The Atlanta based American holding company, owns SunTrust Bank as its largest subsidiary with with $173 billion in consolidated assets as of September 30, 2009. SunTrust operates approximately 1,700 bank branches across Southern states. The current SunTrust Banks, Inc. was the result of a merger between the Trust Company of Georgia and SunBanks, Inc. of Florida in 1985. Its successful acquisition list includes Crestar Financial of Virginia in 1998 and National Commerce Financial Corporation (NCF) for $7 billion in 2004. Sun Trust received $4.9 billion in TARP financing.

State Street Corp.:

State Street was founded in 1792 and is one of the world’s leading providers of financial services to institutionalstate-streetinvestors including investment servicing, investment management and investment research and trading. With $17.9 trillion in assets under custody and administration and $1.7 trillion in assets under management at September 30, 2009, State Street operates in 27 countries and more than 100 geographic markets worldwide.

State Street has deep roots in the commercial history of Boston. A group of prominent Bostonians gathered together to establish a new bank, the Union Bank, which would be the third bank in Boston. The bank had its charter renewed several times, and in 1865, the directors applied for and received a National Charter and was renamed the National Union Bank of Boston. In1891,State Street Deposit & Trust Company was chartered in Boston and its name was shortened to State Street Trust Company 6 years later. State Street Trust grew steadily during the early years from 1900 to 1925 and finally merged with National Union Bank in 1925. With more mergers in the following years, the Company adopted the name State Street Corporation in 1997. In 2003, State Street purchased Deutsche Bank’s securities services division for $1.5 billion which made the company largest security services firm, surpassing JP Morgan Chase and The Bank of New York.

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