First Chicago Bank
Encyclopedia
National Bank of Detroit
The National Bank of Detroit , later renamed NBD Bank, was a bank that operated mostly in the Midwestern United States. Following its merger with First National Bank of Chicago, the bank was ultimately acquired and merged into Bank One, at which point the NBD name was discontinued...
). In 1998, First Chicago NBD merged with Banc One Corporation to form Bank One Corporation
Bank One Corporation
Some of the banks that were merged into these banks include:*Bank One**Security National Bank & Trust **Affiliated Bankshares of Colorado **American Fletcher Corp. **City National Bank and Trust Co...
, today a part of CHASE
Chase (bank)
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
.
Founding and early history
On July 1, 1863, banker Edmund Aiken and his partners invested $100,000 to found a new federally chartered bank that could take advantage of the National Banking ActNational Banking Act
The National Banking Acts of 1863 and 1864 were two United States federal laws that established a system of national charters for banks, and created the United States National Banking System. They encouraged development of a national currency backed by bank holdings of U.S...
of 1863, which allowed national banks to exist along with state-chartered institutions for the first time. First Chicago received National Bank charter No. 8. The new bank known as The First National Bank of Chicago, or The First, grew steadily in the 1860s, financing the American Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
.
The First merged with Union National Bank in 1900 and with the Metropolitan National Bank in 1902. In 1913, The First became a charter member of the Federal Reserve system. The First survived the depression, even acquiring Foreman State Banks in 1931 and was able to open its doors without regulatory delays following the National Bank Holiday of 1933
Emergency Banking Act
The Emergency Banking Act was an act of the United States Congress spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933...
.
In 1903, the First opened the First Trust and Savings Bank which provided savings accounts to individual customers. First Trust and Savings Bank merged with Union Trust Company in 1928 to become the First Union Trust and Savings Bank. During the Great Depression, the First would absorb First Union Trust and Savings Bank's customers and operations. The bank was active in the sale of War Bonds during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. During the 1950s and 1960s the First expanded both in the Midwestern US as well as abroad, opening offices in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
(1959), Tokyo (1962) and later Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
(1980).
First Chicago
In 1969 the bank was reorganized as the primary subsidiary of the new First Chicago Corporation, a newly formed bank holding company. First Chicago was used as a brand name starting in 1969 and the bank moved into a new skyscraper in the Loop in ChicagoChicago Loop
The Loop or Chicago Loop is one of 77 officially designated Chicago community areas located in the City of Chicago, Illinois. It is the historic commercial center of downtown Chicago...
. The bank grew consistently through the early 1970s, however, the bank's growth undermined its underwriting standards. By the end of 1975 and the beginning of 1976, non-performing loans at First Chicago had reached twice the national average for commercial banks at roughly 11% of all loans. Efforts to fix the bank failed and the bank struggled through the end of the 1970s, suffering from highly speculative bets on interest rates.
New CEO Barry F. Sullivan, formerly with Chase Manhattan Bank
Chase Manhattan Bank
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
, was able to turn around the bank in the early 1980s. Additionally First Chicago's private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
operations proved highly successful and served the incubator for a number of successful independent private equity groups. Stanley Golder
Stanley Golder
Stanley C. Golder was an American financier and venture capitalist.He is the namesake of the Stanley C. Golder Center for the Study of Private Equity at the University of Illinois at Urbana-Champaign, which he graduated ....
, who built the group in the 1970s left the bank in 1980 to found GTCR
GTCR
GTCR LLC is a private equity firm focused on leveraged buyout, leveraged recapitalization, growth capital and rollup transactions. As of 2008, it manages more than $8 billion in equity and mezzanine capital invested in a wide range of companies and industries....
. In the 1990s, the team, led by John Canning, Jr.
John Canning, Jr.
John A. Canning, Jr. is a private equity investor and sports executive. He is the founder and chairman of Madison Dearborn Partners, the large Chicago-based private equity firm. He has recently been linked to discussions about the potential sale of the Chicago Cubs.-Career:Canning was an early...
would spin out of First Chicago to form private equity firm Madison Dearborn
Madison Dearborn
Madison Dearborn Partners is a private equity firm specializing in leveraged buyouts of privately held or publicly traded companies, or divisions of larger companies; recapitalizations of family-owned or closely held companies; balance sheet restructurings; acquisition financings; and growth...
. Midwestern private equity firm, Primus Capital
Primus Capital
Primus Capital is a private equity firm focused on growth capital, leveraged buyout and leveraged recapitalization investments in middle-market companies. The firm invests primarily in companies in the business services, healthcare and for-profit education sectors.The firm, which is based in...
was also founded by First Chicago private equity alumni.
In 1987 First Chicago acquired First United Financial Services and Beneficial National Bank USA (renamed it FCC National Bank) to strengthen its credit card business In 1988, First Chicago acquired Gary-Wheaton Corp., a bank holding company.
Bank One
First Chicago once again began to suffer from the quality of its loan portfolio in the early 1990s and sought out a merger with the National Bank of DetroitNational Bank of Detroit
The National Bank of Detroit , later renamed NBD Bank, was a bank that operated mostly in the Midwestern United States. Following its merger with First National Bank of Chicago, the bank was ultimately acquired and merged into Bank One, at which point the NBD name was discontinued...
, which at the time was the 18th largest bank in the US (First Chicago was the 10th largest bank). The $5 billion merger created the 7th largest bank in the US with $72 billion of assets, and was also a leader in the issuance of credit cards. In April 1998 First Chicago NBD announced a $30 billion merger with Banc One Corporation, which was also a leading issuer of credit cards through its First USA division. In 2004, Bank One merged with CHASE
Chase (bank)
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
bank.
Other notes
- Lyman J. GageLyman J. GageLyman Judson Gage was an American financier and Presidential Cabinet officer.He was born at DeRuyter, New York, educated at an academy at Rome, New York, and at the age of 17 he became a bank clerk...
– Secretary of the Treasury under William McKinleyWilliam McKinleyWilliam McKinley, Jr. was the 25th President of the United States . He is best known for winning fiercely fought elections, while supporting the gold standard and high tariffs; he succeeded in forging a Republican coalition that for the most part dominated national politics until the 1930s...
and Theodore RooseveltTheodore RooseveltTheodore "Teddy" Roosevelt was the 26th President of the United States . He is noted for his exuberant personality, range of interests and achievements, and his leadership of the Progressive Movement, as well as his "cowboy" persona and robust masculinity...
was a former bank president, who ascended the organization after beginning as a cashier
- In 1882, The First became the first bank to open a women's banking department, to attract female customers.
- In 1899, The First established a corporate pension plan, the first bank to do so in the U.S.
See also
- Bank One CorporationBank One CorporationSome of the banks that were merged into these banks include:*Bank One**Security National Bank & Trust **Affiliated Bankshares of Colorado **American Fletcher Corp. **City National Bank and Trust Co...
- JPMorgan Chase
- Chase (bank)Chase (bank)JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
- Madison DearbornMadison DearbornMadison Dearborn Partners is a private equity firm specializing in leveraged buyouts of privately held or publicly traded companies, or divisions of larger companies; recapitalizations of family-owned or closely held companies; balance sheet restructurings; acquisition financings; and growth...
- National Bank of DetroitNational Bank of DetroitThe National Bank of Detroit , later renamed NBD Bank, was a bank that operated mostly in the Midwestern United States. Following its merger with First National Bank of Chicago, the bank was ultimately acquired and merged into Bank One, at which point the NBD name was discontinued...
(NBD) - Waid VanderpoelWaid VanderpoelWaid Richard Vanderpoel was an American financier and conservationist born in the Chicago neighborhood of Norwood Park, Illinois and died in Barrington, Illinois.-Personal Life and Education:...
External links
- HISTORY OF JPMORGAN CHASE: 1799 To Present
- First Chicago NBD Corporation (official website from Internet Archive)