A Short History of Bank of America
The Bank of Italy was originally formed by Amadeo Giannini in 1904 in the city of San Francisco. At the time, banks dealt mostly with the wealthy, so the immigrant Italian community was financially under-served. In the San Francisco earthquake of 1906, Giannini was able to salvage the deposits from the bank building and was afterward able to begin lending for those who wanted to rebuild.
In 1928, Giannini merged his bank with the Bank of America, Los Angeles and by 1929 the combined Bank of America had over 450 branches throughout the state of California. Interstate banking was prohibited at the time, so expansion into other Western states outside of California eventually created a spin-off called First Interstate Bancorp. The 1980s brought changes in banking regulation that then provided the opportunity for expansion outside California.
The 1980s and 1990s were years of mergers and acquisitions with the parent BankAmerica Corporation becoming the largest bnak holding company in the United States. The end of the 1990s found Bank of America with significant losses related to the 1998 Russian bond default, Nationsbank from North Carolina ended up purchasing Bank of America. Due to the benefits of name recognition, the new company was called Bank of America and had slightly under 5,000 branches in 22 states.
2000 to 2008 was a period of continued acquisitions with the culmination of the purchase of CountryWide Financial and Merrill Lynch. While there could be much speculation about the involvement of government officials and implied requirements for the purchases, the one thing that is very obvious is that Bank of America took a significant financial hit with the purchases.
We are still seeing the shakeout of the Great Recession, Bank of America has downsized, focused on consumer services and still has a huge share of both the mortgage and credit markets. Regulatory actions, lawsuits, bailouts and settlements have all been part of the landscape, but it is fairly obvious Bank of America will come out of it all on the other side.
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