The History of Bank of America
Bank of America is one of the nation’s oldest and largest banking institutions, packing the security and resources to offer excellent products at a low cost for any consumer. Bank of America offers 27 different credit cards. Customers can choose Visa, MasterCard or American Express credit cards with Power Rewards, credit cards associated with airlines, credit cards associated with travel organizations, student credit cards, fully secured credit cards, a Major League Baseball credit card, a Susan G. Komen Foundation credit card, a Upromise credit card and basic credit cards.
Bank of America traces its heritage back more than 200 years to the very founding of our nation. The very earliest banks to be established in America’s major cities were the genesis of the modern financial institutions that have joined together over the decades to form the modern-day Bank of America – a global organization that offers a wide range of financial services to individual consumers and giant corporations alike. Bank of America’s innovations have included the magnetic ink character recognition system (MIRC) and the electronic recording method of accounting (ERMA) that became a national standard, the automatic teller machine and the first consumer credit card.
The nation’s first bank, Massachusetts Bank, was formed immediately after the signing of the Declaration of Independence. This and dozens of small local banks would eventually merge over the decades into the major bank lines that would become Bank of America – the Bank of Italy in California and North Carolina National Bank. These early predecessors included The Union Bank of New London; Pacific Nationa; Bank of the Metropolis; Boatmen’s Bank; Seafirst; Merchants’ Savings, Loan and Trust Company; US Trust Company; Commercial National Bank (the first direct ancestor of Bank of America, in Charlotte, NC, where Bank of America still maintains its headquarters); Bank of Jacksonville; Security Pacific; Old Colony Trust. The establishment of the Bank of Italy by Amadeo Giannini in San Francisco, CA in 1904 became the trunk of Bank of America’s extensive family tree. Bank of Italy was the first to establish a local branch system, a practice that would become standard for most banks across the country. Merrill Lynch, established in New York in 1914, would eventually be one of Bank of America’s most important acquisitions.
The Bank of America was formed in the late 1920s when the Bank of Italy (based in San Francisco) and the Bank of America in Los Angeles merged. The merged bank, led by Giannini and co-chaired by E. Monette (founder of the Bank of America) was named BankAmerica. BankAmerica began expanding throughout California. The various members of what would eventually become the nationwide Bank of America, in its early forms, financed massive projects ranging from the Erie Canal to numerous railroads to World War I war bonds to the construction of Charles Lindbergh’s record-breaking aircraft. During the Great Depression, Bank of America was a major investor in the construction of the Golden Gate Bridge.
Security National Bank, a direct antecedent of the modern Bank of America, was the first bank in North Carolina to open and survive after the great 1933 bank holiday that put so many banks built on less solid footing out of business. Many Bank of America predecessors were so solidly built that they kept lending throughout the Great Depression. As the Depression wound down, Bank of America predecessors innovated such important bank products as term loans and low-cost consumer installment loans for major individual purchases. Bank of America sold millions in wartime securities during World War II, and funded many major wartime manufacturing projects to supply the armed forces during the war.
In 1950, Bank of America started the process of computerizing its transactions. Working with Stanford Research Institute, Bank of America developed the magnetic ink character recognition system (MIRC) and the electronic recording method of accounting (ERMA) – the system that allowed checks to be read and routed by machines. These methods are still in use today, and are a global standard for getting checks from the payor’s account to the recipient’s, from one bank to another.
Bank of America continued to fund major projects, including the construction of Walt Disney’s Magic Kingdom.
Beginning in 1957, a series of bank mergers in North Carolina took the state many steps forward toward a statewide banking system, and formed the customer base that would eventually be served by the modern Bank of America.
In 1958, BankAmerica changed consumer purchasing practices forever when it introduced BankAmeriCard, the first true consumer credit card that allowed members to carry a revolving balance by paying interest from month to month. This innovative product would be licensed to banks across the country and in 1976, be renamed Visa, a standard accepted throughout the world. In North Carolina, a merger between Security National Bank of Greensboro and American Commercial Bank of Charlotte resulted in the formation of North Carolina National Bank. A series of mergers and acquisitions throughout North Carolina strengthen NCNB, preparing it for massive interstate expansion beginning in 1982 with the purchase of First National Bank of Lake City, Florida. In 1983, BankAmerica expanded into Washington by acquiring Seafirst. The nationwide growth, through many mergers and acquisitions by BankAmerica and NCNB, that would lead to the modern Bank of America was underway. Throughout the 1980s and into the ‘90s, NCNB would expand into South Carolina, Texas and Georgia by buying struggling local banks, and BankAmerica expanded into Nevada and Illinois in the same manner. When NCNB bought Atlanta-based C&S/Sovran in 1991, it renamed itself NationsBank. NationsBank kept growing. In 1993, it bought MNC Financial, the parent company of Maryland National Bank. The following year, the Bank of America Web site was launched to make banking easier for the company’s 30 million users worldwide.
In 1998, NationsBank bought BankAmerica, the largest bank acquisition in history. The headquarters for this massive corporation, now named Bank of America at last, was established in Charlotte, NC. This united Bank of America as a nationwide entity. Later acquisitions during the first decade of the 21st century included FleetBoston Financial, MBNA, United States Trust Company, Countrywide Financial and Merrill Lynch.
The Bank of America of the 21st century offers checking and savings accounts, auto loans, home loans, mortgages, personal loans and 27 different credit cards. Customers can choose credit cards with rewards, credit cards associated with airlines, credit cards associated with travel organizations such as the Automobile Association of America (AAA) and Royal Caribbean, student credit cards, fully secured credit cards, a Major League Baseball credit card, a Susan G. Komen Foundation credit card, a Upromise credit card and basic credit cards.
Bank of America is the largest bank holding company in the United States, the fifth largest business in the nation by total revenue, and the second largest non-petroleum company in the country, exceeded only by Wal-Mart. Bank of America serves individual and corporate clients in more than 150 countries. It works with most of the Fortune 500 and Fortune Global 500. Bank of America is counted on both the S&P 500 Index and the Dow Jones Industrial Average. Bank of America is a member of the Federal Deposit Insurance Corporation (FDIC).