First Chicago Bank

Source: Wikipedia, the free encyclopedia.
First Chicago Corporation
HeadquartersChicago, Illinois,
United States
Key people
Barry F. Sullivan (CEO)
ProductsFinancial Services
BrandsFirst Card
Subsidiaries
  • FCC National Bank (Delaware)

First Chicago Bank was a

Chicago-based retail and commercial bank tracing its roots to 1863, when it received one of the first charters under the then new National Bank Act. Over the years, the bank operated under several names including The First National Bank of Chicago and First Chicago NBD (following its 1995 merger with the former National Bank of Detroit). In 1998, First Chicago NBD merged with Banc One Corporation to form Bank One Corporation, today a part of Chase
.

History

Michigan-Wacker Historic District

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 Act 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.[1][2] The new bank known as The First National Bank of Chicago, or The First, grew steadily in the 1860s, financing the American Civil War.[3][4]

The First merged with Union National Bank in 1900

National Bank Holiday of 1933
.

The First National clock is located at Exelon Plaza next to the Chase Tower in the Chicago Loop. The tower was called First National Plaza when it was built in 1969.

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. During the 1950s and 1960s the First expanded both in the Midwestern US as well as abroad, opening offices in London (1959), Tokyo (1962) and later Beijing (1980).[4]

First Chicago

A plaque located below the clock next to the Chase Tower (originally First National Plaza). It was dedicated in 1979.

In 1969 the bank was reorganized as the primary subsidiary of the new First Chicago Corporation, a newly formed bank holding company.[7] First Chicago was used as a brand name starting in 1969 and the bank moved into a new skyscraper in the Loop in Chicago (originally called First National Plaza, it is now known as Chase Tower). 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.[3][4]

Expansion beyond a single retail banking location was hindered for years. Not only was Illinois one of the last states to allow branch banking, but for years it did not allow holding companies to own more than one bank. First Chicago was not able to open its first branch bank until 1977,[8] when banks were allowed to open two limited banking facilities within 1,500 feet of the main office.

Unlike its rivals, First Chicago waited two years before making its first bank purchase after the Illinois legislature began to allow holding companies to own more than one bank in 1981.

Walter E. Heller International Corporation for $275 million.[10][11][12]

Management

During the 1980s, CEO

Madison Dearborn.[13] Midwestern private equity firm, Primus Capital was also founded by First Chicago private equity alumni.[citation needed
]

Expanding out of downtown and into the suburbs

First Chicago began to expand for the first time into the northwest suburbs of Chicago with the acquisition of the Arlington Heights-based First United Financial Services, a bank holding company with five banks, in 1987.[14] The following year, First Chicago entered DuPage County by acquiring Gary-Wheaton Corp., another bank holding company.[4][15][16]

In 1989, First Chicago acquired the north Chicago-based Ravenswood Financial Corp. for $55.1 million. Ravenswood Financial's only bank was renamed First Chicago Bank of Ravenswood.[17] First Chicago also acquired the Winnetka-based Winnetka Bank for $21.6 million in stock.[18]

In 1993, First Chicago acquired Lake Shore Bancorp, another Chicago-based bank holding company, $323 million.[19]

Most of the acquired banks were named First Chicago Bank of followed by the name of the geographical location. Illinois law did not permit the merger of most of the acquired banks into the First National Bank of Chicago until as late as 1993.[20]

Credit cards

To strengthen its credit card business, First Chicago acquired Delaware-based Beneficial National Bank USA in 1987 and renamed it FCC National Bank.[21][22][23][24]

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 Detroit, which at the time was the 18th largest bank in the US (First Chicago was the 10th largest bank). The $5 billion merger, completed in 1995, created First Chicago NBD Corporation, the 7th largest bank in the US with $72 billion of assets, and was also a leader in the issuance of credit cards. While NBD was the nominal survivor, the merged bank was headquartered in Chicago.

In April 1998 First Chicago NBD announced a $30 billion merger with Banc One Corporation of

JPMorgan Chase Bank
, National Association.

Other notes

See also

References

  1. ^ "The History of JPMorgan Chase & Co.: 200 Years of Leadership in Banking" (PDF). JPMorgan Chase & Co. 2008. p. 4.
  2. ProQuest 182712620
    .
  3. ^ a b c Wilson, Mark R. (2005). "First National Bank of Chicago". In Grossman, James R.; Keating, Ann Durkin; Reiff, Janice L. (eds.). Encyclopedia of Chicago.
  4. ^ a b c d e "Bank One Corporation History". FundingUniverse.
  5. ^
    ProQuest 172974396
    .
  6. ProQuest 173044772
    .
  7. ProQuest 168884045
    .
  8. ProQuest 169543236
    .
  9. ProQuest 172391257
    .
  10. ^ Cole, Robert J. (August 10, 1983). "Heller to Sell American National to First Chicago". The New York Times. The Walter E. Heller International Corporation said yesterday that it had signed a letter of intent to sell its American National Corporation, owner of the American National Bank and Trust Company, to the First Chicago Corporation, owner of the First National Bank of Chicago, for $275 million.
  11. ProQuest 176023613
    .
  12. ProQuest 170643451
    .
  13. ^ "Fund Venture Begun in Chicago". The New York Times. January 7, 1992.
  14. ^ Cohen, Laurie (January 28, 1987). "First Eyes Bank Chain In Suburbs". Chicago Tribune.
  15. ^ "Gary-wheaton Acquisition". Chicago Tribune. February 11, 1988.
  16. ^ "First Chicago In Acquisition". The New York Times. November 25, 1987.
  17. ^ Winter, Christine (April 26, 1989). "1st Chicago Buying Ravenswood Bank". Chicago Tribune.
  18. ^ "First Chicago Corp. has agreed to acquire The Winnetka..." Chicago Tribune. May 25, 1989.
  19. ^ Stangenes, Sharon (November 22, 1993). "First Chicago Is Buying Lake Shore". Chicago Tribune.
  20. ^ Schmeltzer, John (January 16, 2004). "Illinois laws curbed banks' size, scope". Chicago Tribune.
  21. ProQuest 397986864
    . First Chicago Corp. moved to expand its profitable credit card operations with an agreement to buy a Delaware bank, which has $1 billion in credit card loans, from Beneficial Corp. for $247 million. The purchase of Beneficial National Bank USA of Wilmington would expand First Chicago's big and profitable Visa and MasterCard business by nearly a third -- to about $4.4 billion in loans on about four million cards. At the same time, the move would give the Chicago-based parent company of First National Bank of Chicago a banking charter in a state that has been hospitable to credit card issuers... the Delaware bank would give First Chicago a safe haven in any event, as Delaware doesn't regulate interest rates or annual fees on credit cards. First Chicago is the fifth-largest U.S. charge-card issuer.
  22. ^ Phillips, Stephen (January 1, 1987). "First Chicago to Buy Delaware Bank". The New York Times.
  23. ^ Gruber, William (January 1, 1987). "First Buying Delaware Bank: Major Credit Card Business Is Part Of The Deal". Chicago Tribune.
  24. ^ "First Chicago Finishes Deal". Chicago Tribune. July 7, 1987.

External links

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