The History of Bank of America – 120 Years of Banking for the Nation

The history of Bank of America is not just one of success in the financial sector, but also a narrative intertwined with broader cultural and economic trends.

With an array of sources at our disposal, Business2Community has meticulously crafted a story that encapsulates the essence of Bank of America’s rise. From its start as a local bank in San Francisco catering to immigrants to its current prominence as a leading force in the financial world, each chapter of its history unfolds against the backdrop of societal shifts and economic transformations.

Who Owns Bank of America?

Bank of America is a public company primarily owned by institutional investors. The US-based multinational banking services institution is headquartered in Charlotte, North Carolina.

The bank’s major shareholders demonstrate strong institutional backing, with institutions holding 58.07% of shares and insiders 13.15%. As of 2024, Berkshire Hathaway, Inc. was the top institutional shareholder of Bank of America, Inc., holding 13% of the outstanding shares. CEO Brian T. Moynihan held the majority of insider shares, followed by Lauren Mogensen, the Global General Counsel.

Bank of America conducted its IPO in February 1973, selling shares at $4.62 each. The highest price per share was recorded in February 2006 at $44.10. As of February 2024, the price per share stands at $33.69

Who is the Bank of America CEO?

Brian T. Moynihan serves as the CEO of Bank of America Corporation. He was appointed President and Chief Executive Officer in 2010 and was later selected as Chair of the Board of Directors in 2014.

Under Brian T. Moynihan’s leadership at Bank of America Corporation, the bank has focused on streamlining operations, prioritizing risk management, investing in digital innovation, and strengthening its capital position. Additionally, the Bank of America has integrated sustainable finance practices, resolved legal matters, and supported community development.

The Bank of America has had 10 CEOs since its foundation as The Bank of Italy in 1904. These leadership changes have often corresponded with the bank’s mergers and acquisitions, reflecting shifts in ownership and strategic direction. Notable CEOs throughout its history include:

Growth and Development of Bank of America

The history of Bank of America dates back 140 years, marking a legacy of resilience and innovation in the banking industry. Central to its growth and development are numerous mergers and acquisitions, which have defined its trajectory. Let’s review these key milestones to understand how Bank of America achieved its prominence.

1900s-1920s: The Early Days of Amadeo Giannini’s Bank

In 1904, Amadeo Giannini formed The Bank of Italy in San Francisco with $150,000. The goal was to provide banking services to immigrants and small businesses in San Francisco which were often underserved by traditional banks at the time.

Gianni was inspired to open a bank after discovering that a small bank in North Beach only served wealthy clients, despite his efforts to persuade them otherwise. He educated communities about the role and benefits of banks in facilitating home purchases or starting businesses.

He’s quoted as saying:

I might never have gone into the banking business if I hadn’t gotten so damn mad at those directors

By 1905, Bank of Italy collected over $700,000 in deposits, equivalent to roughly $20 million today.

Following the 1906 San Francisco earthquake, Giannini’s bank gathered attention with its new location in the Italian neighborhood at North Beach Wharf. While traditional large banks faced difficulties recovering, he offered loans to struggling residents with just a handshake, contributing to the city’s recovery.

This turn of events inspired Gianni to broaden operations beyond San Francisco, leading to the establishment of branches in other cities and states. The Bank of Italy’s reach extended beyond San Francisco with the opening of its first branch in Los Angeles in 1913.

By 1915, Giannini’s bank had 7 locations in San Jose, Stockton, Ventura, Merced, Modesto, and Los Angeles, with total resources reaching $22 million, deposits amounting to $20 million, and capital of $1.2 million.

Giannini operated 24 branches by 1918, with total resources amounting to $93 million, deposits reaching $85 million, and capital standing at $5 million.

By 1919, The Bank of Italy had loaned over 50% of the $74 million allocated to owners in the agricultural industry. This demonstrated that Giannini remained committed to his initial motive for opening the bank, continuing to support small business owners who required financial assistance.

In 1921 The Bank of Italy established a women’s banking division. It employed 17 female workers who offered financial advice and the opportunity for female business owners to secure business loans. This decision corresponded with the 1920 constitutional amendment granting women the right to vote.

Additionally, in the early 1920s, The Bank of Italy initiated a School Savings Accounts program. Parents interested in the savings program received a folder to collect 50 one-cent savings stamps. Once two booklets with the 50 stamps were completed, the bank would contribute $1.00.

The Bank of Italy offered portable safes for clients to save securely at home by the mid-1920s. To access the funds or deposit them into their account, customers visited a bank branch where the safe’s key was kept.

By 1926, The Bank of Italy, marketed as The Bank for Just Plain Folks, offered clients the opportunity to communicate with bank staff in their native languages such as:

• Italian
• Chinese
• Greeks
• French
• Portuguese
• Yugoslavian
• Slovenians
• Russian
• Spanish

Amadeo Giannini founded the Transamerica Corporation in 1928, as a holding company to consolidate his diverse business interests.

This move allowed for better management and oversight of various investments beyond banking. Transamerica Corporation eventually expanded into industries such as insurance, transportation, and real estate, enhancing Giannini’s influence in the business world.

1930s-1950s: The Bank of Italy and Bank of America Los Angeles Merger

On November 1st, 1930, the Bank of Italy in San Francisco became the Bank of America through a merger organized by Giannini and the president of Bank of America Los Angeles, Orra E. Monnette. The merged bank, which included the smaller Bank of America Los Angeles, eventually resulted in the Bank of America becoming the largest bank in the US.

The Bank of America retained the Bank of Italy’s branch banking number #13044, directly connecting it to Giannini’s original bank.

In 1930, Bank of America announced its acquisition of the Occidental Life Insurance Company through the Transamerica Corporation.

However, the separation of Bank of America from Transamerica Corporation was mandated by the Clayton Antitrust Act in 1953. This regulatory measure aimed to ensure that countrywide financial institutions were distinct from non-banking entities such as insurance companies.

Subsequently, the Bank Holding Company Act of 1956 formalized this separation, leading to Bank of America and Transamerica parting ways, with Transamerica continuing its operations in the insurance sector.

During the 1930s, the Bank of America extended numerous business loans to notable projects that are recognized today. For example, Amadeo Giannini played a crucial role in funding the construction of the Golden Gate Bridge in 1933.

Despite financial challenges during the Great Depression, Giannini supported the project by purchasing $6 million worth of bonds.

Furthermore, in the 1930s, Giannini entered the Hollywood industry by providing financial assistance to Walt Disney for his classic film “Snow White and the Seven Dwarfs.”

Disney faced a budget overrun of $2 million, but with Giannini’s loan, the animated film was completed, marking an unprecedented investment in animated features. This crucial support rescued the project which would go on to greatly influence the future of animation and entertainment.

Additionally, under Giannini’s direction, the private bank funded several other notable Hollywood projects, including:

• Gone With The Wind
• West Side Story
• Lawrence of Arabia
• United Artists Studio
• American Madness
• It’s a Wonderful Life

In 1946, Amadeo Giannini’s Bank of America reached a remarkable milestone by becoming the largest bank in the world. Meanwhile, the pending applications for 26 branches at the Bank of America National Trust and Savings Association reopened the debate on whether to allow further expansion of its branch system in California.

Giannini passed away in 1949, leaving behind a legacy of extraordinary success and innovation in the banking industry.

Bank of America introduced the first bank credit card in 1958 called the BankAmericard. It was the first credit card company to offer revolving credit, allowing users to pay balances over time instead of all at once each month.

In 1976, BankAmericard was officially renamed Visa. Numerous institutions began to compete with BankAmericard, such as Interbank’s introduction of Master Charge, which is known as Mastercard today.

1960s-1980s: Bank of America Navigates Through Financial Losses

The beginning of the 1960s marked a period of innovation for Bank of America, as it became the first bank to automate check processing using MICR (Magnetic Ink Character Recognition) technology. This advancement streamlined operations and reduced processing times significantly.

However, as the 1970s unfolded, there was a new set of challenges. The Bank of America was a prime target for revolutionaries and militants. The bank experienced 66 assaults, including 53 bombings and fire bombings, as well as 13 arson cases. Damages totaled $500,000, with the Isla Vista incident alone accounting for $400,000.

During the 1960s and 1970s, Bank of America extended massive loans to a diverse range of customers, including energy firms, farmers, commercial real estate owners, and foreign governments. However, the simultaneous downturn across these sectors resulted in a significant deterioration of the bank’s loan portfolio.

According to Yahoo Finance, in December 1974, Bank of America’s stock price hit a historic low of $0.83 per share.

In 1983, Bank of America acquired Seafirst Corporation. This was a game-changing decision as it was the largest interstate bank acquisition of its time for $250 million in a combination of cash and preferred stock.

Additionally, Bank of America invested an extra $150 million into Seafirst to mitigate losses from bad energy loans acquired from Penn Square of Oklahoma City. This major acquisition contributed to Bank of America’s stock, reaching its highest point since its fall in 1974.

However, even with this success, BankAmerica continued to struggle with significant losses in the 80s, particularly in 1986 and 1987, totaling over $500 million.

Furthermore, the 80s saw Bank of America face challenges with loans in the Latin American market. Particularly notable was the situation in Brazil, where the bank had over $2 billion in loans outstanding.

To counter these losses, Bank of America sold its San Francisco headquarters and an office building in Los Angeles. Furthermore, the American commercial bank made operational cutbacks, suspended dividends, and terminated 6,600 employees, including President Samuel H. Armacost.

Despite the challenges faced by Bank of America during these decades, July 1989 proved to be rewarding, as the bank reached its highest stock price per share since its inception, reaching $13.65.

1990s-2010s: Key Acquisitions and Legal Challenges

During the 1990s and 2000s, Bank of America significantly expanded through a series of commercial banking acquisitions. However, one of America’s major financial institutions also faced a handful of legal issues.

In 1992, Bank of America acquired Security Pacific Corporation, the largest bank on the West Coast at the time, for $4 billion. The deal united two major players in the banking industry, creating the largest bank in the US, with Security Pacific Corporation and Bank of America combined assets totaling $200 billion.

Then, in 1994, Bank of America completed the acquisition of Continental Bank in a $1.9 billion deal, compensating Continental shareholders with $939 million in cash and 21.25 million shares of stock. This acquisition opened doors for Bank of America with access to the Midwestern corporate and investment banking market.

Additionally, the bank merged with NationsBank in 1998, a massive financial institution headquartered in Charlotte, North Carolina.

The joint venture, valued at approximately $62 billion, made Bank of America the largest bank in the US in terms of assets, totaling around $524.72 billion. Together, they commanded an 8% share of the nation’s bank deposits and were leaders in lending to both individuals and businesses.

As the new millennium proceeded, Bank of America merged with FleetBoston Financial Corporation in 2003 in a deal valued at $47 billion in stock, equivalent to $45 per FleetBoston Financial share. With the addition of FleetBoston’s assets and customer base, Bank of America further solidified its position as the largest bank and leading provider of financial services nationwide.

Bank of America and China Construction Bank (CCB) formed a partnership in 2005 when Bank of America acquired a 9% stake in CCB for $3 billion. This collaboration aimed to strengthen both banks’ positions in their markets and foster cross-border opportunities.

Subsequently, in 2006, China Construction Bank acquired Bank of America (Asia) for HK$9.7 billion. This acquisition allowed CCB to expand its presence in the Asian market, particularly in Hong Kong, where Bank of America (Asia) had a strong foothold.

Additionally, in 2005, Bank of America bought MBNA Corporation, a significant credit card issuer at the time, in a $35 billion cash and stock deal.

The merger, finalized in 2006, expanded Bank of America’s credit card business and customer base. The Bank of America Card Services division, incorporating the former MBNA, oversaw more than 40 million US accounts with nearly $140 billion in outstanding balances.

The 2008 Merrill Lynch acquisition transformed Bank of America into a financial powerhouse (if it wasn’t one already), solidifying its position as a leading international bank. Amid the global financial crisis, Bank of America’s agreement to acquire Merrill Lynch was approved under the Bank Holding Company Act.

However, challenges arose as the SEC charged Bank of America for misleading investors about bonuses paid to Merrill Lynch executives. Bank of America settled the charges, agreeing to pay a penalty of $33 million. This was a rather paltry sum as the Merrill Lynch acquisition was valued at $50 billion.

The same year Bank of America announced it was going to buy Countrywide Financial for $4 billion. It was the largest American mortgage lender in the US at the time had been heavily involved in the subprime mortgage market, which contributed to the collapse of the housing market and the broader financial crisis.

This acquisition was part of Bank of America’s strategy to expand its presence in the mortgage servicing industry. However, it also exposed Bank of America to significant legal and financial risks due to Countrywide’s discriminatory lending practices.

Other notable acquisitions and mergers by Bank of America during the 2000s included:

• Banco Itaú (2006) – $2.2 billion
• LaSalle Bank (2007) – $21 billion
• The United States Trust Company (2007) – $3.3 billion

In 2004, Parmalat SpA filed a class action lawsuit against Bank of America for $10 billion, alleging the bank’s complicity in its financial collapse. Parmalat accused Bank of America of aiding and abetting its former management in accounting fraud.

The lawsuit claimed the bank knew about the fraudulent activities within Parmalat while profiting from transactions with the company. Bank of America settled with Parmalat in 2009, agreeing to pay $98.5 million to resolve the lawsuit.

Bank of America encountered legal hurdles stemming from its acquisition of Countrywide Financial. The Department of Justice pursued a significant settlement, alleging discrimination against African-American and Hispanic borrowers from 2004 to 2008.

Over 200,000 affected borrowers were involved, with claims of higher fees and rates compared to white borrowers. This settlement, filed in the US District Court, sought $335 million in compensation.

Furthermore, in August 2014, Bank of America reached a settlement agreement with the Justice Department for a historic sum of $16.65 billion. The settlement stemmed from allegations regarding the sale of toxic mortgage-linked securities before the 2008 financial crisis.

As part of the agreement, Bank of America agreed to pay fines and provide relief to homeowners facing foreclosure or financial distress. This settlement marked one of the largest ever in the banking industry and underscored efforts to address the aftermath of the housing market collapse.

2020s: Bank Of America’s Impact and Evolution

In 2022, Bank of America employed over 165,000 employees globally. The company prides itself on its diversity, with figures from that year highlighting its commitment. 51% of its global workforce were women, and more than 49% of its US-based workforce was racially or ethnically diverse.

From 2014 to 2022, the majority of Bank of America’s total assets were primarily concentrated in the United States. In 2022, the bank’s assets in the US reached approximately $2.63 trillion.

Consequently in the 2020s, Forbes ranked Bank of America among the largest and most influential banks globally.

• 2020 Fortune 500
• 2023 Global 2000

In addition, the Federal Reserve ranked Bank of America as the second-largest bank in the US in 2024, with over 3,700 branches. In 2022, the company reported a total of 6.6 million new clients, including 4.4 million new credit card accounts. Nonetheless, despite its success, Bank of America continued to grapple with class action lawsuits throughout the 2020s.

In November 2023, the Consumer Financial Protection Bureau (CFPB) fined Bank of America $12 million for submitting false mortgage lending data over four years.

Loan officers failed to ask demographic questions and falsely reported applicants’ responses, which violated the Home Mortgage Disclosure Act.

In 2023 Bank of America announced major changes expected in the economy for the new decade. The 2020s started amid the COVID-19 pandemic, prompting significant fiscal and monetary measures and leading to inflation.

In their analysis, Bank of America Research identified 15 key themes that suggest a period of significant change and uncertainty for investors.

With a market capitalization of $261.07 billion in February 2024, Bank of America stands as one of the world’s largest financial institutions. Furthermore, it ranked as the second-largest American bank by assets in 2023, with a total amounting to $3.194 trillion, trailing behind JPMorgan Chase & Co.

In Q4 2023, Bank of America’s total revenue, net of interest expense, reached $22.0 billion, contributing to a total net revenue of $98.6 billion in 2023.

Bank of America operates through 5 different segments:

In Q4 2023, Bank of America’s consumer banking segment emerged as the top performer, generating revenue of $10.3 billion.

The segment recorded 36.7 million consumer checking accounts, with 92% being primary, and added approximately 130,000 net new consumer checking accounts. Additionally, Bank of America reported having 3.9 million small business checking accounts.

What Does Bank of America Own?

Bank of America owns organizations operating under 6 brand names:

• Bank of America
• Banc of America
• Bank of America Private Bank
• U.S. Trust
• Merrill
• BofA Securities

These brands were formed through a series of acquisitions and mergers, as listed in the table below:

History of the Bank of America Logo

The Bank of Italy, serving as a precursor to Bank of America, prominently displayed its full name in capital letters on storefronts in the 1900s.

Then in 1930, when the Bank of Italy in San Francisco rebranded as Bank of America, it unveiled a new wordmark logo featuring a script-style black font. This logo, which lasted until 1969, projected sophistication with its traditional lettering.

The bank’s second logo, introduced in 1969, adopted a modern combination-style emblem designed by Walter Landor. It featured the name The Bank of America in a contemporary sans-serif font, all in uppercase. Alongside, Landor created a distinct monogram BA graphic, merging smooth, thick rounded lines of both letters.

In 1980, Bank of America’s logo underwent a significant change, placing greater emphasis on the BA emblem, which was enlarged and positioned above the wordmark.

The lettering, in a bold and straightforward Helvetica typeface, exuded style and modernity, with refined emblem contours enhancing its sleek design.

In 1998, coinciding with its merger with NationsBank, Bank of America introduced its third logo, transitioning from a black wordmark design to a bold blue sans-serif typeface. Additionally, the emblem resembled the American flag with blue and red rectangles.

In its latest logo change in 2018, Bank of America worked alongside designers at Lippincott. The bank deepened the blue color of its wordmark and emblem rectangles, reinforcing the connection to America’s flag and nation. This darker hue, along with capitalizing Bank of America, heightened its prominence, strengthening the patriotic symbolism.

The Future of Bank of America

As Bank of America reflects on its storied history and looks toward the future, one thing remains constant: a steadfast commitment to responsible growth. With a focus on client-centricity, risk management, and sustainable practices, Bank of America continues to innovate and evolve.

Leveraging cutting-edge technologies like artificial intelligence, exemplified by its virtual AI-driven assistant, Erica®, Bank of America aims to provide personalized solutions to millions of clients worldwide. Furthermore, its dedication to driving progress towards a low-carbon economy underscores its role as a leader in sustainable finance.

As they strive to mobilize and deploy trillions of dollars by 2030, Bank of America is poised to shape a more sustainable and inclusive future for generations to come.

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