First Chicago Bank
First Chicago Bank was a Chicago-based retail and commercial bank tracing its roots back to 1863. 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.
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. The new bank known as The First National Bank of Chicago, or The First, grew steadily in the 1860s, financing the American Civil War.
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.
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).
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 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.
Expansion beyond a single retail banking location was hindered for years by the Illinois state legislature with Illinois being one of the last states to allow branch banking. Illinois also did not allow holding companies to own more than one bank. First Chicago was not allowed to open its first branch bank until 1977, 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. In 1984, First Chicago purchased American National Corp., the holding company for American National Bank, another bank located in the Loop.
New CEO Barry F. Sullivan, formerly with Chase Manhattan Bank, was able to turn around the bank in the early 1980s. Additionally First Chicago's private equity operations proved highly successful and served the incubator for a number of successful independent private equity groups. Stanley Golder, who built the group in the 1970s left the bank in 1980 to found GTCR. In the 1990s, the team, led by John Canning, Jr. would spin out of First Chicago to form private equity firm Madison Dearborn. Midwestern private equity firm, Primus Capital 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.
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 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, a bank holding company headquartered in Columbus, Ohio, that was also a leading issuer of credit cards through its First USA division. Following the merger the company was renamed Bank One Corporation with headquarters in Chicago, Illinois. In 2004, Bank One merged with CHASE bank.
|This section does not cite any sources. (February 2015)|
- Lyman J. Gage – Secretary of the Treasury under William McKinley and Theodore Roosevelt 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.
- Bank One Corporation
- JPMorgan Chase
- Chase (bank)
- Madison Dearborn
- National Bank of Detroit (NBD)
- Waid Vanderpoel
- "The History of JPMorgan Chase & Co.: 200 Years of Leadership in Banking" (PDF). JPMorgan Chase & Co. 2008. p. 4.
- Wilson, Mark R. (2005). "First National Bank of Chicago". In Grossman, James R.; Keating, Ann Durkin; Reiff, Janice L. Encyclopedia of Chicago.
- "Bank One Corporation History". FundingUniverse.
- Clark, William (February 5, 1969). "First National Maps Holding Firm". Chicago Tribune. p. E1. Alternate Link via ProQuest.
- Grubber, William (January 21, 1977). "1st National to open 2 branches". Chicago Tribune. p. C7 Alternate Link via ProQuest.
- Gruber, William & Barnhart, Bill (June 21, 1981). "Bank rush could be in offing". Chicago Tribune. p. W5. Alternate Link via ProQuest.
- Gruber, William (September 18, 1983). "Illinois has own financial version of 'Jaws'". Chicago Tribune. pp. F1–F2. Alternate Link via ProQuest.
- Gruber, William (March 18, 1984). "First National's turnaround enters new phase". Chicago Tribune. pp. N1–N2. Alternate Link via ProQuest.
- "Fund Venture Begun in Chicago". New York Times. January 7, 1992.
- History of JP Morgan Chase: 1799 To Present
- First Chicago NBD Corporation (official website from Internet Archive)