Oct. 28–Bank of America likes big.
The company’s headquarters in downtown Charlotte, N.C., is an impressive 60 stories high, the tallest building in the Southeast.
As large as it is, Bank of America decided about five years ago that it needed even more space. It built the 46-story Hearst Tower last year, now the second-tallest building in Charlotte.
Like FleetBoston, Bank of America has evolved from small, local banks into a national powerhouse.
The company was formed in 1998 with the $42.8-billion mega-merger of NationsBank Corp. and BankAmerica Corp.
Bank of America’s roots date back to 1904, when it was founded as the Bank of Italy in San Francisco. Its credo at the time was considered radical: To serve “the little fellows,” according to the Business and Company Resource Center.
The founder was Amadeo Peter Giannini, an Italian immigrant.
He was said to have rescued $80,000 in cash before the building burned in the great San Francisco earthquake of 1906.
He hid the money in a wagon full of oranges and brought it to his house for safekeeping. With that money, he was able to reopen before any other bank, making loans from a plank-and-barrel counter, according to the Business and Company Resource Center account. The company eventually became know as Bank of America.
NationsBank, which was based in Charlotte, grew quickly through the 1980s into the 1990s, to become one of the country’s top five banking institutions. It was formed by the 1991 merger of NCNB Corp., the oldest of Bank of America’s predecessor companies, with C&S/Sovran Corp. That combination created the fourth-largest banking company in the United States.
In 1998, Bank of America and NationsBank announced they had agreed to a “merger of equals,” although NationsBank became the dominant partner.
The new company was called BankAmerica, with headquarters in Charlotte, and headed by Hugh L. McColl Jr., the NationsBank chief executive officer. The merger create the country’s first coast-to-coast bank. (The company’s name reverted back to Bank of America in 1999.) Bank of America suffered from integration problems in 1999 and 2000, and it ended up cutting nearly 10,000 jobs.
McColl retired in 2001, and was replaced by his handpicked successor, Kenneth D. Lewis, the current chief executive.
Lewis, 56, started his career with NCNB.
Lewis was described by an unnamed former bank executive as being dispassionate and having “ice water in his veins,” according to a profile last year in BusinessWeek.
Lewis is credited with reshaping the bank’s culture “to match his own hard-nosed Southern style,” according to BusinessWeek.
He helped get the company back on track by eliminating about $50 billion of the bank’s most unprofitable corporate accounts.
Since Lewis took over the bank’s operations in 2001, the company’s stock price has risen about 50 percent. The company has consistently beat quarterly expectations and during the first six months of this year, the bank’s profits rose 29 percent, to $2.9 billion.
Bank of America now has close ties with Americans’ wallets.
The company offers credit cards, debit cards, home mortgages and other loans.
But Lewis and his company are facing charges that they may have gone too far in their quest for profits.
New York Atty. Gen. Eliot Spitzer alleges that Bank of America’s New York-based asset management division gave special treatment to a wealthy client. Spitzer alleges that the company allowed a New Jersey hedge fund, Canary Capital Partners LLC, to engage in after-hours trading in the bank’s own mutual funds.
A former broker for Bank of America has been charged with securities fraud, although the company has not been charged with any wrongdoing.
Lewis had said he will not tolerate unethical actions, according to the Charlotte Observer newspaper. Three high-profile employees were fired and Lewis said that any investor hurt by the bank’s association with Canary would be made whole, the Observer reported.
It’s unclear if the Canary investigation will affect Lewis’s ambition, according to an article about the matter in last month’s New York Times.
“At a minimum,” the article concluded, “it is an embarrassment and a distraction to an executive who had worked diligently to maintain a clean image even as he yearned to compete with the big Wall Street firms on their own turf.”
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