NCNB bought Bank of America roughly 25 years ago when BoA was struggling. BofA was originally out of California. It rebranded the entire company as Bank of America and moved the corporate headquarters to North Carolina. This is similar to what SBC (formerly Southwestern Bell) did when they bought New Jersey based AT&T. The entire company became AT&T and is run from Dallas.
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Perhaps true, but that wasnât the issue here, which was simply a mismatch between bank assets and liabilities. SVB did not crater bcos of its âriskyâ portfolio of companies.
Thatâs a fair point, but those low-level auditors write reports and send them up the chain of command. Eventually, a senior manager/director has to approve or raise a red flag on the bankâs metrics. And those reports should be reviewed by another senior manager. (And those managers/directors are a lot closer to Fed senior management who hobnobs with the bankâs CEO.)
SVBâs bond portfolio is much more liquid than its loan portfolio, so it had to sell part of its bond portfolio to meet redemptions, which revealed the interest rate risks that it was taking. Itâs, therefore, unsurprising that the risks in its bond portfolio triggered the crisis. However, the risks (mostly credit risk) in its loan portfolio were much less visible to outsiders, until they do their due diligence on it, as First Citizens seemed to have done (as have some other banks that ultimately decided to walk away without submitting their bids).
NCNB had already acquired other banks and changed its name to NationsBank by the time it acquired the old Bank of America.
SBC was originally a spinoff of the old AT&T when it was broken up. Eventually, it acquired its former parent company.
Other examples of acquirers taking the acquired companyâs name are Chemical Bank â Chase Manhattan â JP Morgan Chase and America West Airlines â US Airways â American Airlines.
Here in PA BB&T (from Wilson, NC) bought out our local bank (which went through a lot of hands/names in our 25+ years here). Now they are Truist Bank. Iâm not sure how widespread they are, but my guess is theyâre continuing to grow.
Yes, that is correct. But note, regardless of what due diligent First Citizens performed, they have entered into an agreement with the FDIC which will backstop losses on the commercial loans that First is buying. (No surprise its stock rocketed up today, as investors are liking that written guarantee.)
The FDIC will actually let the buyer cherry pick the loans and assets it wants to buy, cancel any contracts the buyer bank doesnât want (leases, purchase orders, maintenance). The bad stuff never goes to the buyer bank.
It was NCNB first (their slogan was âwe want to be the best bank in the neighborhoodâ and any NCer of a certain age can sing that jingle) then they merged and acquired another bank and changed their name to NationsBank. Then some years later they merged with BankAmerica (no âofâ) and changed their name to Bank OF America. Decent overview on Wikipedia. North Carolina National Bank - Wikipedia
Truist is also HQâd in Charlotte. It is a national bank. I believe it is 7th largest nationally. It was a merger of BB&T and SunTrust.
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The acquired corporation was named BankAmerica Corporation, but most of the banks it owned were named Bank of America.
And now the corporation is named Bank of America. Hugh McColl former CEO of NCNB and NationsBank said if he had it to do over he would have kept the NationsBank name.
W/o looking it up, they kept Charlotte as HQ, whereas BofA was HQâd in SF, right?
It really was a merger of equals and a lot of bank ops remain in NC.
Financial reasons. A lot cheaper to run things from NC than SF. A lot of credit card operations are in South Dakota and Delaware because those places are cheaper than Chicago or NYC. State/local laws too.
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I donât think it was a merger of equals. The CEO of NationsBank became the CEO. BankAmerica was troubled and NationsBank came to the rescue. Several articles refer to it as an acquisition by NationsBank.
I donât remember B of A being in trouble at the time of the merger, but I do remember B of A being very unpopular in SF. Pretty much all big corporations are unpopular in SF, especially big banks. I think the merger was mostly a case where itâs very expensive for a big bank to have its HQ in SF, and a merger was a way to shut it down and move a lot of operations away. There used to be multiple big banks that were based in SF, but now Wells Fargo is the only one.
Somewhere in that process, BofA acquired Seafirst Bank (still have their logo on my checkbook cover). The customer service tanked big time, but then gradually got better.
The current Wells Fargo is the old Norwest that acquired the old Wells Fargo but took the name and moved to SF. The old Wells Fargo was having trouble digesting its First Interstate acquisition.
Youâre not refuting anything I said. Wells Fargo has been headquartered in SF since 1852, mergers and all.
It was spun as a merger of equals, but the Charlotte senior management took over, so it was clear who was buying who.
BofA got stiffed by the Government when they added CountryWide Mortgage in a shot-gun wedding. BofA was promised help with future liabilities, but it was only a verbal hand-shake in a rush to close, which the feds then reneged once it became public and politicos reacted negatively to bailing out big banks.
First Citizen was smart to get their liability caps in writing.