First Chicago Bank

First Chicago Bank was an American retail and commercial bank based in Chicago, Illinois. Its roots trace back 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

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]

First Chicago

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.[9] In 1984, First Chicago purchased American National Corporation, the holding company for American National Bank and Trust Company of Chicago, another bank located in the Loop, from Walter E. Heller International Corporation for $275 million.[10][11][12]

Management

During the 1980s, 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.[13] Midwestern private equity firm, Primus Capital was also founded by First Chicago private equity alumni.

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]

trade name	First Chicago Bank
traded as	(1969–1995)
type	Bank Holding Company
industry	Financial Services
successors	First Chicago NBD (1995–1998) Bank One (1998–2004) Chase (2004–)
hq location	Chicago, Illinois
hq location country	United States
predecessor	First National Bank of Chicago
fate	Merged with Banc One Corporation
defunct	1995 as holding company 1998 as banking brand
founded	1863 as bank 1969 as holding company
founder	Edmund Aiken
key people	Barry F. Sullivan (CEO)
subsid	FCC National Bank (Delaware)
products	Financial Services
brands	First Card

History

Founding and early history

First Chicago

Management

Expanding out of downtown and into the suburbs

Management

Expanding out of downtown and into the suburbs

Credit cards

Bank One

Other notes

See also

External links

References

Credit cards