Story of

Bank of America

The eastern portion of the Bank of America franchise can be traced to 1784 when Massachusetts Bank was chartered—the first iteration of FleetBoston, which Bank of America acquired in 2004.

In 1874, Commercial National Bank was founded in Charlotte. That bank merged with American Trust Company in 1958 to form American Commercial Bank.

From a naming perspective, the history of Bank of America dates back to October 17, 1904, when Amadeo Pietro Giannini founded the Bank of Italy in San Francisco.

The central portion of the franchise dates to 1910, when Commercial National Bank and Continental National Bank of Chicago merged in 1910 to form Continental & Commercial National Bank, which evolved into Continental Illinois National Bank & Trust.

In 1918, another corporation, Bancitaly Corporation, was organized by A. P. Giannini, the largest stockholder of which was Stockholders Auxiliary Corporation. This company acquired the stocks of various banks located in New York City and certain foreign countries.

In 1918, the Bank (Bank of America, Los Angeles) opened a Delegation in New York in order to follow American political, economic and financial affairs more closely.

The Bank of America name first appeared in 1923, with the formation of Bank of America, Los Angeles.

While NationsBank was the nominal survivor, the merged bank took the better-known name of Bank of America. Hence, the holding company was renamed Bank of America Corporation, while NationsBank, N.A. merged with Bank of America NT&SA to form Bank of America, N.A. as the remaining legal bank entity. The combined bank operates under Federal Charter 13044, which was granted to Giannini's Bank of Italy on March 1, 1927.

In 1928, "Bank of America, Los Angeles" was acquired by Bank of Italy of San Francisco, which took the Bank of America name two years later. The two banks merged in 1928 and consolidated it with other bank holdings to create what would become the largest banking institution in the country. Giannini merged his bank with Bank of America, Los Angeles, headed by Orra E. Monnette.

By 1929, the bank had 453 banking offices in California with aggregate resources of over US$1.4 billion.

Bank of Italy was renamed on November 3, 1930, to Bank of America National Trust and Savings Association, which was the only such designated bank in the United States at that time. Giannini and Monnette headed the resulting company, serving as co-chairs.

Giannini sought to build a national bank, expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. In 1953 regulators succeeded in forcing the separation of Transamerica Corporation and Bank of America under the Clayton Antitrust Act.

The passage of the Bank Holding Company Act of 1956 prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America and Transamerica were separated, with the latter company continuing in the insurance sector. However, federal banking regulators prohibited Bank of America's interstate banking activity, and Bank of America's domestic banks outside California were forced into a separate company that eventually became First Interstate Bancorp, later acquired by Wells Fargo and Company in 1996.

New technologies also allowed the direct linking of credit cards with individual bank accounts. In 1958, the bank introduced the BankAmericard, which changed its name to Visa in 1977.

Two years later Commercial National Bank became North Carolina National Bank when it merged with the Security National Bank of Greensboro.

A coalition of regional bankcard associations introduced Interbank in 1966 to compete with BankAmericard. Interbank became Master Charge in 1966 and then MasterCard in 1979.

BankAmerica experienced huge losses in 1986 and 1987 due to the placement of a series of bad loans in the Third World, particularly in Latin America.

The losses resulted in a huge decline of BankAmerica stock, making it vulnerable to a hostile takeover. First Interstate Bancorp of Los Angeles (which had originated from banks once owned by BankAmerica), launched such a bid in the fall of 1986, although BankAmerica rebuffed it, mostly by selling operations.

In 1991, North Carolina National Bank merged with C&S/Sovran Corporation of Atlanta and Norfolk to form NationsBank.

BankAmerica's next big acquisition came in 1992. The company acquired Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon, and Washington, which Security Pacific had acquired in a series of acquisitions in the late 1980s. This represented, at the time, the largest bank acquisition in history.

In 1994, BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago. At the time, no bank possessed the resources to bail out Continental, so the federal government operated the bank for nearly a decade. Illinois then regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 21st century. BankAmerica moved its national lending department to Chicago in an effort to establish a financial beachhead in the region.

In 1997, BankAmerica lent hedge fund D. E. Shaw & Co. $1.4 billion in order to run various businesses for the bank. However, D.E. Shaw suffered significant losses after the 1998 Russia bond default.

In addition, in 1997, BankAmerica acquired Robertson Stephens, a San Francisco–based investment bank specializing in high technology for $540 million. Robertson Stephens was integrated into BancAmerica Securities and the combined subsidiary was renamed "BancAmerica Robertson Stephens".

NationsBank of Charlotte acquired BankAmerica in October 1998 in what was the largest bank acquisition in history at that time.

In 1998, Bank of America possessed combined assets of $570 billion, as well as 4,800 branches in 22 states. Despite the size of the two companies, federal regulators insisted only upon the divestiture of 13 branches in New Mexico, in towns that would be left with only a single bank following the combination.

NationsBank president, chairman, and CEO Hugh McColl took on the same roles with the merged company in 1998. In 2001, McColl stepped down and named Ken Lewis as his successor.

In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial for $47 billion in cash and stock. By merging with Bank of America, all of its banks and branches were given the Bank of America logo. At the time of the merger, FleetBoston was the seventh-largest bank in the United States with $197 billion in assets, over 20 million customers, and revenue of $12 billion. Hundreds of FleetBoston workers lost their jobs or were demoted, according to The Boston Globe.

In 2004, the bank pledged $750 million over a ten-year period for community development lending and affordable housing programs.

On June 30, 2005, Bank of America announced it would purchase credit card giant MBNA for $35 billion in cash and stock. The Federal Reserve Board gave final approval to the merger on December 15, 2005, and the merger closed on January 1, 2006. The acquisition of MBNA provided Bank of America a leading domestic and foreign credit card issuer. The combined Bank of America Card Services organization, including the former MBNA, had more than 40 million U.S. accounts and nearly $140 billion in outstanding balances. Under Bank of America, the operation was renamed FIA Card Services.

In 2005, Bank of America acquired a 9% stake in China Construction Bank, one of the Big Four banks in China, for $3 billion.

Bank of America operated under the name BankBoston in many other Latin American countries, including Brazil. In 2006, Bank of America sold BankBoston's operations to Brazilian bank Banco Itaú, in exchange for Itaú shares. The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America (ending the BankBoston brand).

In May 2006, Bank of America and Banco Itaú (Investimentos Itaú S.A.) entered into an acquisition agreement through which Itaú agreed to acquire BankBoston's operations in Brazil and was granted an exclusive right to purchase Bank of America's operations in Chile and Uruguay. The deal was signed in August 2006 under which Itaú agreed to purchase Bank of America's operations in Chile and Uruguay.

On November 20, 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation. US Trust had about $100 billion of assets under management and over 150 years of experience. The deal closed on July 1, 2007.

On August 23, 2007, the company announced a $2 billion repurchase agreement for Countrywide Financial. This purchase of preferred stock was arranged to provide a return on investment of 7.25% per annum and provided the option to purchase common stock at a price of $18 per share.

On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire LaSalle Bank Corporation from ABN AMRO for $21 billion. With this purchase, Bank of America possessed $1.7 trillion in assets. A Dutch court blocked the sale until it was later approved in July. The acquisition was completed on October 1, 2007.

The acquisition was seen as preventing potential bankruptcy for Countrywide. Countrywide, however, denied that it was close to bankruptcy. Countrywide provided mortgage servicing for nine million mortgages valued at $1.4 trillion as of December 31, 2007.

On January 11, 2008, Bank of America announced that it would buy Countrywide Financial for $4.1 billion.

In January 2008, Bank of America began notifying some customers without payment problems that their interest rates were more than doubled, up to 28%. The bank was criticized for raising rates on customers in good standing, and for declining to explain why it had done so.

In March 2008, it was reported that the Federal Bureau of Investigation (FBI) was investigating Countrywide for possible fraud relating to home loans and mortgages.

LaSalle Bank and LaSalle Bank Midwest branches adopted the Bank of America name on May 5, 2008.

This news did not hinder the acquisition, which was completed in July 2008, giving the bank a substantial market share of the mortgage business, and access to Countrywide's resources for servicing mortgages.

Around the same time, Bank of America was reportedly also in talks to purchase Lehman Brothers, however a lack of government guarantees caused the bank to abandon talks with Lehman. Lehman Brothers filed for bankruptcy the same day Bank of America announced its plans to acquire Merrill Lynch. This acquisition made Bank of America the largest financial services company in the world. Shareholders of both companies (Bank of America and Merrill Lynch) approved the acquisition on December 5, 2008, and the deal closed January 1, 2009.

Bank of America received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) on January 16, 2009, and a guarantee of $118 billion in potential losses at the company.

The bank, in its January 16, 2009, earnings release, revealed massive losses at Merrill Lynch in the fourth quarter, which necessitated an infusion of money that had previously been negotiated with the government as part of the government-persuaded deal for the bank to acquire Merrill. Merrill recorded an operating loss of $21.5 billion in the quarter, mainly in its sales and trading operations, led by Tom Montag. The bank also disclosed it tried to abandon the deal in December after the extent of Merrill's trading losses surfaced, but was compelled to complete the merger by the U.S. government. The bank's stock price sank to $7.18, its lowest level in 17 years, after announcing earnings and the Merrill mishap. The market capitalization of Bank of America, including Merrill Lynch, was then $45 billion, less than the $50 billion it offered for Merrill just four months earlier, and down $108 billion from the merger announcement.

According to an article in The New York Times published on March 15, 2009, Bank of America received an additional $5.2 billion in government bailout money, channeled through American International Group.

Bank of America CEO Kenneth Lewis testified before Congress that he had some misgivings about the acquisition of Merrill Lynch and that federal officials pressured him to proceed with the deal or face losing his job and endangering the bank's relationship with federal regulators. Lewis' statement is backed up by internal emails subpoenaed by Republican lawmakers on the House Oversight Committee. In one of the emails, Richmond Federal Reserve President Jeffrey Lacker threatened that if the acquisition did not go through, and later Bank of America were forced to request federal assistance, the management of Bank of America would be "gone". Other emails, read by Congressman Dennis Kucinich during the course of Lewis' testimony, state that Mr. Lewis had foreseen the outrage from his shareholders that the purchase of Merrill would cause, and asked government regulators to issue a letter stating that the government had ordered him to complete the deal to acquire Merrill. Lewis, for his part, states he didn't recall requesting such a letter. The acquisition made Bank of America the number one underwriter of global high-yield debt, the third-largest underwriter of global equity, and the ninth largest adviser on global mergers and acquisitions. As the credit crisis eased, losses at Merrill Lynch subsided, and the subsidiary generated $3.7 billion of Bank of America's $4.2 billion in profit by the end of quarter one in 2009, and over 25% in quarter 3 2009.

Parmalat SpA is a multinational Italian dairy and food corporation. Following Parmalat's 2003 bankruptcy, the company sued Bank of America for $10 billion, alleging the bank profited from its knowledge of Parmalat's financial difficulties. The parties announced a settlement in July 2009, resulting in Bank of America paying Parmalat $98.5 million in October 2009.

On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition, in December 2008.

On September 14, the judge rejected the settlement and told the parties to prepare for trial to begin no later than February 1, 2010. The judge focused much of his criticism on the fact that the fine in the case would be paid by the bank's shareholders, who were the ones that were supposed to have been injured by the lack of disclosure. He wrote, "It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims' money should be used to make the case against the management go away," ... "The proposed settlement," the judge continued, "suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders but also of the truth".

In September 2009, a Bank of America credit card customer, Ann Minch, posted a video on YouTube criticizing the bank for raising her interest rate. After the video went viral, she was contacted by a Bank of America representative who lowered her rate. The story attracted national attention from television and internet commentators.

In October 2009, Julian Assange of WikiLeaks claimed that his organization possessed a 5-gigabyte hard drive formerly used by a Bank of America executive and that Wikileaks intended to publish its contents.

On December 2, 2009, Bank of America announced it would repay the entire $45 billion it received in TARP and exit the program, using $26.2 billion of excess liquidity along with $18.6 billion to be gained in "common equivalent securities" (Tier 1 capital). The bank announced it had completed the repayment on December 9.

Ken Lewis, who had lost the title of Chairman of the Board, announced that he would retire as CEO effective December 31, 2009, in part due to controversy and legal investigations concerning the purchase of Merrill Lynch. Brian Moynihan became President and CEO effective January 1, 2010, and afterward, credit card charge offs and delinquencies declined in January. Bank of America also repaid the $45 billion it had received from the Troubled Assets Relief Program.

In 2010, the U.S. government accused the bank of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue Service and $4.5 million to the state attorney general, to the affected organizations to settle the allegations.

In 2010 the state of Arizona launched an investigation into Bank of America for misleading homeowners who sought to modify their mortgage loans. According to the attorney general of Arizona, the bank "repeatedly has deceived" such mortgagors. In response to the investigation, the bank has given some modifications on the condition that the homeowners remove some information criticizing the bank online.

In November 2010, Forbes published an interview with Assange in which he stated his intent to publish information that would turn a major U.S. bank "inside out".

In December 2010, Bank of America announced that it would no longer service requests to transfer funds to WikiLeaks, stating that "Bank of America joins in the actions previously announced by MasterCard, PayPal, Visa Europe, and others and will not process transactions of any type that we have reason to believe are intended for WikiLeaks... This decision is based upon our reasonable belief that WikiLeaks may be engaged in activities that are, among other things, inconsistent with our internal policies for processing payments".

In August 2011, Bank of America was sued for $10 billion by the American International Group. Another lawsuit filed in September 2011 pertained to $57.5 billion in mortgage-backed securities Bank of America sold to Fannie Mae and Freddie Mac.

Sometime before August 2011, WikiLeaks claimed that 5 GB of Bank of America leaks was part of the deletion of over 3500 communications by Daniel Domscheit-Berg, a now ex-WikiLeaks volunteer.

During 2011, Bank of America began conducting personnel reductions of an estimated 36,000 people, contributing to intended savings of $5 billion per year by 2014.

In November 2011, Bank of America announced plans to divest most of its stake in the China Construction Bank.

In December 2011, the Justice Department announced a $335 million settlement with Bank of America over discriminatory lending practices at Countrywide Financial. Attorney General Eric Holder said a federal probe found discrimination against qualified African-American and Latino borrowers from 2004 to 2008. He said that minority borrowers who qualified for prime loans were steered into higher-interest-rate subprime loans.

In December 2011, Forbes ranked Bank of America's financial wealth 91st out of the nation's largest 100 banks and thrift institutions.

That December, Bank of America agreed to pay $335 million to settle a federal government claim that Countrywide Financial had discriminated against Hispanic and African-American homebuyers from 2004 to 2008, prior to being acquired by BofA.

On February 9, 2012, it was announced that the five largest mortgage servicers (Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo) agreed to a historic settlement with the federal government and 49 states.

In September 2012, BofA settled out of court for $2.4 billion in a class-action lawsuit filed by BofA shareholders who felt they were misled about the purchase of Merrill Lynch.

On September 28, 2012, Bank of America settled the class-action lawsuit over the Merrill Lynch acquisition and will pay $2.43 billion.

In 2012, Bank of America cut ties to the American Legislative Exchange Council (ALEC).

On October 24, 2012, the top federal prosecutor in Manhattan filed a lawsuit alleging that Bank of America fraudulently cost American taxpayers more than $1 billion when Countrywide Financial sold toxic mortgages to Fannie Mae and Freddie Mac. The scheme was called 'Hustle', or High-Speed Swim Lane.

On October 24, 2012, American federal prosecutors filed a $1 billion civil lawsuit against Bank of America for mortgage fraud under the False Claims Act, which provides for possible penalties of triple the damages suffered. The government asserted that Countrywide, which was acquired by Bank of America, rubber-stamped mortgage loans to risky borrowers and forced taxpayers to guarantee billions of bad loans through Fannie Mae and Freddie Mac. The suit was filed by Preet Bharara, the United States attorney in Manhattan, the inspector general of FHFA, and the special inspector for the Troubled Asset Relief Program.

Bank of America cut around 16,000 jobs in a quicker fashion by the end of 2012 as revenue continued to decline because of new regulations and a slow economy. This put a plan one year ahead of time to eliminate 30,000 jobs under a cost-cutting program, called Project New BAC.

In September 2013, Bank of America sold its remaining stake in the China Construction Bank for as much as $1.5 billion, marking the firm's full exit from the country.

In April and May 2014, Bank of America sold two dozen branches in Michigan to Huntington Bancshares. The locations were converted to Huntington National Bank branches in September.

In August 2014, Bank of America agreed to a near–$17 billion deal to settle claims against it relating to the sale of toxic mortgage-linked securities including subprime home loans, in what was believed to be the largest settlement in U.S. corporate history. The bank agreed with the U.S. Justice Department to pay $9.65 billion in fines, and $7 billion in relief to the victims of the faulty loans which included homeowners, borrowers, pension funds, and municipalities.

On May 6, 2015, Bank of America announced it would reduce its financial exposure to coal companies. The announcement came following pressure from universities and environmental groups. The new policy was announced as part of the bank's decision to continue to reduce credit exposure over time to the coal mining sector.

In 2015, Bank of America began expanding organically, opening branches in cities where it previously did not have a retail presence. They started that year in Denver, followed by Minneapolis–Saint Paul and Indianapolis, in all cases having at least one of its Big Four competitors, with Chase Bank being available in Denver and Indianapolis, while Wells Fargo is available in Denver and the Twin Cities.

On May 23, 2016, the Second U.S. Circuit Court of Appeals ruled that the finding of fact by the jury that low-quality mortgages were supplied by Countrywide to Fannie Mae and Freddie Mac in the "Hustle" case supported only "intentional breach of contract", not a fraud. The action, for civil fraud, relied on provisions of the Financial Institutions Reform, Recovery, and Enforcement Act. The decision turned on lack of intent to defraud at the time the contract to supply mortgages was made.

In April 2018, Bank of America announced that it would stop providing financing to makers of military-style weapons such as the AR-15 rifle.

On April 9, 2019, the company announced the minimum wage will be increased beginning May 1, 2019, to $17.00 an hour until it reaches a goal of $20.00 an hour in 2021.