Bank of America: The Humble Beginnings of a Large Bank (2024)

After the devastating earthquake in April 1906, looters roamed the streets of San Francisco. Rescuing gold and silver from his small Bank of Italy, A.P. Giannini gained fame by setting up a makeshift bank on a North Beach wharf and making loans to local residents "on a handshake."

Bank of America: The Humble Beginnings of a Large Bank (1)

A.P. Giannini in 1904. Called "the handsomest man in North Beach," the 22-year old produce merchant married the daughter of the Beach's richest man. When Giannini's father-in-law died in 1902, his widow and 11 children did not divvy up his $1 million estate. Instead, they enlisted the talented Giannini to manage the property. It included a large block of stock in North Beach's first Italian bank. (Bank of America Historical Collection)

Amadeo Peter Giannini was born in San Jose, California in 1870. The son of Italian immigrants had an outsized personality and unlimited faith in the American dream.

Giannini began by selling fruits and vegetables from a horse-drawn wagon. But he was made for bigger things. At age 34, he launched a small bank in the Italian neighborhood of North Beach, San Francisco. At the time, big banks lent only to large businesses, handled deposits of the wealthy, and frowned on aggressive advertising.

The novice financier knocked on doors and buttonholed people on the street. He persuaded "unbanked" immigrants that gold and silver coins were safer in vaults than under mattresses. Moreover, the money would earn interest at his "Bank of Italy."

On the morning of April 18, 1906, a massive earthquake hit San Francisco. The ensuing fires burned down the large banks. Their superheated metal vaults could not be opened for weeks—lest the cash and paper records catch fire when oxygen rushed in.

As flames threatened his one-room bank, Giannini spirited $80,000 in coins out of town. He hid the precious metal under crates of oranges and steered his wagons past gangs of thugs and looters in the streets.

As other banks struggled to recover, Giannini made headlines by setting up a makeshift bank on a North Beach wharf. He extended loans to beleaguered residents "on a handshake" and helped revive the city.

Bank of America: The Humble Beginnings of a Large Bank (2)

After the devastating earthquake in April 1906, looters roamed the streets of San Francisco. Rescuing gold and silver from his small Bank of Italy, A.P. Giannini gained fame by setting up a makeshift bank on a North Beach wharf and making loans to local residents "on a handshake." (California History Room, California State Library, Sacramento, California)

The innovative bank welcomed small borrowers who might otherwise have to use high-cost loan sharks. Most banks at the time regarded people with modest incomes as credit risks not worth the paperwork. But experience had taught Giannini otherwise: that working class people were no less likely to pay their debts than the wealthy.

Seeking more customers, the former produce salesman returned to his old haunts—the fertile valleys of California. He "walked in rows beside farmers engaged in plowing" to explain how bank branches make credit cheaper and more reliable. Town by town, he built the first statewide branching system in the nation.

On November 1, 1930, the Bank of Italy in San Francisco changed its name to Bank of America. The bank today has the same national bank charter number as Giannini's old bank— #13044.

When A.P. Giannini died in 1949, the former single-teller office in North Beach claimed more than 500 branches and $6 billion in assets. It was then the largest bank in the world.

Bank of America: The Humble Beginnings of a Large Bank (2024)

FAQs

What was the beginning of Bank of America? ›

1904: A.P. Giannini founded Bank of Italy, later renamed Bank of America, to support clients and small business owners overlooked by other banks at the time. 1919: Charles Merrill hired Anne Grimes, the first woman to become a bonds salesperson in the U.S.

Is Bank of America the problem child of big banks? ›

These days, BofA finds itself the problem child of big banks, perhaps more so than even Citigroup (C), with its sprawling, disjointed businesses constantly in need of fixes, or Wells Fargo (WFC), still under a consent decree. BofA trades at just 8.2 times earnings, a 15% discount to JPMorgan's 9.6 times.

What is the summary of Bank of America? ›

What we offer. Bank of America is one of the world's leading financial institutions, serving individuals, small- and middle-market businesses, large corporations, and governments with a full range of banking, investment management and other financial and risk management products and services.

Why did Bank of Italy change to Bank of America? ›

The Bank of Italy merged with the smaller Bank of America, Los Angeles in 1928. In 1930, Giannini changed the name from "Bank of Italy" to "Bank of America". As chairman of the new, larger Bank of America, Giannini expanded the bank throughout his tenure, which continued until his death in 1949.

What family owns Bank of America? ›

Berkshire Hathaway (BRK. A -0.23%)(BRK. B -0.28%): Warren Buffett's Berkshire Hathaway is the largest Bank of America shareholder, with 1.03 billion shares amounting to a 13% stake. As of March 2024, it was the second-largest of Warren Buffett's stock holdings after Apple (AAPL 2.48%), worth almost $37 billion.

What happened to the first Bank of America? ›

After the charter for the First Bank of the United States expired in 1811, Stephen Girard purchased most of its stock as well as the building and its furnishings on South Third Street in Philadelphia and opened his own bank, later known as Girard Bank.

Why does Bank of America have a bad reputation? ›

In those cases, Bank of America illegally used or obtained consumers' credit reports, without their permission, to complete applications. Because of Bank of America's actions, consumers were charged unjustified fees, suffered negative effects to their credit profiles, and had to spend time correcting errors.

Which Bank are in trouble in USA? ›

Bank Failures of 2023 and 2024
Bank NameCityState
First Republic BankSan FranciscoCA
Heartland Tri-State BankElkhartKS
Citizens Bank of Sac CitySac CityIA
Republic First BankPhiladelphiaPA
2 more rows

Is Bank of America in financial trouble? ›

Bank of America's Financial Health

In recent years, Bank of America's financial performance has been relatively stable. In 2022, the bank reported a net income of $20.4 billion, a decrease from the previous year's $27.4 billion.

Who did Bank of America merge with? ›

The bank was founded by the merger of NationsBank and Bank of America in 1998. It is the second-largest banking institution in the United States and the second-largest bank in the world by market capitalization, both after JPMorgan Chase.

What Bank says can't stop banking? ›

Bank of American (BOA) ran the multi-channel Can't Stop Banking campaign to grow awareness, consideration and use of its digital banking services during the COVID-19 pandemic in the United States.

Who is CEO of Bank of America? ›

Brian T. Moynihan. As our Chief Executive Officer, Mr. Moynihan leads a team of more than 200,000 employees focused on driving Responsible Growth for our teammates, clients, communities, and shareholders.

Is there a problem with Bank of America today? ›

Current Status: Up

Here's the apdex score for Bank of America. Good!

What was Bank of America originally called? ›

On November 1, 1930, the Bank of Italy in San Francisco changed its name to Bank of America. The bank today has the same national bank charter number as Giannini's old bank— #13044. When A.P. Giannini died in 1949, the former single-teller office in North Beach claimed more than 500 branches and $6 billion in assets.

Why was the Bank of America controversial? ›

In its investigation, the CFPB found that Bank of America engaged in unfair and abusive acts and practices that resulted in Californians not getting their unemployment benefits at the height of the pandemic, when many people needed the money the most.

What was the purpose of the first Bank of America? ›

The Bank acted as the federal government's fiscal agent, collecting tax revenues, securing the government's funds, making loans to the government, transferring government deposits through the bank's branch network, and paying the government's bills.

How did banking start in America? ›

Investment banking began in the 1860s with the establishment of Jay Cooke & Company, one of the first selling agents for government bonds. In 1863, the National Bank Act was passed to create a national currency and a federal banking system, and to make public loans.

What were the names before Bank of America? ›

BOfA was established by an Italian Immigrant in 1904 in San Francisco by then name of Bank of Italy by 1930 it was renamed as Bank of America National Trust and saving Association and again in October of 2000 it was renamed as BOfA. The bank has a very long history and a long list of ownership shuffles.

What was Bank of America first computer? ›

ERMA (Electronic Recording Machine, Accounting) was a computer technology that automated bank bookkeeping and check processing. Developed at the nonprofit research institution SRI International under contract from Bank of America, the project began in 1950 and was publicly revealed in September 1955.

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