Barnett Bank
Encyclopedia
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
in Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
with over 600 offices and $41.2 billion in deposits. The purchase by NationsBank
NationsBank
NationsBank was one of the largest banking corporations in the United States, based in Charlotte, North Carolina. In 1998, it acquired BankAmerica to become Bank of America.-Corporate history:...
was announced August 29, 1997, but even before signs on Barnett's branches were changed, NationsBank merged with BankAmerica in 1998, creating Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
.
Foundation
William Boyd Barnett was a merchant and a banker in northeast Kansas when he journeyed with his wife to Jacksonville to visit their oldest son in 1875. Sarah Barnett's health improved during their time in Florida, so the Barnetts returned to Kansas, liquidated their assets, and relocated to Jacksonville in March, 1877. Bion, their youngest son, was a senior at the University of KansasUniversity of Kansas
The University of Kansas is a public research university and the largest university in the state of Kansas. KU campuses are located in Lawrence, Wichita, Overland Park, and Kansas City, Kansas with the main campus being located in Lawrence on Mount Oread, the highest point in Lawrence. The...
and withdrew from school to join his parents.
In the spring of 1877, the United States was in middle of the Depression of 1873-79
Long Depression
The Long Depression was a worldwide economic crisis, felt most heavily in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. At the time, the episode was labeled the Great...
, and Jacksonville already had three banks. The city's population was under 10,000 and there was no infrastructure to support a beginning tourism industry.
On May 7, 1877, Barnett opened the Bank of Jacksonville (BoJ) on the corner of Main and Forsyth with $43,000 in capital. William was president, Bion acted as bookkeepper, and one other person was hired as teller/clerk. Most Florida banks at the time were private and unregulated. In spite of being a newcomer and a Yankee
Yankee
The term Yankee has several interrelated and often pejorative meanings, usually referring to people originating in the northeastern United States, or still more narrowly New England, where application of the term is largely restricted to descendants of the English settlers of the region.The...
, Barnett and the new institution slowly gained the people's trust, but at the end of their first year, and deposits only amounted to $11,000. Undeterred, William invited his son, Bion Barnett
Bion Barnett
Bion Hall Barnett was an American banker. In 1877 he co-founded Barnett Bank, known as "Florida's Bank", the largest in the U.S. state of Florida at the time of its acquisition by NationsBank in 1997.-Early years:...
, to be partner and passed along Barnett's five rules of business:
- Follow the Golden RuleGolden RuleGolden Rule may refer to:*The Golden Rule in ethics, morality, history and religion, also known as the ethic of reciprocity*Golden Rule savings rate, in economics, the savings rate which maximizes consumption in the Solow growth model...
. You cannot go wrong treating the other man as you would be treated. - Give a man 50 cents if you can make a dollar out of him. In other words, be liberal in your dealings but always have a net profit. Do not do business at a loss.
- If a young man is of good habits - honest, capable, saving, giving close attention to his business and making progress but lacking in capital - help him. The young man of today is the businessman of tomorrow.
- Never make a promise you cannot and do not fulfill. Investigate carefully before granting a line of credit; once granted, there being no adverse change in your client's financial condition, fulfill your promise. Your word must be as good as your bond.
- Watch your expense account and your losses; your profits will take care of themselves.
According to Bion Barnett, "I have never found a flaw in it. It is good advice today."
Fate
A conversation between Bion Barnett and Henry L’Engle changed the bank's fortunes. L'Engle, the Duval County Tax Collector, was annoyed because the bank holding the county's funds charged $6.25 for each transfer to New York City banks. Bion immediately offered to waive the fee if Duval County deposited their funds in the Bank of Jacksonville. L'Engle agreed, and the BoJ began to prosper. Within a year, L'Engle was appointed Treasurer for the State of Florida, and the state's accounts were transferred to BoJ. Within a few years, operating capital exceeded $150,000, and the Barnetts applied for and received a National Charter, pursuant to the National Bank Act. This allowed them to become the National Bank of Jacksonville. The institution's deposits exceeded $1 million in 1893.20th Century
The Great Fire of 1901Great Fire of 1901
The Great Fire of 1901 in Jacksonville, Florida was one of the worst disasters in Florida history and the largest urban fire in the Southeast. It was similar in scale and destruction to the 1871 Great Chicago Fire.-Origin:...
destroyed most of the city, but the National Bank of Jacksonville was the only bank still standing. William Boyd Barnett died September 2, 1903 and Bion renamed the institution, Barnett Bank, in his father's honor.
The bank survived various economic downturns and crises, including the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, ultimately emerging stronger. Its headquarters, built during the Roaring 20s, was for many years the tallest building in Jacksonville. When Barnett died in 1958, at the age of 101, Barnett Bank had come to be known as "Florida's Bank". The bank continued to grow with the acquisition of many more Florida banks over the next two decades.
However, under Chairman of the Board Hugh Jones, Barnett Bank was slow to become involved in the rapidly-evolving interstate banking mergers of the 1970s and 80s. Though eventually Barnett did make some purchases of out-of-state banks, starting in Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
, it did so without growing its own brand recognition. While technically, according to federal statute, one bank cannot own another bank in another state, they can both be owned by the same holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
. Barnett, like other banks, grew across state lines in this way. But unlike other such banks, Barnett did not change the names of its new holdings, keeping the Barnett name exclusively within Florida. Ultimately, this weakened the company's stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
, as the perception lingered that Barnett was not a major player in the area of mergers and acquisitions. Despite its slower than average growth, the holding company built a new corporate headquarters building in downtown
Downtown
Downtown is a term primarily used in North America by English speakers to refer to a city's core or central business district ....
Jacksonville: announced in 1987 and occupied in 1993, the year Hugh Jones retired. At 42 stories, the Barnett Center
Bank of America Tower (Jacksonville)
The Bank of America Tower is a skyscraper in downtown Jacksonville, Florida, United States. It is the tallest building in Jacksonville, and the ninth-tallest in the state of Florida...
was the highest building in Jacksonville, and the second-tallest in Florida as of 2010.
Demise
For many years, it looked like Barnett would be the only bank of Jacksonville's "Big Three" to ignore the lure of big money from nation-wide banking conglomerates. Atlantic National BankAtlantic National Bank
The Atlantic National Bank was an American bank based in Jacksonville, Florida. It existed from 1903 until 1985, when it merged into First Union The company constructed two significant buildings in Downtown Jacksonville: 121 Atlantic Place and the Schultz Building The Atlantic National Bank was...
of Florida was the first to sell out to First Union in 1985/7, followed by Florida National Bank
Florida National Bank
Florida National Bank , founded in 1905, grew to became the second largest commercial bank in Florida. Florida National Group was acquired in 1990 by First Union Corporation, which was renamed Wachovia in 2001.-Early years:...
in 1990. But in 1997, Barnett CEO Charles Rice, who was named Jacksonville's highest paid individual among public companies at $4.5 million (excluding stock options), offered the company up for sale, just six weeks after a month spent at a drug rehabilitation
Drug rehabilitation
Drug rehabilitation is a term for the processes of medical or psychotherapeutic treatment, for dependency on psychoactive substances such as alcohol, prescription drugs, and so-called street drugs such as cocaine, heroin or amphetamines...
facility for treatment of alcoholism
Alcoholism
Alcoholism is a broad term for problems with alcohol, and is generally used to mean compulsive and uncontrolled consumption of alcoholic beverages, usually to the detriment of the drinker's health, personal relationships, and social standing...
. Charlotte
CHARLOTTE
- CHARLOTTE :CHARLOTTE is an American blues-based hard rock band that formed in Los Angeles, California in 1986. Currently, they are signed to indie label, Eonian Records, under which they released their debut cd, Medusa Groove, in 2010. Notable Charlotte songs include 'Siren', 'Little Devils',...
-based NationsBank
NationsBank
NationsBank was one of the largest banking corporations in the United States, based in Charlotte, North Carolina. In 1998, it acquired BankAmerica to become Bank of America.-Corporate history:...
made the highest offer, and the deal was done. Rice, who had publicly stated more than a decade earlier that he would never sell Bion Barnett's bank to any of its competitors, became board chairman of NationsBank. However, less than a year later, NationsBank merged into Bank of America, and Rice himself was forced out as chairman, becoming vice chairman of corporate development. At the time of Barnett's demise, the company had an annual payroll of a quarter billion dollars spread among 6,800 employees.
More than a few of those who lost their jobs found the situation ironic. Rice's payout in the Barnett merger was $17.9 million; however, he did not live long enough to enjoy his booty. After retiring in early 2001,
Rice died in a swimming pool accident in December of that year.
Volunteering
In the 1980s, CEO Hugh Jones began a corporate-wide program of giving back to their communities. All the bank's employees, which numbered 1,000, were encouraged to donate time to the charitable cause of their choosing. The Community Involvement Initiative resulted in over 40,000 hours of assistance to worthy projects where they lived.As of 2010, the reinforced concrete
Reinforced concrete
Reinforced concrete is concrete in which reinforcement bars , reinforcement grids, plates or fibers have been incorporated to strengthen the concrete in tension. It was invented by French gardener Joseph Monier in 1849 and patented in 1867. The term Ferro Concrete refers only to concrete that is...
Barnett Center (now, the Bank of America Tower
Bank of America Tower (Jacksonville)
The Bank of America Tower is a skyscraper in downtown Jacksonville, Florida, United States. It is the tallest building in Jacksonville, and the ninth-tallest in the state of Florida...
) remains the tallest building in Jacksonville.
Fight over the name
In late 2000 financier Reid MackReid Mack
Reid Mack is a commercial banker and financier based in Miami, Florida. He is most known for his acquisition of corporate names associated with Barnett Bank, which was once the largest commercial bank in Florida....
secured the Florida corporate names to three former Barnett Bank entities; Barnett Mortgage Company, Barnett Lending Services, and Barnett Credit Services. Bank of America fought over the intellectual property rights to the names, and over the subsequent years Mr. Mack abandoned the possible use to the names.
Historic preservation
The Barnett Historic Preservation Foundation, Inc. was created in December, 1997, after NationsBank purchased Barnett. Former Barnett president Allen Lastinger joined several other bank officers to create a non-profit organization to preserve and document Barnett's historical legacy.They acquired the company archives containing annual reports, investor presentations, press releases, correspondence, miscellaneous ledgers, videos and account books; then solicited former employees for other material, including photographs, scrapbooks, news clippings, marketing materials and employee publications. Over 70 interviews were conducted which generated 3,000 pages of transcripts that were included in an oral history
Oral history
Oral history is the collection and study of historical information about individuals, families, important events, or everyday life using audiotapes, videotapes, or transcriptions of planned interviews...
component.
In 2001, the Barnett Bank collection was donated to the Florida State Archives
Florida State Archives
The State Library and Archives of Florida is the central repository for the archives of state government for the state of Florida. It is located at the R.A...
, which also holds the Florida State Department of Banking records, as well as records from other defunct banks.