First Interstate Bancorp
Encyclopedia
First Interstate Bancorp was a bank holding company based in the United States
that was taken over in 1996 by Wells Fargo
. Headquartered in Los Angeles
, it was the nation's eighth largest banking company.
The name (along with the company logo) has continued to be used in the banking world after the merger by First Interstate BancSystem
who had been using the name under a franchise agreement since 1984.
to Italian
immigrant parents, formed a holding company, the Transamerica Corporation
, to consolidate his existing financial ventures, which began business with $1.1 billion in assets and both banking and nonbanking activities. From the 1930s through the mid-1950s, Transamerica made a number of acquisitions of banks and other financial corporations throughout the western United States, creating the framework for the later First Interstate system.
In 1953, regulators succeeded in forcing the separation of Transamerica Corporation
and Bank of America
under the Clayton Antitrust Act
The Bank Holding Company Act of 1956
placed new restrictions on companies such as Transamerica. Therefore, in 1957, Transamerica's banking operations, which included 23 banks in 11 western states, were spun off as Firstamerica Corporation. Transamerica continued to pursue its insurance and other operations.
Firstamerica changed its name to Western Bancorporation in 1961. Western expanded steadily in the 1960s, both domestically and overseas, ending the decade with assets of more than $10 billion. The bank's financial services network grew through the 1974 founding of the Western Bancorporation Mortgage Company and the 1979 formation of Western Bancorp Venture Capital Company.
In June 1981 the company changed its name to First Interstate Bancorp. The First Interstate name became a systemwide brand for most of the company's banks, thus promoting greater public recognition of the company and internal consistency. During the 1980s, in addition to acquiring more banks, First Interstate jumped into new areas of financial services as the deregulation of the banking industry progressed. In 1983 the First Interstate Discount Brokerage was set up to provide bank customers with securities and commodities support. In 1984 the bank branched into merchant banking with the purchase of Continental Illinois Ltd. and equipment leasing with the acquisition of the Commercial Alliance Corporation of New York, and broadened its mortgage banking activities by acquiring the Republic Realty Mortgage Corporation. In 1986 and 1987, First Interstate attempted a bold $3.2 billion hostile takeover of the ailing Bank of America
, but the bid was successfully defeated.
First Interstate ran into its own troubles in the late 1980s and early 1990s stemming from bad real estate loans and the severe recession in California
. The bank posted losses in the hundreds of millions for 1987, 1989, and 1991. Consequently, First Interstate concentrated on rebuilding and rejuvenating its existing operations rather than acquiring new ones. A number of noncore unprofitable subsidiaries were jettisoned, including the equipment leasing unit, a government securities operation, and most of the wholesale banking unit. Rumors of a takeover of First Interstate were rife in the early 1990s before the bank recovered fully by mid-decade under the leadership of Joe Pinola and William Siart.
Despite First Interstate's healthier condition, and with the banking industry consolidation in full swing, Wells Fargo
made a hostile bid for First Interstate in October 1995 initially valued at $10.8 billion. Other banks came forward as potential 'white knights,' including Norwest
, Bank One Corporation
, and First Bank System. The latter made a serious bid for First Interstate, with the two banks reaching a formal merger agreement in November valued initially at $10.3 billion. But First Bank ran into regulatory difficulties with the way it had structured its offer and was forced to bow out of the takeover battle in mid-January 1996. Talks between Wells Fargo and First Interstate then led within days to a merger agreement.
In 1984, First Interstate BancSystem of Montana entered into a franchise agreement with First Interstate Bancorp of California to use the First Interstate Bank name and logo. In 1996 when First Interstate Bancorp was split up, the Montana organization successfully negotiated to retain the well known First Interstate name and logo. First Interstate BancSystem continues to offer banking in Montana, Wyoming, and South Dakota.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
that was taken over in 1996 by Wells Fargo
Wells Fargo
Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
. Headquartered in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
, it was the nation's eighth largest banking company.
The name (along with the company logo) has continued to be used in the banking world after the merger by First Interstate BancSystem
First Interstate BancSystem
First Interstate BancSystem, Inc., a financial holding company, and its primary banking subsidiary First Interstate Bank are based in Billings, Montana, USA....
who had been using the name under a franchise agreement since 1984.
History
In 1928, A.P. Giannini, born in CaliforniaCalifornia
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
to Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
immigrant parents, formed a holding company, the Transamerica Corporation
Transamerica Corporation
Transamerica Corporation is a holding company for various life insurance companies and investment firms doing business primarily in the United States. It was acquired by the Dutch financial services conglomerate AEGON in 1999.-History:...
, to consolidate his existing financial ventures, which began business with $1.1 billion in assets and both banking and nonbanking activities. From the 1930s through the mid-1950s, Transamerica made a number of acquisitions of banks and other financial corporations throughout the western United States, creating the framework for the later First Interstate system.
In 1953, regulators succeeded in forcing the separation of Transamerica Corporation
Transamerica Corporation
Transamerica Corporation is a holding company for various life insurance companies and investment firms doing business primarily in the United States. It was acquired by the Dutch financial services conglomerate AEGON in 1999.-History:...
and 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...
under the Clayton Antitrust Act
Clayton Antitrust Act
The Clayton Antitrust Act of 1914 , was enacted in the United States to add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices...
The Bank Holding Company Act of 1956
Bank Holding Company Act of 1956
The Bank Holding Company Act of 1956 is a United States Act of Congress that regulates the actions of bank holding companies.The original law , specified that the Federal Reserve Board of Governors must approve the establishment of a bank holding company, and prohibited bank holding companies...
placed new restrictions on companies such as Transamerica. Therefore, in 1957, Transamerica's banking operations, which included 23 banks in 11 western states, were spun off as Firstamerica Corporation. Transamerica continued to pursue its insurance and other operations.
Firstamerica changed its name to Western Bancorporation in 1961. Western expanded steadily in the 1960s, both domestically and overseas, ending the decade with assets of more than $10 billion. The bank's financial services network grew through the 1974 founding of the Western Bancorporation Mortgage Company and the 1979 formation of Western Bancorp Venture Capital Company.
In June 1981 the company changed its name to First Interstate Bancorp. The First Interstate name became a systemwide brand for most of the company's banks, thus promoting greater public recognition of the company and internal consistency. During the 1980s, in addition to acquiring more banks, First Interstate jumped into new areas of financial services as the deregulation of the banking industry progressed. In 1983 the First Interstate Discount Brokerage was set up to provide bank customers with securities and commodities support. In 1984 the bank branched into merchant banking with the purchase of Continental Illinois Ltd. and equipment leasing with the acquisition of the Commercial Alliance Corporation of New York, and broadened its mortgage banking activities by acquiring the Republic Realty Mortgage Corporation. In 1986 and 1987, First Interstate attempted a bold $3.2 billion hostile takeover of the ailing 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...
, but the bid was successfully defeated.
First Interstate ran into its own troubles in the late 1980s and early 1990s stemming from bad real estate loans and the severe recession in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. The bank posted losses in the hundreds of millions for 1987, 1989, and 1991. Consequently, First Interstate concentrated on rebuilding and rejuvenating its existing operations rather than acquiring new ones. A number of noncore unprofitable subsidiaries were jettisoned, including the equipment leasing unit, a government securities operation, and most of the wholesale banking unit. Rumors of a takeover of First Interstate were rife in the early 1990s before the bank recovered fully by mid-decade under the leadership of Joe Pinola and William Siart.
Despite First Interstate's healthier condition, and with the banking industry consolidation in full swing, Wells Fargo
Wells Fargo
Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
made a hostile bid for First Interstate in October 1995 initially valued at $10.8 billion. Other banks came forward as potential 'white knights,' including Norwest
Norwest
Norwest Corporation was a banking and financial services company based in Minneapolis, Minnesota, United States. In 1998, it merged with Wells Fargo & Co. and since that time has traded under the Wells Fargo name.-Early formation:...
, Bank One Corporation
Bank One Corporation
Some of the banks that were merged into these banks include:*Bank One**Security National Bank & Trust **Affiliated Bankshares of Colorado **American Fletcher Corp. **City National Bank and Trust Co...
, and First Bank System. The latter made a serious bid for First Interstate, with the two banks reaching a formal merger agreement in November valued initially at $10.3 billion. But First Bank ran into regulatory difficulties with the way it had structured its offer and was forced to bow out of the takeover battle in mid-January 1996. Talks between Wells Fargo and First Interstate then led within days to a merger agreement.
In 1984, First Interstate BancSystem of Montana entered into a franchise agreement with First Interstate Bancorp of California to use the First Interstate Bank name and logo. In 1996 when First Interstate Bancorp was split up, the Montana organization successfully negotiated to retain the well known First Interstate name and logo. First Interstate BancSystem continues to offer banking in Montana, Wyoming, and South Dakota.
See also
- Aon Center (Los Angeles)Aon Center (Los Angeles)Aon Center is a 62-story, Modernist office skyscraper located at 707 Wilshire Boulevard in downtown Los Angeles, California. Designed by Charles Luckman, and completed in 1973, the rectangular black building with white trim is remarkably slender for a skyscraper in a seismically active area. It is...
- U.S. Bank Tower (Los Angeles)
- Wells Fargo Center (Portland, Oregon)Wells Fargo Center (Portland, Oregon)Wells Fargo Center is an office building located in Portland, Oregon, United States. The tower rises 546 feet with 40 floors of office space and three levels of parking below the surface...
– named First Interstate Tower 1981–1996