Mellon Financial
Encyclopedia
Pittsburgh, Pennsylvania
Pittsburgh is the second-largest city in the US Commonwealth of Pennsylvania and the county seat of Allegheny County. Regionally, it anchors the largest urban area of Appalachia and the Ohio River Valley, and nationally, it is the 22nd-largest urban area in the United States...
, it was in the business of institutional and high-net-worth-individual asset management, including the Dreyfus family of mutual funds; business banking; and shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
and investor
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...
services. On December 4, 2006 it announced a merger agreement with Bank of New York
Bank of New York
The Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007...
, to form The Bank of New York Mellon
Bank of New York Mellon
The Bank of New York Mellon Corporation is a global financial services company formed on July 1, 2007 as result of the merger of The Bank of New York and Mellon Financial Corporation...
. After regulatory and shareholder approval, the banks completed the merger on July 2, 2007.
History
Mellon was founded in 1869 by Thomas MellonThomas Mellon
Thomas Alexander Mellon was a Scotch-Irish American, entrepreneur, lawyer, and judge, best known as the founder of Mellon Bank and patriarch of the Mellon family of Pittsburgh, Pennsylvania.-Early life:...
and his sons Andrew W. Mellon
Andrew W. Mellon
Andrew William Mellon was an American banker, industrialist, philanthropist, art collector and Secretary of the Treasury from March 4, 1921 until February 12, 1932.-Early life:...
and Richard B. Mellon
Richard B. Mellon
Richard Beatty Mellon , sometimes R.B., was a banker, industrialist, and philanthropist from Pittsburgh, Pennsylvania....
, as T. Mellon & Sons' Bank. In 1902, the institution became Mellon National Bank.
Mellon Bank was the driving force behind the vast majority of the mass production revolution, especially in the Midwestern United States
Midwestern United States
The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest....
. The Mellon family using the bank as a proxy had direct involvement with founding the modern aluminium, oil, consumer electronics and financial industries. Alcoa
Alcoa
Alcoa Inc. is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries...
, Gulf Oil
Gulf Oil
Gulf Oil was a major global oil company from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters oil companies...
(now Chevron-Texaco), Westinghouse (now CBS Corporation
CBS Corporation
CBS Corporation is an American media conglomerate focused on commercial broadcasting, publishing, billboards and television production, with most of its operations in the United States. The President and CEO of the company is Leslie Moonves. Sumner Redstone, owner of National Amusements, is CBS's...
and Siemens
Siemens
Siemens may refer toSiemens, a German family name carried by generations of telecommunications industrialists, including:* Werner von Siemens , inventor, founder of Siemens AG...
) and Rockwell
Rockwell International
Rockwell International was a major American manufacturing conglomerate in the latter half of the 20th century, involved in aircraft, the space industry, both defense-oriented and commercial electronics, automotive and truck components, printing presses, valves and meters, and industrial automation....
, all were directly founded and managed by the bank. U.S. Steel
U.S. Steel
The United States Steel Corporation , more commonly known as U.S. Steel, is an integrated steel producer with major production operations in the United States, Canada, and Central Europe. The company is the world's tenth largest steel producer ranked by sales...
(the world's first billion dollar corporation), Heinz
H. J. Heinz Company
The H. J. Heinz Company , commonly known as Heinz and famous for its "57 Varieties" slogan and its ketchup, is an American food company with world headquarters in Pittsburgh, Pennsylvania.Perhaps best known for its ketchup, the H.J...
, General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
, Koppers
Koppers
Koppers is a global chemical and materials company based in Downtown Pittsburgh, Pennsylvania, United States in an art-deco 1920s skyscraper, the Koppers Tower.-Structure:...
and ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
(as Rockefeller's Standard Oil) were born and nurtured by Mellon.
In 1920 Andrew left his leadership post of the bank to become the longest serving U.S. Treasury Secretary in history (serving under three separate administrations).
In 1929, Richard founded Mellbank Corporation. In 1946, Mellon National, Mellbank, and the Union Trust Company merged to form Mellon National Bank and Trust Company.
A reorganization in 1972 brought about a name change to Mellon Bank, N.A. and the formation of a holding company, Mellon National Corporation.
In 1983, Mellon bought Girard Bank
Girard Bank
Girard Bank was a Philadelphia based bank, founded by Stephen Girard in 1811. The bank was acquired by Mellon Bank in 1983 and then two decades later by Citizens Bank....
of Philadelphia and Central Counties Bank of State College, Pennsylvania
State College, Pennsylvania
State College is the largest borough in Centre County in the U.S. state of Pennsylvania. It is the principal city of the State College, Pennsylvania Metropolitan Statistical Area which encompasses all of Centre County. As of the 2010 census, the borough population was 42,034, and roughly double...
. The next year, Mellon National Corporation became Mellon Bank Corporation, and purchased Northwest Pennsylvania Corporation of Oil City, Pennsylvania
Oil City, Pennsylvania
Oil City is a city in Venango County, Pennsylvania that is known in the initial exploration and development of the petroleum industry. After the first oil wells were drilled nearby in the 1850s, Oil City became central in the petroleum industry while hosting headquarters for the Pennzoil, Quaker...
.
In 1986, Mellon bought Commonwealth National Financial of Harrisburg, Pennsylvania
Harrisburg, Pennsylvania
Harrisburg is the capital of Pennsylvania. As of the 2010 census, the city had a population of 49,528, making it the ninth largest city in Pennsylvania...
.
In 1991, Mellon bought United Penn Bank of Wilkes-Barre, Pennsylvania
Wilkes-Barre, Pennsylvania
Wilkes-Barre is a city in the U.S. state of Pennsylvania, the county seat of Luzerne County. It is at the center of the Wyoming Valley area and is one of the principal cities in the Scranton/Wilkes-Barre metropolitan area, which had a population of 563,631 as of the 2010 Census...
. The next year, Mellon bought 54 branch offices of Philadelphia-based Philadelphia Savings Fund Society
Philadelphia Savings Fund Society
The Philadelphia Savings Fund Society , originally called the Philadelphia Saving Fund Society, was a savings bank headquartered in Philadelphia, Pennsylvania, United States. PSFS was founded in December 1816, becoming the first savings bank to organize and do business in the United States...
, whose parent company had become insolvent. Philadelphia Savings Fund Socity, was the first savings bank in the United States, founded in 1819.
In 1993, Mellon bought The Boston Company from American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
and AFCO Credit Corporation from The Continental Corporation. The next year, Mellon merged with the Dreyfus Corporation
Dreyfus Corporation
Dreyfus, established in 1951 and headquartered in New York City, is one of the nation’s leading managers of investment products and strategies. The company merged with Mellon Financial in 1994, and then became a subsidiary of Bank of New York Mellon when Mellon Financial and The Bank of New York...
, bringing its mutual funds under its umbrella.
1998 saw Mellon's purchase of United Bankshares, Inc., of Miami
Miami, Florida
Miami is a city located on the Atlantic coast in southeastern Florida and the county seat of Miami-Dade County, the most populous county in Florida and the eighth-most populous county in the United States with a population of 2,500,625...
, 1st Business Bank of Los Angeles
Los Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...
, and Founders Asset Management.
In 1999, Martin G. McGuinn became chairman and chief executive officer of Mellon Bank Corporation. Mellon Bank Corporation then became Mellon Financial Corporation. Two years later, it sold its retail banking
Retail banking
Retail banking is banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.-Types of...
operations to Citizens Financial Group
Citizens Financial Group
Citizens Financial Group, Inc. is an American bank headquartered in Providence, Rhode Island, which operates in the states of Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont. Citizens is a wholly owned...
.
In 2004, Mellon announced it would purchase Safeco Trust Company from Seattle-based Safeco Corporation. The same year, it purchased outstanding shares in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
-based Pareto Partners and offered them floor space in Mellon Financial Centre (opened earlier in the year).
In 2006, Mellon announced its plans to merge with Bank of New York.
July 1, 2007, merged with Bank of New York to become The Bank of New York Mellon. Headquarters of the new company are located in New York. It is the world's largest securities servicing firm and one of the world's top ten asset managing firms.
These two companies, along with State Street, followed essentially the same evolution. All were originally large diversified financial service providers, particularly in the corporate banking space in the regions they were located in. However competition in the corporate loans and retail banking businesses saw them jettison these operations in favor of what were believed to be more stable, fee based business: asset management (i.e. investment management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
in the form of mutual funds and other separately managed accounts) and asset servicing (i.e. corporate trust
Corporate trust
In the most basic sense of the term, A corporate trust is a trust created by a corporation.However, the term in the United States is most often used to describe the business activities of many financial services companies and banks that involve acting in a fiduciary capacity for investors in a...
, stock transfer services and American Depository Receipts).
Mellon is a large provider of what are known as controlled disbursement accounts. These are checking accounts in specialized locations which are given early warning by the Federal Reserve as to what checks will be clearing them. Companies can then transfer the exact amount needed to pay those checks, while then investing the unneeded money or using other funds to pay down debt.
Merger with Bank of New York
Talks of a merger began when Tom Renyi approached Robert Kelly about a possible amalgamation between the Bank of New York and Mellon Financial Corporation. The $United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
16.5 billion deal was finalized on July 1, 2007, with Kelly as the Chief Executive Officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
(CEO) of the new company, and Renyi as Executive Chairman. Per the deal, the new Board of Directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
is composed of ten directors appointed by the Bank of New York, and eight by Mellon. The Bank of New York Mellon launched its new brand identity on October 1, 2007.