Union Planters
Encyclopedia
Union Planters Bank was a United States
financial institution and multi-state bank holding corporation headquartered in Memphis
, Tennessee
prior to being acquired by Regions Financial Corporation. With over $34 billion in assets, Union Planters Bank was the largest bank in Tennessee
and among the thirty largest bank holding companies in the United States. Union Planters operated over 760 banking centers in the states of Alabama
, Arkansas
, Florida
, Illinois
, Indiana
, Iowa
, Kentucky
, Louisiana
, Mississippi
, Missouri
, Tennessee
, and Texas
.
businessman who had prospered during the American Civil War
and emerged the wealthy head of an insurance company. In 1868, Farrington and the Board of Directors of Desoto Insurance Company applied to convert the company to a bank and they received government approval on February 12, 1869. Prior to the Civil War, the two most prominent banks in Memphis were Union Bank
and the Branch Planters Bank. The assets of both, however, were seized during the war and the two banks had ceased to exist. Hoping to capitalize on the defunct antebellum banks' names, Farrington and the Board named their new bank Union and Planters. The board sold $671,300 in stock and established offices in a three-story brownstone in the Memphis
financial district. On September 1, 1869, Union and Planters officially opened for business.
Union and Planters early years were plagued with overdrafts. Farrington became increasingly at odds with the members of the Board of Directors, largely due to his interest in the Memphis & Little Rock Railroad. The struggling railroad company was indebted to Union and Planters, who held loans for the railroad totaling $200,000. In 1874, the bank's directors voted to remove Farrington from office. Outraged, Farrington remained one of the bank's largest stockholders and for the next two years, became a thorn in the bank's side. He refused to pay off the railroad company's loans and he attended board meetings during which he read lengthy protests into the minutes, demanded detailed information on bank operations and voted in opposition to even the most routine measures.
At a time of extreme financial hardship throughout the American South, Union and Planters nevertheless posted profits thanks to the sound advice the bank received from several Wall Street
contacts. Napoleon Hill's assumption of the presidency in 1885, ushered in a period of growth for the bank. With little formal education, Hill had established himself in the business world as owner of a combination grocery store and saloon in Sacramento, California
which he had founded amidst the 1849 gold rush. In 1857, he traveled to Memphis
where he established a cotton and supply business. Like his predecessor Farrington, Hill prospered during the Civil War and emerged from it quite wealthy. Under his leadership from 1885 to 1890, Union and Planters reported profits of nearly $100,000 and deposits of more than one million dollars. With Hill at the helm, Union and Planters fared well during the depression years of the early 1890s. He suffered a stroke in 1894 but continued running the bank until a second stroke in 1897 forced him to transfer power to his "right-hand man," Samuel Read.
Samuel Read began as a clerk in a West Tennessee
country store before moving to Memphis
in 1857 to work in the cotton supply business. During the Civil War, he made a fortune in the dry goods trade. His reputation as an extremely conservative banker was well earned. During his leadership, new customers wishing to open an account with Union and Planters were required to have an endorsement from an established customer who, by endorsing the new account holder, assumed personal responsibility for any default. The bank's problem with overdrafts ceased—and so did the bank's growth. From 1896 to 1900, Union and Planters reported no new account holders, no increases in deposits, and few loans were extended. As a result, Union and Planters was surpassed in size by several other Memphis
banks.
The end of the nineteenth century saw the popularity of trust companies surge at the expense of banks. To stimulate growth, in 1906, Union and Planters merged with Tennessee Trust Company, formerly the Security Bank of Memphis to form the Union and Planters Bank and Trust Company. By offering a wide range of services—including mortgages, trusts, savings accounts, and a brokerage for stocks and bonds. It was the first Memphis
institution to take a department approach to banking. Union and Planters relocated its offices to the Tennessee Trust Building. Read stayed on as the bank's president, an office he held until his death in 1915.
The bank's directors chose young 41-year-old Frank Hill, Napoleon Hill's son, as Read's replacement. Hill vowed to reinvigorate Union and Planters with "young blood, enterprise, aggressiveness and modern ideas." The days of his predecessor's safe and conservative stewardship of the bank was over. Hill encouraged new business and embraced innovation. In 1918 he established Union and Planters first branch location at a time when most banks operated out of a single location. This expansion was achieved by purchasing Mercantile National, a small and troubled institution renamed the Franklin Savings Bank and soon experienced strong growth. The bank celebrated its fiftieth anniversary in 1919, and Hill's leadership gave the bank every reason to celebrate. Union and Planters was now the largest bank in Memphis
and one of the ten largest banks in the South, holding deposits of nearly twenty million dollars and having assets of nearly thirty million dollars. Three years after the first branch opened, a second branch was opened on Memphis
' famous Beale Street
. Union and Planters acquired the North Memphis Savings Bank the following year and converted its offices into a third branch.
In 1924 Union and Planters experienced a major scandal involving an officer, Robert S. Polk. During the bank's decade of expansion, Polk stood out as a driving force. An orphan since he was 16, he came to the bank as a messenger in 1900 then rose through the ranks, his aggressive nature eventually catching the eye of Frank Hill. Polk became a vice president and oversaw bank operations during Hill's summer vacations in Cape Cod
. Hill and Polk became business partners in a number of outside ventures financed by Union and Planters and seemed an unstoppable team. Then, Polk vanished in March 1924 with nearly $42,000 taken from a teller cage, replaced by Hill's endorsed markers. A teller reported to Hill that this was not the first time this had been done, and additional inquiries revealed that Polk had also diverted nearly $20,000 in Liberty Bond
accounts for his own use. Several businessmen came forward with allegations that Polk had offered them loans from Union and Planters they would not have to repay, provided they turn over the loan proceeds to Polk. A day after his disappearance was reported in the local press, Polk wired Hill from El Paso, Texas
that he would be returning soon and that there was no reason for concern. A grand jury was convened in the matter and planned to hear Polk's explanation upon his return. When he did arrive in Memphis, he was scheduled to appear the following morning to offer insight into what had happened the next morning. When he failed to appear as scheduled, authorities went to his residence. There they found Polk's body, his hand gripping the .38 revolver he used to kill himself.
Polk's suicide ruined Hill's credibility and forced him to retire from the bank. Frank Hayden took over as bank president after Union and Planters acquired Guaranty Bank and Trust Company, the company he formerly headed. Hayden inherited a bank in the midst of some serious problems. Polk had embezzled over $500,000 from the bank, not including the questionable loans for which he and Hill were responsible totaling about $8.1 million. Numerous customers claiming to have been defrauded by Polk demanded restitution. Hayden immediately wrote off more than $450,000 in loans, but more drastic action was required. In September 1924 Union and Planters engineered a reverse split, reducing its capital stock from $3.75 million to $1.87 million, and as a result cut shareholder equity in half. New shares were then issued and sold to boost the bank's capital to $2.5 million. Over the next four years Hayden was able to further shore up finances by collecting on bonds that covered some of Polk's theft, as well as successfully fending off lawsuits alleging the bank's responsibility for Polk's fraudulent actions. In the summer of 1928, however, Union and Planters again faced difficult circumstances when its account holders panicked and a bank run occurred. In order to shore up its finances, the bank sought a merger partner, resulting in an association with Rogers Caldwell, a Nashville
investment banker. In 1917 at the age of 27, he began building an empire, as well as a reputation as a financial genius. Within ten years, riding the bull market of the 1920s, he controlled a network of fifty companies valued at over five hundred million dollars. In 1928 he and his associate, former U.S. Senator Luke Lea
, bought a fifty-one percent stake in Manhattan Savings Bank and Trust Company in Memphis
and agreed to merge with Union and Planters. The parties developed a massive reorganization plan, raising new funds to transform Union and Planters into a national bank. Upon completion of the conversion in the spring of 1929 the bank changed its name to Union Planters National Bank and Trust Company.
In the early years of the Depression, Union Planters changed presidents three times before electing Vance J. Alexander, who remained president from 1933 to 1963. Although the bank survived the 1930s, it struggled until the economy was spurred by military spending during World War II
. It opened several new branches, and Union Planters had eight total locations at the end of the 1940s. In the postwar housing boom, Union Planters issued numerous building loans and became aggressive in the area of installment lending, especially car loans. Deposits also expanded at a rapid pace, growing from $93 million in 1941 to more than $250 million in 1948. Under Alexander's leadership, Union Planters followed a consistent strategy: open new branches and focus on retail banking and correspondent banking with rural institutions. By 1961, Union Planters operated thirteen branches and boasted deposits of $400 million. As authority passed to Alexander's successor, the new CEO, John E. Brown, the bank began to slip during the 1960s. With a decrease in correspondent banking, Union Planters overbuilt its branch system to make up the difference. In addition, Brown's managerial style caused problems at the bank. He was reluctant to delegate authority, pay his staff competitive wages, or even invest in office equipment. In order to use the photocopier, for example, bank lawyers had to produce a permission slip
signed by Brown himself. The result was a demoralized staff and the exodus of key executives. In 1967 Brown was replaced by C. Bennett Harrison, who struggled for the next seven years addressing the bank's problems, only landing Union Planters in deeper trouble when in the 1970s higher interest rates turned many high-risk loans into money-losing propositions. In 1971, Union Planters Corporation was formed as a holding company for the bank's operations.
To save Union Planters from impending disaster, William M. Matthews, Jr., was brought in as the bank's new president, replacing Harrison in 1974, but the extent of the bank's difficulties proved far greater than expected. Several officers of the bank, including Executive Vice-President Jesse Barr, had defrauded the bank. Barr and several officers were convicted of criminal charges and sent to prison. To his credit, Matthews openly addressed all problems of the bank with the press. At the same time, he took steps to revitalize the bank, closing unproductive branches and cutting staff while raising salaries to redress the long-term problem of low pay. He also invested heavily in technology. Union Planters, which a decade earlier owned but a single electric typewriter, now became the most technologically advanced bank in the region, allowing it to operate with significantly fewer employees. Furthermore, Matthews all but eliminated commercial lending, preferring instead to focus on investment banking and fee-based products and services. Although he returned the bank to profitability and repaired its tarnished image, after ten years of his leadership Union Planters was at best a lackluster performer.
Matthews was asked to resign as CEO in 1984 and his replacement, Benjamin W. Rawlins, Jr., immediately vowed to return Union Planters to traditional banking services. Within two years the bank showed enough improvement to explore future growth opportunities. The bank began initiating a plan to acquire community banks and by the end of the decade, this acquisition strategy evolved into what bank officials deemed the "Delta Strategy." The Delta Strategy called for the purchase of community banks within 150 miles of Memphis
and urban or suburban banks within 300 miles. Union Planters suffered a setback in the late 1980s when a number of bad real estate loans, coupled with losses from a broker-dealer unit, resulted in a $22 million loss in 1989. But Rawlins was able to improve the balance sheet over the next several quarters and renew Union Planters' acquisition strategy. The pace was especially aggressive in 1993, a year Union Planters picked up thirteen banks and adding some $1.5 billion to its assets. By this time, Union Planters attracted the attention of Wall Street
, as rumors spread over the next few years that it was either fattening itself up for the market or that a larger player in the consolidating world of banking would find it a desirable addition. None of the takeover rumors panned out, however, and Union Planters continued to buy up smaller banks. In 1998, the $2.3 billion acquisition of Magna Group of St. Louis bolstered Union Planters' position in Missouri
and expanded the bank into Iowa
and Illinois
.
In September, 2000, Rawlins suffered a heart attack while on his treadmill jogging and died. During the 16 years he headed Union Planters, the bank grew from $2 billion to $34 billion in assets, operating 800 branches in twelve states, and became one of the thirty largest banks in the country. Rawlins was replaced as chief executive by bank president Jackson W. Moore
, a lawyer who joined Union Planters in 1989. Within months of taking over, he initiated an effort to cut costs and improve profitability during a period of falling interest rates. The bank closed or sold less productive branches, outsourced some back-office functions, and eliminated jobs. Moreover, it only acquired one bank, St. Louis-based Jefferson Savings Bancorp, in February 2001. The addition was also in keeping with another key strategy of Moore's: shifting the focus away from rural community banks to the core urban markets of Memphis
, Nashville
, Indianapolis
, St. Louis, and Miami.
Regions, with over 1,400 branches throughout the South
and Midwest. Both Regions and Union Planters were given an equal number of seats on the board of directors. According to the Federal Reserve Order Approving the Merger, Union Planters Bank was the thirty-ninth largest bank in the United States
, having total consolidated assets of $31.5 billion and controlling deposits of $22.8 billion. Upon completion of the merger, Regions Financial Corporation became the twenty-first largest bank in the United States
.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
financial institution and multi-state bank holding corporation headquartered in Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
prior to being acquired by Regions Financial Corporation. With over $34 billion in assets, Union Planters Bank was the largest bank in Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
and among the thirty largest bank holding companies in the United States. Union Planters operated over 760 banking centers in the states of Alabama
Alabama
Alabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
, Arkansas
Arkansas
Arkansas is a state located in the southern region of the United States. Its name is an Algonquian name of the Quapaw Indians. Arkansas shares borders with six states , and its eastern border is largely defined by the Mississippi River...
, 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...
, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
, Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
, Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
, Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
, Mississippi
Mississippi
Mississippi is a U.S. state located in the Southern United States. Jackson is the state capital and largest city. The name of the state derives from the Mississippi River, which flows along its western boundary, whose name comes from the Ojibwe word misi-ziibi...
, Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
, and Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
.
History
Union and Planters Bank was founded by William Farrington, a MemphisMemphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
businessman who had prospered during the American Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
and emerged the wealthy head of an insurance company. In 1868, Farrington and the Board of Directors of Desoto Insurance Company applied to convert the company to a bank and they received government approval on February 12, 1869. Prior to the Civil War, the two most prominent banks in Memphis were Union Bank
Union Bank
Union Bank was established in 1991 and had its headquarters in Karachi, Sindh, Pakistan. Prior to the merger with Standard Chartered Bank , it was Pakistan's eighth largest bank and had 65 branches in some 22 cities, about US$2 billion in assets, and about 400,000 customers.In 2006, Standard...
and the Branch Planters Bank. The assets of both, however, were seized during the war and the two banks had ceased to exist. Hoping to capitalize on the defunct antebellum banks' names, Farrington and the Board named their new bank Union and Planters. The board sold $671,300 in stock and established offices in a three-story brownstone in the Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
financial district. On September 1, 1869, Union and Planters officially opened for business.
Union and Planters early years were plagued with overdrafts. Farrington became increasingly at odds with the members of the Board of Directors, largely due to his interest in the Memphis & Little Rock Railroad. The struggling railroad company was indebted to Union and Planters, who held loans for the railroad totaling $200,000. In 1874, the bank's directors voted to remove Farrington from office. Outraged, Farrington remained one of the bank's largest stockholders and for the next two years, became a thorn in the bank's side. He refused to pay off the railroad company's loans and he attended board meetings during which he read lengthy protests into the minutes, demanded detailed information on bank operations and voted in opposition to even the most routine measures.
At a time of extreme financial hardship throughout the American South, Union and Planters nevertheless posted profits thanks to the sound advice the bank received from several Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
contacts. Napoleon Hill's assumption of the presidency in 1885, ushered in a period of growth for the bank. With little formal education, Hill had established himself in the business world as owner of a combination grocery store and saloon in Sacramento, California
Sacramento, California
Sacramento is the capital city of the U.S. state of California and the county seat of Sacramento County. It is located at the confluence of the Sacramento River and the American River in the northern portion of California's expansive Central Valley. With a population of 466,488 at the 2010 census,...
which he had founded amidst the 1849 gold rush. In 1857, he traveled to Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
where he established a cotton and supply business. Like his predecessor Farrington, Hill prospered during the Civil War and emerged from it quite wealthy. Under his leadership from 1885 to 1890, Union and Planters reported profits of nearly $100,000 and deposits of more than one million dollars. With Hill at the helm, Union and Planters fared well during the depression years of the early 1890s. He suffered a stroke in 1894 but continued running the bank until a second stroke in 1897 forced him to transfer power to his "right-hand man," Samuel Read.
Samuel Read began as a clerk in a West Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
country store before moving to Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
in 1857 to work in the cotton supply business. During the Civil War, he made a fortune in the dry goods trade. His reputation as an extremely conservative banker was well earned. During his leadership, new customers wishing to open an account with Union and Planters were required to have an endorsement from an established customer who, by endorsing the new account holder, assumed personal responsibility for any default. The bank's problem with overdrafts ceased—and so did the bank's growth. From 1896 to 1900, Union and Planters reported no new account holders, no increases in deposits, and few loans were extended. As a result, Union and Planters was surpassed in size by several other Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
banks.
The end of the nineteenth century saw the popularity of trust companies surge at the expense of banks. To stimulate growth, in 1906, Union and Planters merged with Tennessee Trust Company, formerly the Security Bank of Memphis to form the Union and Planters Bank and Trust Company. By offering a wide range of services—including mortgages, trusts, savings accounts, and a brokerage for stocks and bonds. It was the first Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
institution to take a department approach to banking. Union and Planters relocated its offices to the Tennessee Trust Building. Read stayed on as the bank's president, an office he held until his death in 1915.
The bank's directors chose young 41-year-old Frank Hill, Napoleon Hill's son, as Read's replacement. Hill vowed to reinvigorate Union and Planters with "young blood, enterprise, aggressiveness and modern ideas." The days of his predecessor's safe and conservative stewardship of the bank was over. Hill encouraged new business and embraced innovation. In 1918 he established Union and Planters first branch location at a time when most banks operated out of a single location. This expansion was achieved by purchasing Mercantile National, a small and troubled institution renamed the Franklin Savings Bank and soon experienced strong growth. The bank celebrated its fiftieth anniversary in 1919, and Hill's leadership gave the bank every reason to celebrate. Union and Planters was now the largest bank in Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
and one of the ten largest banks in the South, holding deposits of nearly twenty million dollars and having assets of nearly thirty million dollars. Three years after the first branch opened, a second branch was opened on Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
' famous Beale Street
Beale Street
Beale Street is a street in Downtown Memphis, Tennessee, which runs from the Mississippi River to East Street, a distance of approximately . It is a significant location in the city's history, as well as in the history of the blues. Today, the blues clubs and restaurants that line Beale Street are...
. Union and Planters acquired the North Memphis Savings Bank the following year and converted its offices into a third branch.
In 1924 Union and Planters experienced a major scandal involving an officer, Robert S. Polk. During the bank's decade of expansion, Polk stood out as a driving force. An orphan since he was 16, he came to the bank as a messenger in 1900 then rose through the ranks, his aggressive nature eventually catching the eye of Frank Hill. Polk became a vice president and oversaw bank operations during Hill's summer vacations in Cape Cod
Cape Cod
Cape Cod, often referred to locally as simply the Cape, is a cape in the easternmost portion of the state of Massachusetts, in the Northeastern United States...
. Hill and Polk became business partners in a number of outside ventures financed by Union and Planters and seemed an unstoppable team. Then, Polk vanished in March 1924 with nearly $42,000 taken from a teller cage, replaced by Hill's endorsed markers. A teller reported to Hill that this was not the first time this had been done, and additional inquiries revealed that Polk had also diverted nearly $20,000 in Liberty Bond
Liberty bond
A Liberty Bond was a war bond that was sold in the United States to support the allied cause in World War I. Subscribing to the bonds became a symbol of patriotic duty in the United States and introduced the idea of financial securities to many citizens for the first time. The Act of Congress which...
accounts for his own use. Several businessmen came forward with allegations that Polk had offered them loans from Union and Planters they would not have to repay, provided they turn over the loan proceeds to Polk. A day after his disappearance was reported in the local press, Polk wired Hill from El Paso, Texas
El Paso, Texas
El Paso, is a city in and the county seat of El Paso County, Texas, United States, and lies in far West Texas. In the 2010 census, the city had a population of 649,121. It is the sixth largest city in Texas and the 19th largest city in the United States...
that he would be returning soon and that there was no reason for concern. A grand jury was convened in the matter and planned to hear Polk's explanation upon his return. When he did arrive in Memphis, he was scheduled to appear the following morning to offer insight into what had happened the next morning. When he failed to appear as scheduled, authorities went to his residence. There they found Polk's body, his hand gripping the .38 revolver he used to kill himself.
Polk's suicide ruined Hill's credibility and forced him to retire from the bank. Frank Hayden took over as bank president after Union and Planters acquired Guaranty Bank and Trust Company, the company he formerly headed. Hayden inherited a bank in the midst of some serious problems. Polk had embezzled over $500,000 from the bank, not including the questionable loans for which he and Hill were responsible totaling about $8.1 million. Numerous customers claiming to have been defrauded by Polk demanded restitution. Hayden immediately wrote off more than $450,000 in loans, but more drastic action was required. In September 1924 Union and Planters engineered a reverse split, reducing its capital stock from $3.75 million to $1.87 million, and as a result cut shareholder equity in half. New shares were then issued and sold to boost the bank's capital to $2.5 million. Over the next four years Hayden was able to further shore up finances by collecting on bonds that covered some of Polk's theft, as well as successfully fending off lawsuits alleging the bank's responsibility for Polk's fraudulent actions. In the summer of 1928, however, Union and Planters again faced difficult circumstances when its account holders panicked and a bank run occurred. In order to shore up its finances, the bank sought a merger partner, resulting in an association with Rogers Caldwell, a Nashville
Nashville, Tennessee
Nashville is the capital of the U.S. state of Tennessee and the county seat of Davidson County. It is located on the Cumberland River in Davidson County, in the north-central part of the state. The city is a center for the health care, publishing, banking and transportation industries, and is home...
investment banker. In 1917 at the age of 27, he began building an empire, as well as a reputation as a financial genius. Within ten years, riding the bull market of the 1920s, he controlled a network of fifty companies valued at over five hundred million dollars. In 1928 he and his associate, former U.S. Senator Luke Lea
Luke Lea
Luke Lea may refer to:* Luke Lea , U.S. Representative from Tennessee, 1833–1837* Luke Lea , U.S. Senator from Tennessee, 1911–1917; founder of The Tennessean newspaper* Luke Lea, Commissioner of Indian Affairs 1850-1853...
, bought a fifty-one percent stake in Manhattan Savings Bank and Trust Company in Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
and agreed to merge with Union and Planters. The parties developed a massive reorganization plan, raising new funds to transform Union and Planters into a national bank. Upon completion of the conversion in the spring of 1929 the bank changed its name to Union Planters National Bank and Trust Company.
In the early years of the Depression, Union Planters changed presidents three times before electing Vance J. Alexander, who remained president from 1933 to 1963. Although the bank survived the 1930s, it struggled until the economy was spurred by military spending during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. It opened several new branches, and Union Planters had eight total locations at the end of the 1940s. In the postwar housing boom, Union Planters issued numerous building loans and became aggressive in the area of installment lending, especially car loans. Deposits also expanded at a rapid pace, growing from $93 million in 1941 to more than $250 million in 1948. Under Alexander's leadership, Union Planters followed a consistent strategy: open new branches and focus on retail banking and correspondent banking with rural institutions. By 1961, Union Planters operated thirteen branches and boasted deposits of $400 million. As authority passed to Alexander's successor, the new CEO, John E. Brown, the bank began to slip during the 1960s. With a decrease in correspondent banking, Union Planters overbuilt its branch system to make up the difference. In addition, Brown's managerial style caused problems at the bank. He was reluctant to delegate authority, pay his staff competitive wages, or even invest in office equipment. In order to use the photocopier, for example, bank lawyers had to produce a permission slip
Permission slip
A permission slip in the United States is a form that a school or other organization sends home with a student to a parent in which the parent provides authorization for minor children to travel under the auspices of the school or organization for some type of event, such as a field trip.Permission...
signed by Brown himself. The result was a demoralized staff and the exodus of key executives. In 1967 Brown was replaced by C. Bennett Harrison, who struggled for the next seven years addressing the bank's problems, only landing Union Planters in deeper trouble when in the 1970s higher interest rates turned many high-risk loans into money-losing propositions. In 1971, Union Planters Corporation was formed as a holding company for the bank's operations.
To save Union Planters from impending disaster, William M. Matthews, Jr., was brought in as the bank's new president, replacing Harrison in 1974, but the extent of the bank's difficulties proved far greater than expected. Several officers of the bank, including Executive Vice-President Jesse Barr, had defrauded the bank. Barr and several officers were convicted of criminal charges and sent to prison. To his credit, Matthews openly addressed all problems of the bank with the press. At the same time, he took steps to revitalize the bank, closing unproductive branches and cutting staff while raising salaries to redress the long-term problem of low pay. He also invested heavily in technology. Union Planters, which a decade earlier owned but a single electric typewriter, now became the most technologically advanced bank in the region, allowing it to operate with significantly fewer employees. Furthermore, Matthews all but eliminated commercial lending, preferring instead to focus on investment banking and fee-based products and services. Although he returned the bank to profitability and repaired its tarnished image, after ten years of his leadership Union Planters was at best a lackluster performer.
Matthews was asked to resign as CEO in 1984 and his replacement, Benjamin W. Rawlins, Jr., immediately vowed to return Union Planters to traditional banking services. Within two years the bank showed enough improvement to explore future growth opportunities. The bank began initiating a plan to acquire community banks and by the end of the decade, this acquisition strategy evolved into what bank officials deemed the "Delta Strategy." The Delta Strategy called for the purchase of community banks within 150 miles of Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
and urban or suburban banks within 300 miles. Union Planters suffered a setback in the late 1980s when a number of bad real estate loans, coupled with losses from a broker-dealer unit, resulted in a $22 million loss in 1989. But Rawlins was able to improve the balance sheet over the next several quarters and renew Union Planters' acquisition strategy. The pace was especially aggressive in 1993, a year Union Planters picked up thirteen banks and adding some $1.5 billion to its assets. By this time, Union Planters attracted the attention of Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
, as rumors spread over the next few years that it was either fattening itself up for the market or that a larger player in the consolidating world of banking would find it a desirable addition. None of the takeover rumors panned out, however, and Union Planters continued to buy up smaller banks. In 1998, the $2.3 billion acquisition of Magna Group of St. Louis bolstered Union Planters' position in Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
and expanded the bank into Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
and Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
.
In September, 2000, Rawlins suffered a heart attack while on his treadmill jogging and died. During the 16 years he headed Union Planters, the bank grew from $2 billion to $34 billion in assets, operating 800 branches in twelve states, and became one of the thirty largest banks in the country. Rawlins was replaced as chief executive by bank president Jackson W. Moore
Jackson W. Moore
Jackson W. Moore is an American attorney and retired Executive Chairman of Union Planters Bank and Regions Financial Corporation.-Early career:...
, a lawyer who joined Union Planters in 1989. Within months of taking over, he initiated an effort to cut costs and improve profitability during a period of falling interest rates. The bank closed or sold less productive branches, outsourced some back-office functions, and eliminated jobs. Moreover, it only acquired one bank, St. Louis-based Jefferson Savings Bancorp, in February 2001. The addition was also in keeping with another key strategy of Moore's: shifting the focus away from rural community banks to the core urban markets of Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, Nashville
Nashville, Tennessee
Nashville is the capital of the U.S. state of Tennessee and the county seat of Davidson County. It is located on the Cumberland River in Davidson County, in the north-central part of the state. The city is a center for the health care, publishing, banking and transportation industries, and is home...
, Indianapolis
Indianapolis
Indianapolis is the capital of the U.S. state of Indiana, and the county seat of Marion County, Indiana. As of the 2010 United States Census, the city's population is 839,489. It is by far Indiana's largest city and, as of the 2010 U.S...
, St. Louis, and Miami.
Acquisition & Merger
In 2004, Regions Financial Corporation entered merger negotiations with Union Planters Bank. It was a $5.9 billion transaction and resulted in the emergence of one bank,Regions, with over 1,400 branches throughout the South
South
South is a noun, adjective, or adverb indicating direction or geography.South is one of the four cardinal directions or compass points. It is the opposite of north and is perpendicular to east and west.By convention, the bottom side of a map is south....
and Midwest. Both Regions and Union Planters were given an equal number of seats on the board of directors. According to the Federal Reserve Order Approving the Merger, Union Planters Bank was the thirty-ninth largest bank in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, having total consolidated assets of $31.5 billion and controlling deposits of $22.8 billion. Upon completion of the merger, Regions Financial Corporation became the twenty-first largest bank in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.