A FINANCIAL HISTORY OF BANK OF AMERICA
Amadeo Giannini founded the Bank of Italy in San Francisco in 1904. Two years later he saved the bank's cash, gold, and notes before it was destroyed by fire after the 1906 earthquake. In 1921, Giannini circumvented a federal ruling prohibiting branch banking by acquiring the Bank of America of Los Angeles, which had 21 branches. In 1928, Giannini formed a holding company, Transamerica Corporation, to manage his banks and other businesses. By 1930, Bank of Italy and Bank of America were operating as Bank of America (BofA). During the 1930s, Giannini was troubled by regulatory investigations, and in 1937, Transamerica was forced to divest 58 percent of Bank of America (Healy, 1995). By the end of 1945, Bank of America had passed Chase Manhattan to become the largest American bank, but by 1953, action by the Securities and Exchange Commission resulted in Transamerica's divestiture of all Bank of America stock.
During the 1950s BofA decentralized; the company encouraged local managers to make decisions based on local conditions. This was the beginning of the bank's successful transformation into a community-based branch operation that resulted in the company achieving the impressive financial results it has posted. However, BofA also expanded internationally; by 1970 it was one of the largest international lenders based in the United States. It was also an early pioneer in consumer credit, introducing the BankAmericard (which later became VISA) in 1958 (Kutler, 1993). BankAmerica Corporation, a holding company, was formed in 1968. In the late 1960s and early 1970s, BofA's size and wealth made it a target for social protest groups, and it made efforts to increase its minority hiring and widen the scope of its lending policies. These efforts were directed not only at decreasing the effect of the protest groups, but in increasing the company's market share and remaining competitive in ...