User:Heatherer/Bank of New York Mellon History

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History[edit]

Bank of New York[edit]

The Walton Mansion housed the Bank of New York from 1784 to 1787.
Alexander Hamilton shortly after the American Revolution.

The Bank of New York was founded by Alexander Hamilton on June 9, 1784, in the old Walton Mansion in New York City.[1][2] Due to local politics, it wasn't able to procure a charter until 1791.[2]

The bank provided the United States government its first loan in 1789. The loan was orchestrated by Hamilton, then Secretary of the Treasury, and it paid the salaries of United States Congress members and President George Washington.[3] The Bank of New York was the first company to be traded on the New York Stock Exchange when it first opened in 1792.[4]

During the 1800s, the bank was known for its conservative lending practices that allowed it to weather financial crises. It was involved in the funding of the Morris and Erie canals, and steamboat companies.[5][6] The bank helped finance both the War of 1812 and the Union Army during the American Civil War.[7][8] Following the Civil War, the bank loaned money to many major infrastructure projects, including utilities, railroads, and the New York City Subway.[5]

Through the early 1900s, the Bank of New York continued to expand and prosper.[6][8] In July 1922, the bank merged with the New York Life Insurance and Trust Company.[9] The bank continued to profit and pay dividends throughout the Great Depression, and its total deposits increased during the decade.[6][8] In 1948, the Bank again merged, this time with the Fifth Avenue Bank, which was followed by a merger in 1966 with the Empire Trust Company.[5][8] The bank's holding company was created in 1969.[5]

In 1988, the Bank of New York merged with Irving Bank Corporation.[10] From 1993 to 1998, the bank made 33 acquisitions, including acquiring JP Morgan’s Global Custody Business in 1995.[8] Ivy Asset Management was acquired in 2000, and the bank acquired Pershing LLC, the United States' second-largest trade clearinghouse, in 2003.[8][11] In 2006, the Bank of New York traded its retail banking and regional middle-market businesses for J.P. Morgan Chase's corporate trust assets. The deal signaled the bank's exit from retail banking.[12]

Mellon Financial[edit]

Mellon Financial was founded as T. Mellon & Sons' Bank in Pittsburgh, Pennsylvania in 1869 by retired judge Thomas Mellon and his sons Andrew W. Mellon and Richard B. Mellon.[13]The bank invested in and helped found numerous industrial firms in the late 1800s and early 1900s including Alcoa, Westinghouse, Gulf Oil, General Motors and Bethlehem Steel.[14][15] Both Gulf Oil and Alcoa are, according to the financial media, considered to be T. Mellon & Sons' most successful financial investments.[15][14]

In 1902, T. Mellon & Sons' name was changed to the Mellon National Bank.[14] The firm merged with the Union Trust Company, a business founded by Andrew Mellon, in 1946. The newly formed organization resulting from the merger was named the Mellon National Bank and Trust Company, and was Pittsburgh's first US$1 billion bank.[16]

The bank formed the first dedicated family office in the United States in 1971.[17] A reorganization in 1972 led to the bank's name changing to Mellon Bank, N.A. and the formation of a holding company, Mellon National Corporation.[13][14]

Mellon Bank acquired multiple banks and financial institutions in Pennsylvania during the 1980s and 1990s.[18] In 1992, Mellon acquired 54 branch offices of Philadelphia Savings Fund Society, the first savings bank in the United States, founded in 1819.[19]

In 1993, Mellon acquired The Boston Company from American Express and AFCO Credit Corporation from The Continental Corporation. The following year, Mellon merged with the Dreyfus Corporation, bringing its mutual funds under its umbrella.[14] In 1999, Mellon Bank Corporation became Mellon Financial Corporation. Two years later, it exited the retail banking business by selling its assets and retail bank branches to Citizens Financial Group.[14]

Merger[edit]

The Bank of New York Mellon headquarters at 1 Wall Street.

On December 4, 2006, the Bank of New York and Mellon Financial Corporation announced they would merge.[20] The merger created the world's largest securities servicing company and one of the largest asset management firms by combining Mellon’s wealth-management business and the Bank of New York’s asset-servicing and short-term-lending specialties.[1][20]

The deal was valued at $16.5 billion and under its terms, the Bank of New York's shareholders received 0.9434 shares in the new company for each share of the Bank of New York that they owned, while Mellon Financial shareholders received 1 share in the new company for each Mellon share they owned.[7] The Bank of New York and Mellon Financial entered into mutual stock option agreements for 19.9 percent of the issuer's outstanding common stock.[20] The merger was finalized on July 1, 2007.[21] The company's principal office of business at the One Wall Street office previously held by the Bank of New York.[22] The full name of the company became The Bank of New York Mellon Corp., with the BNY Mellon brand name being used for most lines of business.[22][21]

Recent history[edit]

In October 2008, the U.S. Treasury named BNY Mellon the master custodian of the Troubled Asset Relief Program (TARP) bailout fund during the financial crisis of 2007 to 2010. BNY Mellon won the assignment, which included handling accounting and record-keeping for the program, through a bidding process.[23] In November 2008, the company announced that it would lay-off 1,800 employees, or 4 percent of its global workforce, due to the financial crisis.[24] According to the results of a February 2009 stress test conducted by federal regulators, BNY Mellon was one of only three banks that could withstand a worsening economic situation.[25] The company received $3 billion from TARP, which it paid back in full in June 2009, along with US$136 million to buy back warrants from the Treasury in August 2009.[26][27]

Also in August 2009, BNY Mellon purchased Insight Investment, a management business for external funds, from Lloyds Banking Group.[28] The company acquired PNC Financial Services' Global Investment Servicing Inc. in July 2010 and Talon Asset Management's wealth management business in 2011.[29][30]

By 2013, the company's capital had steadily risen from the financial crisis. In the results of the Federal Reserve's Dodd-Frank stress test in 2013, the bank was least affected by hypothetical extreme economic scenarios among banks tested.[31] It was also a top performer on the same test in 2014.[32]

BNY Mellon began a major branding campaign in 2013 to increase awareness of the company.[33] It adopted the slogan "The Investments Company for the World" and changed its logo.[33][34]

In May 2014, BNY Mellon agreed to sell the building housing its headquarters to increase efficiency. The company announced plans to move its headquarters to lower Manhattan in 2015, leasing space at Brookfield Place.[35] In June 2014, the company combined its global markets, global collateral services and prime services to create the new Markets Group. Kurt Woetzel was named the group's president.[36] The company expanded its Hong Kong office in October 2014 as part of the company's plans to grow its wealth management business.[37] It opened the BNY Mellon Innovation Center, an office focused on emerging technologies, big data, digital and cloud-based projects, in Palo Alto in November 2014.[38][39]

  1. ^ a b David Teather (December 5, 2006). "Bank of New York merges with Mellon in £8bn deal". The Guardian. Retrieved 14 January 2015.
  2. ^ a b Steven H. Jaffe; Jessica Lautin (2014). Capital of Capital: Money, Banking, and Power in New York City. New York: Columbia University Press. pp. 9, 23. ISBN 0231537719. Retrieved 14 January 2015.
  3. ^ Rhodes' Journal of Banking ...: A Practical Banker's Magazine vol 21. Chicago: B. Rhodes & Company. 1894. p. 752. Retrieved 14 January 2015.
  4. ^ "Bank of New York Profile". The New York Job Source. Retrieved 2007-08-08.
  5. ^ a b c d Charles R. Geisst (2009). Encyclopedia of American Business History. Infobase Publishing. pp. 42–43. ISBN 1438109873. Retrieved 14 January 2015.
  6. ^ a b c "Bank of New York Building Profile". NYC Architecture. Retrieved 22 January 2015.
  7. ^ a b Adrian Cox (December 4, 2006). "Bank of New York agrees to acquire Mellon Financial". The Salt Lake Tribune. Retrieved 22 January 2015.
  8. ^ a b c d e f "The Bank of New York Company, Inc. - Company Profile, Information, Business Description, History, Background Information on The Bank of New York Company, Inc". referenceforbusiness.com. Reference for Business. Retrieved 14 January 2015.
  9. ^ "New York's Oldest". TIME. time.com. 26 March 1934. Retrieved 14 January 2015.
  10. ^ "Irving Bank Deal Completed". The New York Times. January 2, 1989. Retrieved 22 January 2015.
  11. ^ "Bank of New York Acquires CSFB's Pershing For $2 Billion". TheStreet.com. January 8, 2003. Retrieved 14 January 2015.
  12. ^ Kathie O'Donnell (April 10, 2006). "Bank of NY and J.P. Morgan swap assets". MarketWatch. Retrieved 22 January 2015.
  13. ^ a b "Mellon Financial Profile". The New York Job Source. Retrieved 14 January 2015.
  14. ^ a b c d e f "Mellon Financial Corporation - Company Profile, Information, Business Description, History, Background Information on Mellon Financial Corporation". referenceforbusiness.com. Reference for Business. Retrieved 22 January 2015.
  15. ^ a b Abram Brown (July 8, 2014). "175 Years Later, The Mellons Have Never Been Richer. How'd They Do It?". Forbes. Retrieved 22 January 2015.
  16. ^ "The Mellons Go to Work Again". TIME. February 7, 1946. Retrieved 22 January 2015.
  17. ^ Will Ashworth (January 8, 2015). "The light shines brightly on the family office". Wealth Professional. Retrieved 22 January 2015.
  18. ^ "Pittsburgh pride". Vault. Retrieved 14 January 2015.
  19. ^ Michael Quint (December 6, 1989). "Mellon Bank to Buy 54 of Meritor's Units". The New York Times. Retrieved 22 January 2015.
  20. ^ a b c Lloyd Vries (December 4, 2006). "Bank Of New York To Merge With Mellon". CBS News. Retrieved 22 January 2015.
  21. ^ a b Patty Tascarella (July 2, 2007). "Bank of New York, Mellon complete merger". Pittsburgh Business Times. Retrieved 23 January 2015.
  22. ^ a b Dan Fitzpatrick (May 25, 2007). "Mellon Merger OK'D, HQ On Way Out". Pittsburgh Post-Gazette. {{cite news}}: |access-date= requires |url= (help)
  23. ^ Eric Dash (October 14, 2008). "Bank of New York Mellon Will Oversee Bailout Fund". The New York Times. Retrieved 15 January 2015.
  24. ^ "WaMu, BNY Mellon latest to shed jobs". NBC News. AP. November 21, 2011. Retrieved 15 January 2015.
  25. ^ Maha Atal (July 23, 2009). "Banker: "TARP helped avert a global calamity"". Fortune. Retrieved 23 January 2015.
  26. ^ Stephen Bernard (June 17, 2009). "Bank of New York Mellon repays TARP funds". The Seattle Times. Retrieved 15 January 2015.
  27. ^ Johnathan Stempel (August 5, 2009). "Bank of NY Mellon pays $136 mln for TARP warrants". Reuters. Retrieved 15 January 2015.
  28. ^ Steve McGrath and Margot Patrick (August 13, 2009). "Lloyds to Sell Insight Investment to Bank of New York Mellon". The Wall Street Journal. Retrieved 14 January 2015.
  29. ^ "BNY Mellon Initiates GFI Group". Zacks. July 7, 2010. Retrieved 15 January 2015.
  30. ^ Charles Stein (April 28, 2011). "BNY Mellon to Buy Talon Wealth Management to Expand in Chicago". Bloomberg. Retrieved 15 January 2015.
  31. ^ Joe Adler (March 7, 2013). "Fed Unveils Dodd-Frank Stress Test Results". American Banker. Retrieved 23 January 2015.
  32. ^ Halah Touryalai (March 20, 2014). "Stress Test Results: Big Banks Look Healthier As 29 of 30 Pass, Zions Fails". Forbes. Retrieved 23 January 2015.
  33. ^ a b Noreen O'Leary (August 28, 2013). "BNY Mellon Review Meetings Set for Next Week New CMO Judy Hu leads the search". AdWeek. Retrieved 15 January 2015.
  34. ^ Andrew McMains (September 12, 2013). "TBWA Wins BNY Mellon's Global Account". Adweek. Retrieved 15 January 2015.
  35. ^ Saabira Chaudhuri and Keiko Morris (June 26, 2014). "BNY Mellon to Keep Headquarters in New York City". The Wall Street Journal. Retrieved 15 January 2015.
  36. ^ Rick Baert (June 25, 2014). "BNY Mellon combines 3 units into new group". Pensions & Investments. Retrieved 20 January 2015.
  37. ^ Henny Sender (October 22, 2015). "BNY Mellon launches Asia wealth management strategy". Financial Times. Retrieved 14 January 2015.
  38. ^ Clint Boulton (November 20, 2014). "BNY Mellon Hiring Tech Talent for Silicon Valley Innovation Center". The Wall Street Journal. Retrieved 23 January 2015.
  39. ^ Greg MacSweeney (December 2, 2014). "BNY Mellon Aims to Tap Data Science Talent In Silicon Valley". Wall Street and Technology. Retrieved 15 January 2015.
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