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BankAmerica’s Love of Growth Goes Way Back With PM-Bank Merger,Bjt

August 13, 1991

SAN FRANCISCO (AP) _ There was a time when Bank of America’s main assets were a plank and two barrels.

Today, financial giant BankAmerica Corp., the bank’s parent holding company, is set to absorb Security Pacific Corp. in a move that would result in a West Coast superpower with assets totaling about $190 billion.

Headlines blaze that the merger would result in the nation’s second-biggest bank. Actually, it would merely put BankAmerica back in a familiar position.

There was a long stretch of time when ″largest bank″ and ″Bank of America″ were synonymous. From 1945 to 1979, the bank was the largest in the world.

But that, as well as the wave of megamergers sweeping today’s banking industry, was far in the future when Amadeo Peter Giannini placed the plank over the barrels to open a waterfront office after the city’s 1906 earthquake.

Two years before, in 1904, Giannini had founded the Bank of Italy. The bank, the acorn from which BofA and all its branches would grow, opened in a tavern in North Beach, the city’s mainly Italian neighborhood.

Giannini dubbed his bank ″The Little Fellow’s Bank″ and made loans as small as $25. That was a revolutionary idea at a time when commercial banks shied away from making loans to consumers of average means.

Giannini had another unheard-of idea when he opened the temporary bank on the docks. When he lent to those who wanted to rebuild the city, Giannini was willing to accept ″only their character as collateral,″ according to the bank’s historical records.

″The gamble paid off,″ it said. ″The bank gained hundreds of new depositors. And every penny loaned out was repaid.″

There were other gambles ahead. The bank helped build the Golden Gate Bridge when no other bank would purchase the bonds to finance the construction. It also lent money to fledgling movie makers.

″Without A.P. Giannini, the movies and Hollywood as we know them would have developed much more slowly,″ wrote director Frank Capra, whose movies include ″It’s A Wonderful Life,″ the Christmas classic with a plot involving a failed financial institution. ″The bank revived the spirit of the whole motion picture industry.″

The bank’s name was changed to Bank of America in 1930, reflecting the manifest destiny envisioned by its founder.

A nationwide banking system was always Giannini’s ″great dream,″ said Duncan Knowles, a bank vice president and its official historian.

″When nationwide branch banking is an accomplished fact, America will have come of age financially,‴ Knowles said Giannini, who died in 1949, propounded in 1935.

″This goes right along with what he had in mind,″ Knowles said of the BankAmerica merger with Security Pacific.

At the shareholders meeting in May, chief executive Richard Rosenberg told the annual gathering he expected Bank of America to become a nationwide bank by the end of the decade.

In the mid-1980s, when BankAmerica was staggering from a series of setbacks, it would have been difficult to find an executive willing to publicly make such a forecast.

The bank lost $1.8 billion from 1985 through 1987, mostly because of bad loans. Divestitures, large layoffs, and a nearly complete turnover in top management led to the bank’s recovery.

During those days, the bank’s executives said concentrating on retail banking in California and the West was enough of an ambition.

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