NationsBank → BankAmerica
The largest bank merger in US history when it closed in September 1998: Charlotte's NationsBank took over San Francisco's BankAmerica in a $62bn exchange of shares, adopted the better-known Bank of America name and kept control, management and headquarters in North Carolina.
Produced the first US bank with branches from coast to coast, trading under the Bank of America name.
- Value
- $62B
- Announced
- April 1998
- Completed
- September 1998
- Sector
- Banking
- Deal type
- merger
- Acquirer
- NationsBank (United States)
- Target
- BankAmerica (United States)
Why it mattered
NationsBank was Hugh McColl's creation. Starting from North Carolina National Bank, he bought the failed First Republic Bank Corporation of Dallas from the FDIC, then more than 200 thrifts and community banks, merged with C&S/Sovran in 1991 to form NationsBank, and added Boatmen's Bancshares for $9.6bn and Florida's Barnett Banks for $15.5bn. BankAmerica had consolidated the West Coast by buying Security Pacific in 1992, but by 1997 it had fallen behind NationsBank in US deposits. A 1994 federal law had opened the way to interstate banking and branching.
The merger was announced on 13 April 1998. Each BankAmerica share became 1.1316 shares of a new holding company based in Charlotte; McColl would be chairman and chief executive, and BankAmerica's chief executive, David Coulter, president and his expected successor. Regulators asked only for the sale of 13 branches in New Mexico towns that would otherwise have been left with a single bank. The deal closed on 30 September 1998, creating the largest US bank, with $572bn of assets, 8% of the nation's deposits, almost 5,000 banking offices in 22 states and the District of Columbia, and relationships with 30 million households.
What it left behind
The first combined results, in October 1998, showed the Russian crisis reaching the new bank: they included a $372m write-down of a credit to a trading and investment firm — BankAmerica had lent $1.4bn to D. E. Shaw, which lost heavily in the crisis — and a $500m reserve against global conditions. Coulter left the same month, and NationsBank's Ken Lewis became McColl's successor in 2001. Under Lewis the bank kept buying: FleetBoston for $47bn in 2004, then Countrywide and Merrill Lynch in 2008; losses at Merrill led Lewis to force out John Thain, who ran the combined investment bank, in January 2009. Lewis stepped down that year and was replaced by Brian Moynihan, the first leader without NCNB or NationsBank roots. The bank remains based in Charlotte and is the second-largest US banking group by assets. When a buyer takes the target's name, the brand says little about control; board seats, the chief executive's succession and the headquarters show who bought whom.