Chemical Bank was a bank with headquarters in New York City from 1824 to 1996. By the end of 1995, Chemical was the third largest bank in the US, with assets of approximately $ 182.9 billion and over 39,000 employees across the board world.
Beginning in 1920 and accelerating in the 1980s and 1990s, Chemistry is a leading consolidator of the US banking industry, acquiring Chase Manhattan Bank, Hanover Producers, Texas Commerce Bank, and Corn Exchange Bank among others. After 1968, the bank operated as the principal subsidiary of the parent company of the bank which was eventually renamed to Chemical Banking Corporation .
After the Chase chemical acquisition in 1996, the bank adopted the glorious Chase brand. What was once Chemistry is the core of JPMorgan Chase today.
Video Chemical Bank
Overview of the company
Chemical Bank is a major operating subsidiary of Chemical Banking Corporation, the parent company of the bank. By the end of 1995, before the merger with Chase Manhattan Bank, Chemical was the third largest bank in the United States with total assets, with $ 182.9 billion. The Chemical Banking Corporation is the fifth largest bank holding company in terms of total assets.
Of the $ 182.9 billion Chemical, the bank held about $ 82.1 billion in loans, including mortgage loans, other consumer loans, and commercial loans in the US and internationally. Among the largest international exposure of Chemistry are to Japan, Germany, and England. Other assets on bank balance sheets include cash as well as various debt and equity securities.
Chemical reported a record net income of $ 1.8 billion for 1995. The level of chemical capital at the end of 1995 remained strong, with the capital adequacy ratio far exceeding regulatory requirements. Tier 1 and Total Capital Corporations are 8.5% and 12.1%, respectively.
Chemistry is one of the leading banks in the US, active in both corporate and retail banking. In retail banking, Chemical provides private and commercial checking accounts, savings and deposit accounts, personal loans, consumer financing and mortgage banking as well as estate trust and administration.
The corporate banking corporation provides a wide range of business loans, leasing, real estate financing, money transfers, and cash management among other services. Chemistry is one of the leading bank lenders for small and medium-sized businesses. Chemistry also has a significant presence in investment banking as well as corporate debt guarantees and equity securities.
Business line
Prior to the 1996 merger with Chase, Chemical had two operating segments: Global Bank and Consumer & amp; Banking Relations.
- Global Bank Global Bank serves large corporate bank clients and consists of traditional investment banking divisions, known as Global Banking & amp; Investment Banking as well as the sales and trade division, known as Global Markets. Global & amp; Investment Banking conducts consulting services such as mergers and acquisitions and restructuring as well as capital improvement functions, such as loan syndication with leverage, high yield financing and debt and other equity guarantees. The function of private equity and bank venture capital is also placed in this division. Global Markets mainly focuses on sales and trading activities, foreign exchange trading; derivative trading and structuring, risk management and other market related functions. In 1995, revenue from Bank Ekonomi Global was more or less balanced between banking investment and market activity
- Consumer & amp; Banking Relationships . Consumer and Relationship Banking consists of a number of businesses, including consumer banking, commercial banking; credit card; mortgage banking (and other consumer finance, ie - home equity loans, student loans) as well as a number of small businesses. Chemical maintains a leading market share position in providing financial services to medium-sized national market firms and small businesses in the New York metropolitan area. This division also includes a small private banking business, although Chemical is not a leading player in this market.
Office
The bank opened its first office at 216 Broadway in Downtown New York in 1824 on the corner of Ann Street. In 1848, the bank agreed to sell the building to its neighbor Barnum's American Museum (the building collapsed during Barnum's renovation) and in 1850 the bank moved to its newly built base on 270 Broadway. Chemistry bought additional land next to its building in 1879 and 1887 but its office remained modest in the early 20th century.
In 1907, the bank built a new headquarters on the original and adjacent property on 270 Broadway. In 1921, Chemical obtained a 13-storey building owned by Shoe & amp; Leather Bank on Broadway, next to and surrounded by existing properties. Despite expanding its 1907 headquarters for many years, in the mid-1920s Chemistry needed more space to accommodate its growth and reflect its growing profile.
In 1926, the bank made plans to move again, this time building a new six-story building on 165 Broadway, on the corner of Broadway and Cortlandt Street, closer to the Financial District. Chemistry moved after the building was completed in 1928, and the bank's headquarters remained there for more than five decades.
Under Chairman Donald Platten, Chemical's headquarters was moved to 277 Park Avenue in 1979. The bank moved to Park Avenue in 1991 to occupy the former Hanover Corporation's headquarters at 270 Park Avenue, which is still the chemical replacement headquarters of JPMorgan Chase. However, JPMorgan Chase returned to 277 Park Avenue in 2000, following the departure of previous tenants, Donaldson Lufkin & amp; Jenrette. In 2008, after JPMorgan acquired Bear Stearns, the bank moved its investment banking group from Chemical headquarters to 383 Madison Avenue.
Maps Chemical Bank
History
Establishment and initial history
The company was founded in 1823 as New York Chemical Manufacturing Company by Balthazar P. Melick together with the original directors of the company, John C. Morrison, Mark Spenser, Gerardus Post, James Jenkins, William A. Seely and William Stebbins. In addition, Joseph Sampson, though not the director is one of the largest shareholders of the world's banks. The founders use manufacturing companies, which produce chemicals such as blue vitriol, alum, nitric acid, camphor and belching, as well as drugs, paints, and dyes as a means of securing bank charter from New York legislature. During the 1820s, prospective bankers found that they were more likely to succeed in securing the charter if the bank was part of a larger business. The following year, in April 1824, the company succeeded in changing its charter to allow Chemistry to start its banking practices. As a result, Chemical Bank was originally a division of the New York Chemical Manufacturing Company. Balthazar Melick was named the first president of the bank, which serves merchants in New York City.
John Mason became a shareholder of the bank in 1826 and will serve as Chemical's second president. Mason, who would later be called the "father of Chemical Bank," and was one of the richest merchants of his time in New York, replaced Baltus Melick in 1831. Mason was responsible for building a highly conservative business culture from a young bank that would last nearly 90 years. During the first twenty-five years, the bank does not pay dividends, nor does it pay interest on its customer deposits. Mason was also responsible for leading Chemical through Panic of 1837. When the speculative bubble collapsed on May 10, 1837, the bank suspended the payment of gold and silver. Although twenty years later, Chemistry will stand on its own and continue to make payments in certain forms, in this crisis banks follow others in suspending payments. Chemistry is one of the earliest to continue payment in the form of a specie.
Mason died on September 26, 1839, but his conservatism legacy was taken by his successors. Isaac Jones and then his cousin John Quentin Jones will lead Chemical, both serving as president, for the next forty years until 1878. Both Isaac and John Jones have close ties to John Mason, specifically Isaac who marries one of John Mason's three daughters. The Masons and the Joneses will maintain effective Chemical control for the first five decades. John Q. Jones was replaced in 1878 by George G. Williams, who joined the bank in 1842 and served as a bank cashier from 1855 onwards. In that position, Williams also instilled in the style of conservative banking Chemical. Williams will serve as president from 1878 to 1903.
In 1844, when the original charter of New York Chemical Manufacturing Company came to an end, the chemical company was liquidated and merged as a bank only, becoming Chemical Bank of New York in 1844. Among the bank's first directors under the new charter were Cornelius Roosevelt, John D. Wolfe, Isaac Platt and Bradish Johnson, and bank president John Q. Jones. The Company sold all remaining supplies of the chemical division as well as the ownership of real estate in 1851.
Two years later, in 1853, Chemistry became a charter member of the New York Clearing House, America's first and largest clearing bank. Two Chemical presidents will also serve as head of the clearing house, with John Q. Jones serving from 1865 to 1871 and George G. Williams served in 1886 and from 1893-1894.
During Panic of 1857, Chemical Bank earned the nickname "Old Bullion" by taking the attitude that it will continue to exchange its paper money on specie throughout the crisis. The panic, which hit the bank and caused a number of failures, led banks across the country to suspend specie payments and move on to the issuance of promissory notes. Chemical decisions are very unpopular amongst fellow banks and led to the temporary suspension of banks from the New York Clearing House, where Chemical is a charter member. While hundreds of banks were closed, including 18 banks in New York in a single day, Chemical developed a reputation for stability. This reputation proved very important in the growth of Chemistry during the next recession during the 1860s. Chemistry is often used restraint "Good as gold, as good as gold today" in the ads from the 1860s until the 20th century.
Chemistry received the national charter as Chemical National Bank of New York in 1865, at the urging of the treasury secretary. This allows Chemical to issue government-backed national bank records, a precursor to paper money. By the early 1870s, Chemistry had collected more than $ 6 million in deposits.
The contemporary Chemical perspective of 1893 describes the bank as follows:
The Chemical National Bank is a well known company. Its stock orders a larger price in proportion to its par value compared with other bank stocks. It has the largest surplus and undivided benefits, with the sole exception, from any bank in the country. It has the largest number of individual deposits. It pays the largest percentage of dividends at face value of any company in any form... Bank shares based on a nominal value of $ 100 have sold as high as $ 4.980 each.
1900-1946
In the first decade of the 20th century, Chemical has one of the strongest reputations in banking but when business is declining, it loses accounts every year. Unlike many of his colleagues, Chemicals are reluctant to expand into securities and other businesses and do not pay interest on bank accounts. Both practices, which are considered very conservative, have enabled Chemicals to develop large reserves of capital but do not attract customers. William H. Porter, a prominent banker of the time, was appointed bank president in 1903 following the death of his previous president George G. Williams. Porter will leave Chemistry seven years later to become a partner in J.P. Morgan & amp; Co. in 1910 and replaced by Joseph B. Martindale, who was elected president in 1911.
In 1917, Chemical named the bank's new president, Herbert Twitchell, after the death of Joseph B. Martindale. It was revealed, just a few months after Martindale's death, that the former president of Chemistry had stolen as much as $ 300,000 from the account of Ellen D. Hunt, Wilson G. Hunt's nephew.
Twitchell initiated a major Chemical change, set up a business trust and reversed Chemistry's policy of not paying interest on cash accounts. These measures along with other initiatives, resulted in an increase in deposits from $ 35 million to $ 81 million in 1920. In 1920, Twitchell was replaced by Percy H. Johnston and remained with the bank as chairman of the board. Johnston would hold the presidency of the bank until 1946 when it grew to become the seventh largest bank in the US.
In 1920, Chemical completed its first major acquisition, joining Citizens National Bank. The acquisition of Citizens National, a small commercial bank in New York, increases its Chemical assets to more than $ 200 million with over $ 140 million in deposits. In 1923, Chemical established its first branch and by the late 1920s had opened a dozen branches in Manhattan and Brooklyn as well as a branch in London, its first international presence.
In 1929, Chemical reincorporated as a state bank in New York as Chemical Bank & amp; Trust Company and join United States Mortgage & amp; Trust Company, headquartered on Madison Avenue and 74th Street. During the Depression era of the 1930s, chemical deposits grew by more than 40% and in 1941, the bank reached $ 1 billion in assets. During this period, Chemical also established Chemical National Company, a securities underwriting business.
1947-1979
In 1947, after the retirement of Percy Johnston, Harold Holmes Helm was named the new president of Chemistry and would serve first as president and then as chairman of the bank for the next 18 years until retiring in 1965. Under Helm, Chemistry completed a series of major mergers at the end 1940s and early 1950s which again made the bank the largest in the US. In 1947, Chemistry joined the Continental Bank and Trust Company. Then in 1954, Chemical will join the Corn Exchange Bank and only five years later rejoin the New York Trust Company.
Chemistry completed its largest acquisition until that point, in 1954, joining the Corn Exchange Bank to become Chemical Corn Exchange Bank . Founded in 1853, Corn Exchange Bank is based in New York City, but has established a branch network in other countries through the acquisition of a community bank. The merger with Corn Exchange Bank added an additional 98 branches to the Chemical system primarily in New York City and $ 774 million in deposits.
In 1959, the bank, now known as Chemical Corn Exchange Bank, joined the New York Trust Company, effectively doubling the size of the company. New York Trust Company, which has great confidence and wholesale banking business, specialized in serving large industrial accounts. At the time of the merger, Chemical Corn was the fourth largest bank in New York and the New York Trust was the ninth largest bank and merger created the third largest bank in New York, and the fourth-largest in the US with $ 3.8 billion in assets. After the merger, the bank stopped using "corn exchanges" from the company name to New York Bank Trust Company.
In 1968, Chemical reorganized itself as the parent company of the bank, Chemical New York Corporation , allowing for faster expansion. Throughout the early 1960s, Chemistry began to expand into the suburbs of New York, opening branches on Long Island and in Westchester County. However, in the late 1960s and early 1970s, Chemistry focused on building its international business. In recent years, Chemical has opened new offices in Frankfurt, Germany (1969), Zurich, Switzerland (1971), Brussels, Belgium (1971), Paris, France (1971) and Tokyo, Japan (1972).
In 1975, Chemical acquired Security National Bank, which has a branch network on Long Island.
1980s
Chemicals continued to pursue acquisitions, throughout the 1980s primarily acquisitions of Texas Commerce Bank (1986) and Horizon Bancorp (1986) as well as attempted takeovers from Florida National Bank (1982).
Chemical and Florida National Bank agreed, in 1982, to enter into the merger, after the law prevented inter-bank banking repealed, giving Chemists the option of obtaining business. In February, 1982, the Southeast Banking Corporation (SBC), which had been denied in an attempt to acquire Florida National, was sued for command of a chemical merger. In early 1983, Southeast Banking Corporation dropped the takeover bid and agreed to exchange their Florida National shares with 24 FNB branch offices and other considerations. Following an agreement with SBC, Florida National was cleared to join Chemistry, but interstate banking acquisitions are still banned by Federal law and required state legislative approval. With a 1990 deadline for its option to buy Florida National and no sign of state legislative approval, Chemical Bank sold 4.9% of their interest to First Union Corporation for $ 115 million.
Chemical completed its biggest transaction in the 1980s in December 1986, when the bank agreed to acquire Texas Commerce Bank. The $ 1.1 billion deal represents the largest interstate-bank merger in US history up to that time. Texas Commerce, officially acquired in May 1987, is one of the largest holding companies of the Southwest American bank, with a strong presence in corporate banking for small and medium-sized businesses. Chemical is not looking for the Federal Deposit Insurance Corporation that supports the acquisition of Texas Commerce even though other major Texas banks, First RepublicBank Corporation (Acquired by NationsBank) and MCorp Bank (acquired by Bank One), receive support of more than $ 5 billion. Finally, Chemicals donated $ 300 million to replace Texas Commerce for continued losses.
Also in 1986, Chemistry agreed to merge with the New Jersey-based Horizon Bancorp, although the merger was not completed until 1989, due to return to banking regulations between countries.
The parent company of the bank, Chemical New York Corporation, was renamed Chemical Banking Corporation in 1988 after a series of overseas mergers and acquisitions, including Texas Commerce Bank and Horizon Bancorp.
It was during this period, in the 1980s and early 1990s, that Chemistry emerged as one of the leaders in financing leveraged purchases. In the late 1980s, Chemical expanded its reputation for financing purchases, building a syndicated financial business with leverage and related advisory business under the auspices of pioneering investment banker Jimmy Lee. Only in 1993 Chemistry would allow to bear corporate bonds, but within a few years, Chemical (and later Chase) became the underwriter of lower-grade debt under Lee's investment. In addition, in 1984, Chemical launched Chemical Venture Partners to invest in private equity transactions with various financial sponsors.
1990s
In July 1991, Chemical announced it would acquire the Hanover Corporation's Manufacturers in a merger transaction worth $ 135 billion. At the time of the merger, Chemical and Manufacturer Hanover is the sixth and ninth largest bank, respectively, with assets. The transaction, when closed in late 1991, made the joint bank, which retained the name Chemical, the second largest bank in the US, behind Citicorp both in terms of assets and customers (about 1.2 million household accounts in 1991). Chemistry adopted the logo design of Hanover Producers and moved to its headquarters at 270 Park Avenue in New York. In corporate banking, Hanover Producers are more established with big companies, blue-chip companies, while Chemical is stronger with small and medium-sized businesses.
Nationwide, Chemical Bank's combined became one of the largest lenders to US companies and arguably leaders in global loan syndication. In addition, Chemical takes a leading role in providing foreign exchange, interest rates and currency exchange, corporate financial services, cash management, corporate and institutional trust, trading services and fund transfers. Chemical operated one of the largest bank credit card franchises in the country and is the main originator and provider of home mortgage services.
In 1996, Chemical acquired Chase Manhattan Corporation in a $ 10 billion merger to create the largest financial institution in the United States. Although Chemical is a acquiring company and a nominal survivor, the merged bank adopts the name Chase, who is considered better known, especially internationally. Chase, which tops the largest bank in the US, fell to sixth, while Chemical was the third largest bank at the time of the merger. This merger resulted in the reduction of more than 12,000 jobs between the two banks and the merger-related costs of approximately $ 1.9 billion.
The Bank continues to operate under the Chase brand until the acquisition of J.P. Morgan & amp; Co. in December 2000 to form JPMorgan Chase & amp; Co. During all of these acquisitions, Chemical's original management team, led by Walter V. Shipley, remains in charge of the bank. When a joint bank buys J.P. Morgan & amp; Co., William B. Harrison, Jr., who has long been a Chemical executive, was appointed CEO of a joint venture. In addition, many Chemical businesses remain intact through various mergers. The private chemical equity group, for example, was renamed several times, eventually becoming JP Morgan Partners before finishing a spin-out from the bank, as CCMP Capital, after the bank's 2004 merger with Bank One. In addition, JPMorgan Chase maintains a history of stock prices before 1996, as well as Chemical's headquarters at 270 Park Avenue.
Acquisition history
Electronic banking
Chemistry is one of the pioneers of online electronic banking. On September 2, 1969, Chemical installed the first automated teller machine (ATM) at its branch in Rockville Center, New York. The first ATM is designed to issue a certain amount of cash when the user enters a specially encoded card. A Bank Ekonomi advertisement boasted "On September 2, our bank will open at 9:00 and never close again." ATM Chemical, originally known as Docuteller, was designed by Donald Wetzel and his company Docutel. Chemical executives initially hesitated about the transition of electronic banking given the high price of the early machines. In addition, executives worry that customers will refuse to have machines that handle their money.
In 1982, Chemistry started its first personal computer-based banking system when it launched a pilot electronics banking program called Pronto. Chemical has spent $ 20 million to develop software for Pronto. The system, which works with the ATARI console, starts in New York and serves 200 Chemical Bank customers. Pronto is an extension of other electronic banking services offered by Chemical that include a growing corporate cash management system and ATM network and is one of the bank's biggest initial efforts into home-based banking. However, a year after Pronto's launch, only 21,000 of 1.15 million Chemical subscribers use the system, largely due to the high monthly subscription fees that Chemical charged to customers to use. In 1985, it was clear that Pronto, who was heavily promoted by Chemistry, grew much more slowly than anticipated.
In 1985, Chemical and BankAmerica, another pioneer in electronic banking, joined in a joint venture with AT & amp; T Corporation and Time Inc., known as Covidea, to market banking services and stock-broker discounts for computer-equipped households. By combining resources and cost sharing, the four companies hope to reduce the risk of large and prolonged losses. Finally Chemical stopped his business in 1989 with a loss of nearly $ 30 million.
Famous employees and executives
Executives and directors
- William B. Harrison, Jr., then CEO of JPMorgan Chase
- James B. Lee, Jr., an investment banker and senior executive at JPMorgan Chase, is noted for his role in developing financial markets with leverage in the US.
- Robert I. Lipp, partner of Brysam Global Partners, private equity firm, and former board member of JPMorgan Chase
- John McGillicuddy, former chairman and CEO of Hanover Manufacturer
- John Mason, initial shareholder and second president of Chemical Bank
- Balthazar P. Melick, founder and first president of Chemical Bank
- John L. Notter, international financier and developer, former director
- Cornelius Roosevelt, original director of Chemical Bank of New York when it was inaugurated in 1844
- Emlen Roosevelt, Theodore Roosevelt's cousin and president Roosevelt & amp; Child
- James A. Roosevelt, Uncle Theodore Roosevelt and founder of Roosevelt & amp; Child
- Walter V. Shipley, former Chairman and CEO of Chemistry and then Chase Manhattan Bank and Chairman of JPMorgan Chase
Former other employees
- Henry B. R. Brown, the originator of the world's first money market fund
- Granger K. Costikyan, founder of Costikyan Freres
- Alan H. Fishman, last CEO of Washington Mutual before the bank was confiscated in 2008
- Ford M. Fraker, former ambassador to Saudi Arabia
- Abraham George, businessman, academician and philanthropist and founder of The George Foundation
- Espen Gaarder Haug, author, quantitative and arbitrageur trader specializing in options and other derivatives
- Glenn Hutchins, founder of Silver Lake Partners
- Kathryn V. Marinello, former President and CEO of Ceridian Corporation
- Darla Moore, partner of Rainwater, Inc. and Richard Rainwater's wife
- Nancy Naples, director of Amtrak
- Peggy Post, an American author and consultant on etiquette
- Pat Toomey, United States Senator from Pennsylvania
- Kathleen Waldron, an American author, financial executive and educator
References
Source
Source of the article : Wikipedia
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