Bank of New York

Bank of New York was one of the oldest banks in the United States and an important institution in the development of American banking and capital markets. It was organized in New York City in 1784, partly in response to local merchants' need for a dependable source of credit and banking services. Alexander Hamilton was among the investors associated with its formation, and the bank's first president was Alexander McDougall. The institution initially operated from the Walton Mansion and later moved to locations around Hanover Square and Wall Street. The bank gained early national importance by providing the United States government with a loan in 1789. The funds, arranged while Hamilton was secretary of the Treasury, were used to meet federal payroll obligations, including the salaries of members of Congress and President George Washington. In 1792, Bank of New York became the first company traded on the newly established New York Stock Exchange, giving it a distinctive place in the history of American public markets. During the nineteenth century, the bank followed relatively conservative lending practices. It financed or supported transportation, infrastructure, utilities, railroads, canal projects, steamboat companies, and government war financing. Its lending activity included support for the War of 1812, the Union Army during the American Civil War, and later urban infrastructure such as the New York City subway. The bank's conservative posture helped it remain resilient through repeated financial disruptions. Bank of New York expanded through mergers and acquisitions during the twentieth century. It combined with New York Life Insurance and Trust Company in 1922, Fifth Avenue Bank in 1948, and Empire Trust Company in 1966. A holding company was established in 1969. In 1988, following a year-long takeover effort, it merged with Irving Bank Corporation and moved its principal headquarters to Irving's former location at One Wall Street. During the 1990s and early 2000s, the institution broadened its financial-services platform through numerous acquisitions, including J.P. Morgan's global custody business in 1995, Ivy Asset Management in 2000, and Pershing in 2003. The Pershing transaction strengthened Bank of New York's position in securities clearing and brokerage infrastructure. The bank also developed asset-management, private-banking, custody, correspondent-banking, and wealth-management capabilities. In 2006 it exchanged its retail banking and regional middle-market operations for J.P. Morgan Chase corporate-trust assets, marking its exit from traditional retail banking and emphasizing institutional financial services. Bank of New York's independent corporate identity ended when it merged with Mellon Financial Corporation. Announced in December 2006 and completed on July 1, 2007, the transaction created The Bank of New York Mellon Corporation. The combined company used BNY Mellon as its principal commercial brand and retained major businesses associated with both predecessors. The historical Bank of New York therefore survives primarily through the lineage, corporate records, businesses, and brand heritage of BNY Mellon.

Bank of New York was formed in 1784 by New York investors seeking to establish a local bank for merchants and businesses. Alexander Hamilton was among those connected with the founding effort, while Alexander McDougall became the first president and William Seton the first cashier. The bank began operations from the Walton Mansion and soon moved to Hanover Square. It operated for several years without a formal charter before receiving legal recognition. Its early relationship with the federal government gave it national significance. In 1789, it supplied the United States government with its first loan, arranged by Hamilton in his capacity as Treasury secretary. The proceeds helped fund federal salaries. In 1792, Bank of New York became the first company traded on the New York Stock Exchange. It opposed the creation of the Bank of the Manhattan Company in 1799, which ended the bank's early monopoly over New York City banking services. Through the nineteenth century, Bank of New York was associated with cautious credit management and financing for canals, shipping, utilities, railways, and other infrastructure. It supported government financing during the War of 1812 and the Civil War. During the twentieth century it continued to grow through combinations with trust companies and commercial banks, including New York Life Insurance and Trust Company, Fifth Avenue Bank, and Empire Trust Company. Its holding company was created in 1969. The 1988 merger with Irving Bank Corporation substantially expanded the institution and transferred its headquarters to One Wall Street. A series of acquisitions during the 1990s and early 2000s shifted the group toward institutional services. Important transactions included J.P. Morgan's global custody business, Ivy Asset Management, Lockwood Financial Partners, and Pershing. Pershing, acquired in 2003, strengthened the bank's stock-clearing and broker-dealer services. Bank of New York also expanded in Eastern Europe and maintained correspondent relationships with Russian banks. Those activities later became associated with a major money-laundering investigation and a 2005 settlement. Separately, the bank's 2006 exchange of retail and regional middle-market assets for corporate-trust operations confirmed its strategic move away from branch banking. The final stage of the company's history was the 2007 merger with Mellon Financial Corporation. The combined organization became The Bank of New York Mellon Corporation, commonly branded BNY Mellon. Although the separate Bank of New York ceased to operate as an independent company, its name, businesses, and institutional heritage continued within the successor group.

1. 2007Merger with Mellon Financial completed

   The merger created The Bank of New York Mellon Corporation and ended Bank of New York as a standalone company.

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2. 2006Retail banking operations exchanged

   The bank traded its retail and regional middle-market businesses for J.P. Morgan Chase corporate-trust assets.

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3. 2003Pershing acquired

   Bank of New York acquired Pershing, a stock-clearing business, expanding its role in brokerage and securities infrastructure.

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4. 1995Acquisition of J.P. Morgan global custody business

   The transaction strengthened the bank's international custody and securities-servicing operations.

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5. 1988Merger with Irving Bank Corporation

   After a takeover effort lasting about a year, Bank of New York combined with Irving Bank Corporation and moved its headquarters to One Wall Street.

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6. 1969Holding company established

   Bank of New York created a holding-company structure as part of its corporate expansion.

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7. 1922Merger with New York Life Insurance and Trust Company

   The bank expanded its trust and financial-services activities through a major merger.

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8. 1792First company traded on the New York Stock Exchange

   Bank of New York became the first company traded on the newly opened New York Stock Exchange.

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9. 1789First federal government loan

   The bank provided the United States government with an early loan arranged by Treasury Secretary Alexander Hamilton.

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10. 1784Bank founded in New York

    A group of New York investors, including Alexander Hamilton, established the Bank of New York.

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A conservative, institution-focused bank whose historical franchise evolved from New York commercial banking into global custody, securities servicing, clearing, asset management, and other financial infrastructure services.

• Custody and securities servicingInstitutional financial services

  Bank of New York developed a major institutional franchise providing custody, settlement, accounting, record-keeping, and related administrative services for securities owners and investment institutions. This business became one of the principal foundations of the successor BNY Mellon organization.

• PershingSecurities clearing2003

  Pershing was acquired in 2003 and provided clearing, brokerage-processing, and related infrastructure for financial intermediaries. Its integration gave Bank of New York a stronger position in the institutional and broker-dealer services market.

• Corporate trust servicesTrust and fiduciary services

  The bank acted as trustee, paying agent, custodian, and administrator for corporate and public-sector debt and other financial instruments. Corporate trust became increasingly important as the company moved away from retail banking.

• Asset managementInvestment management

  Through acquisitions and internal development, Bank of New York assembled asset-management and wealth-management capabilities serving institutions, investment advisers, and affluent individuals.

• 2007Merge with Mellon FinancialM&A

  The combination was intended to unite Bank of New York's securities-servicing and short-term-lending strengths with Mellon's asset-management and wealth-management businesses.

  What changed. Bank of New York and Mellon Financial completed their merger on July 1, creating The Bank of New York Mellon Corporation.

  Aftermath. The Bank of New York ceased to exist as an independent company, while its operating franchises continued under the BNY Mellon group.

  Announced transaction value. $16.5 billion (2006 announcement)

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• 2006Exit retail bankingStrategy

  Bank of New York was concentrating on securities servicing, corporate trust, custody, and asset management.

  What changed. The bank exchanged its retail banking and regional middle-market operations for corporate-trust assets from J.P. Morgan Chase.

  Aftermath. The transaction accelerated the company's transition from a traditional commercial bank into an institution-focused financial-services provider.

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• 2003Acquire PershingM&A

  The bank sought to expand its securities-processing and brokerage infrastructure.

  What changed. Bank of New York acquired Pershing, the stock-clearing unit of Credit Suisse First Boston, for a reported $2 billion.

  Aftermath. The transaction made the bank one of the largest stock-clearing firms in the United States and strengthened its institutional-services strategy.

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• 2005Russian money-laundering investigationControversy

  Bank of New York paid a reported $14 million settlement concerning money-laundering activity attributed to a rogue employee and transactions involving Russian banking relationships during the 1990s. The episode was widely associated with the label Russiagate.

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• 2007Bank of New York Mellon merger completed

  The merger was completed on July 1, ending Bank of New York's existence as an independent corporate group.

  M&A
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• 2006Bank of New York and Mellon Financial announce merger

  The two financial institutions announced a combination intended to create a major global securities-servicing and asset-management company.

  M&A
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• 2006Bank of New York exits retail banking

  The bank exchanged its retail banking and regional middle-market operations for corporate-trust assets held by J.P. Morgan Chase.

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1. BNY
2. Bank of New York