Starting a bank during the Civil War doesn't feel like it would be a smart business move. But days after the battle of Gettysburg, investors in Cincinnati took a chance, opening the First National Bank of Cincinnati on July 13, 1863, under a charter signed by the Lincoln administration.
That lender would survive wars, recessions and other calamites to become a cornerstone of U.S. Bank.
The Minneapolis-based megabank, which still runs under the Lincoln charter, is marking its 150th anniversary this week. Chief executive Richard Davis, along with two of the company's longest-serving employees and four who serve in the military, rang the closing bell today on the New York Stock Exchange.
Decades of mergers and acquisitions have transformed U.S. Bank into the country's fifth largest bank. It earned a record $5.6 billion profit last year. Locally, it's remained an important player in the state economy.
"Many banks have come and gone. They've weathered an awful lot and come out a shining star in my view," said Art Rolnick, former research director at the Minneapolis Federal Reserve Bank of Minneapolis.
U.S. Bank traces its Minnesota roots to the First National Banks of St. Paul and Minneapolis. The institutions got their charters during the final two years of the Civil War and later become the heart of First Bank System.
Both First Bank and long-time rival Northwestern National grew into regional banking powerhouses through the Great Depression and into the 1970s.
Northwestern became Norwest, which eventually bought Wells Fargo, taking that bank's name and moving the corporate headquarters to San Francisco. It still employs about 20,000 in Minnesota.
First Bank hit a rough patch in the late 1980s. It was losing money. Jack Grundhofer took over as CEO in 1990 and proceeded to slash costs and cut thousands of jobs, earning him nicknames such as "Jack the Ripper."
During Grundhofer's reign, though, First acquired more than a dozen banks, including Oregon-based U.S. Bancorp. First took the U.S. Bank name but kept the headquarters in Minneapolis.
Rolnick credits Grundhofer with turning the institution into a national power.
In 2001, Grundhofer's bank merged with Milwaukee-based Firstar, which was run by Grundhofer's brother, Jerry.
Most importantly, said retired banking analyst Ben Crabtree, Minneapolis continued as the corporate headquarters because U.S. Bank was the top dog in the deal.
"When you have mergers like that, companies play a lot of games with who's acquiring who, what name gets to continue," he said. The fact that they kept the U.S. Bank name and headquarters in Minneapolis, I think, tells you who was really the acquirer."
U.S. Bank made it through the big dip in much better shape than many other banks, owing to the bank's conservative, disciplined approach to lending under CEO Davis, said Edward Jones banking analyst Shannon Stemm.
"There's a lot to like about U.S. Bank from the investment side," she said. "It's one of the better run organizations. It is one of the most efficient banks out there, meaning they control costs better than many of their peers. It's a bank that is focused on making higher quality loans. They stayed away from some of the riskier mortgages."
Crabtree said U.S. Bank's smart decisions have been good for the Twin Cities. About 11,000 of U.S. Bank's 66,000 employees work in Minnesota.
"Having a bank as a major employer in your economy is desirable," he said. "Non-polluting. Relatively well paying jobs. Mostly non-cyclical. Pretty stable."