Security Pacific Bank facts for kids
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| Industry | Banking |
|---|---|
| Fate | Merged into the Bank of America Corporation |
| Predecessor | Security First National Bank |
| Successor | Bank of America |
| Founded | 1967 (as Security Pacific National Bank) |
| Defunct | April 22, 1992 |
| Headquarters | Los Angeles, California |
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Area served
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Western U.S. |
| Subsidiaries | Rainier Bank |
Security Pacific National Bank (often called SPNB) was a very large U.S. bank that had its main office in Los Angeles, California. It became part of Bank of America in 1992.
Contents
A Bank's Journey: From Small Start to Big Merger
Security Pacific National Bank started a long time ago. On September 1, 1868, a company called Hellman, Temple and Co. opened its first bank in Los Angeles. This was the beginning of what would become the Farmers and Merchants Bank, and later, Security First National Bank.
The bank quickly became known for its strong business methods. It grew a lot as more people moved to and the economy expanded in the Western United States. By the middle of the 1900s, it was working with other countries too. It became the fifth-largest bank in the United States and the third-largest in California based on how much money people had in their accounts.
In 1967, Security First National Bank bought another bank, Pacific National Bank of San Francisco. After this, it changed its name to Security Pacific National Bank.
In 1971, SPNB bought a large part of a bank called Bank of Canton. A few years later, in 1975, Security Pacific Bank built a very tall 55-story building in downtown Los Angeles. Today, this building is known as the Bank of America Plaza.
Big Events and Challenges
In 1978, a computer expert named Stanley Rifkin found out the secret electronic codes that Security Pacific used to send money to other banks. On October 25, he managed to take $10.2 million from an account that didn't even exist! This was one of the biggest bank thefts in history. He used the money to buy many Russian diamonds in Switzerland. He tried to bring them back to the United States to sell them, but he was caught. Security Pacific got the diamonds back, but it was hard for them to sell so many at once. They eventually had to sell them for less money than they hoped.
On May 9, 1980, five men robbed a Security Pacific branch in Norco, California. They had many weapons and even homemade bombs. They were so well-armed that they stopped several police cars and made a police helicopter stop chasing them. During the Norco shootout, a police officer and two of the robbers were killed. The other three robbers were arrested and sent to prison for life.
In 1984, SPNB wanted to buy all the remaining shares of the Bank of Canton that it didn't already own. The plan was that the Bank of Canton's leaders would stay in charge. SPNB paid about $42 million for the rest of the shares.
In 1985, Security Pacific faced a legal issue where some people said the bank had charged too much money to about 2,500 customer accounts since 1974. Also in 1985, Security Pacific bought The Arizona Bank.
In 1986, SPNB bought California Pacific National Bank. This was a smaller bank that mostly helped Chinese businesses in Los Angeles. SPNB also talked about buying American Asian Bank, which had branches in San Francisco and Los Angeles.
In 1987, Security Pacific bought Rainier Bancorp, a bank that served the Pacific Northwest region.
In 1988, Security Pacific did not offer a job to a computer expert named Kevin Mitnick. This was because he had not told them about some past legal problems. A few days later, a fake news story spread that the bank had lost $400 million. This made the bank's stock price drop. The Federal Bureau of Investigation (FBI) thought Mitnick might be connected to this, but they never found proof. Mitnick himself said in his book that he was not involved in that event.
Also in 1988, SPNB finished buying Bank of Canton and changed its name to Security Pacific Asian Bank. SPNB also finally bought American Asian Bank.
The End of an Era
The 1980s were a good time for banks, but Security Pacific's plan to buy many other banks and some financial deals, along with an economic slowdown in 1990 and a crash in the Southern California housing market, caused problems for the bank. Many of its loans started to lose value. Government regulators became worried and watched the bank very closely.
On April 22, 1992, Security Pacific Bank joined with San Francisco-based BankAmerica (which is now called Bank of America). At the time, this was one of the biggest bank mergers ever! However, government rules meant that Bank of America had to sell Security Pacific's bank in Washington state, Rainier Bank. This was because combining them would give Bank of America too much control of the banking market in that state. The Rainier Bank branches were sold to other banks. Later that year, Bank of America also grew into Nevada by buying Valley Bank of Nevada.
In 1993, Bank of America changed Security Pacific Asian Bank's name to Bank of America (Asia). In 1994, another bank bought Security Pacific Asian Bank's operations in Malaysia.
In 2000, Robert H. Smith, who was the last leader of Security Pacific, wrote a book about the bank's struggles and its merger with Bank of America.
Images for kids
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Security Pacific Bank logo from the late 1980s
