Happy Birthday, “You and I”

First Interstate Bank logo“You and I” was was a slogan of First Interstate Bank in the 1980s. It was based on the Bank’s logo, a clever “I” that also delineated an “F” and “B.”

First Interstate pioneered a new way for banks to operate as one company across state lines, and eventually merged with Wells Fargo in 1996. The story of how it got to that point is fascinating to me.

“You and I” forwards the message of convenience, having multiple banking choices coast-to-coast. While this convenience seems obvious to us now, the benefits of interstate banking have only been with us for about a generation.

I remember, not so long ago, that I needed to really plan access to cash as part of travel. Travelers checks were the ordinary method for long summer road trips, where you didn’t know what was available in small towns along the way. Today, of course, we can leave home with minimal cash and only an ATM card.

How did all this begin?

First Interstate employeesEarly banking derived no benefit from multiple and interstate branches, because of slow communication and the need for coordinating transactions real-time. In the first half of the twentieth century, banks began to merge and form branch networks, with a handful crossing state boundaries. Bank of California operated in three adjacent coastal states—California, Oregon, and Washington—that used traditional sea lanes for commerce and communication.

Bank of California’s original California state bank charter (1864) was grandfathered into a tri-state charter when they converted to a national charter in 1910.

The first person who envisioned interstate banking was A.P. Giannini, founder of Bank of America. Some of my past articles have mentioned him and Transamerica, his organization intended to open banks beyond California. Transamerica was confronted with a key choice in 1956, when the Bank Holding Company Act required it to decide between commercial banking or other financial services. Transamerica selected insurance and non-financial businesses for its future, then spun off the banking side of the business as Firstamerica Bancorp.

The name Firstamerica clearly conveys an intention; but while it was aiming to be national, in reality the operating banks used different names in the dozen or so states where it operated. A 1961 name change of the parent company to Western Bancorp denoted a more focused view, but the operating banks continued to use different names, including United California Bank.

First Interstate stockEventually a second visionary came along who could fulfill Giannini’s intent, Joseph J. Pinola. Pinola had spent the first twenty three years of his career at Bank of America, but in December 1975, he became President of United California Bank. He quickly became Chief Executive Officer of Western Bancorp.

At the top, Pinola was able to make a radical change, which looks obvious to our modern view—he coordinated the simultaneous name change of the holding company and all operating banks to a uniform name on June 1, 1981: First Interstate.

Now, a single franchise spanned a dozen states instead of a confederation of different names. Company stock was concurrently allotted a prestigious single letter ticker symbol, “I,” for Interstate. The name change increased the firm’s visibility and signaled to the public, other banks, and regulators, that interstate banking had finally arrived.

Among the novel concepts pioneered by First Interstate was the franchising of its name and systems. This enabled banks in other states to join the national network without a formal merger. Suddenly, the first truly nationwide network was born—from the District of Columbia to Hawaii, and north to Alaska. Convenient interstate banking was here.

First Interstate Bank branchSo the next time you get ready for travel, whether business or personal, think how interstate banking has improved financial convenience. And if someone asks who helped bring about this convenience, “You and I” know that Joseph Pinola was one of many before us who helped bring about true interstate banking.

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Guided By History

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