Bank of America Private Bank
| Company type | Subsidiary |
|---|---|
| Industry | Financial services |
| Predecessor | United States Trust Company of New York (U.S. Trust) |
| Founded | 1853 |
| Fate | Acquired by Charles Schwab in 2000; acquired by Bank of America in 2007 |
| Headquarters | New York City , United States |
Area served | United States (31 states plus Washington, D.C.) |
Key people | Keith Banks (President, 2008) |
| Products | Wealth structuring, investment management, credit and lending solutions |
| Parent | Bank of America |
Bank of America Private Bank—originally known as U.S. Trust—was established in 1853 under the name United States Trust Company of New York. It operated as an independent entity until its acquisition by Charles Schwab in 2000, and subsequently became a subsidiary of Bank of America in 2007. The Private Bank specializes in wealth structuring, investment management, as well as credit and lending solutions for its clientele.
History
Founded in 1853 with a New York State charter, U.S. Trust holds the distinction of being the oldest trust company in the United States. The company commenced operations with an initial capital of $1 million contributed by affluent investors, including notable individuals such as Cornelius Lawrence, who was both New York’s Mayor and the company’s president at the time, along with John Aikman Stewart, serving as Secretary. Other key founders were prominent industrialists like Peter Cooper and Erastus Corning.
Expansion of Services
U.S. Trust was created to provide fiduciary services to both institutions and private clients, acting as executor and trustee, and was among the first to introduce trust services during the mid-19th century. By 1886, it had established a reputation for financial soundness. Its client base comprised wealthy individuals and significant corporate entities engaged in financing major infrastructure ventures such as railroads and the Panama Canal. This enabled U.S. Trust to become a foremost corporate trustee while simultaneously growing its personal trust management business with clients including William Waldorf Astor, Jay Gould, and Oliver Harriman.
Having weathered numerous financial upheavals through the late 1800s and early 1900s, U.S. Trust managed assets exceeding $1 billion by 1928, outstripping many rivals. Its commitment to stability allowed it to withstand the Wall Street Crash of 1929 and the ensuing Great Depression. In later years, the firm diversified its personalized offerings to encompass advisory services on family-related concerns such as education and career planning. Starting in 1958, U.S. Trust enhanced its marketing efforts via society page advertisements and partnerships with cultural organizations like the Metropolitan Opera and New York Philharmonic Society.
Restructuring During the 1970s, 1980s, and 1990s
By 1965, trust services, investment operations, and estate administration accounted for 85% of U.S. Trust’s gross revenue. Banking emerged as a significant growth sector, with the company providing investment management services to banks and insurance firms for their deposit portfolios; by 1977, banking activities represented half of its earnings.
During the late 1970s, profitability declined due to expansion challenges, loss of major pension fund clients following underperformance, and a $397 million municipal bond disappearance incident. As a result, U.S. Trust retreated from international lending activities, closed its Geneva and London offices, and increased minimum asset thresholds for prospective clients.
The 1980s were marked by organizational changes: the launch of Financial Technologies International to commercialize financial software products; discontinuation of business and real estate lending; and divestiture of $275 million in commercial loan portfolios. By 1986, U.S. Trust had fallen behind competitors in terms of assets under management and trust income generation. In 1987, it reduced minimum account balances from $1–2 million down to $250,000. Throughout the 1990s, the firm pursued geographic expansion through opening new branches and acquiring businesses across various U.S. markets.
Charles Schwab and Bank of America
In May 2000, Charles Schwab & Co. completed the purchase of U.S. Trust for $2.7 billion in stock, aiming to strengthen its wealth management offerings and secure affluent clients amid competition from firms such as Merrill Lynch and Morgan Stanley. Nevertheless, the integration process faced difficulties due to contrasting corporate cultures between U.S. Trust's exclusive approach and Schwab's discount brokerage operations.
By November 2006, Schwab divested U.S. Trust, selling it to Bank of America for $3.3 billion in cash; the transaction finalized in 2007 and substantially enhanced Bank of America's private banking services tailored to wealthy clientele. In 2008, Keith Banks was named president of U.S. Trust.
On July 13, 2000, U.S. Trust was issued a "cease and desist" directive to improve its anti-money laundering controls in compliance with the Bank Secrecy Act, along with a penalty totaling $10 million.
Services
U.S. Trust specializes in personalized wealth structuring, investment oversight, banking, and credit solutions. Its advisory teams provide expertise in financial and estate planning, philanthropic endeavors, management of specialized assets, family office support, bespoke credit products, financial administration, and stewardship of family trusts.
Locations
The firm is headquartered at 114 West 47th Street in New York City and maintains a presence through more than 100 offices distributed across 31 states plus Washington, D.C.