First Bank System
| Company type | Public |
|---|---|
| Industry | Banking |
| Founded | 1864 |
| Defunct | 1997 |
| Fate | Merged with original U.S. Bancorp; combined entity adopted U.S. Bancorp name |
| Headquarters | Minneapolis , United States |
Area served | Minnesota, North Dakota, South Dakota, Montana, Wisconsin, Washington, Colorado, Illinois, Nebraska, Iowa, Kansas, Wyoming |
| Products | Banking services |
First Bank System was a regional bank holding company headquartered in Minneapolis, active from 1864 until 1997. It serves as the foundation of the current U.S. Bancorp following its 1997 merger with the original U.S. Bancorp, after which the combined entity adopted the U.S. Bancorp name.
History
The earliest predecessor of First Bank traces back to the establishment of First National Bank of Minneapolis in 1864, receiving its charter in 1865, and originating from the private banking firm Sidel, Wolford and Co.
On August 23, 1929, a merger between First National Bank of Minneapolis and First National Bank of Saint Paul (also founded in 1864 as Parker, Paine and Co.) resulted in the creation of First Bank Stock Corporation. This newly formed corporation acquired shares in 32 additional banks located throughout Minnesota, North Dakota, South Dakota, and Montana.
In February 1956, First Bank Stock Corporation expanded by purchasing six banks within Minnesota along with one bank in La Crosse, Wisconsin—marking its initial venture into the Wisconsin market. This acquisition was its final interstate expansion for several decades due to the restrictions imposed by the Bank Holding Company Act of 1956, which limited such cross-state growth until regulatory reforms occurred later.
The company adopted the name First Bank System Inc. in April 1968.
In 1992, First Bank System inaugurated its new headquarters at First Bank Place, a skyscraper with 53 floors that ranked among Minneapolis's tallest buildings at that time.
Growth within Minnesota
In May 1989, First Bank System revealed its plan to acquire Northern Cities Bancorp Inc., based in Anoka, which included Northern Bank of Anoka and Northern National Bank of Forest Lake; financial details were not disclosed.
In January 1992, an agreement was reached for First Bank System to purchase Carl Pohlad's Minneapolis-based Bank Shares Inc., which owned Marquette Bank Minneapolis and Marquette Bank Rochester, for $230 million in stock. Due to regulatory concerns, Marquette Bank Rochester was excluded from the transaction, reducing the price to $200 million for Marquette Bank Minneapolis alone. The acquisition finalized in December 1992 and led to the closure of three First Bank branches and seven Marquette locations within Minneapolis.
In April 1993, First Bank System announced intentions to buy American Bancshares of Mankato along with its subsidiary American Bank; terms were not publicly disclosed. The deal concluded in March 1994 for approximately $15.6 million in stock. At that time, American Bancshares held $120 million in assets and operated offices in three neighboring communities. Following the acquisition, American Bank was merged into First Bank’s existing Mankato operations, which had assets totaling around $171 million.
In July 1994, First Bank System declared it would acquire Metropolitan Financial Corporation from Minneapolis, owner of Metropolitan Federal Savings Bank, for roughly $877 million in stock. Metropolitan Financial maintained 211 branches across Minnesota, Nebraska, Iowa, Kansas, Wisconsin, Wyoming, and both Dakotas. Meanwhile, First Bank operated 215 branches across six states. The transaction completed in January 1995 for $800 million in stock and marked First Bank’s expansion into Nebraska, Iowa, Kansas, and Wyoming. Afterward, First Bank divested 63 Metropolitan branches located across eight states by selling them to 28 different banks; these branches were identified as having limited growth opportunities.
Growth in North Dakota
In December 1991, First Bank System revealed plans to acquire Siouxland Bank Holding Co., headquartered in Fargo, North Dakota. This acquisition included Dakota Bank and Trust of Fargo as well as First National Bank of Hettinger. The transaction was finalized in July 1992. Due to regulatory requirements imposed by state authorities, First Bank divested First National Bank of Hettinger to Rolla Holding Co. in 1993.
By December 1993, First Bank System reached an agreement to purchase United Bank of Bismarck, which held $123 million in assets. This move effectively doubled the bank’s footprint in Bismarck and allowed it to match the local market share of competitor Norwest Bank. The deal closed in September 1994, merging United Bank with First Bank of North Dakota and further extending First Bank System’s influence within the state.
Growth in South Dakota
In October 1994, First Bank System announced its intention to acquire First Western Corporation of Sioux Falls, the parent company of Western Bank, for an undisclosed sum. Completed in March 1995, this acquisition brought nine additional branches and $323 million in assets under First Bank System’s control. Western Bank ranked as the third-largest bank in Sioux Falls, operating six branches within the city and others located in Colton, Hartford, and Humboldt. This acquisition boosted First Bank System’s deposits in Sioux Falls to $480 million and expanded its South Dakota network to 12 branches with nearly $1.2 billion in assets. At that time, First Bank System oversaw $26.3 billion in assets distributed across nine banks and 225 branches predominantly situated throughout the Midwest.
Growth in Wisconsin
First Bank System made its initial entry into Wisconsin by acquiring Batavian National Bank of La Crosse (later renamed National Bank of Wisconsin) in February 1956. Subsequently, in July 1977, its Wisconsin subsidiary purchased Midland National Bank of Milwaukee for $13 million—a financially troubled institution—under the supervision of the Comptroller of Currency. After acquisition, Midland National was absorbed as a branch of National Bank of Wisconsin and rebranded as First Bank-Midland Milwaukee Division. This strategy exploited a regulatory exception within the Bank Holding Company Act of 1956 to facilitate expansion into Milwaukee. Despite legal opposition from Milwaukee’s three largest banks, federal courts ultimately upheld the acquisition.
Short-term Expansion in Washington
In September 1986, First Bank System acquired Mid Valley Bank of Omak, Washington—a failed institution—through a transaction arranged by the Federal Deposit Insurance Corporation. The bank was subsequently renamed First Bank Washington. This acquisition enabled First Bank System to establish operations within Washington state, complementing its existing presence across Minnesota, Wisconsin, North Dakota, South Dakota, and Montana. The company invested $6.2 million in capital and took over Mid Valley’s four branches located throughout Okanogan Valley.
Seven years later, in 1993, First Bank System announced plans to divest the four offices of First Bank Washington to local investors for $4 million. The sale was completed by May 1994, with the institution rebranded as North Central Washington Bank under new ownership by Central Bancorporation of Wenatchee. At that point, North Central Washington Bank managed assets totaling $55 million.
Expansion into Colorado
First Bank System made its initial entry into the Colorado market in June 1988 by acquiring Central Bancorporation, a Denver-based holding company, along with its 19 Central Bank subsidiaries, for $152.5 million. The purchase involved acquiring an 88% stake from AmeriTrust and the remaining 12% from minority shareholders. As part of the agreement, First Bank committed $8 million to support depositors of 14 failed industrial banks in Colorado. This acquisition was finalized in December 1988.
In July 1991, First Bank System further expanded by purchasing deposits and 18 branches of the failed Capitol Federal Savings, based in Aurora, from the Resolution Trust Corporation for $12.5 million. This move extended Central Bank's presence in the region. Of these branches, two were closed while the other sixteen were integrated as Central Bank locations.
In May 1992, First Bank announced a $150 million stock deal to acquire Western Capital Investment Corporation of Denver, which owned Bank Western with 35 branches and assets totaling $2.4 billion. Completed in December 1992, this transaction elevated First Bank to the position of Colorado’s second-largest banking institution after Norwest. At that time, Central Banks managed assets worth $2.5 billion.
By November 1992, First Bank agreed to purchase Colorado National Bankshares, headquartered in Denver, for $500 million in stock; the transaction was concluded in May 1993. This acquisition established First Bank as the largest banking organization in the Rocky Mountain area with approximately $8 billion in assets—combining Colorado National’s $2.9 billion with Central Banks and Bank Western holdings.
In June 1993, First Bank consolidated all its Colorado operations under the Colorado National Bank brand and eliminated ten duplicate branches to streamline its expanded branch network.
Expansion into Illinois
First Bank System entered Illinois by announcing in September 1993 the acquisition of Chicago-based Boulevard Bancorp for $200 million in stock. The deal included Boulevard Bancorp’s subsidiaries: Boulevard Bank located in the Wrigley Building, National Security Bank of Chicago, First National Bank of Des Plaines, and Citizens National Bank of Downers Grove. The acquisition was completed by March 1994. Boulevard Bancorp operated ten banking locations across Chicago and surrounding suburbs with assets totaling $1.6 billion and deposits of $1.2 billion. After finalizing the purchase, First Bank System integrated these branches into its platform, rebranding them collectively as First Bank Illinois and consolidating the four subsidiaries into a unified statewide network of ten offices. This strategic initiative laid a foundation for future growth within Illinois and included plans to establish residential mortgage branches in Des Plaines and Downers Grove.
Expansion into Nebraska
First Bank System initiated its Nebraska presence in January 1995 through the acquisition of Metropolitan Financial, based in Minnesota.
In June 1995, First Bank System announced separate acquisitions of Southwest Bank of Omaha and First Bank of Omaha. Both transactions were completed by November 1995 and added roughly $422 million in assets along with $374 million in deposits, bringing Nebraska operations close to $925 million in total assets. These deals aimed to enhance First Bank’s commercial lending capabilities beyond Metropolitan’s predominantly consumer-oriented portfolio. As part of their typical integration strategy, First Bank reduced staff and branch numbers while increasing revenue through expanded lending activities and cross-selling initiatives.
In August 1995, First Bank System declared a stock acquisition valued at $700 million for Omaha-based FirsTier Financial Inc., which was finalized in February 1996 for $908 million in stock consideration. This acquisition expanded First Bank’s operations in Nebraska to approximately $5 billion in assets and $4.5 billion in deposits, serving about 485,000 retail clients and 24,500 businesses across Nebraska and Iowa. The merger consolidated Metropolitan Federal Savings, Southwest Bank, and First Bank of Omaha offices under the First Bank Nebraska name; during this process, 28 branches were closed while maintaining 65 locations to optimize efficiency and reduce operational costs.
U.S. Bancorp
In March 1997, First Bank System revealed plans to acquire U.S. Bancorp, headquartered in Portland, in a stock transaction valued at $9 billion. At that period, U.S. Bancorp's operations spanned Oregon, Washington, California, Idaho, and Utah, whereas First Bank System maintained branches throughout Minnesota and various other Midwestern states. The agreement designated First Bank System as the surviving entity with its headquarters in Minneapolis; however, the merged organization adopted the well-known U.S. Bancorp name. John F. Grundhofer, serving as chairman and CEO of First Bank System, assumed the roles of president and CEO for the combined firm, while Gerry B. Cameron, U.S. Bancorp’s chairman and CEO, was named chairman until his retirement in 1998. The transaction was finalized in August 1997.
This consolidation resulted in a financial institution with a presence across 17 states, managing $72 billion in assets and boasting a market value of $22 billion. It ranked as the 14th-largest bank nationwide by assets and held the 10th position by market capitalization. The newly formed company was listed on the New York Stock Exchange under the symbol USB. As part of an 18-month integration plan aimed at cost reduction and operational efficiency, nearly 4,000 positions were eliminated, predominantly affecting staff in Portland.