Marine Midland Corporation (now HSBC USA Inc.) was formed on 4 October 1929 in New York, USA. It was the first multi-bank holding company in the state.
Its origins can be traced back to the Marine Bank of Buffalo (later Marine Trust Company of Buffalo), which was founded in 1850. This firm was initially focused on trade finance for grain and other commodities, between the Midwest and New York state. It grew through the acquisition of numerous smaller local banks in the decades to come.
George Rand Jr. took over as Marine Trust Company of Buffalo president in 1925. He was a son of George Rand, a former Marine president, and influenced by his father’s vision of “chain banking” – banks coming together in partnership, whilst remaining under community control and partnership. This inspired him to form the Marine Midland Corporation in 1929. Headquartered in Buffalo, it listed on the New York Stock Exchange, and issued shares in exchange for stock in 17 banks in the region. The Marine Trust Company of Buffalo, continued to operate in its own name under the central leadership of the Corporation, and continued to acquire small local banks in the Buffalo region.
In 1930, Marine Midland Corporation acquired the Fidelity Trust Company of New York, establishing the company’s first presence in New York City. Numerous other banks would join the affiliation over the next few years. These included a range of small firms and larger institutions such as the Bank of Yorktown (acquired 1949), Syracuse Trust Company (1951) and First Bank and Trust Company of Utica (1954). Some acquisitions were merged into existing members of the Corporation, whilst the majority continued to function as separate entities, each with their own capital, personnel and board of directors. However, they operated with a common sense of purpose through the central leadership of the Corporation. By the early 1950s, the Marine family tree consisted of more than 100 predecessor institutions, with roots dating back to 1812.
In 1951, Marine Midland Corporation began consolidating its affiliated banks. The Marine Trust Company of Buffalo, for example, was merged with other banks to create the Marine Trust Company of Western New York (later Marine Midland Bank - Western). The other regional banks created to serve New York State comprised of: Marine Midland Bank - New York; Marine Midland Tinker National Bank; Marine Midland Bank of Southeastern New York; Marine Midland Bank - Eastern; Marine Midland Bank - Southern; Marine Midland Bank - Central; Marine Midland Bank - Rochester; Marine Midland Bank - Northern; Marine Midland Bank - Chautauqua.
Head office operations were still being conducted from the 237 Main Street, Buffalo – the home of Marine Trust Company of Buffalo since 1913. Additional space and more modern facilities were unveiled with the opening of a new headquarters building in 1958 at 241 Main Street, adjacent to the office at 237.
By 1960, Marine Midland had become the second largest bank-holding company in the US and it continued to grow through further acquisitions. It was instrumental in the development of a national interbank credit card, which later became MasterCard. Marine was also pioneering in consumer finance and the finance of agribusiness. In 1968, Marine Midland Corporation was renamed Marine Midland Banks, Inc., and a new 38-storey headquarters was unveiled at 1 West Seneca Street in Buffalo (‘Marine Midland Center’) three years later.
In 1976, following a change in state law, Marine Midland Inc. amalgamated the ten regional banks under its control. This was the largest merger in US bank history at the time. The newly-formed institution operated 316 offices and held total assets of USD10.5 billion. It took the name Marine Midland Bank (now HSBC Bank USA). Marine Midland Banks, Inc. remained in place as the holding company. However, Marine soon found itself in financial difficulties due to a weak economy and non-performing loans inherited from various predecessor institutions.
The Hongkong and Shanghai Banking Corporation (HSBC) was seeking to expand in the North American market at this time. It had been operating in the US since 1875, adding a local subsidiary in the form of The Hongkong and Shanghai Banking Corporation of California in 1955. However, potential for growth was limited in such a fast-moving market, and a stake in an existing American bank offered the best opportunity for expansion.
Marine Midland and HSBC began talks in early 1978. An initial agreement was reached that would see HSBC acquiring 51 per cent shareholding in Marine Midland Banks, Inc. The deal was held up by lengthy regulatory approvals and political debate, but finally completed in October 1980 at a total cost of USD314 million. HSBC purchased the outstanding 49 per cent stake to complete full ownership in 1987.
Marine’s customer base continued to grow through acquisitions, such as the East River Savings Bank in 1996 and First Federal Savings and Loans Association of Rochester in 1997. There was also greater focus on integration with HSBC through operations, technology, people and branding. Marine Midland Banks, Inc. was renamed HSBC Americas, Inc. in 1995. The name changed again, to HSBC USA Inc., in 1999.
In December 1999, HSBC completed the acquisition of Republic New York Corporation and Safra Republic Holdings. Republic New York Corporation was merged into HSBC USA Inc. and central operations were consolidated at Republic’s headquarters at 452 Fifth Avenue, New York City.
HSBC’s acquisition of Household International in 2003 prompted a restructuring of operations in North America. All businesses, including HSBC USA Inc., were consolidated under HSBC North America Holdings Inc., a new Chicago-based holding company. Its location changed to New York City in 2010. HSBC Bank USA continues to operate as a subsidiary of HSBC USA Inc..
Further reading: ‘The History of The Hongkong and Shanghai Banking Corporation’ volumes 1-4 by Frank H H King (Cambridge University Press, 1987-1991); ‘The Lion Wakes, A Modern History of HSBC’ by Richard Roberts and David Kynaston (Profile Books, 2015).
