Whatever happened to Valley National Bank of Arizona
If you lived in Phoenix any time between the 1890s and 1992, you probably remember Valley Bank. No, that's not a typo, 1890s, eighteen-nineties. And even if you didn't bank there, there were branches all over Arizona, and chances are very good that someone you knew financed their house, car, or business, through VNB.
I've spent many years trying to figure out the story of what went wrong, and what went right, with Valley National Bank of Arizona. And what went wrong was, well, the 1980s in Arizona.
If you know about the financial disasters that hit Arizona in the 1980s, a lot of things spring to mind. The Savings and Loan failures, Charlie Keating, the list goes on and on. And apparently the shock waves were enough to even affect a solid institution like Valley National Bank.
By the time I started at VNB, in their marketing department, in 1989, the company was in terrible trouble. I really didn't understand, and still don't today, but I knew that it was not paying dividends to its shareholders (it's called freezing). People who did understand were genuinely concerned for the future of Phoenix, and of Arizona. The fact was that VNB had pretty much financed most of Phoenix since the 1890s, and its collapse would have a devastating effect on the city. Sure, there was the FDIC, but that wasn't going to be enough to protect the crushing effect of a bankrupt Valley National Bank on the city that it had helped to create.
From my selfish point of view, I just remember thinking how unfortunate it would be for me, after getting this great job, to watch it wash away as the company failed. I really had no idea how important Valley Bank was, not just to me.
For the rest of the story, you have to appreciate that true national banking was on its way. That is, banking over state lines, which we take for granted today. Before national banking was legalized in 1996, no bank could operate over state lines. The idea went back to the Great Depression. If a bank should fail, at least its failure would be contained within a state. And that's why Bank One had been buying up banks all over the country, and it probably got Valley National Bank, in 1992, at a bargain price.
I was a Bank One employee from 1992 to 1996 and it was a glorious time. They brought in the much-needed capital to keep the bank running. And, really, other than the name, nothing else changed at that time. The bank kept the same employees, like me. Even the Valley Bank commercials, which had the head coaches from ASU and the U of A, remained the same. The logo changed from Valley National Bank to Bank One, but that's all. Bank One was wise enough to let the bank continue running. And it came back strong. So strong that in 2002 JP Morgan Chase bought it, and Chase continues the legacy of "financing the frontier".
And that's what happened to Valley Bank.
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Posted by Brad Hall