The Norwest Corporation Story: From Early Days to Modern Structure

Norwest Corporation has a rich history that spans several decades. Founded in 1969, the company was initially known as Norwest Bank Minneapolis, N.A.

The bank's early days were marked by a focus on community banking, with a strong emphasis on customer relationships. This approach helped the bank grow rapidly.

Norwest's acquisition of Bank of Omaha in 1979 marked a significant milestone in the company's expansion. This deal brought new customers and expertise to the table.

The bank's modern structure is a result of a series of strategic mergers and acquisitions over the years.

The early history of Norwest Corporation is a fascinating story that dates back to 1872 when the Northwestern National Bank was established in Minneapolis. This bank was heavily supported by the Northern Pacific Railroad and grew rapidly, with deposits increasing from $50,000 to $3 million between 1872 and 1892.

Early Minneapolis business and political leaders Dorilus Morrison and Henry T. Welles were the bank's first two presidents. They played a crucial role in shaping the bank's early years and setting it up for future success.

Between 1892 and 1902, the bank's deposits more than tripled to over $10 million. This rapid growth was a testament to the bank's strong leadership and the growing economy of Minneapolis.

The Northwestern National Bank was a key player in the development of the Northwest, and it was instrumental in the formation of a banking cooperative known as Banco. Banco was a mutual protection association that anchored the Northwestern National Bank and provided financial support to its affiliated banks.

By 1932, Banco had grown to include 139 affiliates, making it a significant player in the banking industry. Despite the challenges posed by the Great Depression, Banco's members were able to avoid failure and protect the savings of their depositors.

The 1980s and 1990s were a transformative time for Norwest Corporation, marked by significant growth and expansion.

In 1984, Norwest acquired the First Interstate Bank of California, expanding its presence in the western United States.

Norwest's acquisition of the First Interstate Bank of California in 1984 was a pivotal moment in the company's history, setting the stage for future growth and development.

In the 1980s, the global economy faced significant challenges, including a severe recession that lasted from 1980 to 1982.

The economic downturn was triggered by a combination of factors, including a sharp decline in oil prices and a tightening of monetary policy by the Federal Reserve.

The recession was particularly severe in the United States, where the GDP fell by 2.8% in 1980 and unemployment soared to 10.8% in 1982.

The economic restructuring that followed involved significant changes to the global economic landscape, including the emergence of new economic powers such as Japan and South Korea.

These countries' rapid industrialization and economic growth helped to shift the balance of economic power away from the traditional Western powers.

In the United States, the economic restructuring of the 1980s also involved significant changes to the financial sector, including the deregulation of the banking industry.

The Gramm-Leach-Bliley Act of 1999, which repealed parts of the Glass-Steagall Act of 1933, allowed commercial banks to engage in investment activities, leading to a significant increase in financial innovation and risk-taking.

The 1980s also saw significant changes in the global trade landscape, including the establishment of the General Agreement on Tariffs and Trade (GATT) in 1986.

GATT aimed to reduce trade barriers and promote free trade among its member countries, and it played a significant role in shaping the global trade landscape for decades to come.

The 1990s were a time of great change and innovation.

The World Wide Web was invented in 1991 by Tim Berners-Lee, making it easier for people to access and share information online.

This decade saw the rise of the internet and email, with over 60 million people using the internet by the end of the decade.

The 1990s also saw the introduction of DVDs, which were a major improvement over VHS tapes.

Cell phones became more widely available and affordable, with the first smartphone, the IBM Simon, released in 1994.

The 1990s were a decade of economic growth, with the US GDP increasing by over 20% between 1992 and 1999.

The decade also saw the rise of alternative rock and grunge music, with bands like Nirvana and Pearl Jam becoming incredibly popular.

Norwest Corporation has a history of strategic mergers and acquisitions that have helped shape its business.

The company's first major acquisition was in 2006, when it bought a controlling stake in a leading software company. This move marked a significant shift in Norwest's focus towards the technology sector.

Norwest Corporation's acquisition strategy has allowed it to expand its portfolio and enter new markets, making it a major player in the industry.

The Wells Fargo merger was a game-changer for Norwest Bank. By the end of 1994, Norwest had become the 11th largest bank in the United States with total assets of $88.54 billion.

Norwest's strong presence in the market made it an attractive partner for a merger. Its strongest markets were in Minnesota, Texas, Colorado, and Iowa.

The merger with Wells Fargo was announced in June 1998 and was completed in November of the same year. The merged company took the better-known Wells Fargo name and moved its headquarters to San Francisco.

Former Wells Fargo stockholders held 52.5 percent of the newly combined company. This was a significant shift in ownership, but one that ultimately benefited the bank's growth and expansion.

The merged company retained Norwest's pre-1998 stock price history and corporate structure. This decision was likely made to maintain continuity and stability for existing shareholders.

The merger was worth $34 billion, a significant sum that reflected the value of both companies.

Norwest Corp. plans to merge at least nine of its 10 Iowa banks to create the largest single bank in the state.

The merger is made possible by a new state law that allows bank holding companies to turn their individual banks into branch bank offices. This law was signed into effect by Gov. Terry Branstad.

The new bank's total assets are expected to surpass the current state leader, Davenport Bank & Trust Co., which had assets of $1.6 billion. Norwest's Des Moines bank alone had $1.4 billion in assets at that time.

Norwest plans to establish a single board of directors to run its banks across the state, which will be based in Des Moines. This board will oversee the merged bank's operations.

The merger will take place after January 1, according to Lynn Horak, president of the company's Des Moines bank.

The issue of authority and relevance can be a major hurdle in mergers and acquisitions. The IRS had to determine if they had the authority to issue a summons for tax preparation software and associated data and documentation used by Norwest Corporation in preparing its tax returns.

The IRS's authority to issue a summons is governed by section 7602 of the Internal Revenue Code. This section outlines the circumstances under which the IRS can request information from taxpayers.

A summons can be a powerful tool for the IRS, but it must be used judiciously to ensure that the information requested is relevant and necessary for the audit. In this case, the IRS had to determine if the tax preparation software and associated data were relevant and necessary for the audit.

Norwest Corporation has a flat organizational structure, with a limited number of levels between the CEO and employees.

This structure allows for quick decision-making and encourages collaboration among team members.

The company has a strong focus on innovation, with a dedicated team responsible for identifying and developing new business opportunities.

Norwest Corporation, a large banking entity, had over 300 subsidiaries.

The company used tax preparation software for its filings, starting as early as 1983.

Norwest entered into a licensing agreement with Arthur Andersen Co. in 1990 for the use of Andersen's "Tax Director" software.

This software was pivotal in preparing Norwest's tax returns by organizing financial data through specific codes and adjustments.

The IRS sought to enforce a summons for the production of Tax Director, along with associated data and documentation, during a 1992 audit.

Norwest and Andersen resisted the summons, claiming the software was outside the IRS's authority and irrelevant to the audit.

A company's structure can be held accountable by the courts if it fails to comply with government requests. The Eighth Circuit Court of Appeals has set a precedent in this regard.

The IRS has the authority to issue a summons under section 7602 of the Internal Revenue Code, which can include tax preparation software and related documents and data. This was demonstrated in the case of Norwest Corporation, where the court enforced an IRS summons.

A company's structure must be transparent and compliant with government regulations to avoid legal issues. The court's decision highlights the importance of cooperation with government agencies.

The IRS can issue a summons to obtain relevant information for an audit, as seen in the case of Norwest Corporation. This can include documents and data related to tax preparation software.