Businessmen David Macy, Volney T. Malott, Alexander Metzger, and brothers Henry and Augustus Schnull founded Merchants National Bank on January 17, 1865, with Henry Schnull as president of Merchants’ first office at 23 North Meridian Street. 

Merchants National Bank building, at the corner of Meridian and Washington streets, n.d. Credit: Bass Photo Co Collection, Indiana Historical Society View Source

In 1867, the bank hired a 13-year-old messenger, John P. Frenzel Ii, the first of several generations of Frenzels to figure prominently with Merchants. Frenzel served in various capacities before being elected president in 1882 at age 28, then the nation’s youngest national bank president. Merchants’ offices changed locations several times until 1884 when it moved to the southwest comer of Washington and Meridian streets, later the site of the L. S. Ayres & Company building, where the bank installed the city’s first safety deposit vault.

In the early 1890s, Frenzel successfully lobbied the Indiana General Assembly to charter trust companies in Indiana. Trust companies were for individuals, whereas banks primarily served businesses. He organized the Indiana Trust Company in April 1893 and actively sought minority business by featuring a women’s department, providing savings passbooks printed in German, and employing foreign-language-speaking lobby guards during busy Saturday banking hours.

War loan drive posters adorn the lobby of the Merchants National Bank, 1944 Credit: Indiana Historical Society View Source

Merchants built Indianapolis’ first downtown skyscraper in 1913. The 17-story Merchants National Bank Building at the southeast comer of Washington and Meridian streets remained the city’s tallest structure for 50 years until surpassed by the City-County Building in 1962.

In 1918, the Frenzels and associates organized three neighborhood banks, forerunners of the institution’s later branch banking system, including the State Bank of Massachusetts Avenue, site of a robbery by John Herbert Dillinger in the 1930s. In 1934, Merchants opened its first branch bank in the old Mustard Pot restaurant on East 38th Street. The firm then acquired former neighborhood banks and quickly converted them to branch offices.

Merchants National Bank and Trust, known as the “Zipper Building,” 1961 Credit: Bass Photo Co Collection, Indiana Historical Society View Source

In 1953, Merchants National Bank and the Indiana Trust Company consolidated as the Merchants National Bank and Trust Company of Indianapolis. The institutions previously had been closely allied through management and stock control. During the 1960s, Merchants doubled its assets from $232 million to more than $500 million and had 22 banking offices in the Indianapolis area by 1965.

In 1971, the Merchants National Corporation, a bank holding company, became the bank’s parent organization. Six years later, the $50 million merchants plaza complex opened at Washington Street and Capitol Avenue, housing Merchants’ headquarters and the Hyatt Regency Hotel. The bank put together a $12.5 million loan package to lure the Colts professional football team to Indianapolis in 1984.

Aided by a new state banking law that allowed statewide and limited interstate banking, Merchants launched an aggressive acquisition campaign in 1985. Targeting banks that were first or second in market share, Merchants purchased 20 banks in four years and doubled its assets from $2.6 billion to $5.5 billion. In 1987, Merchants won a lucrative contract from the U.S. Defense Department to provide banking services to military personnel abroad.

In May 1992, the Cleveland-based holding company National City Corporation acquired Merchants National Corporation in a transaction valued at $640 million. Merchants became National City Bank, Indiana, the following October. The merger gave National City, with $30 billion in assets, the largest share of the combined banking markets of Indiana, Ohio, and Kentucky and ranked National City among the top 25 U.S. bank holding companies. Prior to the acquisition, Merchants employed 3,500 statewide. By 1993, National City Bank, Indiana employed approximately 2,000 people statewide, of which 1,500 worked in Indianapolis.

During the 1990s and 2000s, the National City Corporation continued acquiring local banks throughout the Indiana area and larger Midwest region. Beginning in 2007, problems arose when consumers began defaulting on subprime mortgages. National City’s mortgage business dragged profits into losses, and bank officers put the bank up for sale. PNC Financial Services purchased National City for $5.58 billion. The deal was completed on October 24, 2008. The acquisition made PNC the fifth-largest bank in the U.S. and second-largest in Indiana.

Merchants Plaza, which had carried the name National City Center with the previous merger, became known as Hyatt Regency Indianapolis, PNC Center in 2010.

Revised February 2021

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