Former U.S. Bancorp Chairman John “Jack” Grundhofer, who turned around a struggling bank in Minneapolis and built it into what would become one of the country’s largest financial companies, died Sunday at 82.
Grundhofer was a prominent California banker rising through the ranks at Wells Fargo when he was recruited to help turn around Minneapolis-based First Bank System as its CEO in 1990. He quickly became known as a cost cutter at the then-$10 billion-asset bank, slashing 20% of the workforce, turning over upper management and even
Grundhofer was kidnapped at gunpoint during his first year at First Bank System on the parking ramp as he was heading into work. Sticks of dynamite were strapped to his arms as he was forced to drive out to a wooded area in Wisconsin. After being left alone, Grundhofer managed to untie himself and escape to a nearby farmhouse. Investigators later suspected a former employee or a disgruntled borrower cut off from the bank’s tighter lending policies were behind the kidnapping, though it was never solved.
Despite the harrowing episode that became legend in the banking industry, First Bank started to right the ship. It went on to make nearly three dozen acquisitions over the next several years, culminating in its 1997 deal for U.S. Bancorp in Portland, Ore.
The $9 billion merger created a $70 billion-asset company that took on the U.S. Bancorp name but remained headquartered in Minneapolis.
Richard Davis, who later became CEO of U.S. Bancorp and its subsidiary U.S. Bank and guided it through the 2008 financial crisis, said Grundhofer “took [First Bank] from near death” and set it up for its nationwide expansion.
In 2000, Grundhofer sold U.S. Bancorp to Milwaukee-based Firststar, which was run by his younger brother Jerry Grundhofer at the time, in a $21 billion deal. That deal created a $160 billion-asset company, which kept the U.S. Bancorp name and its Minnepaolis headquarters. Jerry was named CEO of the combined company and Jack became its chairman.
Today, U.S. Bancorp is the nation’s fifth-largest commercial bank, with $553.9 billion of assets. Its current Chairman and CEO Andy Cecere was mentored by Grundhofer and served as his chief financial officer before U.S. Bancorp was sold to Firststar and through the merger.
“[Grundhofer] pushed for excellence in financial management and had a vision that was bigger than what many thought was possible at the time,” Cecere said in a statement announcing his former mentor’s death.
Grundhofer retired in 2002 and became chairman emeritus of U.S. Bancorp. He spent time funding nonprofits and teaching. A longtime supporter of the arts, Grundhofer helped rescue the Palm Springs International Film Festival from financial trouble.
He is survived by his wife Patti, two daughters, five grandchildren and his brother Jerry.
