It was a strange time in Charlotte, where normal life – commutes to work, trips to the grocery store, Panthers games – ran on a parallel track to earth-shattering eleventh-hour deals, weekend government rescues and stomach-turning plunges in the Dow Jones industrial average.
The raging financial crisis five years ago would change this city and its big banks – Wachovia and Bank of America – forever.
Over the weekend of Sept. 13-14, 2008, as an Observer banking reporter, I worked the phones at my desk in Charlotte while banking executives gathered at the New York Fed to hash out the fate of the tottering Lehman Brothers investment bank.
A source that Saturday told me he wouldn’t be surprised if Bank of America skipped a chance to buy Lehman to instead nab Merrill Lynch – a bold move keeping with the bank’s penchant to buy up rivals at their most desperate moments. Later, on Sunday, word leaked that, indeed, Bank of America had a $50 billion deal to buy Merrill, and Lehman would file for bankruptcy, spinning the financial system into chaos.
By Wednesday, I was in New York for a story on Bank of America’s latest blockbuster and found more surreal moments. A luxury car show was underway at Merrill’s headquarters, even as the Wall Street icon was turning to Bank of America for a lifeline. One employee told me that when he was walking to work that morning a construction worker at the nearby World Trade Center site called out, “Good luck, guys.”
Of course, much more was to come.
In the next two weeks, Wachovia found itself in a deal to be sold to Citigroup – only to have Wells Fargo swoop in with a better offer. In a reaction never to be expected in Charlotte – where banks were always buyers, never sellers – Wachovia employees celebrated when healthier Wells Fargo agreed to acquire their bank, rather than Citi, which seemed on life-support itself.
One of the most unusual moments for me, personally, was when I was so tired I slept during a playoff game pitting my Philadelphia Phillies against the Milwaukee Brewers the day after the Wells Fargo deal was announced. The Phillies lost the game but went on to win the World Series.
Like in sports, winners and losers have emerged from the financial crisis. And there are those stinging what-if moments that will haunt the players and the rest of the city for generations.
What if Bank of America and Wachovia hadn’t done so many ill-advised deals? What if Wachovia had received a government bailout? What if regulators and ratings agencies had done more to rein in risks in the financial system?
Among the many lessons learned in the crisis: Charlotte realized that its place in the banking world wasn’t as lofty as it had once thought. Most of the decisions concerning the fate of the city’s banks were made by lawyers in Midtown Manhattan and regulators inside the Beltway. The city got a taste of what San Francisco, Birmingham, Ala., Atlanta and Boston felt when Charlotte banks snapped up their hometown institutions.
Five years later, Charlotte has fewer banking jobs and less clout in the financial world, but it has shown an impressive resilience. An array of financial firms have set up shop in the city, giving employees from the big banks a place to land. Other industries such as the energy sector are picking up some of the slack.
Memories of the nerve-wracking and wearying days of the financial crisis are fading, but a glance at some of the Observer’s photos from 2008 and 2009 will bring back a rush of emotions to anyone who lived in Charlotte during those dizzying times.
In one shot, Wachovia executives Bob Steel and Ben Jenkins, obviously emotionally drained, prepare for an employee meeting announcing the Wells Fargo merger, as Wells CEO John Stumpf looks on with empathy.
In another, after the close of the Wells Fargo deal, a rolling stock ticker on a College Street tower flashes the listing for Wachovia: “N/A.”
Observer business reporter Rick Rothacker has covered banking in Charlotte since 2001. He is the author of “Banktown: The Rise and Struggles of Charlotte’s Big Banks.”
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