Charlotte might be a major hub for the financial services sector, but it's now headquarters to just one bank.
On Monday, Ohio-based Park National Corporation announced the closing of its $76.4 million purchase of NewDominion Bank, a community bank headquartered in midtown's Metropolitan development. That means Bank of America officially becomes the only bank based in the city.
The development comes after Charlotte for years has lost banking headquarters, as outside firms have snapped up local names. One of the most prominent examples was when Wells Fargo bought Wachovia to rescue it from potential collapse in 2008.
For a city known as "Banktown" and that has long prided itself on its financial sector, the reality of being headquarters to just one bank could affect its image as a financial hub, said Michael Walden, economics professor at N.C. State University.
"It would take a little bit of the luster, simply because people recognize where headquarters are," he said.
But, he added, Charlotte's overall economy and banking sector remain robust: "Charlotte still has a lot of momentum, still is considered one of the brightest metropolitan areas in the country."
Many of Charlotte's banking headquarters losses have been of smaller, community lenders like NewDominion, which has a branch at its headquarters and one in Mooresville. NewDominion, launched in 2005, said it will keep its name and local leadership but become a division of Park National.
The shrinking number of Charlotte-headquartered banks was a prime factor in the city losing its long-held title as the nation's second-largest banking center to San Francisco.
As the Observer first reported last year, growth in San Francisco’s financial sector helped it push Charlotte to No. 3, based on value of loans and other assets held by banks based in the respective cities.
From eight to one
In 2007, Charlotte was headquarters to eight banks, including Wachovia. Just over the past year, three other local names have disappeared: Capital Bank, Carolina Premier Bank and Park Sterling Bank.
Ronnie Bryant, CEO of the Charlotte Regional Partnership, a public-private economic development organization, said headquarters bring significant benefits to a region, including well-paying jobs and prestige.
But he said he doesn't think the loss of bank headquarters hurts the region's ability to recruit within financial services or other industries.
"It's good for bragging rights, to some degree," Bryant said, adding that the area's financial services sector has seen substantial job growth in recent years and remains strong even as the local economy has diversified.
Similar consolidations of community or regional banks have affected other parts of the U.S.
Experts cite a variety of reasons, including the desire for banks to get bigger to spread higher regulatory costs across a larger asset base. For some banks, selling also becomes an attractive option as their senior leadership nears retirement age, experts say.
Even with the losses, the finance industry remains a large employer in Charlotte.
Last year, the region had 66,690 finance and insurance jobs on average — up about 13 percent from 59,236 in 2007, according to federal data.
Many jobs are housed at Bank of America, which employs about 15,000 in the region, and Wells Fargo, which employs 25,100.
Also, other banks continue to enter the region, adding to the number of financial services jobs.
This year, Louisiana-based IberiaBank announced plans to open its first branch in Charlotte, a group of Union County business leaders disclosed plans to launch a community bank in Monroe called American Bank & Trust and another group unveiled plans for a new community bank in Statesville called Spirit Community Bank.
Walden, the NC State professor, said a big benefit of having headquarters of any company is the participation of a firm's leadership in civic activities. That involvement could disappear or shrink when companies leave, he said.
Companies could also donate less to communities where they are not based, Walden said.
"I think you could see that as a negative to having fewer headquarters of any kind," he said.
Brett Lindahl, director of resource development at United Way of York County in South Carolina, which receives donations from financial institutions, said the nonprofit benefits from partnering with banks based in Charlotte and elsewhere. But he acknowledged the uncertainty created when headquarters leave.
"I think whether it's banking or any industry, when there’s movement involved, it raises questions for everybody," Lindahl said.