The Duke Energy Center in Charlotte, N.C., was designed to be a nighttime attention grabber. Some evenings, the tower lights up the skyline with colors paying tribute to local athletic teams, or in patterns tied to special events, like the rolling rainbow that celebrated gay pride week last summer.

On Nov. 29, the top of the 786-foot building glowed in the bright yellow hue of a ripened banana. It was an electric homage to Chiquita Brands International, which announced earlier that day that it would be moving its corporate headquarters from Cincinnati to Charlotte.

The relocation would bring 400 jobs to a city known less for fresh produce than for Cam Newton, NASCAR and big banks. And there was something else Chiquita offered that Charlotte needed. As Michael Smith, head of the downtown development group Charlotte City Center Partners, told the local paper that day, Chiquita's arrival represented "an unprecedented diversification, in jobs, investment and development in our economic center."

Unprecedented, perhaps, because there never had been much need to diversify in a city long dominated by two firms and one industry. Bank of America and Wachovia, and all of the predecessor institutions that went into building them, had long ago turned Charlotte into a banking town-so much so that by 2007, the peak year for industry wages locally, financial services accounted for nearly $1 of every $5 paid to private-sector employees in the metro area. For Charlotte, just like the industry it grew up with, the latest downturn was an object lesson in concentration risk. "We truly were just a one-trick pony," a BofA banker from the area says.

The number of finance and insurance jobs in the metro area, which topped out at 57,767 in 2006, had shrunk to 51,691 by the end of 2010, according to the most recent figures from the North Carolina Employment Security Commission-and that was before the most recent round of industry job cuts. Overall, the city has lost $800 million in industry wages since a peak of $5.77 billion in 2007.

"We know that the payroll mix has changed," said Bob Morgan, president of the Charlotte Chamber of Commerce. "There are fewer investment banking jobs, and I suspect the overall payroll numbers won't be what they were."

So it was big news in 2009 when the city poached the North American headquarters of appliance maker ElectroLux and lawn and garden equipment maker Husqvarna from Augusta, Ga., in two separate deals. And the yellow lights that heralding Chiquita's relocation announcement last fall would have held a special poignancy for anyone remembering that the Duke Energy Center originally had been known as the Wachovia Corporate Center.

Charlotte's effort to diversify was being met with some success. But a funny thing happened while civic leaders got busy touting the city as an ideal home for manufacturing, energy, health-care and transportation companies: regional banks from far-flung parts of the country started moving into the vacuum as well, picking up veterans of the two Charlotte banking giants and establishing beachheads in the South.

One of the most prominent of the regional players is U.S. Bancorp, which employs about 180 people in Charlotte.

The company, which weathered the crisis better than most, had decided to press ahead with plans laid before the downturn to expand its corporate banking group beyond the Midwestern and Western footprint of the Minneapolis-based company. It opened a New York office in 2007 and arrived in the Southeast in 2009, building a corporate banking and high-grade debt team led by former Wachovia executives.

"We were looking at Charlotte and Atlanta," says Dick Payne, the U.S. Bancorp vice chairman in charge of wholesale banking. "But Charlotte had two huge banks and a deeper talent pool."

Charlotte's ties to finance date back to the late 18th century, when the city was at the center of the first U.S. gold rush. (North Carolina led the nation in gold production until the California Gold Rush began in 1848.) How the city emerged as a U.S. hub of modern-day finance, one that by the early 1990s trailed only New York, seems by most observable facts to have been an accident of fate. But for the drive of two bankers late in the last century, Hugh McColl and Ed Crutchfield, the city might not have become any more synonymous with banking than any other mid-size American city.

As the banking industry consolidated in the second half of the 20th century, it was two Charlotte banks (NCNB, run by McColl, and First Union, led by Crutchfield) that became some of the most aggressive acquirers of rival institutions, working up ever greater appetites as cross-state banking restrictions eased.

McColl was the architect of the industry's first coast-to-coast franchise when NationsBank teamed with Bank of America in 1998, adopting the latter's name for the new corporate behemoth. First Union grew exponentially, if not smoothly, through the 90-odd acquisitions made under Crutchfield's leadership. Hiccups in company's acquisition of CoreStates Financial in 1998 and the disastrous buyout of The Money Store (netting First Union a $1.7 billion loss two years later) did not give First Union pause in its $15 billion takeover of Wachovia in 2001.

Having two home-town firms with similar ambitions ratcheted up the competition and helped drive Charlotte's expansion as a banking center, with McColl strategizing at BofA on North Tryon Street and Crutchfield plotting Wachovia's next steps from his office on South Tryon Street.

Both empires faltered under the next generation of leadership. Wachovia's new skyscraper was still under construction when the bubble burst. The company never got the chance to move into the Wachovia Corporate Center. It sold to Wells Fargo, stripping Charlotte of its claim to be the headquarters for two of the biggest players in banking.

BofA, meanwhile, has been beaten down by its mortgage exposure and missteps in foreclosures. For Charlotte, this has only compounded the pain of losing investment banking jobs to New York after BofA bought Merrill Lynch.

The effects of the crisis have rippled out well beyond the local banking sector. Art galleries shut down as demand dried up. Many high-end restaurants and bars in Uptown-what local residents call the downtown center-closed their doors.

"Charlotte has always been an up-beat, can-do city, but the spirit of the city has been affected, no question," says Wes Sturges, CEO of Bank of Commerce, a community bank in Charlottewith $145 million in assets."We've lost our swagger, that's gone," says the three-decade veteran of the city's banking industry.

In its place, though, is a sense that Charlotte's banking sector is regrouping, albeit in new and unexpected ways."The green shoots are the regional banks," says Tony Plath, a banking professor at the University of North Carolina at Charlotte and a longtime industry observer.

Regions Financial, based in Birmingham, Ala., is among the players to expand what had been a relatively miniscule presence in Charlotte."I think some of the regional banks had previously viewed Charlotte as locked up by the two larger competitors," says Ed Hawes, Regions' local market president. "Now that's not the case." Regions has been growing its commercial and middle-market lending units, and now employs about 75 people in the metro area.

Cincinnati-based Fifth Third Bancorp, a relative newcomer to the city, and BB&T, which had long done battle with BofA and Wachovia from its headquarters in Winston-Salem, N.C., also are hiring in the city. And later this year, Pittsburgh-based PNC Financial Services Group will make a push locally with the re-branding of 18 RBC Bank USA branches in the area, inherited in the acquisition of a Royal Bank of Canada subsidiary that had been based in Raleigh, N.C."It doesn't feel like a two-bank town anymore," says Dee O'Dell, a former Wachovia executive who joined U.S. Bancorp in 2009 as national corporate banking chief.

But it doesn't feel like all the slack has been taken up by the regionals, either.

BofA announced plans last fall to slash 30,000 jobs across its footprint. And while Wells Fargo may not have cut as many jobs as some feared after it purchased Wachovia in 2008, the bank has not shown a surge in hiring.

Meanwhile, says the Chamber of Commerce's Morgan, "we're still dealing with the loss of dividend income" from Charlotte's mainstays. "It was here yesterday, gone today. It's going to be a red-letter day when the regulators allow the banks to begin paying regular dividends."

No matter how successful Charlotte becomes at recruiting other industries, replicating some aspects of banking-like its significantly above-average pay rates-will be tough to achieve.

Few have seen the changes in Charlotte's commercial makeup quite like the city's bicycle messengers. Before the crisis, a half-dozen local messenger services employed 20 bike messengers to deliver packages and documents throughout the Uptown core. Those companies billed about $500,000 annually to customers that ranged from the big banks to the accountants, law firms and civil engineers doing business with them, according to Bill Fehr, a Charlotte bike messenger who works for Nova Office Strategies.

Fehr says that during the boom years for banking, he and his rival messengers "delivered everything and anything we could," including orders of bagels from a local bakery that sold to hungry employees of banks and law firms. But since the crisis, Fehr's firm has pulled back to serving just nine law firms, and Fehr, 42, says the number of messengers in the city has dwindled to just five full-time riders. He estimates the remaining messengers bill just $175,000 a year to customers, a 65 percent drop from the peak.

Messengers used to meet in the plaza outside Bank of America's headquarters during their breaks between deliveries. "We never really competitive between the riders," he says. "It was a neat synergy. Everyone felt like they were in it together."But by early 2009, the gatherings had largely stopped, as laid-off messengers moved on to other work, or just disappeared as business dried up.

Other industries and even other banks may help Charlotte maintain its status as an important hub of commercial activity. But for the city's bike messengers and others who relied on having two thriving giants headquartered right in town, "it's not coming back," Fehr says. "It's over."


Joe Rauch is a freelance writer. He is based in Charlotte.

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