By Paul Kurzeja

Charlotte, a landlocked, mid-sized southern city, is an unlikely candidate for a world-class financial center. Despite these hurdles, Charlotte is the second-largest financial center in the United States with an interesting history of how it got there.

Charlotte’s earliest financial boom started with gold. In 1799, just outside Charlotte, a young boy found a 17-pound gold nugget and unknowingly started the first United States gold rush. Over the following decades, gold mines dotted the region and by 1837, over 50 mines were in operation. In the same year, a Charlotte branch of the U.S. Mint opened and minted coins consisting of North Carolina gold.

The gold boom continued until 1849 when the California Gold Rush lured prospectors westward. Although mining continued, the Mint was taken over by the Confederacy in 1861 when North Carolina seceded. They continued to produce coins until the building was converted to a hospital and ultimately closed at the end of the Civil War. Like in most southern towns, the Civil War was devastating but by the 1870s, Charlotte emerged as a rail center and textile hub in need of a local bank. In response, local business leaders started raising money to build banks.

Established in 1874, the Commercial National Bank of Charlotte was founded with $50,000 in equity from various local businessmen. Other banks followed, including Union National Bank in 1908, whose first branch was simply a large roll top desk set in the lobby of the Buford Hotel on West Tryon Street. More than eighty years later, in the late 1950s, Commercial National merged with American Trust in Charlotte and Security National in Greensboro and soon became known as the North Carolina National Bank (NCNB). In 1958 Union National was primed for expansion and acquired the First National Bank of Asheville and became First Union National Bank.

Although both NCNB and First Union were prosperous in the state, further expansion proved to be difficult. Until the mid-1980s, state laws throughout the country prevented banks from purchasing branches in more than one state. NCNB was able to bypass this law in 1982 with the ownership of a small Florida trust company, which was not a bank. Under state laws, the trust company could be owned by a bank from out of the state. NCNB used this loophole to purchase a small bank in Florida and, in accordance with the law, began expansion within the state. With branches in Florida, NCNB officially became one of the first interstate banks. In recognition of its growing interstate presence, NCNB changed its name to NationsBank in 1982.

First Union was not able to expand its bank until 1985. With lobbying from First Union and other banks, the state legislature passed the Southeastern Regional Banking Compact, a law allowing North Carolina banks to open branches in other states while forbidding other banks from entering North Carolina. This legislation, while clearly protectionist, allowed First Union to expand while minimizing the risk of being acquired by a large out-of-state bank. First Union immediately purchased Atlantic Bancorp of Jacksonville, Florida. Over the following years, First Union and NationsBank continued to expand through acquisitions in various states.

In 2001 First Union acquired Winston-Salem-based Wachovia National Bank and took on the name. The bank was hit hard by the 2008 recession and was bought by California-based Wells Fargo. Charlotte remains Wells Fargo’s East Coast headquarters.

In 1998, NationsBank acquired the San Francisco-based BankAmerica and became Bank of America. BankAmerica had a huge west coast presence and the purchase created the first coast-to-coast bank.

Both Wells Fargo and Bank of America continue to be important financial institutions in Charlotte employing 27,000 and 223,000 people with annual revenues of $72.3 and $85.1 billion respectively.

Sources

Rick Rothacker, Banktown, (Winston-Salem, 2010).

Greg Farrell, Crash of the Titans, (New York, 2010).

Bank of America Company Information, Fortune 500

Mary Norton Kratt, Charlotte: Spirit of the New South (John F. Blair Publisher, Winston-Salem, NC 1992).

Hugh Talmage Lefler and Albert Ray Newsome, North Carolina: The History of a Southern State (Chapel Hill, The University of North Carolina Press, 1954).