As Alabama gives up its big banks, it follows Florida path to a banking colony
It was only a few years ago that Alabama was awash in prosperous banking institutionsheadquartered in the southern state. Many chalked it up to culture. Alabama banks prospered within their borders, in part because other southeastern banks then on the hunt -- North Carolina's Bank of America (then called NationsBank), Wachovia (then called First Union) and Atlanta's SunTrust -- thumbed their noses at 'Bama-based banks because they did not see Alabama has a long-term growth state. And the state, right or wrong, still had an insular reputation that did not appeal to fast-growing banks.
Eventually, Alabama banks looked across their southern border and saw the boom in Florida.They realized, belatedly, that they might grow faster if they expanded to Florida rather than stay bottled up in their own turf. So the invasion of Florida, via acquisitions, began in earnest in the 1990s and spilled into the new millennium.
Alabama heavyweights like AmSouth and SouthTrust poured into northern and central Florida, buying many smaller institutions in the Tampa Bay area along the way. Then banks like Compass and Colonial pushed into the state.
It might be argued that most of these Alabama banks did not anticipate the intensity of bank competition in Florida. Certainly Florida banks themselves have proved lousy competitors. There are no big banks based in Florida any more. They've been gobbled up by more ambitious banks elsewhere.
But what has happened to all those Alabama banks?
1- SouthTrust, based in Birmingham, ran out of steam and was bought by Wachovia in 2004.
2- Compass Banks, based in Birmingham, was purchased in 2007 by Banco Bilbao Vizcaya Argentaria, the second largest bank in Spain.
3- Colonial Bank, based in Montgomery, failed last Friday and was sold by the FDIC to North Carolina's BB&T.
So where are we? Regions is the last big bank standing in Alabama. In the second quarter of this year it lost $188 million.
Regions is considered a likely acquisition target, sooner or later, of a bigger and better capitalized bank. If that happens, then Alabama will lose its once formidable banking industry and join Florida as a banking colony, dominated by big banks based elsewhere.
-- Robert Trigaux, Times Business Columnist