When I was a young business person four major banks were headquartered in Birmingham: First National Bank, Birmingham Trust National Bank, Exchange Security Bank, and Central Bank. These banks eventually morphed into AmSouth, SouthTrust, Regions, and Compass.
Birmingham was a banking powerhouse—and a great source of pride.
Compass was bought by BBA and became BBVA Compass, SouthTrust ultimately became Wells Fargo, and AmSouth and Regions merged into Regions Financial.
Suddenly our four locally headquartered banks became one– Regions–the only Fortune 500 Company based in Alabama.
Regions is critical to Birmingham
If Birmingham had a right hand—it would be Regions Financial.
Regions is often the major contributor to our nonprofits and most every nonprofit board includes one or more Region employees.
A prominent UAB professor recently told me he that his family would not have been able to move to Birmingham if his wife hadn’t found employment at Regions. Many trailing spouses of UAB doctors, professors, and professionals depend on Regions to provide high level employment.
According to Al.com, Regions had a $7.6 billion impact on the Alabama economy last year–$4.1 in Jefferson and Shelby counties alone. “Regions accounts for nearly $2.2 billion in direct expenditures in payroll and non-payroll expenses, and $1.9 billion in indirect or induced spending.”
More than 36% of Regions employees live in Birmingham metro creating 17,643 jobs, with 5,927 direct employees and 11,716 indirect or induced jobs.
Regions $800 million payroll and benefits average 46% higher than the average Alabama worker and the bank has lent more than $3.3 billion to Alabama consumers and businesses.
I have been repeatedly warned by banking professionals that sooner or later Regions will be acquired or merged—maybe not this year or the next—but one day.
Banking mergers and acquisitions ebb and flow—but merger/acquisition activities are currently on the rise.
Last year our locally headquartered National Commerce Corporation (National Bank of Commerce) announced it was being acquired by Winter Haven, Florida-based CenterState Bank Corp.
Then BB&T and Sun Trust announced a merger and you’ll soon see BB&T signs and logos updated with a new name—Truist.
The loss of Regions to Birmingham would likely wound our community. Many mid-level jobs would likely remain, but the top executive positions would be eliminated—and local professional firms that support Regions would be impacted.
How we can avoid this economic apocalypse
We can’t stop bank mergers, but we can develop options.
We used to have 30 public companies headquartered in Birmingham. We now have only nine.
Recruiting new public companies likely will not be our salvation.
Our best option is to invest and support small business and startups.
Four years ago I visited Bill Smith, the founder of Shipt, in his newly acquired office in the old AmSouth John Hand building at 1st Avenue and 20th Street North downtown.
I met with Bill to ask him to consider joining a small business owners’ support group which I facilitate. I had reservations about offering the invitation because when I looked around the huge mostly empty floor of the building, I only saw a few scattered employees. Our business owners’ group requires a minimum of 30 employees for membership and Bill told me he had only 15 or 20. But he assured me Shipt was growing.
I was unable to recruit Bill and he’s done just fine. He sold Shipt in 2017 for $550 million.
This year Shipt announced it plans to become the anchor tenant of the city’s tallest building—The Wells Fargo Tower—soon to be called the Shipt Tower. Shipt will continue to house its headquarters at the John Hand Building, where the company says it will remain in Birmingham and add 881 jobs.
The real irony is that Shipt got its start in an old AmSouth bank building and now is expanding into what was the SouthTrust headquarters—two of Birmingham’s historically largest banks.
There are dozens of other potential Shipt-like startups currently being birthed in our region.
Our economic success will be defined by growing baby companies, investing in them; supporting them, and then watching them blossom into economic giants.
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David Sher is Co-Founder of AmSher Compassionate Collections. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. firstname.lastname@example.org.