Memphis is the undisputed king of Tennessee banking and has been since AmSouth Bancorp’s 1999 acquisition of Nashville-based First American Corp. Three of the six banks with the biggest market share in the state are headquartered in Shelby County.

Yet by year’s end, Birmingham will be on par with Memphis once Union Planters Corp. becomes a unit of Birm- ingham’s Regions Financial and National Commerce Financial is absorbed into Atlanta’s SunTrust Banks. First Horizon National, the renamed parent of First Tennessee, will be the sole remaining statewide banking power based in Memphis.

Memphians should be aware of Nashville’s cautionary tale about the ripple effects of lost banking headquarters when sales of First American and Third National Corp. (to SunTrust in 1986) terminated Music City’s hold on top banks. Years since those transactions, some Nashville business executives still bemoan the challenge of landing larger loans when out-of-state credit officers are involved. And Nashville not-for-profits, while thankful for the generous support of the banks’ corporate parents, sometimes suspect their coffers would be fuller still if the banks’ ownership had remained local.

“When a corporate headquarters leaves town, you don’t end up with the same level of executive support of the arts and education,” says University of Memphis law professor Jim Smoots, who teaches financial law and has been involved in mergers and acquisitions as a lawyer. “Often they say they will keep it up, but history shows their attention turns back to the headquarters.”

As for lending decisions, Smoots says “some banks are trying to push decision-making down lower in the organization, but it is hard to do. If Regions does it right, they will preserve those relationships, but the people that should be the most nervous are small business owners.”

So far, those in the Memphis business community are optimistic. Current Union Planters CEO Jackson Moore will become head of the new Regions, and that gives many Memphians hope, at least for the immediate future, that the city’s interests will not be forgotten in Birmingham. Also, Memphis will retain the headquarters for the Morgan Keegan brokerage unit of Regions, and will be the home to the new bank’s mortgage operations.

“Jack is a long-time Memphis guy,” says financial business analyst Jeff Davis of FTN Midwest Research. “This merger is a little different.”

Memphis and Birmingham are similar, as are the two banks’ cultures, says Ken Hall of the Memphis Regional Chamber of Commerce. Based on Morgan Keegan’s experience since its March 2001 sale, Hall says the Union Planters merger will go well for Memphis: “They left things alone … and said, ‘If it ain’t broke, don’t fix it’.”

Memphis business owners believe “the people in management here in Memphis … are committed here,” says Jane Atkins, owner of asbestos removal company EnviroRem. “They will not take the capital and go elsewhere with it. They want to grow and get bigger everywhere.”

Nor should the nonprofit community be too worried, counsels Dave Skorupa, spokesman for the United Way of the Mid-South, mindful that donations by Morgan Keegan rose after Regions acquired the brokerage. Two organizations, especially, should be at ease—the United Way and Habitat for Humanity. Company spokesperson Kristi Lamont Harris says Regions has picked those groups as its philanthropies of choice.