CHARLOTTE, N.C. -- A recent awards luncheon for this city's business and civic establishment had all the spiritual fervor of a megachurch sermon, featuring more than 700 people, the owner of the Carolina Panthers football franchise and retired Bank of America Corp. legend Hugh McColl Jr. dining on $75-a-plate tequila-marinated chicken and apple tarts.

Civic leaders crowed of the town's status as one of the South's most vibrant cities.

Alarmy Skyline, Charlotte: The city's banking establishment has taken a hit.

Conspicuously missing was G. Kennedy Thompson, the longtime chairman and chief executive officer of Wachovia Corp., the other megabank of this city of 630,000.

He had been ousted by his board a few days earlier, the latest in a litany of bad news for Charlotte's two big banks. Bank of America has taken more than $6.5 billion in write-downs of securities linked to shoddy mortgages and has drastically downsized its investment bank and cut more than 3,000 jobs. Wachovia has posted $5.3 billion in market-related write-downs since last summer and is downsizing its own investment bank. It has cut 500 jobs so far and slashed its long sacrosanct dividend.

Since Mr. Thompson's ouster, rumors have whipped through Wall Street and Charlotte's Tryon Street -- which divides the city's downtown into unofficial Wachovia and Bank of America territories -- that Wachovia was open to a buyer. Charlotte is fretting over whether it can remain the last great U.S. banking center outside of New York.

The rumors intensified when word leaked that Wachovia had hired as an adviser Goldman Sachs Group Inc., which consults with companies that are for sale. In this case, Goldman is advising Wachovia on the search for Mr. Thompson's permanent successor and a strategic plan, according to people familiar with the situation.

More likely than an outright sale is that Wachovia will further scale back its ambitions, perhaps getting out of investment banking, curtailing its West Coast mortgage operation and returning to its roots as a regional player.

People familiar with the situation said acting CEO Lanty L. Smith has told top executives that Wachovia is committed to remaining independent. Wachovia, Bank of America and Goldman Sachs declined to comment.

Whatever happens, Wachovia, once the fifth-largest U.S. bank and now sixth, has been passed in market value by U.S. Bancorp of Minneapolis -- a company far smaller in assets. Bank of America no longer has sole claim on the title of biggest U.S. bank by market value, as J.P. Morgan Chase & Co., also smaller by assets, has matched its total market valuation of about $130 billion.

It has been a setback for a city that transformed itself in the past generation from a sleepy railroad and mill town. "They thought we ran around barefoot with dirt-floor houses around here," said Jerry Orr, administrator of the Charlotte Douglas International Airport.

Charlotte became a banking powerhouse on the strengths of two rivals -- NCNB Corp., the predecessor of Bank of America, and First Union Corp., predecessor of Wachovia. Over two decades of deal making, both emerged as national banks, and Charlotte became a radically different place. "We like for the folks in Texas to have to come to Charlotte to get their loans approved," said Tony Crumbley of the Charlotte Chamber.

The city's downtown is divided into two territories: Wachovia's headquarters and other property on the south side of town and Bank of America's offices on the north. When First Union built a 42-story skyscraper in 1988, Bank of America built a 60-story edifice. In 2006, when Wachovia decided to install an automated-teller machine in its rival's territory, the move made local front-page news. The banks employ 34,000 in Charlotte.

High-end restaurants anchor upscale neighborhoods of the city. A Ritz-Carlton hotel is under construction downtown, where more than three million square feet of office space has been built in the past decade. Dozens of financial and professional firms have opened offices in Charlotte in the past decade.

One of the biggest anxieties in Charlotte is about the banks' philanthropic support. Already, Bank of America -- with a much wider geographic footprint than Wachovia's -- is perceived as having refocused its interests on a bigger playing field than its hometown. Bank of America Chairman and CEO Kenneth D. Lewis is active in financial-services and philanthropic groups, but more often on a national platform, such as the National Urban League and the corporate fund board of the John F. Kennedy Center for the Performing Arts in Washington, D.C.

Wachovia holds the biggest deposit share in Charlotte, at 61%, according to the Federal Deposit Insurance Corp., and employs far more people, making it the city's charitable mainstay.

Mr. Thompson is on the board of the local United Way, headed a campaign that raised $56 million for the YMCA of Greater Charlotte, led an effort to build playgrounds throughout the city, spearheaded a successful campaign to locate the Nascar Hall of Fame in the city and is board chairman of the Foundation For The Carolinas.

Mr. Thompson was considered by many an embodiment of the city's buoyant self-image of hard work and Southern charm. He golfed with Tiger Woods at the Wachovia Championship tournament but worked out routinely alongside loan officers in the company gym.

"He never had any entourage," Charlotte Mayor Patrick McCrory said. "Often you didn't know that the chairman of the bank was the person sitting right next to you in the barbershop."

Now Charlotte waits to see who or what will follow Mr. Thompson. Mr. Smith, the acting CEO, has said the CEO search could take months. He warns more mortgage loans will fail, an ominous sign for second-quarter earnings, expected July 22. Wachovia shares continue their slide, falling 29% since Mr. Thompson's retirement was announced and 69% from a year ago.

On a recent afternoon, three Wachovia employees nursed beers at an outdoor table during happy hour at Wachovia Plaza. They don't get the sense their rivals take any delight in Wachovia's misfortunes.

Job uncertainty has become "part of life," said Jose Pina, 45 years old, who works in Wachovia's global supply-chain division. "It's almost like you have to be planning to be fired every day."

Write to Alex Roth at alex.roth@wsj.com and Valerie Bauerlein at valerie.bauerlein@wsj.com

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