Let's imagine you're stepping back in time to the streets of Pittsburgh in the early 1990s, looking for an ATM or maybe somewhere to deposit a check. No one would blame you if you felt a little lost.
Except for PNC and Dollar, many of the biggest names atop bank branches would be unfamiliar to customers today -- names such as Integra, Mellon, Great American, First Western, Bell Federal, Southwest National, Three Rivers and NorthSide Bank.
In fact, of the top 25 retail banks in the seven-county Pittsburgh region back then, just nine are in business today. Among the top 10 banks two decades ago, only three -- PNC, Dollar and Washington Federal (now called Washington Financial) -- are still around.
In all, the number of banks in this region plunged from 93 in 1994 to 58 in 2012, according to data complied by the Federal Deposit Insurance Corp.
That means roughly one-third of the banks that were around two decades ago have been merged out of existence. The dearly departed includes the noteworthy failure of Dwelling House, a small Hill District savings and loan that collapsed in 2009.
Some other names that have left the scene include Iron and Glass, Laurel Savings, Peoples Home Savings, Prestige, Pennsylvania Capital, Spring Hill Savings, Troy Hill Federal, Mt. Troy Savings and Fidelity Bancorp, a West View-based bank with 13 offices acquired this month by WesBanco of Wheeling, W.Va.
Nationwide, banks have been disappearing at a similar clip. In 1996 there were 9,208 banks and thrifts across the country, according to the FDIC. By midyear 2012, that number had fallen nearly 30 percent, to 6,581.
Several key factors have facilitated the massive consolidation, including legislation that allowed banks more freedom to expand, the 2008-09 financial crisis and increased regulations -- some spawned by the financial meltdown -- that have made it too costly for some banks to survive on their own.
Among the most jolting changes to the Pittsburgh landscape over the last two decades were the takeover of Integra Financial by Cleveland-based National City Corp. in 1996, the sale of Mellon Financial Corp.'s storied branch banking operations to Rhode Island's Citizens Financial in 2001 and the 2008 blockbuster takeover of a failing National City by Pittsburgh banking titan PNC Financial Services Group. PNC in turn divested 57 National City branches in the Pittsburgh region to Buffalo, N.Y.-based First Niagara in 2009.
Before Integra was swallowed up in 1996, the bank -- formed in 1989 through the merger of Union National in Pittsburgh and Pennbancorp in Titusville, Crawford County -- had been on a buying spree of its own, snapping up such big local names as Landmark Savings (in 1992) and Equimark (in 1993).
Such deals were made possible by state and federal legislation that ate away at rules restricting where banks could do business and allowed them to expand by gobbling up other institutions across state lines.
In 1982, Pennsylvania lifted restrictions that had limited banks to owning branches contiguous to the institution's home county.
Some other key actions included legislation passed in 1986 permitting banks in Pennsylvania to buy or be acquired by an out-of-state bank, as long as that state had a reciprocal agreement, and U.S. legislation in 1994 removing the remaining federal barriers to interstate banking.
In recent years, some of the most acquisition-minded institutions have been FNB Corp. of Hermitage, Mercer County, S&T of Indiana Township and Northwest Savings of Warren, Pa. FNB -- which took over Northside Bank, Iron and Glass and Parkvale Savings, among others -- has zoomed to the third-biggest bank in the region based on deposits, up from roughly No. 91 in 1994.
Analysts expect more consolidation in the coming years, primarily because of the increased costs associated with a growing regulatory burden, including higher capital requirements and stepped up enforcement.
"We do expect consolidation to continue pretty aggressively," said Jim Biery, senior adviser to the Pennsylvania Bankers Association.
Banks are finding it more difficult to manage the costs of doing business, said Bert Ely, a banking consultant in Alexandria, Va.
The growing cost of compliance "disproportionately hits smaller banks because big banks can spread out the costs," he said.
"That will be a driving force for consolidation over the coming years."
For a complete list of banks in the seven-county Pittsburgh region in 1994 and today, visit www.fdic.gov, select the "Industry Analysis" box at the top of the page, click "Bank Data & Statistics," then "Deposit Market Share Report."
Patricia Sabatini: email@example.com or 412-263-3066.