"In western Pennsylvania, people believe that they should pay back their loans," says Leonard M. Carroll, Integra Financial Corp.' president and chief operating officer.

"That kind of dependability is characteristic of our customer base," adds William F. Roemer, the holding company's chairman and chief executive.

Both executives emphasize that Integra's healthy relationship with the people in its communities has been a major reason for the company's increasing success.

A product of the 1989 merger of Pennbancorp (Titusville, Crawford County/Oil City, Venango County) and Union National Corp. (Pittsburgh), Integra experienced some initial struggles tied in part to shaky out-of-market real estate loans from the past, a practice that has since been remanded to the scrap heap.

A Union of Equals

The merger of Pennbancorp and Union National was essentially a union of equals. Both parties maintained assets in excess of $3 billion. But, more importantly, the merger brought together rural and urban bases to create a new financial services entity that could offer a broader range of products and services. It also created a more balanced book of business.

Integra now possessed a major presence north and south of Pittsburgh.

But even though the Union National side of its operation was rooted in the Pittsburgh market, the city still represented Integra's greatest opportunity for growth.

The key was to grow by acquisition. The resulting ability to spread the company's overhead across a larger deposit and asset base would surely help to increase Integra's overall efficiency.

"We were a distant fourth in the market," Mr. Roemer says, "so anything that could help us grow in Pittsburgh was definitely something to consider."

Within two years, Integra seized the strategically important locations of several ailing thrifts, taking over Landmark Savings Association.

The move further tightened its grip on community banking in western Pennsylvania while increasing Integra's presence in Pittsburgh. And then came Equimark Corp., one of the most comprehensive branch network systems in the city.

The acquisition of Equimark established Integra as the fourth-largest holding company in Pennsylvania, with assets in excess of $13 billion.

"They have a lot on their plate to digest," says Bob Kanters, director of research at Legg Mason Wood Walker Inc., an investment securities firm.

"But they have a good organization. I think they know what they're doing. They have decisive management. They size things up quickly and they move quickly. They've done a great job so far."

A Strong No. 3

Industry experts have praised Integra's moves on Landmark Savings and Equimark. From the former, Integra picked up solid deposits and solid assets; from the latter came significant deposits and enviable locations. (Equimark's assets are another story).

By and large, Federal Reserve studies have demonstrated the cost-effectiveness of in-market acquisitions when compared with those made cross-market. In a choice between existing Integra branches and newly acquired Equimark branches, Equimark wins 20 times.

"We realized that we could never become No. 1 or No. 2 in the Pittsburgh market as measured by deposits or assets," Mr. Roemer admits, conceding the dominance of PNC Financial Corp. and Mellon Bank.

"But we believed that, if we could secure a very strong branch network and become a very strong No. 3, we would have fulfilled the goals we had established for ourselves. The Landmark Savings acquisition helped to strengthen us and enhance our position in Pittsburgh, and the Equimark transaction really finished things off for us."

The Community Approach

Despite its unprecedented growth in recent years, the company has never deviated from its established corporate course, which is straight down "Main Street U.S.A.," the heart of the retail of community banking market.

The four most senior officers of the company -- Roemer, Mr. Carroll, John R. Echement (a vice chairman at Integra and president and chief executive of its subsidiary, Integra Trust Co.), and Charles R. Skillington (an Integra vice chairman and its treasurer) -- are all former community bank presidents.

When a person oversees a bank branch in the suburbs, he or she has no choice but to get involved in the community. Such interactions have served Integra well.

"You serve on local boards, for example," says Mr. Carroll. "All four of us bring that kind of background to the company. We believe in community. I don't think it's necessarily part of our strategy. It's just us."

In late 1991, Integra became the first major local bank to lower the interest on its Mastercard and Visa accounts, a tribute to the dependability of its almost exclusively western Pennsylvania clientele.

The following June, one of Integra's bank subsidiaries placed first in Pittsburgh's biannual rating of banks.

Under the direction of the city's Department of Finance, the rating system is used to allocate city business based on each bank's record of service to the city and its neighborhoods.

"Our bank management teams think about their own market areas, and therefore can be more community sensitive," Mr. Skillington says.

Given its close-to-the-market philosophy, Integra offers its bank management teams a great deal of autonomy.

The individual banks "know what their local competition is doing," says Mr. Echement. "We give them considerable latitude in pricing. We give them a menu of products that are standard and uniform throughout the organization, and they can choose whatever products they think will sell best in their areas. We give them guidelines, but within those guidelines we offer flexibility."

This is the epitome of supercommunity banking.

"Someone once described banking as a profession in which you're successful by avoiding disasters," says Mr. Skillington. "I think there's a lot of truth to that. When you're a supercommunity bank and you stay with your communities, lend into your communities, to people you know, you're getting to avoid a lot of headaches."

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