In the 1990s, a wave of merger activity altered the structure of the banking industry at both the national and local levels. While banking remains a relatively unconcentrated industry at the national level, markets for some banking services continue to be primarily local. Concentration looks greater at the local level and generally increased in the 1990s. One can classify the possible motivations for mergers into two categories—those having to do with market power and those having to do with the efficient allocation of capacity among market participants. This article begins an examination of these motives through the behavior of the banking market structures in five North Carolina metropolitan areas from 1990 to 2002.

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