Hill, Townsend Form Investment Firm

Five months after bowing to regulatory pressure to resign as the top executive at Commerce Bancorp Inc. of Cherry Hill, N.J., Vernon W. Hill 2nd has resurfaced with a private investment firm.

Mr. Hill and Gary B. Townsend, a bank analyst at Friedman, Billings, Ramsey Group Inc. of Arlington, Va., announced Tuesday that they will launch Hill-Townsend Capital, a Chevy Chase, Md., group that will invest in financial industry stocks, with a focus on midcap banking companies.

The firm said Tuesday that it will invest in companies that have “superior, easily understood business models” and are “run by passionate, dedicated management teams.”

Mr. Hill, who gained a reputation at Commerce for being an outspoken executive, appears to be taking a much quieter approach with his new venture.

When reached at their offices Tuesday for comment, Mr. Townsend said that, on the advice of attorneys, neither he nor Mr. Hill would be immediately available to speak to the news media about their venture, which is expected to begin operations at the beginning of next year.

In a press release, Mr. Hill said that his company sees an opportunity in the current market environment.

“The market correction hit financial stocks particularly hard but undoubtedly has already created great investment opportunities. We plan to take advantage with strong fundamental analysis and great execution,” he said.

Mr. Hill, who founded Commerce in 1973, resigned abruptly in early July as the $50 billion-asset company’s chief executive officer and chairman amid regulatory pressure resulting from alleged conflicts of interest between Commerce and other companies that Mr. Hill and members of his family controlled.

Since then Commerce has continued to operate under a consent order with one of its regulators and a memorandum of understanding with another.

However, last month it announced a plan to sell itself to Toronto-Dominion Bank’s TD Banknorth Inc. for $8.5 billion. That deal, expected to close in the spring of next year, is expected to double the Canadian company’s assets in the United States

While working for Friedman, Billings, Ramsey, Mr. Townsend covered commercial banking companies, including Commerce. This year Forbes.com ranked him as the second-best earnings estimator for commercial banks among 109 analysts.

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