New Jersey-based Commerce Bancorp says its will keep expanding fast this year, opening 25 branches and hiring 1,500 people.
The $5.4 billion-asset company now has about 100 branches. But it aims to have 200-and $11 billion of assets-by 2003, said chairman and president Vernon W. Hill 2d on Monday.
And 10 years from now, he said, Commerce could have 300 to 400 branches in its three-state market. That includes Delaware, which it entered last year, and eastern Pennsylvania, where it increased its presence.
"We think of ourselves as a retail operation, not a bank," Mr. Hill said. "For us, the more locations where we can gather deposits, the better we do."
Aggressive growth is nothing new for this 25-year-old company, which analysts have dubbed "the McDonald's of banking" for its Sunday hours and standardized branches. Assets have more than doubled since yearend 1994, and two-thirds of its 3,500 branch and nonbranch employees were hired just last year.
New branch plans are up this year-Commerce added only nine branches in 1998-but hiring plans are actually down. Many of the 1998 hires joined a newly formed capital markets group or Commerce's insurance company and back-office operations.
In addition to opening branches, Commerce said Monday it will build an operations complex in Mount Laurel, N.J. The company will add 84,000 square feet of office space in two buildings at the corporate campus that houses its training center.
Analysts remained positive about the company, despite its commitment to increased spending. Cassandra Toroian, a research analyst at Ryan, Beck & Co. in Livingston, N.J., pointed out that Commerce's new branches are often profitable within a year.
"Obviously, expenses are going to remain high at this company," she said. "But Commerce has branch opening and expanding down to a science. They do it cheaper than the typical bank."
She said high-profile deals in the region last year, including the sale of Philadelphia's CoreStates Financial Corp. to First Union Corp., make the timing right for Commerce to expand.
"With all the turmoil in the markets, they can continue to capture market share by being aggressive," Ms. Toroian said. "This is Vernon's style, and they have had great success operating this way."
Mr. Hill confirmed that Philadelphia is the bank's top target for expansion. Commerce plans to open a regional headquarters in downtown Philadelphia this month and house the capital markets group there.
Philadelphia is "a wide-open market," Mr. Hill said. "It has been very good for us."