New Jersey's Commerce Bancorp is expanding into Delaware with a plan to build up to 15 branches.

The Cherry Hill banking company has applied for a charter in the state of Delaware. The state does not allow de novo branching, forcing any out- of-state bank with plans to branch there to charter a new bank.

Commerce said it hopes to open its first branch in Delaware next spring. And during the succeeding two years, it plans to build another 10 to 14 branches throughout northern and central Delaware.

Delaware is a natural complement to the bank's expansion throughout metropolitan Philadelphia, said Vernon W. Hill 2d, president and chairman of the holding company and its Commerce Bank flagship. "We have been filling up the rest of the metropolitan market," Mr. Hill said. "Delaware is the one area we aren't in."

Founded in 1973 as a one-branch bank, Commerce has grown rapidly, opening 20 branches in the past three years. It currently has 70 branches in New Jersey and Pennsylvania and will add 10 by yearend. He hopes to open 15 to 20 new branches each year for the next five years, Mr. Hill said.

Mr. Hill compared his growth strategy to that of McDonald's restaurants- the more locations, the better. "This is the fast-food business, not banking," he said. "The focus is on convenience to the consumer."

Commerce offers seven-day branch banking, free personal checking, on- line banking, and a check card, among other perks to encourage deposits. To balance the cost of those services, Commerce offers low interest rates on deposit products.

"People will trade rates for convenience," Mr. Hill said.

Commerce takes "the opposite approach" from most banks, said David C. Stumpf, analyst at A.G. Edwards & Sons, St. Louis. The bank is deposit- oriented instead of loan-oriented, he said.

From 1992 to 1996, the company reported that total assets grew 101%, to $2.9 billion. Meanwhile, net income grew 166%, to $27 million.

Commerce is profitable despite an average loan-deposit ratio of only 41%. The bank can rapidly add branches because they break even, on average, 11 months after opening, Mr. Hill said.

With growth numbers like those, other banks are bound to notice. But despite years of speculation that Commerce would be acquired by a larger player, Mr. Hill said, "We tell the world on a regular basis this bank is not for sale."

Mr. Stumpf said he believes him. "The company management team is young, and the opportunity is there to continue to grow at a high rate," he said, adding that Commerce's growth rate is greater than those of most potential acquirers.

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