BOSTON — Retail activities, long seen as a poor relation in the banking business, could start to look valuable as market volatility takes its toll on large commercial banking companies, according to bank executives speaking at a recent conference here.

With capital markets wilting and the possibility that fee income from investment banking and asset management will become spotty, sticking to the basics of taking deposits and lending to small businesses may become more attractive, they said.

“Deposits are an excellent source of income,” said Joseph L. Mancino, president and chief executive officer of Roslyn Bancorp of New York.

Roslyn reported in January that deposits in demand and money market accounts rose 13.7% from a year earlier, to $598.4 million, and that fee income related to its free-checking portfolio grew 111.2%, to $2.85 million.

Several thrift executives at the March 8 eastern regional bank symposium sponsored by Keefe, Bruyette & Woods Inc. extolled the virtues of retail banking in the face of current market conditions. And they were not alone in touting the merits of traditional banking.

Vernon Hill, chief executive officer of $8.3 billion-asset Commerce Bancorp of Cherry Hill, N.J, described his company’s commitment to retail banking. Rather than train its branch employees as bankers, the company trains them as retailers, Mr. Hill said. Storefront businesses like Home Depot and McDonald’s are the role models for his branch network, he said.

In accord with this philosophy, all Commerce branches operate as retail stores, reporting deposits the way retailers report sales numbers, Mr. Hill said. The company’s 31% deposit growth last year shows that the strategy has succeeded, he said. Its average branch has $17 million of deposits.

He credited the growth to the company’s efforts to make banking an easy and “fun” experience for customers. Convenient branch hours, including Sundays, and free checking have all added to the experience, he said.

Mr. Hill said he is looking for per-share earnings to grow a hefty 15% this year.

Peter Martin, chief executive officer of Provident Bankshares Corp. in Baltimore, said his company follows a similar strategy. “We have hired retail people and trained them to become bankers.”

Targeting low- and middle-income retail customers and offering business loans of up to $5 million does not confine Provident to earning only spread income, Mr. Martin said. Its deposit service fees have tripled since 1995, to $42.9 million.

However, Provident’s strong retail focus, and the 15 branches it opened last year, have a flip side, Mr. Martin said. Its efficiency ratio of 64.33% is not too good, and he said his target is to improve efficiency to 60% this year and to increase per-share earnings by 10%.

Dan Healy, chief financial officer of North Fork Bancorp. in Melville, N.Y., presented an equally sunny picture of retail banking.

North Fork’s demand deposits grew 25% last year, to $2 billion, and loans grew 19%, to $9.4 billion. Its return on assets rose 18 basis points, to 1.99%.

The company benefits from a simple earnings equation, Mr. Healy said. This concept of combining the safety of a thrift with low-cost commercial banking liabilities will carry the company farther into Manhattan, where it hopes to continue to grow, he said.

Thomas Theurkauf, an equity analyst at Keefe Bruyette, said smaller banking and thrift companies, especially the “plain-vanilla” institutions, may start to appear on the radar screen of larger competitors as acquisition targets. “They are a fairly low-risk affair,” he said, “and they have a loyal clientele with almost all loans secured.”

One possible target is Dime Bancorp of New York, he said.

Washington Mutual Inc., the Seattle thrift company, is likely to look east to expand its geographic reach, Mr. Theurkauf said.

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