So what if everyone else is closing branches.
At a time when most bankers would question de novo expansion in brick and mortar, Vernon W. Hill 2d, chairman and president of Cherry Hill-based Commerce Bancorp, plans to open at least 50 new branches in the next five years.
He wants to open at least 10 a year, and says he'd like to increase his current network of branches from 42 to 100.
Has this entrepreneur - who in addition to running the bank, owns a development firm, a chain of Burger Kings, and a home heating oil company gone daft? Sardonic and outspoken, definitely, but daft Mr. Hill is not. Analysts offer nothing but praise for his expansion strategy.
"Commerce is always growing," says David Stumpf of Wheat First, Butcher & Singer. He would question the strategy from a theoretical standpoint, he said, but Commerce "pulls it off."
The bank's branch size has more than doubled since 1988. Since then, deposits have never decreased. In fact, deposits jumped a record 31% from yearend 1992 to $1.7 billion at yearend 1993.
The bank also grows assets rapidly, having doubled its size in the last two years to slightly more than $2 billion. What amazes analysts so much is that Mr. Hill captures assets with few acquisitions, bucking another industry trend. Purchases last year only contributed $208 million to the bank's 43% asset growth.
Even when New Jersey banks, including Commerce; were rocked by problem real estate loans in the late 1980s, Commerce's asset size continued to increase.
All this expansion has proven successful against competitors. Commerce ranks first in average branch 'deposits in Burlington, Camden, and Gloucester counties, with $55.3 million, Mr. Hill says.
Lawrenceville-based First Fidelity Bancorp, which has $33.7 billion in deposits, comes in a distant second in the three counties with $32.6 million. In every county in Southern New Jersey, Commerce is consistently one of the top two banks in dep. sit share, Mr. Hill says.
Analysts are hard pressed to come up with obstacles to Commerce's monumental expansion. Says Mr. Stumpf: "I've 'got to believe there's a challenge to continue to grow at the pace they've grown." But he doesn't doubt the bank will go on mushrooming, particularly if New Jersey's slow growth economy continues to improve.
While Mr. Hill offers the latest technology, including consumer loan software and automatic voice response service for 24-hour telephone banking, he does not believe it will replace branches. He says he is convinced by his own market surveys and the lines he sees at his branches that customers are not satisfied with telephone services that perform all their banking activities.
Most of the new branches are planned for Philadelphia suburbs, where the bank has a weak presence with only six offices. While analysts say that Commerce lacks the brawn to overtake rivals like First Fidelity, UJB Financial Corp. and Midlantic Bank Corp., those banks could learn a thing or two about retail banking from Mr. Hill.
In 1973, when he funded Commerce with $1.5 million from 20 investors, Mr. Hill modeled his marketing approach after that of McDonald's Corp. He saw the fast food hamburger company's world famous golden arches as something akin to art. The same approach to banking has made Commerce a "deposit gathering machine" Mr. Hill says.
When he began, Mr. Hill designed a simple bank branch in Marieton, N.J. A white stone box about 3,000 square feet in size, the branch had an oblong, red "C" for Commerce on its facade.
This standardized branch is Mr. Hill's version of the golden arches. All 41 offices that were built later follow this model as closely as possible. Mr. Hill says he wants everyone to associate the look of the branch with Commerce, just as everyone associates the golden arches with McDonald's.
That explains why, when he visits one of his Moorestown branches one afternoon, he grumbles, "The town made me go 'with this red brick crap.'
His retail approach is simple and obvious, but other banks have failed to follow it. Before opening the Moorestown branch in 1981, First Fidelity owned 100% of the deposits in that town, he says. Today, Mr. Hill has captured $92 million in deposits, 24% of the market share.
"Unless they can stop me at the individual branch level, they can't stop me," Mr. Hill declares.
"It's the McDonald's strategy;' agrees Elizabeth Summers at Ryan, Beck & Co.
Mr. Hill points out that when he builds a new branch he doesn't have to pay architects for a new design. "Very few banks do that. It amazes me," he says. This means less trouble and expense. Generally, branch construction costs $1 million, he says.
The bank's rapid growth in deposits is also the result of a style of banking that's innovative to the rest of the industry, but old hat to Mr. Hill. "All those buzz words you hear now about what everyone else is trying to do, he was already doing it," Ms. Summers says.
Buzz word number one: "Extended" hours. Since its founding in 1973, Commerce was open longer than any other bank in New Jersey: from 8:30 a.m. to 5 p.m. Mondays through Thursdays; from 8:30 a.m. to 8 p.m. Fridays, and Saturdays from 8:30 a.m. to 1 p.m.
Buzz word number two: "Free" checking. Commerce offered free checking in 1973 to customers who maintained a $100 minimum balance. The bank claims it was the first in the area to do so.
Just as importantly, while other banks are now starting to survey customers to Create "branches of the future," Commerce executives are "constantly surveying their customers, testing price points," Ms. Summers says. "They're trying to figure out what their customers want and how much they will pay for it."
Mr. Hill is especially proud that he is one of the few banks not to charge Automated Teller Machine customers for every transaction or for using ATMs at branches other than Commerce's. Instead, he charges an annual $18 fee.
A customer "can use his card in California or on the moon, I don't care," he says.
The point, according to Mr. Hill, is that customers get aggravated by little things like getting charged by other banks as much as 25 cents every time they make a transaction at an ATM and getting charged even more if they use an ATM at a foreign bank.
To further the bank's presence, Commerce has also opened Sunday hours at drive-in windows from Memorial Day weekend through Labor Day. However, the summer Sunday hours - from noon to 4 p.m. are only offered at some branches.
Mr. Hill sees one type of expansion across the banking industry that he'd like to avoid: turning his bank into a supermarket of financial services, offering annuities and mutual funds, as other banks have. "I'm not in that business," he says.
After all, the country is filled with an almost infinite number of suburban communities where Mr. Hill can plop down his cookie cutter branches, he says. Banks offering mutual funds are "selling off their deposit base for a 1% commission."
On the other hand, he admits, "I'm always the outcast on these things ."
But being different has always been the key to his success.