Commerce Bank of Cherry Hill, N.J., with just under $3 billion of assets, is profitable, growing fast, and fighting the superregionals.

What's its secret?

"The answer begins at the branch, with the cheap deposits a branch can provide," says Vernon W. Hill 2d, founder, chairman and president of the 23-year-old bank.

And how do you attract cheap deposits?

"By service, service, and service."

Here's some of what that means.

*No service charge on any balance of $100 or more.

*Branches that are open 12 hours a day, and also on Saturday and Sunday. (Sunday banking hours used to be noon to 4, but so many people were lined up a noon that the branch doors now open at 11 a.m.)

*Comprehensive training. The training center, called "Commerce University," is more than a quarter of a mile long, and its courses are so good that the American Council on Education recommends them for credit. At least seven local colleges give credit for successful completion of courses at "Old C.U." In addition, the bank awards stock options to employees who complete one of four levels of training: certificate, degree, diploma, or honors.

But can you rake in deposits with service instead of rate advertising? Apparently.

Mr. Hill told me on a recent visit that one local competitor bought by a major bank came with 700,000 depositors - but that only 470,000 were left a year later. A vast number of the deserters moved to Commerce, he said.

I decided to test whether the bank really puts the customer first.

"Suppose a depositor has $500 in the bank and writes three checks - for $6,000, $50, and $75," I said. "Which do you clear first?"

(If Commerce handled the largest first - as many big banks do - it would have to return all three; that means return fees from each. If it paid the small ones first, it would bounce only the largest.)

"We don't bounce any," said Dennis DeFlorio, executive vice president in charge of retail banking. "We call the customer up and ask whether he wants to bring down more money, activate his cash reserve, or let us pay the other two and bounce the largest."

That passes the service test in my book.

The bank operates on the principle that every branch should offer the same service, and that each should have a similar design, clean and modern.

Mr. Hill suggested that I visit South Philadelphia. At one competitor's branch there, he said, a metal detector in the front doorway lets in only one person at a time. But the Commerce branch has the same modern glass- and-cement design as its branches in the suburbs.

Commerce brags that its branches handle more customers per day than the typical Burger King does, and maintain the same uniformity in quality.

Another key to Commerce's success, it seems to me, is the enthusiasm of its branch personnel. I think that reflects the power branch managers have to make consumer loans, instead of just filling in forms for approval or rejection by a computer tied to a credit scoring algorithm. The bank has strict guidelines on this, but the human beings make the decisions.

That's not to say Commerce is behind in technology. Seven percent of its customers have signed up for on-line banking, and most of them pay $5 a month for full bill-paying service. And the bank outsources the handling of technical questions directed to its call center, to make sure they get answered by experts in the field.

Does Mr. Hill worry about competition from giants? No way. So what does he worry about?

He worries that Commerce might get so big that it loses its personal touch. That's why the bank is constantly working on new ideas, such as the "Stupid Rules" contest. Employees win cash for memos criticizing any bank rule that makes little sense or that makes it harder to provide the service that is Commerce's speciality.

With ideas like this, Commerce hopes to keep alive the excitement and customer orientation that has made it a success.

Mr. Nadler is a contributing editor of the American Banker and professor of finance at Rutgers University Graduate School of Management.

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