March 31, 2015


Banking, Retail-Style

Commerce Bank took market share from big, established banks in Philadelphia and New York and is bringing its strategy to Florida.

Mike Vogel | 7/1/2007

"In many ways, " says Commerce Bank CEO Vernon Hill, " our model is the anti'bank model."

From a sun-drenched, warm conference room in his prototypical branch in Florida, Commerce Bank CEO Vernon Hill points out the features of his template location. On the far wall inside the newly built branch is a mural of a steam train stopping at a yesteryear station in Boynton Beach, the branch’s home. Every Commerce branch gets a mural depicting a local scene. Hill himself flips through archival photos as part of the selection.

Against another wall is a different fixture, a coin-counting machine where customers and non-customers alike can dump their loose change and get a receipt to take to a teller for larger denomination currency — a hugely popular, free service at the New Jersey bank’s branches up north. The lobby itself is spacious, the windows large, the lines short, the operating hours long. The bank opens seven days a week, from 7:30 a.m. until 8 p.m. Monday through Saturday and from 11 a.m. to 4 p.m. Sunday. The Boynton branch sits on a pricey corner, the kind of expensive site ($3.7 million) banks tend to leave to Walgreens and CVS in favor of cheaper, less convenient locations in midblock or at less critical intersections. Employees, even the one getting into his car at the end of his workday, are — by nature or by training — hotel-concierge friendly.

Update (June 30): Commerce Bank founder forced out. Read story from Jersey Shore Now

Commerce plans a total of 150 such branches over the next several years in south Florida as it moves, retailer-like, to saturate the market. After that, the bank is expected to move into Orlando and Tampa.

Beginning in 1981, when what’s now Bank of America took over a Lake City bank, out-of-state banks flooded into Florida, snatching up local banks like colonial powers carving up a new continent. North Carolina’s Bank of America and Wachovia and Georgia’s SunTrust captured the market share leadership and held it through a series of acquisitions, while Alabama-based banks dominated a second-tier through a wave of deals. Commerce enters the market with a track record of seizing market share from established banks, expecting to break into Florida’s top rank as it did in Philadelphia and other large markets.

“It’s a retailing phenomenon,” says analyst Robert Patten of Memphis-based Morgan Keegan & Co. “The success of Commerce is really driven by the culture of Commerce, which is different than any other bank on the planet. Commerce has a retail philosophy, which we have called the Starbucks of banking. From the top CEO down, they drive this deep: The customer comes first. In a nutshell, they talk the talk and walk the walk.”

Tags: North Central, Banking & Finance

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