- The Washington Times - Wednesday, June 16, 2004

Fast-growing Commerce Bank, which operates its branches more like retail stores than traditional financial institutions, has identified seven Northern Virginia sites where it plans to set up shop in 2005.

Executives at the Cherry Hill, N.J., bank hope to sign leases for branches in Alexandria, Centreville, Dale City, Herndon, Manassas, Springfield and Woodbridge by the end of this year.

Commerce triggered industrywide speculation last summer when it began scouting locations in the Washington area.

In October, the bank announced plans to open at between 10 and 15 sites in the region in 2005.

Commerce confirmed the first three locations last month: Dupont Circle, Georgetown and Seven Corners.

It will add branches in Maryland after it has put down roots in the District and Northern Virginia, said Vernon W. Hill II, chairman and president of Commerce Bancorp Inc., which owns the bank.

“We picked the D.C. market because we like the size and the demographics, and because I know my way around,” said Mr. Hill, a Vienna, Va., native who previously worked in real estate.

Commerce branches are open seven days a week and as late as 8 p.m. some week nights. It bills itself as “America’s most convenient bank” and emphasizes friendly customer service.

The bank offers new customers free checking for one year, regardless of their balance. It does not charge a monthly fee for checking or savings accounts as long as customers maintain a minimum balance of $100 in each.

Also, it does not charge customers to use its ATMs and online banking services, and it provides them with free use of its coin-counting machines.

All Commerce branches tend to be about the same size and share a standardized look, down to a uniform number of drive-through windows.

“We really see ourselves as a retailer that happens to sell banking products,” Mr. Hill said.

Other banks are borrowing techniques from retailers. Riggs Bank NA, for example, has added comfortable chairs, big-screen TV sets and free Internet access in some of its branches.

In the 1960s, one of Mr. Hill’s first clients in real estate was McDonald’s founder Ray Kroc, who hired him to help scout locations in New Jersey for the then-fledgling fast-food chain.

In addition to running the bank, Mr. Hill is also a Burger King franchisee with 47 locations.

When Commerce enters a new region, it typically opens multiple branches at once. This strategy of flooding the market is reminiscent of retailers such as Starbucks and McDonald’s.

Mr. Hill founded the bank in 1973. It has $25 billion in assets and more than 270 branches in New Jersey, New York, Pennsylvania and Delaware.

The bank aims to have 700 branches and $104 billion in assets by the end of 2009. It plans to begin expanding into the Boston area in 2007.

“No customer is forced to do business with them. Customers have chosen to bank with them because they see value in them. The market has voted,” said Gary B. Townsend, a banking analyst for Arlington investment firm Friedman, Billings, Ramsey Group Inc.

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