Vernon W. Hill II, who changed the pace of East Coast banking by building his Commerce Bank into a chain of fast-service retail stores, before its sale to TD Bank in 2007, has revived his profile on the U.S. banking scene as the new chairman of Philadelphia-based Republic First Bancorp.
Republic also said today that it has raised $100 million from investors, at $5.35 a share. Hill and Harry Madonna, the bank's CEO, are among the buyers, Madonna said, adding the stock sale was "oversubscribed" by eager investors, enabling him and Hill to reduce their own share purchases.
Before Republic's announcement, shares were already up 20 cents in trading Monday, to $5.50, Republic's highest price since 2009. The bank said it will use the $100 million, in part, to build "new stores, primarily in southern New Jersey and the surrounding Philadelphia area."
Like the hundreds of Commerce branches Hill built from Connecticut to Washington, D.C., Republic offices feature prominent real estate locations, glass walls, bright lights, long hours, pet-friendly policies, and a bright red logo.
Like other small banks Republic shares have risen since Donald Trump's election as President, on hopes Republicans will make good on promises to ease consumer, compliance and capital rules. The rules were supposed to prevent a repeat of the 2008 credit crisis; bankers say the rules made it tougher to make profitable loans.
Republic has 20 branches, including eight opened in the last three years, at a time when larger banks have been combining offices as more customers use digital remote banking services. Republic plans branches next year in Blackwood, Cherry Hill, Medford and Sicklerville, N.J.., and in Bensalem and Fairless Hills, Bucks County, Pa.
"We're gonna keep growing," said Madonna. "It's Vernon's model," of making "fans" instead of just customers, he added.
Madonna said branches continue to draw customers, complementing smartphone banking, as shown by the rapid growth of Hill's Metro Bank (UK) in England and of Republic in South Jersey: "We are adding $35 to $40 million in deposits per year, per branch," he said.
Madonna also expects to make more business loans, especially in the "$2 million to $7 million range." He said he and Hill work smoothly together.
Hill has outlasted any former "acrimony" from U.S. bank regulators, who scrutinized Commerce in detail during its years of rapid growth, noted Ted Peters, chairman and chief executive officer of Bluestone Financial Institutions Group of Wayne and a veteran suburban bank CEO.
A more interesting question for investors, Peters added, is the future of branch banking. "Is that really the viable model?" he asked. Republic has invested boldly but its shares remain in the single digits, giving investors little to cheer about -- until recently: "All bank stocks have done well since the election," he said.
Madonna relinquished the corporate chairman's job to Hill, who is one of Republic's largest shareholders. Besides serving as CEO, Madonna remains chairman of the company's bank subsidiary. Andrew Logue, the bank's president and chief operating officer, was in New York today to strike the ceremonial "closing bell" marking the end of today's Nasdaq stock market trading.
After TD bought Commerce, Hill started Metro Bank (UK) in London, a publicly-traded company with 48 branches and assets over $12 billion (corrected). Metro reported its first operating profit last quarter.
Hill is also chairman of Newtown Square-based PetPlan, a veterinary health insurer for dogs.