Is Philadelphia's Republic First Bancorp the last U.S. bank still betting on winning business by building branches? "While operating revenue growth has been strong" -- 9% year-to-date, versus almost nothing at most U.S. banks -- "the continued investment into the franchise via new stores and a focus on customer service," has of course cut into profit/expense ratios, writes Frank Schiraldi, bank analyst at Sandler O'Neill + Partners, New York. 

Republic is modeled on Moorestown real estate and retailing expert Vernon Hill's former Commerce Bancorp, as is Hill's major current project, London-based branch-and-service-oriented Metro Bank Plc (UK), which plans to sell share to investors in an IPO next year. A former Commerce affiliate, Metro Bank (of Pa.), has agreed to be acquired by First National Bank of Pennsylvania after investors stalled its branch-building campaign last year. 

Wells Fargo, PNC and other national branch networks have been consolidating and shutting sites as more customers prefer to bank online or by smartphone. Republic, by contrast, is keeping the faith: "With additional stores planned for Cherry Hill, Gloucester Township, Medford, Moorestown, Washington Township and Wynnewood, we do not expect pressure on the efficiency ratio to lessen" anytime soon, Schiraldi told clients in a report. Republic reported modest first-quarter profits. The stock has been trading in the $3.80 range, about where it should be, according to analyst Schiraldi, though a fraction of its pre-recessionary highs.

Separately, Chester Springs-based Conestoga Bank, which had partly automated its branches with a video-banking system in recent years, has agreed to be purchased by Philadelphia's Beneficial Bank for $105 million. That's a modest gain from the $92 million Conestoga paid to get into the regional banking business when it bought the former Pennsyvlania Business Bank from investors led by then-State Sen. Vincent Fumo in 2007.