TD RESPONDS, see UPDATE below: Six years after Canada's Toronto-Dominion paid $8.5 billion for Marlton-based Commerce Bancorp and its 460 branches and $48 billion in loans and other assets, scrapped their big red C signs and replaced them with white-on-green TD placards, Commerce founder Vernon Hill says the Philadelphia-based lender he's now backing, little Republic Bank, smells opportunity and is ramping up a branch-building campaign.
This weekend Republic (a mosquito, compard to TD, with assets of not quite $1 billion, in 14 Philadelphia-area offices, and shares below $4 in recent trading) will open a glass-walled new-model branch on NJ 70 in Cherry Hill. Another is to open May 10 in Voorhees, and up to four more by the end of next year. All under big red R signs. "The Power of Red is back," Hill told me. The new branches offer "a completely new look, delivering the same service and convenience we had before." He said it resembles the updated branches his British lender, Metro Bank Plc, is building across the London area.
South Jersey needs another bank? "Toronto Dominion, we believe, has lost the essense of what's Commerce. We hear that from retail and commecial clients all the time," Hill told me from Republic's Center City office. UPDATE: "Choice and competition are always good for consumers and the economy," said Mike Carbone, TD's metro Philadelphia regional president. "We are always happy to see new businesses open in the neighborhood."
Commerce veterans occupy key jobs at Republic, including president Andy Logue and retail boss Rhonda Costello, under longtime Republic boss Harry Madonna, who welcomed Hill as an investor after Commerce was sold. Commerce veteran Gina Iacoviello will manage the Cherry Hill branch. Though it's certain that a lot more Commerce veterans work for TD than Republic will be able to hire anytime soon.
How's parent Republic First Bancorp. Inc. doing? Loan growth has been "very strong," up nearly 5% last quarter, thanks partly to government-guaranteed Small Business Administration originations, despite an increase in impaired loans; deposits are heading north too, wrote Frank Schiraldi, managing director at Sandler O'Neill + Partners, in a note to investors earlier this month.
It will be an old-fashioned Hill branch opening, the kind he and his wife and branch development contractor Shirley Hill did slowly in the 1970s, faster (and farther) in the 1980s and 90s, and finally every week, north to New York, south to Washington DC, in the mid-2000s, before federal bank regulators slowed the company's expansion and Hill left. Hill will be there with his dog Duffy, and performers, and the hot dog cart. "We're gonna have the whole thing," Hill said.
What about Metro Bank, the former Commerce Bank of Pennsylvania, where Hill is also an investor, and which was blocked by U.S. regulatory inaction from combining with Republic after the 2008 U.S. banking crisis. "There's no talk of combination at this point," Hill told me. Metro has branches as far east as Reading, but no overlap with Republic. There's no territorial agreement between the two similar banks, but "they haven't done a branch in four or five years," though there has been talk of a Metro (Pa.) expansion recently, Hill concluded.
Metro Bank UK's most recent private share sale boosted its implied market value to $1.2 billion; its assets are 2 billion UK pounds, and should be 4 billion by year's end.