Vernon Hill

Vernon W. Hill II (born August 18, 1945) is an American businessman, the founder and chairman of Metro Bank, a UK retail bank with 48 stores, and assets of £7.4b ($10.6b). He is also the founder, former chairman, president and CEO of Commerce Bancorp of Cherry Hill, New Jersey and chairman of Fetch Inc. (aka Pet Plan North America).

Although known for banking, Hill’s business outlook has been informed by early encounters with retailing. While taking morning classes at Wharton, Hill worked afternoons at a South Jersey bank owned by a local car retailer, where Hill observed the car dealer applying retail principles to banking operations, such as late opening hours. The job also brought Hill into contact with other local retailers, including McDonald's. After graduation Hill founded a real estate firm to find and develop sites for McDonald's, a task which required Hill to drive McDonald's entrepreneur Ray Kroc on scouting trips. Hill claims his experience with McDonald’s taught him the importance of standardised presentation and scale economies in retailing.

Philadelphia Magazine reports that Hill’s experience with McDonald’s led directly to the creation of Commerce Bank. Referring to the creation of Commerce, Morton Kerr, chairman of the board of Markeim-Chalmers, Inc., a South Jersey real estate firm, and one of the original Commerce board members, observed:

“A lot of us knew Vernon from being involved in real estate at that time…He was a 26-year-old kid who called about 15 of us to a meeting in his office. I'll never forget it. He said, 'We're going to start a bank.' And he said we'd each have to put up between $25,000 and $125,000. This was 1973-who had that kind of money? But he'd arranged for all of us to borrow it. If you could put up $100,000, he got us loans for $80,000. Only seven of us didn't get up and walk out, but we still thought he was crazy.”

The deal resulted in Commerce opening its first branch in Marlton, New Jersey, in 1973.

Commerce Bank was notable for its rapid expansion, from one branch in 1973 to 470 branches in 2008, and a deposit base that grew by an average of 25% per year between 1996 and 2001 (against an industry average of 5% in 2001). According to Forbes Magazine, Commerce produced a 23% annual shareholder return compounded for 30 years.

Commerce Bank’s economic model rested on the idea that the fixed costs of a bank branch are largely independent of volume, and so profitability lay in maximizing the number of deposits and accounts per branch. Additionally, Hill believed that the industry's reliance on internet banking had led to dis-investment in bank branches, to the detriment of consumers who prioritised in-person service.

...
Wikipedia