Marking the passing of Commerce Bank

PLUS

Commerce Bank, the Cherry Hill based darling of many analysts for its seven-day a week lobby hours and its "penny arcade" coin counting machines, fell to the merger machine yesterday as its board accepted an $8 billion offer from TD BankNorth. We're quoted on the topic in today's Newark Star-Ledger

Before being bought by Toronto Dominion Bank, TD BankNorth was a tiny New England-based institution that nipped at the heels of my former employer, FleetBoston Financial.

It's sort of deja vu. TD BankNorth had purchased Hudson United Bank, and had a few branches around South Jersey, but not enough to gain what bankers call "critical mass." It's expensive to build new branches, $1-2 million a pop by most estimates. Cheaper to buy an existing network of branches, because they already have the land leases, the physical building, and as a nice bonus, they come with depositor money already in the vault.

It's almost a direct rerun of when Fleet came out of New England with just a smattering of branches in New Jersey (the result of its earlier purchase of NatWest), and scooped up Summit's 460 branch network, only to later succumb to Bank of America.

But the demise of Commerce (and it will be a demise, once they finish the "merger integration" and change the signs) doesn't mean the end of small hometown banks. Far from it. Since Bank of America came to New Jersey, many of its refugee executives have launched de novo (that's banking industry jargon for "new") banks.

Bank mergers are like the Whack-a-Mole game. You hit one in the head and knock it down, and three more pop up out of the other holes.