Academic journal article ABA Banking Journal

Growing Pains

Academic journal article ABA Banking Journal

Growing Pains

Article excerpt

FOR NEW JERSEY'S COMMERCE Bank growth is a mantra; a modus operandi.

Of late, Commerce Bank's growth has been very visible along the East Coast. The phrase "Commerce effect" has come into use to describe the impact on other banks when it enters their markets-most notably its policy of keeping its branches open seven days a week.

Commerce has its share of critics, as noted in this month's cover story, some of whom suggest that its consuming focus on continual rapid growth ultimately will not sustain it.

Yet the same thing could be said of Bank of America or any institutions that have grown rapidly either by internal growth, by acquisition or both. And to be fair, Commerce Bank has been around for more than three decades--under the leadership of the same man--Vernon Hill-the whole time. It's hardly a fluke. In fact, it has a growing number of imitators.

Could Commerce overextend and "come a cropper"? Some competitors probably hope so. Clearly growth can come too fast, like an army outdistancing its supply lines.

But steady, even rapid, growth--of itself--is not a harbinger of doom.

A second feature this month dealing with growth is the roundtable discussion (p. 38) among five community bank CEOs. They address the need for growth, different ways to achieve it, and how to deal with the management challenges that come with it.

The topic was suggested by one of the participants, Norm Beatty, CEO of First Hope Bank, Hope, N.J. As the third-generation head of a $325 million-assets national bank, growth is something Beatty thinks about often. His bank goes up against some sizeable competition, including Washington Mutual and Commerce Bank. …

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