Magazine article American Banker

National Commerce's Strategy: Go Interstate Via Supermarkets

Magazine article American Banker

National Commerce's Strategy: Go Interstate Via Supermarkets

Article excerpt

ATLANTA -- National Commerce Bancorp. has found a unique way to expand from its home base in Memphis: through the supermarket aisle.

The Tennessee company said Monday that it has applied for regulatory permission to operate six supermarket branches in Virginia.

The units are in Kroger supermarkets that previously housed Dominion branches.

Dominion Bankshares was purchased last year by North Carolina-based First Union Corp., which says it has no interest in supermarket banking.

Cross-Border Plan

National Commerce operates bank subsidiaries only in Tennessee. But, as a source of fee income, it has been helping other banks nationwide set up supermarket branches. Now it is ready to operate them on its own outside its home state.

As part of the plan, National Commerce on Monday announced the purchase of First Federal Savings Bank, a $5 million-asset thrift in Belzoni, Miss. Since a federal thrift charter carries full interstate branching powers, National Commerce will use the charter to operate the six supermarket branches in Virginia.

"It's a very interesting way to expand across state lines," said Peter Tuz, a banking analyst with Morgan Keegan Inc. in Memphis.

National Commerce officials said they plan to apply for instore branches later this year in North Carolina. They also are considering supermarket outposts in Mississippi, Alabama, and Texas.

The company expects to be operating in Virginia by mid-July, though it will be starting from scratch. …

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