Commerce Bancorp Tries to Buy Insurance Agency

Commerce Ban-corp is attempting to buy a South Florida insurance agency to sell policies to businesses and consumers who are customers of its bank.

The Cherry Hill, N.J.-based holding company also is preparing to expand Commerce Bank's international banking services in South Florida.

Commerce is taking those steps as it continues talks with Coral Gables-based Commercebank over use of the Commerce name in South Florida banking.

Negotiations are still in progress, said Heather Newcomb, a spokeswoman for the New Jersey bank.

Commerce Bank entered South Florida last December, when it completed its acquisition of Palm Beach County Bank.

Two months earlier, Commercebank filed a civil suit in U.S. District Court in Miami, asking that the New Jersey bank not be permitted to use the Commerce name in Florida.

On Feb. 21, Judge Joan Lenard dismissed the suit without prejudice after Commercebank did not meet a deadline for filing additional information.

Officials familiar with the banks then told The Business Journal that a settlement could be pending - possibly with the Coral Gables bank changing its name after receiving a payment from the New Jersey bank.

Neither bank has confirmed those reports or provided details of discussions.

But on May 23, Newcomb confirmed that Commerce Bank's insurance affiliate has contacted South Florida insurance agencies with offers to buy them.

Commerce Bancorp (NYSE: CBH) operates subsidiary Commerce Insurance Services, which is also based in Cherry Hill.

The president of one South Florida insurance agency said Commerce officials have contacted him several times since April, with requests to buy the agency.

The insurance official, who asked not to be identified because his agency "is not looking to be sold," said he knows of several other South Florida agencies that have been contacted by Commerce.

In a statement relayed by Newcomb, Commerce Insurance Services Chairman George Norcross said the company would like to buy an insurance agency in South Florida and add its operations and customer base into Commerce Insurance.

Commerce already sells policies including property and casualty to South Floridians, said John Tolomer, Commerce Bank's South Florida president.

"We refer them to our insurance people in New Jersey. As we expand geographically, we like to provide all our products and services locally," he said, explaining Commerce Bancorp's interest in buying a South Florida insurance agency.

Commerce Insurance has offices in New Jersey, Pennsylvania and Delaware.

That agency sells policies written by several insurance companies. Products include auto, commercial and residential property, life, employee benefits and professional liability policies.

"I am not surprised that they are looking [for an insurance agency] in Florida and they could be very aggressive there," said Wilson Smith, an analyst at Boenning & Scattergood in West Conshohocken, Pa.

Commerce operates its banking and insurance subsidiaries "somewhat autonomously" and they refer customers to each other, Smith said.

Commerce Bancorp has $41 billion in assets, with bank branches in seven states and the District of Columbia.

The bank has eight South Florida branches - seven in Palm Beach County and one in Broward County.

Commerce has gained attention primarily by having its branches open on Sundays, from 11 a.m. to 4 p.m., and a rivalry with Fort Lauderdale-based BankAtlantic which also has branches open on Sundays.

Commerce also has been adding business clients, after bringing its commercial lending services to branches it acquired from Palm Beach County Bank, Tolomer said.

The bank expects some of its strongest growth will be in its international division, he said.
In January, Commerce hired Joseph Longobardi as regional VP and Hernan Mayol as VP for that division in South Florida.

They have been working from the bank's office in West Palm Beach and meeting with clients around South Florida.

This summer, the two bankers will set up an international office at a new site in Broward County, which the bank is not yet identifying.

The division offers letters of credit, other trade finance, wire transfers and foreign currency exchange.

"Many businesses that are using Commerce [for domestic banking] are discovering that we also offer these services," said Longobardi, who previously was a senior VP in the Miami office of ABN AMRO Bank, based in the Netherlands.

Mayol has worked in the South Florida offices of several banks, including Wachovia.

Commerce is focusing on international services for U.S.-based businesses, Longobardi said. Commerce does not plan to have an international private banking division in South Florida, he said.

"They have been a very strong player in international trade services in their home markets," analyst Smith said. "What they are doing in Florida is a natural expansion."

From South Florida Business Journal (www.bizjournals.com)