Vernon Hill
Vernon W. Hill II | |
|---|---|
| Born | August 18, 1945 United States |
| Occupation(s) | Entrepreneur, banking executive |
| Known for | Founder and former chairman of Metro Bank and Commerce Bancorp; chairman of Fetch Inc.; chairman and CEO of Republic Bank |
Vernon W. Hill II (born August 18, 1945) is an American entrepreneur known for founding and previously chairing Metro Bank, a UK-based retail bank operating 77 branches with assets totaling £7.4 billion ($10.6 billion). He also established and led Commerce Bancorp headquartered in Cherry Hill, New Jersey, and held the position of chairman at pet insurance company Fetch Inc.. In 2016, Hill took on the role of chairman at Philadelphia's Republic Bank.
Early career
Hill's business philosophy was heavily influenced by his early exposure to retail banking environments. While attending Wharton, he gained experience at a South Jersey bank owned by an automotive retailer who implemented retail principles such as extended operating hours into banking services. This role involved collaboration with local businesses, including McDonald's. Upon completing his studies, Hill launched a real estate enterprise focused on acquiring and developing locations for McDonald's, working closely with entrepreneur Ray Kroc. Hill attributes this period to learning the importance of consistent branding and leveraging economies of scale within retail operations.
Philadelphia Magazine highlighted that Hill’s tenure with McDonald's played a direct role in shaping Commerce Bank’s foundation. Morton Kerr, an original board member of Commerce, recalled:
"Many of us knew Vernon through real estate…At just 26 years old, he convened about 15 of us and announced, 'We’re starting a bank,' requesting investments ranging from $25,000 to $125,000. This was back in 1973—who had that kind of capital? Yet he had arranged loans for most attendees. Only seven stayed on board, despite initial skepticism about his plan."
This initiative culminated in Commerce opening its inaugural branch in Marlton, New Jersey in 1973.
Commerce Bancorp
From a single outlet in 1973, Commerce Bank experienced rapid growth, expanding to 470 branches by 2008. Between 1996 and 2001, its deposit base increased by an average of 25% annually—significantly outpacing the industry norm of 5%. Forbes Magazine reported that Commerce achieved a compounded annual shareholder return of 23% over three decades.
The bank’s strategy centered on optimizing deposits and customer accounts per branch, operating under the assumption that fixed branch expenses remain mostly unaffected by transaction volume. Vernon Hill dismissed prevailing industry moves toward online banking at the expense of physical locations, instead championing face-to-face service as a key differentiator.
“While other banks sought to drive customers away from branches due to high operational costs by encouraging online use, we completely oppose that approach. No successful retailer has ever forced customers where they don’t want to go...Some of our branches see as many as 100,000 customer visits monthly; on average, branches get around 40,000 visits. For comparison, an average McDonald’s sees about 25,000 visits per month.”
Hill positioned Commerce as “America’s most convenient bank.” The company motivated employees with $5,000 bonuses whenever nearby competitor branches shut down. It extensively employed mystery shoppers to assess service quality, tied salary increases to these evaluations, and rewarded top-performing managers with luxury sports cars.
On June 29, 2007, Hill stepped down as chairman and CEO following regulatory scrutiny and board decisions restricting transactions with companies connected to his family. These included property leases involving Hill himself and contracts with his wife’s architectural practice. No legal charges were brought against him.
On October 2, 2007, Commerce Bancorp consented to merge with TD Bank Financial Group. Toronto-Dominion Bank acquired Commerce for $8.5 billion through a combination of cash and stock at $42 per share—a valuation representing 28 times earnings. Analysts linked the acquisition partially to Hill’s exit and the strength of the Canadian dollar.
Petplan
Hill serves as chairman of Fetch Inc., a pet health insurance enterprise established by Chris and Natasha Ashton. Fetch operates under the U.S. and Canadian franchise rights of the British company Petplan, which is recognized as the largest global provider of pet insurance policies. Hill made his investment in April 2008, identifying the American pet healthcare sector as a promising area for expansion.
In a 2010 interview with Fortune, Hill remarked, "In the past, pets were often euthanized when ill. Today, they are considered family members. Owners are willing to pursue treatments such as kidney transplants and hip replacements. This industry is poised for significant growth."
Metro Bank
Launched in London in July 2010, Metro Bank UK was co-founded by Hill, who held the position of vice-chairman.
At its inception, Metro Bank was the first new high-street bank to emerge in the UK for over a century, focusing on delivering superior service rather than competing on price alone. By 2010, 85% of current accounts in the UK were controlled by the "big five" banks (HSBC, Barclays, Royal Bank of Scotland, Santander, and Lloyds). A 2008 report from the Office of Fair Trading underscored limited competition and profit-centered practices within UK banking. Forbes characterized Metro as "...seeking to challenge an entrenched industry dominated by a few established firms."
Metro Bank set itself apart by encouraging customer visits through extended branch hours and pet-friendly policies, standing in contrast to traditional banks that prioritized cost-cutting measures which discouraged physical branch interactions.
Hill and fellow founder Anthony Thomson raised £75 million over two years from investors including New York real estate magnate Richard LeFrak, the Reuben brothers, and Fidelity Investments. The bank aimed to establish 200 branches across London by 2020, having opened twelve locations by December 2010. In June 2012, a £126 million capital injection featuring contributions from Moore Capital and billionaire investor Steve Cohen supported further growth.
Investor Wilbur Ross expressed concerns about whether Metro’s increased operational expenses could be justified by expanding its customer base.
Following his tenure as vice chairman, Hill assumed the role of chairman in January 2013, succeeding Thomson.
By September 2013, Metro had accumulated 225,000 accounts and was inaugurating a new branch monthly, targeting 25 new openings within that year.
In April 2013, Hill was honored with the Institute of Economic Affairs' Free Enterprise Award for his leadership at Metro Bank, acknowledged for recognizing opportunities amidst sector difficulties and exemplifying persistence and innovation. IEA director Mark Littlewood commended Metro as "a prime example of innovation enhancing people's lives" and welcomed its contribution to increased competition on UK high streets.
Tom Brown of Bankstocks.com described Hill in August 2013 as "the world’s foremost growth-focused banker," having developed successful growth strategies twice within mature banking markets. Additionally, Hill received the 2013 Stevie Award for International Chairman of the Year.
In 2018, Metro Bank came under scrutiny regarding payments totaling £21 million made to Hill's wife's architecture firm alongside his £120,000 annual corporate expense allowance.
Hill resigned as chairman in October 2019 but continued serving as a non-executive director on the board until the end of that year.
Republic Bank
Hill assumed the role of chairman at Republic First Bancorp, operating as Republic Bank, in 2016 and was appointed CEO in 2021. His tenure ended with his dismissal in May 2022.
Book
In October 2012, Hill published Fans Not Customers: How to Create Growth Companies in a No Growth World. The book promotes competing through exceptional service rather than pricing strategies, highlighting the importance of cultivating loyal fans instead of just customers. The Financial Times commended its straightforward prose and actionable guidance on differentiating service.
Other investments
Hill collaborated with Steve Lewis in US Restaurants Inc, which manages 34 Burger King locations throughout the Philadelphia metropolitan area.
His entrepreneurial journey began with Site Development Inc, a real estate company responsible for the creation of over 1,000 shopping centers and retail properties nationwide.
In 1994, Hill co-established Galloway National Golf Club near Atlantic City, New Jersey. The course, designed by Tom Fazio, has been recognized by GolfDigest.com as one of America's top 100 golf courses.
Business philosophy
Characterized by Fortune Magazine as a "flamboyant, tradition-stomping American billionaire" and dubbed the "P.T. Barnum of banking," Hill advocates for organic expansion rather than growth through acquisitions. He emphasizes building customer loyalty via outstanding service instead of competing on price. During a 2010 testimony before the UK House of Commons Treasury Select Committee, he argued that acquisitions often damage retail banking models and endorsed steady, sustainable organic growth.
Hill has expressed strong criticism of the shadow banking sector, blaming its complexity and risks for much of the 2008 financial crisis. He differentiates traditional banks—which focus on transparent lending—from investment banks involved in obscure financial instruments such as credit default swaps and collateralized debt obligations (CDOs).
He likens his banks to retail enterprises like Home Depot and Starbucks that prioritize accessibility and customer convenience by maintaining open and welcoming environments.
In 2007, Forbes recognized Hill among seven CEOs who had served over two decades at publicly traded companies while delivering annual shareholder returns exceeding 20%, noting Commerce Bank’s compounded return of 23% during his leadership.
Personal life
Hill is the eldest of six children and son to a Virginia-based real estate brokerage owner. He earned a Bachelor of Science degree in economics with a finance concentration from the Wharton School at the University of Pennsylvania in 1967.
His Tuscan-inspired residence, Villa Collina—a sprawling 46,000 ft2 (4,270 m2) estate—features an orangery and is situated in Moorestown Township, New Jersey. Hill has been married for four decades to Shirley Hill, founder of InterArch, the architectural and branding firm responsible for Commerce Bank and Metro Bank’s brand identities. Together they have four children and a Yorkshire terrier named Sir Duffield.
The Hill Family Foundation actively supports philanthropic efforts in both the United States and the United Kingdom, with a particular focus on veterinary medicine. Notable contributions include:
- A $10 million donation toward the Vernon and Shirley Hill Pavilion at the University of Pennsylvania School of Veterinary Medicine.
- Endorsement of the Penn World Veterinary Award.
- Assistance for the UK Kennel Club Achievement Award.