Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 25, 1993 TAG: 9305250123
SECTION: BUSINESS PAGE: C-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
Pending regulatory approval, National Bank of Commerce will open July 16 at Kroger stores in the Roanoke Valley and Blacksburg, said William R. Reed Jr., vice chairman of National Commerce Bancorp of Memphis, the parent company.
Reed said the supermarket banks will offer full services, including mortgage loans, equity lines and investment programs, and will keep day and evening hours six days a week.
In addition to continuing the banks in Krogers at Lakeside Plaza, Tanglewood Mall, Cave Spring Corners and Lake Drive Plaza, National Bank of Commerce will reopen a branch Dominion had closed at Ridgewood Farms in Salem.
This is the Tennessee bank's first move out of state, but it has had an affiliation with Kroger since 1985.
National Commerce owns 29 in-store branches in Kroger stores in Tennessee. A subsidiary has arranged banking partnerships for 89 other Kroger stores nationwide. The subsidiary also worked with more than 70 other financial institutions operating banks in 220 supermarkets.
National Commerce Bancorp is the holding company of National Bank of Commerce in Memphis, Nashville Bank of Commerce and NBC Knoxville Bank. Based on 1992 data, its assets were $2.3 billion and its net income $34 million. It states a return on equity of 18.81 percent and a return on assets of 1.59 percent.
Another subsidiary, National Commerce Bank Services, designed the Kroger branch banks in Western Virginia and contracted with Dominion to operate them.
National Bank of Commerce said First Union Corp., new owner of Dominion, could have continued the agreement.
First Union announced several weeks ago that it would close the branches, but offered to leave automated teller machines in the stores.
Jim Thorne, president of The Kroger Co.'s Mid-Atlantic Division, rejected the offer.
Thorne and Reed announced the new arrangement Monday afternoon at the Kroger store at Lakeside Plaza in Salem.
Reed promised to raise supermarket banking to a new level with state-of-the-art technology capable of distributing coupons and bank statements to customers.
Asked to respond to Dominion's claim that the grocery store branches were not profitable, Reed said supermarket banking has been profitable for his company. Plus, he said, it is an entry into Virginia.
Reed declined to say how much the move into this market will cost. But he said most of the startup costs will be for "remarketing" the Kroger branches. National Bank of Commerce won't even change the Dominion red color on the facilities because it's close to its own maroon.
He said the bank will focus on telling Western Virginia who it is and on developing a customer base. He said he would be quite pleased to get 1,000 customers per store in the first six weeks.
He said the bank wants "to get in here and do it right" before it considers opening other offices.
The bank opened a branch in downtown Nashville three years after it started in Kroger stores there. In Knoxville, it took 3 1/2 years before it opened a branch in a commercial area, he said.
James O. Beckner II, who helped set up the supermarket program for Dominion, has been hired as a senior vice president to manage the National Bank of Commerce branches. He went to work when his Dominion job ended April 1. He said he was contacted by the Tennessee company three days before.
Beckner, who has offices in Tanglewood West Executives Suites, said he hopes to find most of the 26 employees needed from among the current Dominion staff.
by CNB