Chairman and CEO Vernon Hill is out of the company he founded.
Hill is departing as the head of the company's Commerce Bank N.A. unit Friday, and he will retire from his corporate post July 31. To replace him, Commerce has restructured the executive leadership team and named three officials to a newly created Office of the Chairman.
The changes come as the company agreed to a consent order with the Office of the Comptroller of the Currency and a memorandum of understanding with the Federal Reserve Bank of Philadelphia to put to rest questions about the real estate dealings of Hill and others.
Under the terms of the consent order, Commerce's board and new leadership group will initiate governance changes and work more closely with regulators in the future. Commerce also said it will continue to cooperate with any regulatory investigation of insider and insider-related transactions.
Commerce had come under scrutiny because of some of its real estate deals, including the fact that the bank had used an architectural firm owned by Hill's wife to design branch offices.
Effective immediately, any future real estate and vendor transactions will be prohibited with any members of the board and officers and their relatives. All prior related-party real estate and vendor transactions have been or will be terminated, revised or reviewed by independent parties. A new board-level real estate review committee will be formed, and the board's audit and nominating and governance committees will be examined and restructured
The new Office of the Chairman will include Dennis DiFlorio as chairman of Commerce Bank, Robert Falese as president and CEO of the operation and Doug Pauls as chief financial officer of the bank
Commerce Bank has nearly 450 branches, mostly in the Mid-Atlantic region.