Vernon Hill, the former Commerce Bancorp ( CBH - Get Report) CEO who resigned last summer under the cloud of a federal investigation, is resurfacing as a partner in a new investment partnership focused on bank stocks.

The 62-year-old founder of Commerce, who voluntarily left in June as federal regulators probed its real estate transactions and potential conflicts of interest, is teaming with veteran analyst Gary Townsend on the venture, to be called Hill-Townsend Capital. The firm, which will be based in Chevy Chase, Md., will invest in the financial services sector, particularly in mid-cap bank stocks.

Hill-Townsend will "concentrate on long-horizon investment in companies with superior, easily understood business models, run by passionate, dedicated management teams," a news release said. Townsend, in an interview with TheStreet.com, would not comment on how much the firm has raised thus far.

It is a difficult time to be investing in financials -- and particularly bank stocks. As the credit crunch intensified, bank stocks in general have been pummeled. The KBW Bank Index is down 25% this year.

Hill, who founded Commerce 34 years ago, has been widely credited for the bank's successful deposit-gathering strategy and vast branch expansion primarily across New York, New Jersey, Connecticut and eastern Pennsylvania. The company, which has $50 billion in assets and $46 billion in deposits, is known for its extended weekday and weekend hours, a focus on customer service, inviting branch designs and multiple gimmicks to attract customers.

Hill's departure from Commerce was part of an agreement with regulators tied to their investigation into the Cherry Hill, N.J.-based bank. The probe included Commerce's use of an architectural firm, InterArch, owned by Hill's wife to design branch offices.

Less than four months after he left, Commerce agreed to be acquired by TD Bank ( TD - Get Report) for $8.5 billion.

Regulatory problems aside, Commerce has had trouble navigating through a difficult interest rate environment, which has put a damper on the bank's profit in the last year.

"The market correction hit financial stocks particularly hard, but undoubtedly has already created great investment opportunities," Hill said in the release. "We plan to take advantage with strong fundamental analysis and great execution."

Hill was not immediately available for comment.

Still Townsend, who covered Commerce among other banks while at Friedman Billings Ramsey, says with the combination of Hill's extensive banking experience and his analytical skills, the firm will be able to fetter out bargain opportunities in the banking space.

"The problems in mortgage have a bit of a ways to play out," Townsend said in an interview with TheStreet.com. "Many banks that have little in the way of mortgage or capital markets businesses have traded down significantly, so I think there are opportunities."

He will be particularly looking for banks that have "excellent approaches to credit administration" and "that are not too imbued with mortgage."

In addition, once the mortgage sector recovers, Townsend adds that there will be other opportunities, perhaps in subprime.

"Subprime mortgage is not going to go away," he says. "It is an important space and it will continue to provide economic value. As the carnage continues and then finally recedes, there will be good companies left that may be inexpensive and provide investment opportunities."