New Approach to Supermarket Banking.

Lots of banks open branches in supermarkets. Not many supermarkets, however, open their own banks.

An exception is Ukrop's, a Richmond-based grocery chain that has been the majority owner of First Market Bank since 1997. The bank opened in 1997 in seven in-store branches. Today is has 22 branches, including six freestanding offices, and assets of $700 million.

Perhaps more important from Ukrop's standpoint: About 10 percent of the store's customers have opened accounts with First Market Bank. In fact, First Market is now the state's largest Richmond-based bank.

In addition to performing the usual services that supermarket branches engage in, First Market has a substantial portfolio of small-business loans, and it offers a frill range of services including checking and savings accounts, Internet banking and brokerage services.

Originally, Ukrop's intention had been to go about in-store banking in the traditional way, by leasing space to an existing bank. But then, says Cheryl Moore, First Market's director of marketing and public relations, National Commerce Bancorporation came along with "a unique opportunity." National Commerce offered to become the minority (49 percent) owner of a new bank, and Ukrop's would be the majority owner.

Today, Moore says, First Market Bank holds 39 percent of the market in its home territory, and the widespread public acceptance of the Ukrop's name is a major factor. The success of the supermarket-owned bank has been "ahead of anyone's projections," she adds.