(FORTUNE Magazine) – Have you heard about Commerce Bancorp? It's kind of the Southwest Airlines or Starbucks or Home Depot of banking. Which is to say that this Cherry Hill, N.J., institution is fun, iconoclastic, and revered by its customers. It's the anti-bank bank. CEO Vernon Hill--who also happens to be a Burger King franchiser--says he's trying to create a "retail experience" at his 185 branches. Hill's thinking is that if you give customers what they really want from a bank, like friendly service, longer hours, and--get this--Sundays open, they won't mind slightly lower rates on their savings accounts and no interest on checking. Which is probably true. I'd pay an extra $100 a year (the difference on a few basis points on my bank deposits) for a branch open on Sunday.

Commerce is a real highflier. Last year, earnings grew 21% and assets and deposits grew more than 35%. Even "same store" deposit growth (branches open more than a year) grew 26.5%. The company's stock is up fourfold over the past five years. Despite a few concerns about leverage and a loan portfolio a bit overly concentrated in real estate around New Jersey, analysts have found little to complain about. Their reports contain lines like "Bank of the year!" and "Model works like a charm." Hard to find anyone who doesn't LOVE this company, which always gets me wondering....

So I decided to check 'em out. First some fundamental analysis of the familial kind: I took my youngest daughter to a nearby branch to see what she thought. I figured if a four-year-old can have fun at a bank, maybe there really is something to this company. And for the love of time deposits, she had a blast! (It's not that this kid wants to be a teller when she grows up, either.) We poured her saved-up coins into the "penny arcade" machine and got dollar bills back from a teller. (No commission!) There were balloons. And lollies. A free piggy bank too. And we aren't even customers. "When can we come back?" Katie asked.

Anytime. After all, I'd really like to take a further look at the bank's marble floors, glass doors, and striking bold red "C's" everywhere. Why? Well, the thing is, I'm just not all that excited about the design--and that has me a little worried about Hill. You see, the Hill family, it seems, is getting by not just on banking and burgers, but also on interior design.

I point you to Commerce's annual report, where, in footnote No. 7, the bank explains that "the company obtained interior design and general contractor services for $2.0 million, $2.5 million, and $1.3 million in 2000, 1999, and 1998, respectively, from a business owned by the spouse of the Chairman of the Board of the Company." It goes on to read, "Additionally, the business received commissions of approximately $1.6 million, $1.4 million, and $814,000 in 2000, 1999, and 1998, respectively, on furniture and facility purchases made directly by the company."

What does that mean? Well, it means that the bank is paying a business--InterArch of Mt. Laurel, N.J.--owned by Vernon Hill's wife, Shirley, millions of dollars a year to design and decorate Commerce's rapidly expanding branch network. As it turns out, Mrs. Hill has been doing this work for quite some time. Between 1991 and 2000 (the 2001 annual report isn't out yet), Mrs. Hill's firm received around $18 million in contracts and commissions from Commerce! Not bad!

Now, this isn't illegal. But it looks funny. Would, for instance, Commerce shareholders be better served if another contractor--possibly a less expensive one--did this work? I asked Vernon Hill about his wife's firm's work. "The rules require that this is done on an arm's-length basis with competitive pricing, which it is," he says. "It really is no different from any other contractor." Other questions: How many employees does InterArch have? "About 30."

Who are InterArch's other customers? "Obviously it has other clients, but we're not going to tell you about that." Indeed, when we called InterArch to ask about other customers, a spokeswoman said, "We won't give out that kind of information."

I find this tempest in a bank vault a little sad really. If Commerce is such a great story, why muck it up with what could be perceived as a conflict of interest? How important is that income to Mrs. Hill's company? Mr. Hill is sitting pretty. After all, Commerce is his baby. Per his employment agreement in Commerce's 2001 proxy, "Mr. Hill's 'base salary' shall not be less than $1,250,000" (that would be annual). Plus Hill owns or controls 3.2 million shares and options of Commerce worth more than $110 million.

The Hills are reportedly working on a 43,000-square-foot palace--that's nearly the size of Bill Gates' place--in South Jersey. You might think that this new home would be design work enough for Mrs. Hill's firm. Katie and I are awaiting our invite to check it out.