Commerce Bancorp 8-K Results of Operations and Financial Condition

	Commerce Bancorp, Inc. and Subsidiaries
	Consolidated Balance Sheets
	(unaudited)
		September 30,			June 30,		Linked Quarter			September 30,
	(dollars in thousands)	2005			2005		% Change			2004		% Change
Assets	Cash and due from banks	$	1,345,080		$	1,400,346		(4	)%	$	1,069,318		26	%
	Federal funds sold		14,500			13,700		6			255,000		(94	)
	Cash and cash equivalents		1,359,580			1,414,046		(4	)		1,324,318		3
	Loans held for sale		85,372			314,437		(73	)		36,740		132
	Trading securities		150,847			183,894		(18	)		245,258		(38	)
	Securities available for sale		8,965,121			7,676,837		17			12,692,985		(29	)
	Securities held to maturity		12,961,900			11,708,266		11			4,080,134		218
	Loans:
	Commercial real estate:
	Investor developer		1,657,101			1,626,886		2			1,391,812		19
	Residential construction		256,198			245,369		4			182,443		40
			1,913,299			1,872,255		2			1,574,255		22
	Commercial loans:
	Term		1,629,366			1,505,965		8			1,184,854		38
	Line of credit		1,345,536			1,343,279		0			1,105,510		22
	Demand		0			24,000		(100	)		0		0
			2,974,902			2,873,244		4			2,290,364		30
	Owner-occupied		2,313,175			2,229,453		4			1,913,351		21
			5,288,077			5,102,697		4			4,203,715		26
	Consumer:
	Mortgages (1-4 family residential)		1,621,419			1,443,602		12			1,216,110		33
	Installment		203,055			167,663		21			136,538		49
	Home equity		2,177,317			2,024,130		8			1,712,733		27
	Credit lines		86,256			78,370		10			67,616		28
			4,088,047			3,713,765		10			3,132,997		30
	Total loans		11,289,423			10,688,717		6			8,910,967		27
	Less allowance for loan losses		138,903			141,325		(2	)		131,529		6
			11,150,520			10,547,392		6			8,779,438		27
	Bank premises and equipment, net		1,217,222			1,135,035		7			963,459		26
	Other assets		402,978			383,029		5			309,149		30
	Total assets	$	36,293,540		$	33,362,936		9	%	$	28,431,481		28	%
Liabilities	Deposits:
	Demand:
	Noninterest-bearing	$	7,827,651		$	7,540,381		4	%	$	6,047,322		29	%
	Interest-bearing		13,133,145			11,966,515		10			10,886,783		21
	Savings		8,676,201			7,504,035		16			6,104,644		42
	Time		3,606,689			3,508,132		3			3,202,883		13
	Total deposits		33,243,686			30,519,063		9			26,241,632		27
	Other borrowed money		703,227			567,346		24			165,853		324
	Other liabilities		232,266			227,036		2			274,377		(15	)
	Long-term debt		0			200,000		(100	)		200,000		(100	)
			34,179,179			31,513,445		8			26,881,862		27
Stockholders'	Common stock		173,784			164,178		6			158,871		9
Equity	Capital in excess of par value		1,263,180			1,024,851		23			887,861		42
	Retained earnings		725,215			664,803		9			501,477		45
	Accumulated other comprehensive (loss) income		(35,108	)		8,390		(518	)		12,748		(375	)
			2,127,071			1,862,222		14			1,560,957		36
	Less treasury stock, at cost		12,710			12,731		(0	)		11,338		12
	Total stockholders' equity		2,114,361			1,849,491		14			1,549,619		36
	Total liabilities and stockholders' equity	$	36,293,540		$	33,362,936		9	%	$	28,431,481		28	%

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
	(dollars in thousands)	September 30,				June 30, 2005									September 30, 2004
			2005			Actual			$ Change			% Change			Actual			$ Change			% Change
Assets	Cash and due from banks		$	1,345,080		$	1,400,346			($55,266	)		(4	)%	$	1,069,318		$	275,762			26	%
	Federal funds sold			14,500			13,700			800			6			255,000			(240,500	)		(94	)
	Cash and cash equivalents			1,359,580			1,414,046			(54,466	)		(4	)		1,324,318			35,262			3
	Loans held for sale			85,372			314,437			(229,065	)		(73	)		36,740			48,632			132
	Trading securities			150,847			183,894			(33,047	)		(18	)		245,258			(94,411	)		(38	)
	Securities available for sale			8,965,121			7,676,837			1,288,284			17			12,692,985			(3,727,864	)		(29	)
	Securities held to maturity			12,961,900			11,708,266			1,253,634			11			4,080,134			8,881,766			218
	Loans			11,289,423			10,688,717			600,706			6			8,910,967			2,378,456			27
	Less allowance for loan losses			138,903			141,325			(2,422	)		(2	)		131,529			7,374			6
				11,150,520			10,547,392			603,128			6			8,779,438			2,371,082			27
	Reserve %			1.23	%		1.32	%								1.48	%
	Bank premises and equipment, net			1,217,222			1,135,035			82,187			7			963,459			253,763			26
	Other assets			402,978			383,029			19,949			5			309,149			93,829			30
	Total assets		$	36,293,540		$	33,362,936		$	2,930,604			9	%	$	28,431,481		$	7,862,059			28	%
Liabilities	Deposits:
	Demand:
	Noninterest-bearing		$	7,827,651		$	7,540,381		$	287,270			4	%	$	6,047,322		$	1,780,329			29	%
	Interest-bearing			13,133,145			11,966,515			1,166,630			10			10,886,783			2,246,362			21
	Savings			8,676,201			7,504,035			1,172,166			16			6,104,644			2,571,557			42
	Time			3,606,689			3,508,132			98,557			3			3,202,883			403,806			13
	Total deposits			33,243,686			30,519,063			2,724,623			9			26,241,632			7,002,054			27
	Core deposits			32,370,994			29,624,831			2,746,163			9			25,108,705			7,262,289			29
	Total other liabilities			935,493			994,382			(58,889	)		(6	)		640,230			295,263			46
				34,179,179			31,513,445			2,665,734			8			26,881,862			7,297,317			27
Stockholders' Equity				2,114,361			1,849,491			264,870			14			1,549,619			564,742			36
	Total liabilities and stockholders' equity		$	36,293,540		$	33,362,936		$	2,930,604			9	%	$	28,431,481		$	7,862,059			28	%

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
		September 30,			December 31,
	(dollars in thousands)	2005			2004
Assets	Cash and due from banks	$	1,345,080		$	1,050,806
	Federal funds sold		14,500			0
	Cash and cash equivalents		1,359,580			1,050,806
	Loans held for sale		85,372			44,072
	Trading securities		150,847			169,103
	Securities available for sale		8,965,121			8,044,150
	Securities held to maturity		12,961,900			10,463,658
	(market value 09/05-$12,814,738; 2004-$10,430,451)
	Loans		11,289,423			9,454,611
	Less allowance for loan losses		138,903			135,620
			11,150,520			9,318,991
	Bank premises and equipment, net		1,217,222			1,059,519
	Other assets		402,978			351,346
	Total assets	$	36,293,540		$	30,501,645
Liabilities	Deposits:
	Demand:
	Noninterest-bearing	$	7,827,651		$	6,406,614
	Interest-bearing		13,133,145			11,604,066
	Savings		8,676,201			6,490,263
	Time		3,606,689			3,157,942
	Total deposits		33,243,686			27,658,885
	Other borrowed money		703,227			661,195
	Other liabilities		232,266			315,860
	Long-term debt		0			200,000
			34,179,179			28,835,940
Stockholders'	Common stock, 173,784,250 shares issued (160,635,618 shares in 2004)		173,784			160,636
Equity	Capital in excess of par value		1,263,180			951,476
	Retained earnings		725,215			543,978
	Accumulated other comprehensive (loss) income		(35,108	)		20,953
			2,127,071			1,677,043
	Less treasury stock, at cost, 837,338 shares (795,610 shares in 2004)		12,710			11,338
	Total stockholders' equity		2,114,361			1,665,705
	Total liabilities and stockholders' equity	$	36,293,540		$	30,501,645

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited)
		Three Months Ended							Nine Months Ended
		September 30,							September 30,
	(dollars in thousands, except per share amounts)	2005		2004		% Change			2005		2004		% Change
Interest	Interest and fees on loans	$	178,878	$	124,698		43	%	$	485,935	$	346,858		40	%
income	Interest on investments		243,187		195,968		24			703,103		537,396		31
	Other interest		1,774		148		1,099			2,979		642		364
	Total interest income		423,839		320,814		32			1,192,017		884,896		35
Interest	Interest on deposits:
expense	Demand		68,100		24,539		178			168,526		59,211		185
	Savings		35,215		12,408		184			77,553		30,410		155
	Time		26,114		14,210		84			66,793		43,117		55
	Total interest on deposits		129,429		51,157		153			312,872		132,738		136
	Interest on other borrowed money		4,697		2,255		108			16,024		3,755		327
	Interest on long-term debt		2,339		3,020		(23	)		8,379		9,060		(8	)
	Total interest expense		136,465		56,432		142			337,275		145,553		132
	Net interest income		287,374		264,382		9			854,742		739,343		16
	Provision for loan losses		3,000		10,750		(72	)		13,750		30,998		(56	)
	Net interest income after provision for loan losses		284,374		253,632		12			840,992		708,345		19
Noninterest	Deposit charges and service fees		72,302		57,081		27			201,068		155,279		29
income	Other operating income		46,763		42,089		11			131,532		121,339		8
	Net investment securities gains		5,714		943		506			11,511		2,002		475
	Total noninterest income		124,779		100,113		25			344,111		278,620		24
	Total Revenues		412,153		364,495		13			1,198,853		1,017,963		18
Noninterest	Salaries and benefits		134,149		114,467		17			381,002		315,917		21
expense	Occupancy		41,873		31,689		32			118,976		87,748		36
	Furniture and equipment		32,371		27,987		16			90,192		79,167		14
	Office		14,871		11,082		34			40,125		32,922		22
	Marketing		12,460		8,994		39			26,717		26,968		(1	)
	Other		52,858		52,943		(0	)		168,475		142,945		18
	Total noninterest expenses		288,582		247,162		17			825,487		685,667		20
	Income before income taxes		120,571		106,583		13			359,616		301,298		19
	Provision for federal and state income taxes		41,116		36,493		13			123,615		102,998		20
	Net income	$	79,455	$	70,090		13	%	$	236,001	$	198,300		19	%
	Net income per common and common equivalent share:
	Basic	$	0.48	$	0.45		7	%	$	1.45	$	1.27		14	%
	Diluted	$	0.45	$	0.42		7		$	1.36	$	1.19		14
	Average common and common equivalent shares outstanding:
	Basic		165,701		157,250		5			162,947		155,851		5
	Diluted		180,360		172,090		5			177,951		171,865		4
	Cash dividends, common stock	$	0.11	$	0.10		10	%	$	0.33	$	0.29		14	%

Commerce Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(unaudited)

		Three Months Ended
		September 30,			June 30,						September 30,
	(dollars in thousands, except per share amounts)	2005			2005			% Change			2004			% Change
Interest	Interest and fees on loans	$	178,878		$	161,839			11	%	$	124,698			43	%
income	Interest on investments		243,187			234,970			3			195,968			24
	Other interest		1,774			889			100			148			1,099
	Total interest income		423,839			397,698			7			320,814			32
Interest	Interest on deposits:
expense	Demand		68,100			53,755			27			24,539			178
	Savings		35,215			23,258			51			12,408			184
	Time		26,114			22,281			17			14,210			84
	Total interest on deposits		129,429			99,294			30			51,157			153
	Interest on other borrowed money		4,697			6,917			(32	)		2,255			108
	Interest on long-term debt		2,339			3,020			(23	)		3,020			(23	)
	Total interest expense		136,465			109,231			25			56,432			142
	Net interest income		287,374			288,467			(0	)		264,382			9
	Provision for loan losses		3,000			4,500			(33	)		10,750			(72	)
	Net interest income after provision for loan losses		284,374			283,967			0			253,632			12
Noninterest	Deposit charges and service fees		72,302			68,802			5			57,081			27
income	Other operating income		46,763			42,152			11			42,089			11
	Net investment securities gains		5,714			4,689			22			943			506
	Total noninterest income		124,779			115,643			8			100,113			25
	Total Revenues		412,153			404,110			2			364,495			13
Noninterest	Salaries and benefits		134,149			127,552			5			114,467			17
expense	Occupancy		41,873			39,110			7			31,689			32
	Furniture and equipment		32,371			28,895			12			27,987			16
	Office		14,871			12,577			18			11,082			34
	Marketing		12,460			8,456			47			8,994			39
	Other		52,858			61,909			(15	)		52,943			(0	)
	Total noninterest expenses		288,582			278,499			4			247,162			17
	Income before income taxes		120,571			121,111			(0	)		106,583			13
	Provision for federal and state income taxes		41,116			41,702			(1	)		36,493			13
	Net income	$	79,455		$	79,409			0	%	$	70,090			13	%
	Net income per common and common equivalent share:
	Basic	$	0.48		$	0.49			(2	)%	$	0.45			7	%
	Diluted	$	0.45		$	0.46			(2	)	$	0.42			7
	Average common and common equivalent shares outstanding:
	Basic		165,701			162,287			2			157,250			5
	Diluted		180,360			177,202			2			172,090			5
	Cash dividends, common stock	$	0.11		$	0.11			0	%	$	0.10			10	%
	Return on average assets		0.92	%		0.97	%					1.02	%
	Return on average equity		16.62			17.68						18.97

Commerce Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2005			2004			% Change			2005			2004			% Change
	(dollars and shares in thousands)									(dollars and shares in thousands)
Income Statement Data:
Net interest income	$	287,374		$	264,382			9	%	$	854,742		$	739,343			16	%
Provision for loan losses		3,000			10,750			(72	)		13,750			30,998			(56	)
Noninterest income		124,779			100,113			25			344,111			278,620			24
Total revenues		412,153			364,495			13			1,198,853			1,017,963			18
Noninterest expense		288,582			247,162			17			825,487			685,667			20
Net income		79,455			70,090			13			236,001			198,300			19
Per Share Data:
Net income - Basic	$	0.48		$	0.45			7	%	$	1.45		$	1.27			14	%
Net income - Diluted		0.45			0.42			7			1.36			1.19			14
Book value - Basic										$	12.23		$	9.80			25	%
Book value - Diluted											11.69			10.05			16
Revenue per share - Diluted	$	9.14		$	8.47			8	%	$	8.98		$	7.90			14	%
Weighted Average Shares Outstanding:
Basic		165,701			157,250						162,947			155,851
Diluted		180,360			172,090						177,951			171,865
Balance Sheet Data:
Total assets										$	36,293,540		$	28,431,481			28	%
Loans (net)											11,150,520			8,779,438			27
Allowance for loan losses											138,903			131,529			6
Securities available for sale											8,965,121			12,692,985			(29	)
Securities held to maturity											12,961,900			4,080,134			218
Total deposits											33,243,686			26,241,632			27
Core deposits											32,370,994			25,108,705			29
Convertible Trust Capital Securities - Commerce Capital Trust II											0			200,000			-
Stockholders' equity											2,114,361			1,549,619			36
Capital:
Stockholders' equity to total assets											5.83	%		5.45	%
Risk-based capital ratios:
Tier I											12.19			12.31
Total capital											13.02			13.27
Leverage ratio											6.17			6.30
Performance Ratios:
Cost of funds		1.71	%		0.90	%					1.50	%		0.84	%
Net interest margin		3.67			4.29						3.87			4.32
Return on average assets		0.92			1.02						0.96			1.03
Return on average total stockholders' equity		16.62			18.97						17.40			18.90

The following summary presents information regarding non-performing loans and assets as of September 30, 2005 and the preceding four quarters (dollar amounts in thousands).
	September 30,			June 30,			March 31,			December 31,			September 30,
	2005			2005			2005			2004			2004
Non-accrual loans:
Commercial	$	16,926		$	20,467		$	18,376		$	17,874		$	22,647
Consumer		8,559			8,641			8,723			10,138			9,784
Commercial real estate:
Construction		1,882			178			178			-			-
Mortgage		3,353			3,086			1,290			1,317			1,251
Total non-accrual loans		30,720			32,372			28,567			29,329			33,682
Restructured loans:
Commercial		3,230			3,326			3,422			3,518			3,614
Consumer		-			-			-			-			-
Commercial real estate:
Construction		-			-			-			-			-
Mortgage		-			-			-			-			-
Total restructured loans		3,230			3,326			3,422			3,518			3,614
Total non-performing loans		33,950			35,698			31,989			32,847			37,296
Other real estate		310			349			777			626			972
Total non-performing assets		34,260			36,047			32,766			33,473			38,268
Loans past due 90 days or more
and still accruing		177			165			233			602			614
Total non-performing assets and
loans past due 90 days or more	$	34,437		$	36,212		$	32,999		$	34,075		$	38,882
Total non-performing loans as a
percentage of total period-end
loans		0.30	%		0.33	%		0.32	%		0.35	%		0.42	%
Total non-performing assets as a
percentage of total period-end assets		0.09	%		0.11	%		0.10	%		0.11	%		0.13	%
Total non-performing assets and loans
past due 90 days or more as a
percentage of total period-end assets		0.09	%		0.11	%		0.10	%		0.11	%		0.14	%
Allowance for loan losses as a
percentage of total non-performing
loans		409	%		396	%		435	%		413	%		353	%
Allowance for loan losses as a percentage
of total period-end loans		1.23	%		1.32	%		1.40	%		1.43	%		1.48	%
Total non-performing assets and loans
past due 90 days or more as a
percentage of stockholders' equity and
allowance for loan losses		2	%		2	%		2	%		2	%		2	%

The following table presents, for the periods indicated, an analysis of the allowance for loan losses and other related data: (dollar amounts in thousands)
	Three Months Ended						Nine Months Ended						Year Ended
	09/30/05			09/30/04			09/30/05			09/30/04			12/31/04
Balance at beginning of period	$	141,325		$	124,688		$	135,620		$	112,057		$	112,057
Provisions charged to operating expenses		3,000			10,750			13,750			30,998			39,238
		144,325			135,438			149,370			143,055			151,295
Recoveries on loans charged-off:
Commercial		930			435			1,920			695			1,000
Consumer		245			265			1,332			636			1,123
Commercial real estate		30			4			80			52			52
Total recoveries		1,205			704			3,332			1,383			2,175
Loans charged-off:
Commercial		(5,287	)		(1,651	)		(9,102	)		(6,649	)		(9,416	)
Consumer		(1,318	)		(2,951	)		(3,720	)		(4,627	)		(6,733	)
Commercial real estate		(22	)		(11	)		(977	)		(1,633	)		(1,701	)
Total charge-offs		(6,627	)		(4,613	)		(13,799	)		(12,909	)		(17,850	)
Net charge-offs		(5,422	)		(3,909	)		(10,467	)		(11,526	)		(15,675	)
Balance at end of period	$	138,903		$	131,529		$	138,903		$	131,529		$	135,620
Net charge-offs as a percentage of
average loans outstanding		0.20	%		0.18	%		0.13	%		0.19	%		0.19	%
Net Reserve Additions		($2,422	)	$	6,841		$	3,283		$	19,472		$	23,563

Commerce Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
	September 2005							June 2005							September 2004
	Average				Average			Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate
(dollars in thousands)
Earning Assets
Investment securities
Taxable	$	19,732,946	$	239,481		4.81	%	$	18,821,647	$	231,275		4.93	%	$	15,741,541	$	191,627		4.84	%
Tax-exempt		397,351		4,366		4.36			374,448		3,257		3.49			385,814		5,126		5.29
Trading		96,344		1,335		5.50			178,037		2,427		5.47			159,954		1,552		3.86
Total investment securities		20,226,641		245,182		4.81			19,374,132		236,959		4.91			16,287,309		198,305		4.84
Federal funds sold		198,260		1,774		3.55			117,491		889		3.03			40,413		148		1.46
Loans
Commercial mortgages		3,865,284		63,300		6.50			3,707,963		59,684		6.46			3,189,126		48,881		6.10
Commercial		2,760,625		47,117		6.77			2,569,001		41,417		6.47			2,069,986		28,552		5.49
Consumer		4,087,665		62,720		6.09			3,720,529		55,819		6.02			3,024,776		43,287		5.69
Tax-exempt		498,211		8,831		7.03			426,032		7,568		7.12			337,374		6,121		7.22
Total loans		11,211,785		181,968		6.44			10,423,525		164,488		6.33			8,621,262		126,841		5.85
Total earning assets	$	31,636,686	$	428,924		5.38	%	$	29,915,148	$	402,336		5.39	%	$	24,948,984	$	325,294		5.19	%
Sources of Funds
Interest-bearing liabilities
Savings	$	8,127,451	$	35,215		1.72	%	$	7,082,969	$	23,258		1.32	%	$	5,715,755	$	12,408		0.86	%
Interest bearing demand		12,638,411		68,100		2.14			12,094,680		53,755		1.78			10,270,059		24,539		0.95
Time deposits		2,734,408		18,760		2.72			2,668,791		16,085		2.42			2,409,160		11,046		1.82
Public funds		842,894		7,354		3.46			828,305		6,196		3.00			800,579		3,164		1.57
Total deposits		24,343,164		129,429		2.11			22,674,745		99,294		1.76			19,195,553		51,157		1.06
Other borrowed money		541,119		4,697		3.44			845,462		6,917		3.28			614,282		2,255		1.46
Long-term debt		163,043		2,339		5.69			200,000		3,020		6.06			200,000		3,020		6.01
Total deposits and interest-bearing liabilities		25,047,326		136,465		2.16			23,720,207		109,231		1.85			20,009,835		56,432		1.12
Noninterest-bearing funds (net)		6,589,360							6,194,941							4,939,149
Total sources to fund earning assets	$	31,636,686		136,465		1.71		$	29,915,148		109,231		1.46		$	24,948,984		56,432		0.90
Net interest income and
margin tax-equivalent basis			$	292,459		3.67	%			$	293,105		3.93	%			$	268,862		4.29	%
Other Balances
Cash and due from banks	$	1,306,848						$	1,241,372						$	1,145,324
Other assets		1,845,602							1,749,133							1,430,576
Total assets		34,644,396							32,763,128							27,393,847
Total deposits		31,788,250							29,661,511							24,852,938
Demand deposits (noninterest-bearing)		7,445,086							6,986,766							5,657,385
Other liabilities		240,177							259,873							248,878
Stockholders' equity		1,911,807							1,796,282							1,477,749
Allowance for loan losses		144,740							142,525							131,037

Notes	-Weighted average yields on tax-exempt obligations have been computed on a tax-equivalent basis assuming a federal tax rate of 35%.
	-Non-accrual loans have been included in the average loan balance.
	-Consumer loans include loans held for sale.

Commerce Bancorp, Inc. and Subsidiaries
Computation of Net Income Per Share
(dollars in thousands, except per share amounts)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Basic:
Net income applicable to common stock	$	79,455	$	70,090	$	236,001	$	198,300
Average common shares outstanding		165,701		157,250		162,947		155,851
Net income per common share	$	0.48	$	0.45	$	1.45	$	1.27
Diluted:
Net income applicable to common stock	$	79,455	$	70,090	$	236,001	$	198,300
on a diluted basis
Interest expense on trust preferred securities		1,520		1,963		5,446		5,889
	$	80,975	$	72,053	$	241,447	$	204,189
Average common shares outstanding		165,701		157,250		162,947		155,851
Additional shares considered in diluted
computation assuming:
Exercise of stock options		8,478		7,258		7,894		8,432
Conversion of trust preferred securities		6,181		7,582		7,110		7,582
Average common and common equivalent
shares outstanding		180,360		172,090		177,951		171,865
Net income per common and common
equivalent share	$	0.45	$	0.42	$	1.36	$	1.19
Restated for the March 2005 stock split