Commerce Bancorp 8-K Results of Operations and Financial Condition

Exhibit 99.2

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
	December 31,			September 30,			Linked Quarter			December 31,
(dollars in thousands)	2005			2005			% Change			2004		% Change
Assets
Cash and due from banks	$	1,284,064		$	1,345,080			(5	)%	$	1,050,806		22	%
Federal funds sold		12,700			14,500			(12	)		0		0
Cash and cash equivalents		1,296,764			1,359,580			(5	)		1,050,806		23
Loans held for sale		30,091			85,372			(65	)		44,072		(32	)
Trading securities		143,016			150,847			(5	)		169,103		(15	)
Securities available for sale		9,518,821			8,965,121			6			8,044,150		18
Securities held to maturity		13,005,364			12,961,900			0			10,463,658		24
Loans:
Commercial real estate:
Investor developer		2,001,674			1,657,101			21			1,455,891		37
Residential construction		290,530			256,198			13			206,924		40
		2,292,204			1,913,299			20			1,662,815		38
Commercial loans:
Term		1,781,148			1,629,366			9			1,283,476		39
Line of credit		1,517,347			1,345,536			13			1,168,542		30
Demand		0			0			0			0		0
		3,298,495			2,974,902			11			2,452,018		35
Owner-occupied		2,402,300			2,313,175			4			1,998,203		20
		5,700,795			5,288,077			8			4,450,221		28
Consumer:
Mortgages (1-4 family residential)		2,000,309			1,621,419			23			1,340,009		49
Installment		211,332			203,055			4			132,646		59
Home equity		2,353,581			2,177,317			8			1,799,841		31
Credit lines		100,431			86,256			16			69,079		45
		4,665,653			4,088,047			14			3,341,575		40
Total loans		12,658,652			11,289,423			12			9,454,611		34
Less allowance for loan losses		133,664	*		138,903			(4	)		135,620		(1	)
		12,524,988			11,150,520			12			9,318,991		34
Bank premises and equipment, net		1,378,786			1,217,222			13			1,059,519		30
Other assets		568,207			402,978			41			351,346		62
Total assets	$	38,466,037		$	36,293,540			6	%	$	30,501,645		26	%
Liabilities
Deposits:
Demand:
Noninterest-bearing	$	8,019,878		$	7,827,651			2	%	$	6,406,614		25	%
Interest-bearing		13,286,678			13,133,145			1			11,604,066		15
Savings		9,486,712			8,676,201			9			6,490,263		46
Time		3,933,445			3,606,689			9			3,157,942		25
Total deposits		34,726,713			33,243,686			4			27,658,885		26
Other borrowed money		1,106,443			703,227			57			661,195		67
Other liabilities		323,708			232,266			39			315,860		2
Long-term debt		0			0			0			200,000		(100	)
		36,156,864			34,179,179			6			28,835,940		25
Stockholders'   Equity
Common stock		179,499			173,784			3			160,636		12
Capital in excess of par value		1,450,843			1,259,184			15			951,476		52
Retained earnings		750,710			729,211			3			543,978		38
Accumulated other comprehensive (loss) income		(59,169	)		(35,108	)		69			20,953		(382	)
		2,321,883			2,127,071			9			1,677,043		38
Less treasury stock, at cost		12,710			12,710			0			11,338		12
Total stockholders' equity		2,309,173			2,114,361			9			1,665,705		39
Total liabilities and stockholders' equity	$	38,466,037		$	36,293,540			6	%	$	30,501,645		26	%

*  Net of transfer of $7.8 million to Allowance for Unfunded Credit Commitments included in Other Liabilities.

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
(dollars in thousands)	December 31,			September 30, 2005									December 31, 2004
	2005			Actual			$ Change			% Change			Actual			$ Change			% Change
Assets
Cash and due from banks	$	1,284,064		$	1,345,080			($61,016	)		(5	)%	$	1,050,806		$	233,258			22	%
Federal funds sold		12,700			14,500			(1,800	)		(12	)		0			12,700			0
Cash and cash equivalents		1,296,764			1,359,580			(62,816	)		(5	)		1,050,806			245,958			23
Loans held for sale		30,091			85,372			(55,281	)		(65	)		44,072			(13,981	)		(32	)
Trading securities		143,016			150,847			(7,831	)		(5	)		169,103			(26,087	)		(15	)
Securities available for sale		9,518,821			8,965,121			553,700			6			8,044,150			1,474,671			18
Securities held to maturity		13,005,364			12,961,900			43,464			0			10,463,658			2,541,706			24
Loans		12,658,652			11,289,423			1,369,229			12			9,454,611			3,204,041			34
Less allowance for loan losses		133,664	*		138,903			(5,239	)		(4	)		135,620			(1,956	)		(1	)
		12,524,988			11,150,520			1,374,468			12			9,318,991			3,205,997			34
Reserve %		1.12	%		1.23	%								1.43	%
Bank premises and equipment, net		1,378,786			1,217,222			161,564			13			1,059,519			319,267			30
Other assets		568,207			402,978			165,229			41			351,346			216,861			62
Total assets	$	38,466,037		$	36,293,540		$	2,172,497			6	%	$	30,501,645		$	7,964,392			26	%
Liabilities
Deposits:
Demand:
Noninterest-bearing	$	8,019,878		$	7,827,651		$	192,227			2	%	$	6,406,614		$	1,613,264			25	%
Interest-bearing		13,286,678			13,133,145			153,533			1			11,604,066			1,682,612			15
Savings		9,486,712			8,676,201			810,511			9			6,490,263			2,996,449			46
Time		3,933,445			3,606,689			326,756			9			3,157,942			775,503			25
Total deposits		34,726,713			33,243,686			1,483,027			4			27,658,885			7,067,828			26
Core deposits		33,869,540			32,370,994			1,498,546			5			26,656,530			7,213,010			27
Total other liabilities		1,430,151			935,493			494,658			53			1,177,055			253,096			22
		36,156,864			34,179,179			1,977,685			6			28,835,940			7,320,924			25
Stockholders' Equity		2,309,173			2,114,361			194,812			9			1,665,705			643,468			39
Total liabilities and stockholders' equity	$	38,466,037		$	36,293,540		$	2,172,497			6	%	$	30,501,645		$	7,964,392			26	%

* Net of transfer of $7.8 million to Allowance for Unfunded Credit Commitments included in Other Liabilities.

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
	December 31,
(dollars in thousands)	2005			2004
Assets
Cash and due from banks	$	1,284,064		$	1,050,806
Federal funds sold		12,700			0
Cash and cash equivalents		1,296,764			1,050,806
Loans held for sale		30,091			44,072
Trading securities		143,016			169,103
Securities available for sale		9,518,821			8,044,150
Securities held to maturity		13,005,364			10,463,658
(market value 2005-$12,758,552; 2004-$10,430,451)
Loans		12,658,652			9,454,611
Less allowance for loan losses		133,664	*		135,620
		12,524,988			9,318,991
Bank premises and equipment, net		1,378,786			1,059,519
Other assets		568,207			351,346
Total assets	$	38,466,037		$	30,501,645
Liabilities
Deposits:
Demand:
Noninterest-bearing	$	8,019,878		$	6,406,614
Interest-bearing		13,286,678			11,604,066
Savings		9,486,712			6,490,263
Time		3,933,445			3,157,942
Total deposits		34,726,713			27,658,885
Other borrowed money		1,106,443			661,195
Other liabilities		323,708			315,860
Long-term debt		0			200,000
		36,156,864			28,835,940
Stockholders' Equity
Common stock, 179,498,717 shares issued (160,635,618 shares in 2004)		179,499			160,636
Capital in excess of par value		1,450,843			951,476
Retained earnings		750,710			543,978
Accumulated other comprehensive (loss) income		(59,169	)		20,953
		2,321,883			1,677,043
Less treasury stock, at cost, 837,338 shares (795,610 shares in 2004)		12,710			11,338
Total stockholders' equity		2,309,173			1,665,705
Total liabilities and stockholders' equity	$	38,466,037		$	30,501,645

* Net of transfer of $7.8 million to Allowance for Unfunded Credit Commitments included in Other Liabilities.

Commerce Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited)
	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
(dollars in thousands, except per share amounts)	2005			2004		% Change			2005			2004		% Change
Interest income
Interest and fees on loans	$	194,617		$	136,328		43	%	$	680,552		$	483,186		41	%
Interest on investments		278,317			216,806		28			981,420			754,202		30
Other interest		293			261		12			3,272			903		262
Total interest income		473,227			353,395		34			1,665,244			1,238,291		34
Interest expense
Interest on deposits:
Demand		84,148			36,042		133			252,674			95,253		165
Savings		45,866			16,270		182			123,419			46,680		164
Time		31,987			16,691		92			98,780			59,808		65
Total interest on deposits		162,001			69,003		135			474,873			201,741		135
Interest on other borrowed money		12,386			2,930		323			28,410			6,685		325
Interest on long-term debt		0			3,020		(100	)		8,379			12,080		(31	)
Total interest expense		174,387			74,953		133			511,662			220,506		132
Net interest income		298,840			278,442		7			1,153,582			1,017,785		13
Provision for credit losses		5,400			8,240		(34	)		19,150			39,238		(51	)
Net interest income after provision for credit losses		293,440			270,202		9			1,134,432			978,547		16
Noninterest income
Deposit charges and service fees		81,624			62,847		30			282,692			218,126		30
Other operating income		42,600			32,967		29			174,132			154,306		13
Net investment securities (losses) gains		(25,541	)		637		(4,110	)		(14,030	)		2,639		(632	)
Total noninterest income		98,683			96,451		2			442,794			375,071		18
Total Revenues		397,523			374,893		6			1,596,376			1,392,856		15
Noninterest expense
Salaries and benefits		145,426			115,227		26			526,428			431,144		22
Occupancy		46,101			33,462		38			165,077			121,210		36
Furniture and equipment		36,794			30,075		22			126,986			109,242		16
Office		15,708			13,103		20			55,833			46,025		21
Marketing		10,544			9,268		14			37,261			36,236		3
Other		66,320			51,976		28			234,795			194,921		20
Total noninterest expenses		320,893			253,111		27			1,146,380			938,778		22
Income before income taxes		71,230			113,542		(37	)		430,846			414,840		4
Provision for federal and state income taxes		24,292			38,424		(37	)		147,907			141,422		5
Net income	$	46,938		$	75,118		(38	)%	$	282,939		$	273,418		3	%
Net income per common and common equivalent share:
Basic	$	0.27		$	0.47		(43	)%	$	1.70		$	1.74		(2	)%
Diluted	$	0.26		$	0.44		(41	)	$	1.61		$	1.63		(1	)
Average common and common equivalent shares outstanding:
Basic		174,958			158,930		10			165,974			156,625		6
Diluted		182,801			174,889		5			179,135			172,603		4
Cash dividends, common stock	$	0.12		$	0.11		9	%	$	0.45		$	0.40		13	%

	Commerce Bancorp, Inc. and Subsidiaries
	Consolidated Statements of Income
	(unaudited)
		Three Months Ended
		December 31,			September 30,						December 31,
	(dollars in thousands, except per share amounts)	2005			2005			% Change			2004			% Change
Interest	Interest and fees on loans	$	194,617		$	178,878			9	%	$	136,328			43	%
income	Interest on investments		278,317			243,187			14			216,806			28
	Other interest		293			1,774			(83	)		261			12
	Total interest income		473,227			423,839			12			353,395			34
Interest	Interest on deposits:
expense	Demand		84,148			68,100			24			36,042			133
	Savings		45,866			35,215			30			16,270			182
	Time		31,987			26,114			22			16,691			92
	Total interest on deposits		162,001			129,429			25			69,003			135
	Interest on other borrowed money		12,386			4,697			164			2,930			323
	Interest on long-term debt		0			2,339			(100	)		3,020			(100	)
	Total interest expense		174,387			136,465			28			74,953			133
	Net interest income		298,840			287,374			4			278,442			7
	Provision for credit losses		5,400			3,000			80			8,240			(34	)
	Net interest income after provision for credit losses		293,440			284,374			3			270,202			9
Noninterest	Deposit charges and service fees		81,624			72,302			13			62,847			30
income	Other operating income		42,600			46,763			(9	)		32,967			29
	Net investment securities (losses) gains		(25,541	)		5,714			(547	)		637			(4,110	)
	Total noninterest income		98,683			124,779			(21	)		96,451			2
	Total Revenues		397,523			412,153			(4	)		374,893			6
Noninterest	Salaries and benefits		145,426			134,149			8			115,227			26
expense	Occupancy		46,101			41,873			10			33,462			38
	Furniture and equipment		36,794			32,371			14			30,075			22
	Office		15,708			14,871			6			13,103			20
	Marketing		10,544			12,460			(15	)		9,268			14
	Other		66,320			52,858			25			51,976			28
	Total noninterest expenses		320,893			288,582			11			253,111			27
	Income before income taxes		71,230			120,571			(41	)		113,542			(37	)
	Provision for federal and state income taxes		24,292			41,116			(41	)		38,424			(37	)
	Net income	$	46,938		$	79,455			(41	)%	$	75,118			(38	)%
	Net income per common and common equivalent share:
	Basic	$	0.27		$	0.48			(44	)%	$	0.47			(43	)%
	Diluted	$	0.26		$	0.45			(42	)	$	0.44			(41	)
	Average common and common equivalent shares outstanding:
	Basic		174,958			165,701			6			158,930			10
	Diluted		182,801			180,360			1			174,889			5
	Cash dividends, common stock	$	0.12		$	0.11			9	%	$	0.11			9	%
	Return on average assets		0.50	%		0.92	%					1.01	%
	Return on average equity		8.67			16.62						18.48

Commerce Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
					%						%
	2005		2004		Change		2005		2004		Change
	(dollars and shares in thousands)						(dollars and shares in thousands)
Income Statement Data:
Net interest income	$298,840		$278,442		7	%	$1,153,582		$1,017,785		13	%
Provision for credit losses	5,400		8,240		(34)		19,150		39,238		(51)
Noninterest income	98,683		96,451		2		442,794		375,071		18
Total revenues	397,523		374,893		6		1,596,376		1,392,856		15
Noninterest expense	320,893		253,111		27		1,146,380		938,778		22
Net income	46,938		75,118		(38)		282,939		273,418		3
Per Share Data:
Net income - Basic	$0.27		$0.47		(43)	%	$1.70		$1.74		(2)	%
Net income - Diluted	0.26		0.44		(41)		1.61		1.63		(1)
Book value - Basic							$12.92		$10.42		24	%
Book value - Diluted							12.38		10.61		17
Revenue per share - Diluted	$8.70		$8.57		1	%	$8.91		$8.07		10	%
Weighted Average Shares Outstanding:
Basic	174,958		158,930				165,974		156,625
Diluted	182,801		174,889				179,135		172,603
Balance Sheet Data:
Total assets							$38,466,037		$30,501,645		26	%
Loans (net)							12,524,988		9,318,991		34
Allowance for credit losses							141,464		135,620		(1)
Securities available for sale							9,518,821		8,044,150		18
Securities held to maturity							13,005,364		10,463,658		24
Total deposits							34,726,713		27,658,885		26
Core deposits							33,869,540		26,656,530		27
Convertible Trust Capital Securities -       Commerce Capital Trust II							0		200,000		-
Stockholders' equity							2,309,173		1,665,705		39
Capital:
Stockholders' equity to total assets							6.00	%	5.46	%
Risk-based capital ratios:
Tier I							11.81		12.30
Total capital							12.58		13.25
Leverage ratio							6.03		6.19
Performance Ratios:
Cost of funds	2.01	%	1.10	%			1.65	%	0.91	%
Net interest margin	3.52		4.16				3.77		4.28
Return on average assets	0.50		1.01				0.83		1.03
Return on average total stockholders' equity	8.67		18.48				14.90		18.78

The following summary presents information regarding non-performing loans and assets as of December 31, 2005 and the preceding

four quarters (dollar amounts in thousands).

	December 31,			September 30,			June 30,			March 31,			December 31,
	2005			2005			2005			2005			2004
Non-accrual loans:
Commercial	$	16,712		$	16,926		$	20,467		$	18,376		$	17,874
Consumer		8,834			8,559			8,641			8,723			10,138
Commercial real estate:
Construction		1,763			1,882			178			178			-
Mortgage		4,329			3,353			3,086			1,290			1,317
Total non-accrual loans		31,638			30,720			32,372			28,567			29,329
Restructured loans:
Commercial		3,133			3,230			3,326			3,422			3,518
Consumer		-			-			-			-			-
Commercial real estate:
Construction		-			-			-			-			-
Mortgage		-			-			-			-			-
Total restructured loans		3,133			3,230			3,326			3,422			3,518
Total non-performing loans		34,771			33,950			35,698			31,989			32,847
Other real estate		279			310			349			777			626
Total non-performing assets		35,050			34,260			36,047			32,766			33,473
Loans past due 90 days or more
and still accruing		248			177			165			233			602
Total non-performing assets and
loans past due 90 days or more	$	35,298		$	34,437		$	36,212		$	32,999		$	34,075
Total non-performing loans as a
percentage of total period-end
loans		0.27	%		0.30	%		0.33	%		0.32	%		0.35	%
Total non-performing assets as a
percentage of total period-end assets		0.09	%		0.09	%		0.11	%		0.10	%		0.11	%
Total non-performing assets and loans
past due 90 days or more as a
percentage of total period-end assets		0.09	%		0.09	%		0.11	%		0.10	%		0.11	%
Allowance for credit losses as a
percentage of total non-performing
loans		407	%		409	%		396	%		435	%		413	%
Allowance for credit losses as a percentage
of total period-end loans		1.12	%		1.23	%		1.32	%		1.40	%		1.43	%
Total non-performing assets and loans
past due 90 days or more as a
percentage of stockholders' equity and
allowance for credit losses		1	%		2	%		2	%		2	%		2	%

The following table presents, for the periods indicated, an analysis of the allowance for credit losses and other

related data: (dollar amounts in thousands)

	Three Months Ended						Twelve Months Ended
	12/31/05			12/31/04			12/31/05			12/31/04
Balance at beginning of period	$	138,903		$	131,529		$	135,620		$	112,057
Provisions charged to operating expenses		5,400			8,240			19,150			39,238
		144,303			139,769			154,770			151,295
Recoveries on loans charged-off:
Commercial		626			305			2,546			1,000
Consumer		1,234			487			2,566			1,123
Commercial real estate		-			-			80			52
Total recoveries		1,860			792			5,192			2,175
Loans charged-off:
Commercial		(4,842	)		(2,767	)		(13,944	)		(9,416	)
Consumer		(2,192	)		(2,106	)		(5,912	)		(6,733	)
Commercial real estate		(159	)		(68	)		(1,136	)		(1,701	)
Total charge-offs		(7,193	)		(4,941	)		(20,992	)		(17,850	)
Net charge-offs		(5,333	)		(4,149	)		(15,800	)		(15,675	)
Allowance for credit losses acquired bank		2,494						2,494
Balance at end of period	$	141,464		$	135,620		$	141,464		$	135,620
Net charge-offs as a percentage of
average loans outstanding		0.18	%		0.18	%		0.15	%		0.19	%
Net Allowance Additions		2,561			4,091			5,844			23,563

Commerce Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
	December 2005				September 2005				December 2004
	Average		Average		Average		Average		Average		Average
	Balance	Interest	Rate		Balance	Interest	Rate		Balance	Interest	Rate
(dollars in thousands)
Earning Assets
Investment securities
Taxable	$21,761,130	$273,042	4.98	%	$19,732,946	$239,481	4.81	%	$17,294,817	$211,263	4.86	%
Tax-exempt	518,699	6,279	4.80		397,351	4,366	4.36		457,654	5,628	4.89
Trading	124,625	1,838	5.85		96,344	1,335	5.50		180,711	2,898	6.38
Total investment securities	22,404,454	281,159	4.98		20,226,641	245,182	4.81		17,933,182	219,789	4.88
Federal funds sold	26,165	293	4.44		198,260	1,774	3.55		54,620	261	1.90
Loans
Commercial mortgages	4,124,373	68,958	6.63		3,865,284	63,300	6.50		3,357,348	52,747	6.25
Commercial	2,893,352	51,892	7.12		2,760,625	47,117	6.77		2,186,627	31,852	5.80
Consumer	4,402,231	68,197	6.15		4,087,665	62,720	6.09		3,233,755	47,550	5.85
Tax-exempt	487,280	8,570	6.98		498,211	8,831	7.03		350,414	6,429	7.30
Total loans	11,907,236	197,617	6.58		11,211,785	181,968	6.44		9,128,144	138,578	6.04
Total earning assets	$34,337,855	$479,069	5.53	%	$31,636,686	$428,924	5.38	%	$27,115,946	$358,628	5.26	%
Sources of Funds
Interest-bearing liabilities
Savings	$8,993,005	$45,866	2.02	%	$8,127,451	$35,215	1.72	%	$6,289,379	$16,270	1.03	%
Interest bearing demand	13,222,933	84,148	2.52		12,638,411	68,100	2.14		11,348,516	36,042	1.26
Time deposits	2,970,865	23,540	3.14		2,734,408	18,760	2.72		2,472,670	12,436	2.00
Public funds	861,920	8,447	3.89		842,894	7,354	3.46		888,209	4,255	1.91
Total deposits	26,048,723	162,001	2.47		24,343,164	129,429	2.11		20,998,774	69,003	1.31
Other borrowed money	1,213,323	12,386	4.05		541,119	4,697	3.44		545,073	2,930	2.14
Long-term debt	0	0	0.00		163,043	2,339	5.69		200,000	3,020	6.01
Total deposits and interest-bearing     liabilities	27,262,046	174,387	2.54		25,047,326	136,465	2.16		21,743,847	74,953	1.37
Noninterest-bearing funds (net)	7,075,809				6,589,360				5,372,099
Total sources to fund earning assets	$34,337,855	174,387	2.01		$31,636,686	136,465	1.71		$27,115,946	74,953	1.10
Net interest income and
margin tax-equivalent basis		$304,682	3.52	%		$292,459	3.67	%		$283,675	4.16	%
Other Balances
Cash and due from banks	$1,304,177				$1,306,848				$1,223,722
Other assets	1,945,109				1,845,602				1,522,258
Total assets	37,445,373				34,644,396				29,725,307
Total deposits	33,783,365				31,788,250				27,105,818
Demand deposits (noninterest-bearing)	7,734,642				7,445,086				6,107,044
Other liabilities	282,218				240,177				248,762
Stockholders' equity	2,166,467				1,911,807				1,625,654
Allowance for loan losses	141,768				144,740				136,619

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				Twelve Months Ended
	December 31,				December 31,
	2005		2004		2005		2004
Basic:
Net income applicable to common stock	$	46,938	$	75,118	$	282,939	$	273,418
Average common shares outstanding		174,958		158,930		165,974		156,625
Net income per common share	$	0.27	$	0.47	$	1.70	$	1.74
Diluted:
Net income applicable to common stock	$	46,938	$	75,118	$	282,939	$	273,418
on a diluted basis
Interest expense on trust preferred securities		0		1,963		5,446		7,852
	$	46,938	$	77,081	$	288,385	$	281,270
Average common shares outstanding		174,958		158,930		165,974		156,625
Additional shares considered in diluted
computation assuming:
Exercise of stock options		7,843		8,377		7,843		8,396
Conversion of trust preferred securities				7,582		5,318		7,582
Average common and common equivalent
shares outstanding		182,801		174,889		179,135		172,603
Net income per common and common
equivalent share	$	0.26	$	0.44	$	1.61	$	1.63
Restated for the March 2005 stock split