----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

----

**FORM      10-K**

| [X]                                                                           | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
|-------------------------------------------------------------------------------|-------------------------------------------------------------------------|
| **SECURITIES                EXCHANGE ACT OF 1934**                            |
| **For                the fiscal year ended December 31,                2006** |

**OR**

| [                ]                                                                                     | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
|--------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|
| **SECURITIES                EXCHANGE ACT OF 1934**                                                     |
| **For                the transition period from ________________ to                ________________.** |

| New                Jersey                                        | 22-2433468                                                 |
|------------------------------------------------------------------|------------------------------------------------------------|
| **(State                of other jurisdiction of incorporation** | **(I.R.S.                Employee Identification Number)** |
| **or                organization)**                         |                                                       |
| Commerce                Atrium                                   |                                                       |
| 1701                Route 70 East                                | 08034-5400                                                 |
| Cherry                Hill, New Jersey                           | **(Zip                Code)**                              |
| **(Address                of principal executive offices)**      |                                                       |

|   | Common                Stock       |   | New                York Stock Exchange                                      |
|--------|-----------------------------------|--------|-----------------------------------------------------------------------------|
|   | **Title                of Class** |   | **Name                of Each Exchange on Which                Registered** |

----

----

**APPLICABLE      ONLY TO CORPORATE ISSUERS:**

| Common                Stock $1.00 Par Value |   | 189,411,677                                                              |
|---------------------------------------------|--------|--------------------------------------------------------------------------|
| **Title                of Class**           |   | **No.                of Shares Outstanding as of                3/5/07** |

**DOCUMENTS      INCORPORATED BY REFERENCE**

----

----

**COMMERCE      BANCORP, INC.**

**FORM      10-K CROSS-REFERENCE INDEX**

|                                      |                                                                                                                                       | **Page** |
|-------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **Part                I**                 |
| Item                1.                    | Business                                                                                                                                   | 3        |
| Item                1A.                   | Risk                Factors                                                                                                                | 8        |
| Item                1B.                   | Unresolved                Staff Comments                                                                                                   | none     |
| Item                2.                    | Properties                                                                                                                                 | 10       |
| Item                3.                    | Legal                Proceedings                                                                                                           | 10       |
| Item                4.                    | Submission                of Matters to a Vote of Security Holders                                                                         | none     |
|                                      |                                                                                                                                       |     |
|                                      |                                                                                                                                       |     |
| **Part                II**                |
| Item                5.                    | Market                for Registrant's Common Equity, Related Stockholder                Matters and Issuer Purchases of Equity Securities | 11       |
| Item                6.                    | Selected                Financial Data                                                                                                     | 11       |
| Item                7.                    | Management's                Discussion and Analysis of Financial Condition                and Results of Operations                        | 13       |
| Item                7A.                   | Quantitative                and Qualitative Disclosures About Market Risk                                                                  | 27       |
| Item                8.                    | Financial                Statements and Supplementary Data                                                                                 | 31       |
| Item                9.                    | Changes                in and Disagreements with Accountants on Accounting and Financial                Disclosure                         | none     |
| Item                9A.                   | Controls                and Procedures                                                                                                     | 54       |
| Item                9B.                   | Other                Information                                                                                                           | 54       |
|                                      |                                                                                                                                       |     |
|                                      |                                                                                                                                       |     |
| **Part                III**               |
| Item                10.                   | Directors                and Executive Officers of the                Registrant                                                           | 54       |
| Item                11.                   | Executive                Compensation                                                                                                      | 54       |
| Item                12.                   | Security                Ownership of Certain Beneficial Owners and                Management and Related Stockholder Matters               | 54       |
| Item                13.                   | Certain                Relationships and Related                Transactions                                                               | 54       |
| Item                14.                   | Principal                Accounting Fees and Services                                                                                      | 54       |
|                                      |                                                                                                                                       |     |
| **Part                IV**                |
| Item                15.                   | Exhibits                and Financial Statement                Schedules                                                                   | 55       |
|                                      |                                                                                                                                       |     |
| Signatures                                | 59                                                                                                                                         |
| Section                302 Certifications | 60                                                                                                                                         |
| Section                906 Certification  | 62                                                                                                                                         |

----

**PART      I**

**Item      1****.      Business**

**Forward-Looking      Statements**

**General**

----

**Acquisitions**

**Dividends**

**The      Banks**

*Service      Areas*

*Retail      Banking Services and Products*

*Trust      Services*

*Commercial      Banking Services and Products*

----

**Commerce      Banc Insurance**

**Commerce      Capital Markets**

**Other      Activities**

**Competition**

**Supervision      and Regulation **

----

*The      Company*

*Commerce      N.A. and Commerce North*

----

*Commerce      Banc Insurance/Commerce Capital Markets*

*Gramm-Leach-Bliley      Act*

----

**National      Monetary Policy**

**Employees**

**Available      Information**

**Item      1A****.      Risk Factors**

----

*The      Company plans to continue its rapid growth and there are risks associated with      such growth.*

*The      Company operates in a highly regulated environment and may be adversely affected      by changes in laws and regulations.*

*The      Company has been advised that the Office of the Comptroller of the Currency      is      conducting an investigation.*

*Changes      in interest rates could reduce the Company’s income and cash      flows.*

*If      the Company does not adjust to changes in the financial services industry,      its      financial performance may suffer.*

*The      Company’s future success will depend on its ability to compete effectively in a      highly competitive market and geographic area.*

----

*An      interruption to the Company’s information systems could impact the Company’s      operations.*

*Economic      conditions either nationally or locally in areas in which the Company’s      operations are concentrated may be less favorable than      expected.*

*The      Company’s common stock is not insured by any governmental agency and, therefore,      investments in the Company's common stock involves risk. *

**Item      2****.      Properties**

**Item      3****.      Legal Proceedings**

----

**Part      II**

**Item      5****.      Market for Registrant's Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities**

|                                                 |  (a)                                                                         |  (b)                                                        |  (c)                                                                                                                                                         |  (d)                                                                                                                                 |
|------------------------------------------------------|-----------------------------------------------------------------------------------|------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| Period                                          | Total                Number of                Shares Purchased                (1) |  Average                Price Paid per                Share |  Total                Number of Shares                Purchased as Part                of Publicly Announced                Plans or                Programs | Maximum                Number of                Shares that May Yet                Be PurchasedUnder                the Plans or Programs |
|  October                1 to October 31, 2006   |                                                                              |                                                             |                                                                                                                                                              |                                                                                                                                      |
|  November                1 to November 30, 2006 |                                                                              |                                                             |                                                                                                                                                              |                                                                                                                                      |
|  December                1 to December 31, 2006 |  224,277                                                                     |  $36.58                                                |                                                                                                                                                                   |                                                                                                                                           |
| Total                                           | 224,277                                                                      | $36.58                                                      |                                                                                                                                                              |                                                                                                                                      |

**Dividend      Policy**

**Item      6****.      Selected Financial Data**

----

|                                                           |   |                                       |
|----------------------------------------------------------------|--------|--------------------------------------------|
|                                                           |   | **Year                Ended December 31,** |
| *(dollars                in thousands, except per share data)* |   | **2006**                                   |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |   | 2002 |   |
| **Income                Statement Data:**                      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                             | **$**  | **1,274,508**                              |   | **$** | 1,153,582 |   | **$** | 1,017,785 |   | $ | 755,866 |   | $ | 572,755 |   |
| Provision                for credit losses                     |   | **33,700**                                 |   |   | 19,150 |   |   | 39,238 |   |   | 31,850 |   |   | 33,150 |   |
| Noninterest                income                              |   | **591,153**                                |   |   | 442,794 |   |   | 375,071 |   |   | 332,478 |   |   | 257,466 |   |
| Noninterest                expense                             |   | **1,355,761**                              |   |   | 1,146,380 |   |   | 938,778 |   |   | 763,392 |   |   | 579,168 |   |
| Income                before income taxes                      |   | **476,200**                                |   |   | 430,846 |   |   | 414,840 |   |   | 293,102 |   |   | 217,903 |   |
| Net                income                                      |   | **299,313**                                |   |   | 282,939 |   |   | 273,418 |   |   | 194,287 |   |   | 144,815 |   |
| **Balance                Sheet Data:**                         |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                    | **$**  | **45,271,816**                             |   | **$** | 38,466,037 |   | **$** | 30,501,645 |   | $ | 22,712,180 |   | $ | 16,403,981 |   |
| Loans                (net)                                     |   | **15,454,996**                             |   |   | 12,524,988 |   |   | 9,318,991 |   |   | 7,328,519 |   |   | 5,731,856 |   |
| Securities                available for sale                   |   | **11,098,113**                             |   |   | 9,518,821 |   |   | 8,044,150 |   |   | 10,650,655 |   |   | 7,806,779 |   |
| Securities                held to maturity                     |   | **14,884,982**                             |   |   | 13,005,364 |   |   | 10,463,658 |   |   | 2,490,484 |   |   | 763,026 |   |
| Trading                securities                              |   | **106,007**                                |   |   | 143,016 |   |   | 169,103 |   |   | 170,458 |   |   | 326,479 |   |
| Deposits                                                       |   | **41,288,211**                             |   |   | 34,726,713 |   |   | 27,658,885 |   |   | 20,701,400 |   |   | 14,548,841 |   |
| Long-term                debt                                  |   |                                       |   |   |   |   |   | 200,000 |   |   | 200,000 |   |   | 200,000 |   |
| Stockholders'                equity                            |   | **2,801,098**                              |   |   | 2,309,173 |   |   | 1,665,705 |   |   | 1,277,288 |   |   | 918,010 |   |
| **Per                Share Data:**                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income-basic                                | **$**  | **1.62**                                   |   | **$** | 1.70 |   | **$** | 1.74 |   | $ | 1.36 |   | $ | 1.08 |   |
| Net                income-diluted                              |   | **1.55**                                   |   |   | 1.61 |   |   | 1.63 |   |   | 1.29 |   |   | 1.01 |   |
| Dividends                declared                              |   | **0.49**                                   |   |   | 0.45 |   |   | 0.40 |   |   | 0.34 |   |   | 0.31 |   |
| Book                value                                      |   | **14.86**                                  |   |   | 12.92 |   |   | 10.42 |   |   | 8.35 |   |   | 6.77 |   |
| Average                shares outstanding:                     |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   | **184,919**                                |   |   | 165,974 |   |   | 156,625 |   |   | 142,169 |   |   | 133,590 |   |
| Diluted                                                        |   | **193,674**                                |   |   | 179,135 |   |   | 172,603 |   |   | 156,507 |   |   | 149,389 |   |
| **Selected                Ratios:**                            |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Performance**                                                |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return                on average assets                        |   | **0.71**                                   | % |   | 0.83 | % |   | 1.03 | % |   | 0.99 | % |   | 1.05 | % |
| Return                on average equity                        |   | **11.65**                                  |   |   | 14.90 |   |   | 18.78 |   |   | 18.81 |   |   | 18.50 |   |
| Net                interest margin                             |   | **3.35**                                   |   |   | 3.77 |   |   | 4.28 |   |   | 4.36 |   |   | 4.69 |   |
| **Liquidity                and Capital**                       |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                loans to average deposits               |   | **37.09**                                  | % |   | 35.01 | % |   | 34.49 | % |   | 36.93 | % |   | 42.48 | % |
| Dividend                payout-basic                           |   | **30.25**                                  |   |   | 26.47 |   |   | 22.99 |   |   | 25.00 |   |   | 28.70 |   |
| Stockholders'                equity to total assets            |   | **6.19**                                   |   |   | 6.00 |   |   | 5.46 |   |   | 5.62 |   |   | 5.60 |   |
| Risk-based                capital:                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                                          |   | **11.73**                                  |   |   | 11.81 |   |   | 12.30 |   |   | 12.66 |   |   | 11.47 |   |
| Total                                                          |   | **12.44**                                  |   |   | 12.58 |   |   | 13.25 |   |   | 13.62 |   |   | 12.51 |   |
| Leverage                ratio                                  |   | **6.18**                                   |   |   | 6.04 |   |   | 6.19 |   |   | 6.61 |   |   | 6.37 |   |
| **Asset                Quality**                               |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing                assets to total year-end assets  |   | **0.12**                                   | % |   | 0.09 | % |   | 0.11 | % |   | 0.10 | % |   | 0.11 | % |
| Net                charge-offs to average loans outstanding    |   | **0.11**                                   |   |   | 0.15 |   |   | 0.19 |   |   | 0.16 |   |   | 0.18 |   |
| Non-performing                loans to total                   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| year-end                loans                                  |   | **0.32**                                   |   |   | 0.27 |   |   | 0.35 |   |   | 0.29 |   |   | 0.24 |   |
| Allowance                for credit losses to total            |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| end                of year loans                               |   | **1.03**                                   |   |   | 1.12 |   |   | 1.43 |   |   | 1.51 |   |   | 1.56 |   |
| Allowance                for credit losses to non-             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| performing                loans                                |   | **316.72**                                 |   |   | 406.85 |   |   | 412.88 |   |   | 515.39 |   |   | 640.18 |   |

----

**Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

**Executive      Summary**

| ·   | Opened                55 new stores, including 36 in metro New York, the Company’s largest and                fastest growing market. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                assets grew 18%. |
|--------------------|---------------------------------------|

| ·   | Total                deposits grew 19%, with annualized deposit growth per store of $17                million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Total                loans grew 23%, increasing the ratio of loans to deposits to                38%. |
|--------------------|-------------------------------------------------------------------------------------------------------|

|                                        |   |     |        |   |   |    |   |
|---------------------------------------------|--------|----------|-------------|--------|--------|---------|--------|
|                                        |   | **2006** |        | 2005   |   | Change  |   |
| *(amounts                in billions)*      |   |     |        |   |   |    |   |
| Total                Assets                 |   | **$**    | **45.3**    |   | $      | 38.5    |   |   | 18 | % |
| Total                Loans (net)            |   |     | **15.5**    |   |   | 12.5    |   |   | 23 | % |
| Total                Investments            |   |     | **26.1**    |   |   | 22.7    |   |   | 15 | % |
| Total                Deposits               |   |     | **41.3**    |   |   | 34.7    |   |   | 19 | % |
|                                        |   |     |        |   |   |    |   |   |   |   |
| *(amounts                in millions)*      |   |     |        |   |   |    |   |   |   |   |
| Total                Revenues               |   | **$**    | **1,865.7** |   | $      | 1,596.4 |   |   | 17 | % |
| Net                Income                   |   |     | **299.3**   |   |   | 282.9   |   |   | 6 | % |
| Net                Income per Share Diluted |   |     | **1.55**    |   |   | 1.61    |   |   | (4 | )% |

|     |                                                                    |
|----------|-------------------------------------------------------------------------|
|     | Net                Interest Income (dollars                in millions) |
|     | Volume                Increase                                          | Rate                Change | Total                Increase |
| **2006** | **$254.3**                                                              | **($128.0)** | **$126.3** | **11%** |
| 2005     | $272.5                                                                  | ($135.4) | $137.1 | 13% |

**Critical      Accounting**
**Policy**

----

***Allowance      for credit losses***

**Segment      Reporting**

|                              |   |                      |        |
|-----------------------------------|--------|---------------------------|-------------|
|                              |   | Net                Income |        |
|                              |   | **2006**                  |        | 2005 |   | 2004 |   |
| Community                Banks    |   | **$**                     | **289,228** |   | $ | 270,960 |   | $ | 267,466 |   |
| Parent/Other                      |   |                      | **10,085**  |   |   | 11,979 |   |   | 5,952 |   |
| Consolidated                Total |   | **$**                     | **299,313** |   | $ | 282,939 |   | $ | 273,418 |   |

**Average      Balances and Net Interest Income**

**Net      Interest Margin and Net Interest Income**

| · | the                volume, pricing, mix and maturity of interest-earning assets and                interest-bearing liabilities; |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

| · | market                interest rate fluctuations; and |
|--------|-------------------------------------------------------|

| · | asset                quality. |
|--------|-------------------------------|

----

|                                               |   |                                  |    |                                 |   |
|----------------------------------------------------|--------|---------------------------------------|---------|--------------------------------------|--------|
|                                               |   | 2006                vs. 2005          |    | 2005                vs. 2004         |   |
|                                               |   | Increase                (Decrease)    |    | Increase                (Decrease)   |   |
|                                               |   | Due                to Changes in (1)  |    | Due                to Changes in (1) |   |
|                                               |   | Volume                                |    | Rate                                 |   | Total |   | Volume |   | Rate |   | Total |   |
|                                               |   | (dollars                in thousands) |    |
| Interest                on Investments:            |   |                                  |    |
| Taxable                                            |   | $                                     | 225,767 |                                 | $      | 87,475 |   | $ | 313,242 |   | $ | 214,427 |   | $ | 15,041 |   | $ | 229,468 |   |
| Tax-exempt                                         |   |                                  | 7,261   |                                 |   | 6,041 |   |   | 13,302 |   |   | 3,097 |   |   | (4,961 | ) |   | (1,864 | ) |
| Trading                                            |   |                                  | (1,300  | )                                    |   | (824 | ) |   | (2,124 | ) |   | (2,281 | ) |   | 684 |   |   | (1,597 | ) |
| Federal                funds                sold   |   |                                  | 1,783   |                                 |   | 1,871 |   |   | 3,654 |   |   | 766 |   |   | 1,603 |   |   | 2,369 |   |
| Interest                on loans:                  |   |                                  |    |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercialmortgages                                |   |                                  | 74,715  |                                 |   | 20,947 |   |   | 95,662 |   |   | 46,497 |   |   | 10,798 |   |   | 57,295 |   |
| Commercial                                         |   |                                  | 68,532  |                                 |   | 28,847 |   |   | 97,379 |   |   | 40,999 |   |   | 24,592 |   |   | 65,591 |   |
| Consumer                                           |   |                                  | 82,911  |                                 |   | 10,990 |   |   | 93,901 |   |   | 60,702 |   |   | 9,156 |   |   | 69,858 |   |
| Tax-exempt                                         |   |                                  | 4,201   |                                 |   | 69 |   |   | 4,270 |   |   | 7,871 |   |   | (759 | ) |   | 7,112 |   |
| Total                interest income               |   |                                  | 463,870 |                                 |   | 155,416 |   |   | 619,286 |   |   | 372,078 |   |   | 56,154 |   |   | 428,232 |   |
| Interest                expense:                   |   |                                  |    |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                            |   |                                  | 66,538  |                                 |   | 71,471 |   |   | 138,009 |   |   | 36,098 |   |   | 40,641 |   |   | 76,739 |   |
| Interest                bearingdemand              |   |                                  | 79,697  |                                 |   | 162,777 |   |   | 242,474 |   |   | 48,777 |   |   | 108,643 |   |   | 157,420 |   |
| Time                deposits                       |   |                                  | 21,921  |                                 |   | 29,997 |   |   | 51,918 |   |   | 7,413 |   |   | 18,530 |   |   | 25,943 |   |
| Public                funds                        |   |                                  | 23,723  |                                 |   | 15,522 |   |   | 39,245 |   |   | (1,590 | ) |   | 14,620 |   |   | 13,030 |   |
| Other                borrowed                money |   |                                  | 17,617  |                                 |   | 12,070 |   |   | 29,687 |   |   | 12,420 |   |   | 9,305 |   |   | 21,725 |   |
| Long-term                debt                      |   |                                  | -       |                                 |   | (8,379 | ) |   | (8,379 | ) |   | (3,568 | ) |   | (133 | ) |   | (3,701 | ) |
| Total                interest expense              |   |                                  | 209,496 |                                 |   | 283,458 |   |   | 492,954 |   |   | 99,550 |   |   | 191,606 |   |   | 291,156 |   |
| Net                change                          |   | $                                     | 254,374 |                                 |   | (128,042 | ) | $ | 126,332 |   | $ | 272,528 |   |   | (135,452 | ) | $ | 137,076 |   |

| (1) | Changes                due to both volume and rate have been allocated to volume or rate                changes                in proportion to the absolute dollar                amounts of the change in each. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Commerce      Bancorp, Inc. and Subsidiaries Average Balances and Net Interest      Income**

|                                                                          |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |
|-------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|----------------------------------------|----------------|----------------------------|--------------------------|
|                                                                          |                                                                                                                                                                                                                                                                          |                     | Year                Ended December 31, |           |                       |                     |
|                                                                          | 2006                                                                                                                                                                                                                                                                          | 2005                     | 2004                                   |
| (dollars                in thousands)Earning                Assets            | AverageBalance                                                                                                                                                                                                                                                                |  Interest           | AverageRate                            | AverageBalance |  Interest             | AverageRate              | AverageBalance |  Interest | AverageRate |
| Investment                securities                                          |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Taxable                                                                       | $23,846,823                                                                                                                                                                                                                                                                   | $1,278,926               | 5.36                                   | %              | $19,637,178                | $                965,684 | 4.92 | % | $15,276,797 | $                736,216 | 4.82 | % |
| Tax-exempt                                                                    | 556,773                                                                                                                                                                                                                                                                       | 30,516                   | 5.48                                   |           | 424,303                    | 17,214                   | 4.06 |   | 347,979 | 19,078 | 5.48 |   |
| Trading                                                                       | 100,746                                                                                                                                                                                                                                                                       | 4,871                    | 4.84                                   |           | 127,634                    | 6,995                    | 5.48 |   | 169,242 | 8,592 | 5.08 |   |
| Total                investment securities                                    | 24,504,342                                                                                                                                                                                                                                                                    | 1,314,313                | 5.36                                   |           | 20,189,115                 | 989,893                  | 4.90 |   | 15,794,018 | 763,886 | 4.84 |   |
| Federal                funds sold                                             | 132,336                                                                                                                                                                                                                                                                       | 6,926                    | 5.23                                   |           | 98,265                     | 3,272                    | 3.33 |   | 75,269 | 903 | 1.20 |   |
| Loans                                                                         |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Commercial                mortgages                                           | 4,869,826                                                                                                                                                                                                                                                                     | 342,700                  | 7.04                                   |           | 3,808,107                  | 247,038                  | 6.49 |   | 3,091,350 | 189,743 | 6.14 |   |
| Commercial                                                                    | 3,522,513                                                                                                                                                                                                                                                                     | 273,386                  | 7.76                                   |           | 2,639,491                  | 176,007                  | 6.67 |   | 2,024,648 | 110,416 | 5.45 |   |
| Consumer                                                                      | 5,221,014                                                                                                                                                                                                                                                                     | 330,610                  | 6.33                                   |           | 3,911,672                  | 236,709                  | 6.05 |   | 2,908,561 | 166,851 | 5.74 |   |
| Tax-exempt                                                                    | 510,248                                                                                                                                                                                                                                                                       | 36,268                   | 7.11                                   |           | 451,151                    | 31,998                   | 7.09 |   | 340,172 | 24,886 | 7.32 |   |
| Total                loans                                                    | 14,123,601                                                                                                                                                                                                                                                                    | 982,964                  | 6.96                                   |           | 10,810,421                 | 691,752                  | 6.40 |   | 8,364,731 | 491,896 | 5.88 |   |
| Total                earning assets                                           | $38,760,279                                                                                                                                                                                                                                                                   | $2,304,203               | 5.94                                   | %              | $31,097,801                | $1,684,917               | 5.42 | % | $24,234,018 | $1,256,685 | 5.19 | % |
| Sources                of Funds                                               |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Interest-bearing                liabilities                                   |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Savings                                                                       | $                10,326,719                                                                                                                                                                                                                                                   | $                261,428 | 2.53                                   | %              | $                7,698,370 | $                123,419 | 1.60 | % | $                5,446,713 | $                46,680 | 0.86 | % |
| Interest-bearing                demand                                        | 14,867,213                                                                                                                                                                                                                                                                    | 495,147                  | 3.33                                   |           | 12,474,260                 | 252,673                  | 2.03 |   | 10,066,187 | 95,253 | 0.95 |   |
| Time                deposits                                                  | 3,323,462                                                                                                                                                                                                                                                                     | 124,043                  | 3.73                                   |           | 2,736,142                  | 72,125                   | 2.64 |   | 2,454,910 | 46,182 | 1.88 |   |
| Public                funds                                                   | 1,295,061                                                                                                                                                                                                                                                                     | 65,901                   | 5.09                                   |           | 828,860                    | 26,656                   | 3.22 |   | 878,310 | 13,626 | 1.55 |   |
| Total                deposits                                                 | 29,812,455                                                                                                                                                                                                                                                                    | 946,519                  | 3.17                                   |           | 23,737,632                 | 474,873                  | 2.00 |   | 18,846,120 | 201,741 | 1.07 |   |
|                                                                          |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Other                borrowed money                                           | 1,186,068                                                                                                                                                                                                                                                                     | 58,097                   | 4.90                                   |           | 826,400                    | 28,410                   | 3.44 |   | 465,137 | 6,685 | 1.44 |   |
| Long-term                debt                                                 |                                                                                                                                                                                                                                                                          |                     |                                   |           | 140,274                    | 8,379                    | 5.97 |   | 200,000 | 12,080 | 6.04 |   |
| Total                deposits and interest-bearing                liabilities |  30,998,523                                                                                                                                                                                                                                                              |  1,004,616          |  3.24                             |           |  24,704,306           |  511,662            |  2.07 |   |  19,511,257 |  220,506 |  1.13 |   |
| Noninterest-bearing                funds (net)                                |  7,761,756                                                                                                                                                                                                                                                               |                     |                                   |           |  6,393,495            |                     |   |   |  4,722,761 |   |   |   |
| Total                sources to fund earning                assets            |  $38,760,279                                                                                                                                                                                                                                                             |  1,004,616          |  2.59                             |           |  $31,097,801          |  511,662            |  1.65 |   |  $24,234,018 |  220,506 |  0.91 |   |
| Net                interest income andmargin                tax-equivalent    |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| basis                                                                         |                                                                                                                                                                                                                                                                          |  $1,299,587         |  3.35                             |           |                       |  $1,173,255         |  3.77 |   |   |  $1,036,179 |  4.28 |   |
| Tax-exempt                adjustment                                          |                                                                                                                                                                                                                                                                          | 25,079                   |                                   |           |                       | 19,673                   |   |   |   | 18,394 |   |   |
| Net                interest income and margin                                 |                                                                                                                                                                                                                                                                          | $1,274,508               | 3.29                                   | %              |                       | $1,153,582               | 3.71 | % |   | $1,017,785 | 4.20 | % |
| Other                Balances                                                 |                                                                                                                                                                                                                                                                          |                     |                                   |           |                       |                     |   |   |   |   |   |   |
| Cash                and due from banks                                        | $                1,239,398                                                                                                                                                                                                                                                    |                     |                                   |           | $                1,257,799 |                     |   |   | $                1,134,991 |   |   |   |
| Other                assets                                                   | 2,306,101                                                                                                                                                                                                                                                                     |                     |                                   |           | 1,792,339                  |                     |   |   | 1,376,006 |   |   |   |
| Total                assets                                                   | 42,162,415                                                                                                                                                                                                                                                                    |                     |                                   |           | 34,005,732                 |                     |   |   | 26,618,555 |   |   |   |
| Total                deposits                                                 | 38,081,613                                                                                                                                                                                                                                                                    |                     |                                   |           | 30,881,184                 |                     |   |   | 24,254,214 |   |   |   |
| Demand                deposits (noninterest-bearing)                          |  8,269,158                                                                                                                                                                                                                                                               |                     |                                   |           |  7,143,552            |                     |   |   |  5,408,094 |   |   |   |
| Other                liabilities                                              | 324,749                                                                                                                                                                                                                                                                       |                     |                                   |           | 258,886                    |                     |   |   | 243,284 |   |   |   |
| Stockholders'                equity                                           | 2,569,985                                                                                                                                                                                                                                                                     |                     |                                   |           | 1,898,989                  |                     |   |   | 1,455,920 |   |   |   |
| 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. |

----

**Noninterest      Income**

|                                    |   |     |        |   |   |
|-----------------------------------------|--------|----------|-------------|--------|--------|
|                                    |   | **2006** |        | 2005   |   |
| Other                Operating Income:  |   |     |        |   |   |
| Commerce                Banc Insurance  |   | **$**    | **83,525**  |   | $      | 76,216 |   |
| Commerce                Capital Markets |   |     | **29,553**  |   |   | 25,390 |   |
| Operating                lease revenue  |   |     | **15,587**  |   |   | 9,278 |   |
| Loan                brokerage fees      |   |     | **9,861**   |   |   | 15,757 |   |
| eMoney                Advisor revenues  |   |     | **8,667**   |   |   | - |   |
| Gains                on SBA loan sales  |   |     | **7,431**   |   |   | 10,991 |   |
| Other                                   |   |     | **59,622**  |   |   | 36,500 |   |
| Total                Other              |   | **$**    | **214,246** |   | $      | 174,132 |   |

**Noninterest      Expenses**

|                                                    |   |     |        |   |   |
|---------------------------------------------------------|--------|----------|-------------|--------|--------|
|                                                    |   | **2006** |        | 2005   |   |
| Other                Noninterest Expenses:              |   |     |        |   |   |
| Business                Development Costs               |   | **$**    | **41,254**  |   | $      | 38,301 |   |
| Bank-Card                Related Service Charges        |   |     | **55,594**  |   |   | 47,337 |   |
| Professional                Services/Insurance          |   |     | **48,652**  |   |   | 38,723 |   |
| Provisions                for Non-Credit-Related Losses |   |     | **28,738**  |   |   | 28,449 |   |
| Other                                                   |   |     | **104,352** |   |   | 81,985 |   |
| Total                Other                              |   | **$**    | **278,590** |   | $      | 234,795 |   |

**Income      Taxes**

**Net      Income**

**Return      on Average Equity and Average Assets**

----

**Loan      Portfolio**

|                                    |                        |
|-----------------------------------------|-----------------------------|
|                                    | December                31, |
|                                    | 2006                        | 2005 | 2004 | 2003 | 2002 |
| (dollars                in thousands)   |
| Commercial:                             |                        |   |   |   |   |
| Term                                    | $                2,392,889  | $                1,781,148 | $1,283,476 | $1,027,526 | $                842,869 |
| Line                of credit           | 1,843,545                   | 1,517,347 | 1,168,542 | 960,235 | 683,957 |
|                                    | 4,236,434                   | 3,298,495 | 2,452,018 | 1,987,761 | 1,526,826 |
|                                    |                        |   |   |   |   |
| Owner-occupied                          | 2,845,791                   | 2,402,300 | 1,998,203 | 1,619,079 | 1,345,306 |
|                                    |                        |   |   |   |   |
| Consumer:                               |                        |   |   |   |   |
| Mortgages                               |                        |   |   |   |   |
| (1-4                family residential) | 2,235,247                   | 2,000,309 | 1,340,009 | 918,686 | 626,652 |
| Installment                             | 287,151                     | 211,332 | 132,646 | 138,437 | 140,493 |
| Home                equity              | 2,958,893                   | 2,353,581 | 1,799,841 | 1,405,795 | 1,139,589 |
| Credit                lines             | 137,429                     | 100,431 | 69,079 | 60,579 | 56,367 |
|                                    | 5,618,720                   | 4,665,653 | 3,341,575 | 2,523,497 | 1,963,101 |
|                                    |                        |   |   |   |   |
| Commercial                real estate:  |
| Investor                developer       | 2,625,628                   | 2,001,674 | 1,455,891 | 1,167,672 | 885,276 |
| Construction                            | 280,476                     | 290,530 | 206,924 | 142,567 | 102,080 |
|                                    | 2,906,104                   | 2,292,204 | 1,662,815 | 1,310,239 | 987,356 |
| Total                loans              | $15,607,049                 | $12,658,652 | $9,454,611 | $7,440,576 | $5,822,589 |

|                                    |   |                                                  |      |
|-----------------------------------------|--------|-------------------------------------------------------|-----------|
|                                    |   | December                31, 2006                      |      |
|                                    |   | Due                in One Year                or Less |      | Due                in One to Five                Years |   | Due                in Over Five                Years |   |  Total |   |
| *(dollars                in thousands)* |   |
| Commercial:                             |   |                                                  |      |   |   |   |   |   |   |
| Term                                    |   | $                                                     | 767,234   |   | $ | 1,328,716 |   | $ | 296,939 |   | $ | 2,392,889 |   |
| Line                of credit           |   |                                                  | 1,433,007 |   |   | 394,081 |   |   | 16,457 |   |   | 1,843,545 |   |
|                                    |   |                                                  | 2,200,241 |   |   | 1,722,797 |   |   | 313,396 |   |   | 4,236,434 |   |
|                                    |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied                          |   |                                                  | 446,740   |   |   | 1,352,035 |   |   | 1,047,016 |   |   | 2,845,791 |   |
|                                    |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |
| Consumer:                               |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |
| Mortgages                               |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |
| (1-4                family residential) |   |                                                  | 60,326    |   |   | 214,927 |   |   | 1,959,994 |   |   | 2,235,247 |   |
| Installment                             |   |                                                  | 71,693    |   |   | 103,806 |   |   | 111,652 |   |   | 287,151 |   |
| Home                equity              |   |                                                  | 242,955   |   |   | 704,980 |   |   | 2,010,958 |   |   | 2,958,893 |   |
| Credit                lines             |   |                                                  | 46,000    |   |   | 91,429 |   |   |   |   |   | 137,429 |   |
|                                    |   |                                                  | 420,974   |   |   | 1,115,142 |   |   | 4,082,604 |   |   | 5,618,720 |   |
| Commercial                real estate:  |
| Investor                developer       |   |                                                  | 792,961   |   |   | 1,419,967 |   |   | 412,700 |   |   | 2,625,628 |   |
| Construction                            |   |                                                  | 173,392   |   |   | 97,629 |   |   | 9,455 |   |   | 280,476 |   |
|                                    |   |                                                  | 966,353   |   |   | 1,517,596 |   |   | 422,155 |   |   | 2,906,104 |   |
| Total                loans              |   | $                                                     | 4,034,308 |   | $ | 5,707,570 |   | $ | 5,865,171 |   | $ | 15,607,049 |   |
| Interest                rates:          |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |
| Predetermined                           |   | $                                                     | 1,308,673 |   | $ | 3,809,111 |   | $ | 4,247,906 |   | $ | 9,365,690 |   |
| Floating                                |   |                                                  | 2,725,635 |   |   | 1,898,459 |   |   | 1,617,265 |   |   | 6,241,359 |   |
| Total                loans              |   | $                                                     | 4,034,308 |   | $ | 5,707,570 |   | $ | 5,865,171 |   | $ | 15,607,049 |   |

----

**Non-Performing      Loans and Assets**

|                                                                                                   |   |                                   |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                   |   | Year                Ended December 31, |   |
|                                                                                                   |   | 2006                                   |   | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| (dollars                in thousands)                                                                  |   |                                   |   |   |   |   |   |   |   |   |   |
| Non-accrual                loans (1):                                                                  |   |                                   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                             |   | $                                      | 33,686 |   | $ | 16,712 |   | $ | 17,874 |   | $ | 10,972 |   | $ | 6,829 |   |
| Consumer                                                                                               |   |                                   | 11,820 |   |   | 8,834 |   |   | 10,138 |   |   | 9,242 |   |   | 6,326 |   |
| Real                estate                                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction                                                                                           |   |                                   | 3,531  |   |   | 1,763 |   |   |   |   |   | 138 |   |   | 131 |   |
| Mortgage                                                                                               |   |                                   | 1,565  |   |   | 4,329 |   |   | 1,317 |   |   | 1,389 |   |   | 882 |   |
| Total                non-accrual loans                                                                 |   |                                   | 50,602 |   |   | 31,638 |   |   | 29,329 |   |   | 21,741 |   |   | 14,168 |   |
| Restructured                loans (1):                                                                 |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                             |   |                                   | -      |   |   | 3,133 |   |   | 3,518 |   |   | 1 |   |   | 5 |   |
| Total                non-performingloans                                                               |   |                                   | 50,602 |   |   | 34,771 |   |   | 32,847 |   |   | 21,742 |   |   | 14,173 |   |
| Other                real estate/ foreclosed assets                                                    |   |                                   | 2,610  |   |   | 279 |   |   | 626 |   |   | 1,831 |   |   | 3,589 |   |
| Total                non-performingassets(1):                                                          |   | $                                      | 53,212 |   | $ | 35,050 |   | $ | 33,473 |   | $ | 23,573 |   | $ | 17,762 |   |
| Non-performing                assets                as a percent of                total assets        |   |                                   | 0.12   | % |   | 0.09 | % |   | 0.11 | % |   | 0.10 | % |   | 0.11 | % |
| Loans                past due 90 days                or more and stillaccruing                interest |   | $                                      | 620    |   | $ | 248 |   | $ | 602 |   | $ | 538 |   | $ | 620 |   |

| (1) | Interest                income of approximately $2,816,000, $2,760,000, $2,906,000, $1,908,000,                and $1,352,000 would have been recorded in 2006, 2005, 2004, 2003,                and                2002, respectively, on non-performing loans in accordance with their                original terms. Actual interest recorded on these loans amounted                to                $1,530,000 in 2006, $809,000 in 2005, $1,070,000 in 2004, $418,000                in                2003, and $275,000 in 2002. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Allowance      for Credit Losses**

----

|                                                                                                      |   |                                   |    |
|-----------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                      |   | Year                Ended December 31, |    |
|                                                                                                      |   | 2006                                   |    | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| *(dollars                in thousands)*                                                                   |   |                                   |    |   |   |   |   |   |   |   |   |
| Balance                at beginningof                period                                               |   | $                                      | 141,464 |   | $ | 135,620 |   | $ | 112,057 |   | $ | 90,733 |   | $ | 66,981 |   |
| Provisions                charged tooperating                expenses                                     |   |                                   | 33,700  |   |   | 19,150 |   |   | 39,238 |   |   | 31,850 |   |   | 33,150 |   |
|                                                                                                      |   |                                   | 175,164 |   |   | 154,770 |   |   | 151,295 |   |   | 122,583 |   |   | 100,131 |   |
| Recoveries                of loanspreviously                charged-off:                                  |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                |   |                                   | 5,987   |   |   | 2,546 |   |   | 1,000 |   |   | 669 |   |   | 815 |   |
| Consumer                                                                                                  |   |                                   | 1,604   |   |   | 2,566 |   |   | 1,123 |   |   | 584 |   |   | 339 |   |
| Commercial                real estate                                                                     |   |                                   | 385     |   |   | 80 |   |   | 52 |   |   | 11 |   |   | 176 |   |
| Total                recoveries                                                                           |   |                                   | 7,976   |   |   | 5,192 |   |   | 2,175 |   |   | 1,264 |   |   | 1,330 |   |
| Loans                charged-off:                                                                         |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                |   |                                   | (14,107 | ) |   | (13,944 | ) |   | (9,416 | ) |   | (5,601 | ) |   | (7,181 | ) |
| Consumer                                                                                                  |   |                                   | (8,179  | ) |   | (5,912 | ) |   | (6,733 | ) |   | (5,950 | ) |   | (3,514 | ) |
| Commercial                real estate                                                                     |   |                                   | (585    | ) |   | (1,136 | ) |   | (1,701 | ) |   | (239 | ) |   | (33 | ) |
| Total                charged-off                                                                          |   |                                   | (22,871 | ) |   | (20,992 | ) |   | (17,850 | ) |   | (11,790 | ) |   | (10,728 | ) |
| Net                charge-offs                                                                            |   |                                   | (14,895 | ) |   | (15,800 | ) |   | (15,675 | ) |   | (10,526 | ) |   | (9,398 | ) |
| Allowance                for credit losses acquired bank                                                  |   |                                   |    |   |   | 2,494 |   |   |   |   |   |   |   |   |   |   |
| Balance                at end of period                                                                   |   | $                                      | 160,269 |   | $ | 141,464 |   | $ | 135,620 |   | $ | 112,057 |   | $ | 90,733 |   |
| Net                charge-offs as a percentage                of averageloans                outstanding  |   |                                   | 0.11    | % |   | 0.15 | % |   | 0.19 | % |   | 0.16 | % |   | 0.18 | % |
| Allowance                for credit losses as                a percentage ofyear-end                loans |   |                                   | 1.03    | % |   | 1.12 | % |   | 1.43 | % |   | 1.51 | % |   | 1.56 | % |
| Components:                                                                                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance                for loan and lease losses                                                        |   | $                                      | 152,053 |   | $ | 133,664 |   | $ | 135,620 |   | $ | 112,057 |   | $ | 90,733 |   |
| Allowance                for unfunded credit commitments (1)                                              |   |                                   | 8,216   |   |   | 7,800 |   |   |   |   |   |   |   |   |   |   |
| Total                allowance for credit losses                                                          |   | $                                      | 160,269 |   | $ | 141,464 |   | $ | 135,620 |   | $ | 112,057 |   | $ | 90,733 |   |

| (1)   | During                2005, the allowance for unfunded credit commitments was reclassified                from                the allowance for loan and lease losses to other                liabilities. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Allocation      of the Allowance for Loan and Lease Losses**

|                                    |                                                               |                        |     |         |                        |         |         |                        |   |         |
|-----------------------------------------|--------------------------------------------------------------------|-----------------------------|----------|--------------|-----------------------------|--------------|--------------|-----------------------------|--------|--------------|
|                                    | Allowance                for Loan and Lease Losses at December 31, |                        |
|                                    | 2006                                                               |                        | 2005     |         | 2004                        |         | 2003         |                        | 2002   |         |
|                                    |  Amount                                                       | %                GrossLoans |     |  Amount | %                GrossLoans |         |  Amount | %                GrossLoans |   |  Amount | %                GrossLoans |   |  Amount | %                GrossLoans |   |
| *(dollars                in thousands)* |                                                               |                        |     |         |                        |         |         |                        |   |         |   |   |   |   |   |
| Commercial                              | $                                                                  | 61,325                      | 27       | %            | $                           | 55,372       | 26           | %                           | $      | 47,230       | 26 | % | $ | 50,400 | 27 | % | $ | 33,708 | 26 | % |
| Owner-occupied                          |                                                               | 30,755                      | 18       |         |                        | 18,255       | 19           |                        |   | 29,488       | 21 |   |   | 26,862 | 22 |   |   | 24,539 | 23 |   |
| Consumer                                |                                                               | 37,030                      | 36       |         |                        | 36,868       | 37           |                        |   | 38,100       | 35 |   |   | 13,082 | 34 |   |   | 14,497 | 34 |   |
| Commercial                real estate   |                                                               |  22,943                |  19 |         |                        |  23,169 |  18     |                        |   |  20,802 |  18 |   |   |  21,713 |  17 |   |   |  17,989 |  17 |   |
|                                    | $                                                                  | 152,053                     | 100      | %            | $                           | 133,664      | 100          | %                           | $      | 135,620      | 100 | % | $ | 112,057 | 100 | % | $ | 90,733 | 100 | % |

**Investment      Securities**

|                                                                                 |   |                        |       |
|--------------------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                                 |   | December                31, |       |
|                                                                                 |   | 2006                        |       | 2005 |   | 2004 |   |
| *(dollars                in thousands)*                                              |   |
| U.S.                Government agency and                mortgage-backed obligations |   | $                           | 10,984,247 |   | $ | 9,422,478 |   | $ | 7,902,816 |   |
| Obligations                of state and political                subdivisions        |   |                        | 54,745     |   |   | 59,127 |   |   | 87,910 |   |
| Equity                securities                                                     |   |                        | 19,071     |   |   | 22,772 |   |   | 23,303 |   |
| Other                                                                                |   |                        | 40,050     |   |   | 14,444 |   |   | 30,121 |   |
| Securities                available for                sale                          |   | $                           | 11,098,113 |   | $ | 9,518,821 |   | $ | 8,044,150 |   |
| U.S.                Government agency and                mortgage-backed obligations |   | $                           | 14,205,534 |   | $ | 12,415,587 |   | $ | 9,967,041 |   |
| Obligations                of state and political                subdivisions        |   |                        | 554,189    |   |   | 490,257 |   |   | 398,963 |   |
| Other                                                                                |   |                        | 125,259    |   |   | 99,520 |   |   | 97,654 |   |
| Securities                held tomaturity                                            |   | $                           | 14,884,982 |   | $ | 13,005,364 |   | $ | 10,463,658 |   |

----

|                                                                                 |   |                             |     |
|--------------------------------------------------------------------------------------|--------|----------------------------------|----------|
|                                                                                 |   | December                31, 2006 |     |
|                                                                                 |   | Due                Under 1 Year  |     | Due                1-5 Years |   | Due                5-10 Years |   | Due                Over 10 Years |   | Total |   |
|                                                                                 |   | Amount                           |     | Yield |   | Amount |   | Yield |   | Amount |   | Yield |   | Amount |   | Yield |   | Amount |   | Yield |   |
| *(dollars                in thousands)*                                              |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities                available for sale:                                        |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backed                obligations |   |                             | $24,410  |   |   | 4.75 | % |   | $203,845 |   |   | 5.59 | % |   | $460,761 |   |   | 5.54 | % |   | $10,295,231 |   |   | 5.59 | % |   | $10,984,247 |   |   | 5.49 | % |
| Obligations                of state and political                subdivisions        |   |                             | 314      |   |   | 5.14 |   |   |   |   |   |   |   |   | 742 |   |   | 5.50 |   |   | 53,689 |   |   | 6.86 |   |   | 54,745 |   |   | 6.83 |   |
| Other                securities                                                      |   |                             | 10,946   |   |   | 2.26 |   |   | 1,256 |   |   | 4.93 |   |   |   |   |   |   |   |   | 27,848 |   |   | 6.12 |   |   | 40,050 |   |   | 5.03 |   |
|                                                                                 |   |                             | $35,670  |   |   | 3.99 | % |   | $205,101 |   |   | 5.59 | % |   | $461,503 |   |   | 5.54 | % |   | $10,376,768 |   |   | 5.60 | % |   | $11,079,042 |   |   | 5.49 | % |
| Securities                held to maturity:                                          |   |                             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backed                obligations |   |                             | $29      |   |   | 8.61 | % |   | $491,155 |   |   | 4.13 | % |   | $1,011,125 |   |   | 5.52 | % |   | $12,703,225 |   |   | 5.39 | % |   | $14,205,534 |   |   | 5.35 | % |
| Obligations                of state and political                subdivisions        |   |                             | 434,140  |   |   | 5.71 |   |   | 5,010 |   |   | 5.63 |   |   | 41,080 |   |   | 5.78 |   |   | 73,959 |   |   | 6.36 |   |   | 554,189 |   |   | 5.80 |   |
| Other                securities                                                      |   |                             | 125,259  |   |   | 4.65 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 125,259 |   |   | 4.65 |   |
|                                                                                 |   |                             | $559,428 |   |   | 5.47 | % |   | $496,165 |   |   | 4.14 | % |   | $1,052,205 |   |   | 5.53 | % |   | $12,777,184 |   |   | 5.39 | % |   | $14,884,982 |   |   | 5.36 | % |

**Deposits**

|       |   |                          |   |
|------------|--------|-------------------------------|--------|
|       |   | December                  31, |   |
|       |   | 2006                          |   | 2005 |   |
| Consumer   |   | $                             | 16,624 |   | $ | 14,990 |   |
| Commercial |   |                          | 15,768 |   |   | 12,380 |   |
| Government |   |                          | 7,685  |   |   | 6,500 |   |
| Total      |   | $                             | 40,077 |   | $ | 33,870 |   |

----

|                                                                              |   |    |       |    |   |    |   |
|-----------------------------------------------------------------------------------|--------|---------|------------|---------|--------|---------|--------|
|                                                                              |   | 2006    |       | 2005    |   | 2004    |   |
|                                                                              |   | Average |       | Average |   | Average |   | Average |   | Average |   | Average |   |
|                                                                              |   | Balance |       | Rate    |   | Balance |   | Rate |   | Balance |   | Rate |   |
| (dollars                in thousands)                                             |   |    |       |    |   |    |   |   |   |   |   |   |   |
| Demand                deposits:                                                   |   |    |       |    |   |    |   |   |   |   |   |   |   |
| Noninterest-bearing                                                               |   | $       | 8,269,158  |    |   |    |   | $ | 7,143,552 |   |   |   |   | $ | 5,408,094 |   |   |   |   |
| Interest-bearing                (money market and N.O.W.                accounts) |   |    | 14,867,213 |    |   | 3.33    | %      |   | 12,474,260 |   |   | 2.03 | % |   | 10,066,187 |   |   | 0.95 | % |
| Savings                deposits                                                   |   |    | 10,326,719 |    |   | 2.53    |   |   | 7,698,370 |   |   | 1.60 |   |   | 5,446,713 |   |   | 0.86 |   |
| Time                deposits/public funds                                         |   |    | 4,618,523  |    |   | 4.11    |   |   | 3,565,002 |   |   | 2.77 |   |   | 3,333,220 |   |   | 1.79 |   |
| Total                deposits                                                     |   | $       | 38,081,613 |    |   |    |   | $ | 30,881,184 |   |   |   |   | $ | 24,254,214 |   |   |   |   |

|                                  |   |   |      |   |   |      |   |
|---------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Maturity                              |   | 2006   |      | 2005   |   | 2004      |   |
| (dollars                in thousands) |   |   |      |   |   |      |   |
| 3                months or less       |   | $      | 1,453,925 |   | $      | 1,088,353 |   | $ | 983,909 |   |
| 3                to 6 months          |   |   | 694,344   |   |   | 198,166   |   |   | 182,573 |   |
| 6                to 12 months         |   |   | 350,651   |   |   | 272,156   |   |   | 206,326 |   |
| Over                12 months         |   |   | 110,457   |   |   | 538,952   |   |   | 457,489 |   |
| Total                                 |   | $      | 2,609,377 |   | $      | 2,097,627 |   | $ | 1,830,297 |   |

|                                  |   |   |      |
|---------------------------------------|--------|--------|-----------|
| Maturity                              |   |   |      |
| (dollars                in thousands) |   |   |      |
| 2007                                  |   | $      | 4,741,636 |   |
| 2008                                  |   |   | 170,366   |   |
| 2009                                  |   |   | 70,140    |   |
| 2010                                  |   |   | 45,956    |   |
| 2011                                  |   |   | 10,324    |   |
| Thereafter                            |   |   | 202       |   |
| Total                                 |   | $      | 5,038,624 |   |

**Interest      Rate Sensitivity and Liquidity**

|                                                                                       |   |                                          |     |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------|----------|
|                                                                                       |   | Interest                Rate Sensitivity Gaps |     |
|                                                                                       |   | December                31, 2006              |     |
|                                                                                       |   |  1-90Days                                |     |  91-180Days |   |  181-365Days |   |  1-5Years |   |  Beyond5                Years |   |   Total |   |
| (dollars                in millions)                                                       |   |                                          |     |   |   |   |   |   |   |   |   |   |   |
| Rate                sensitive:                                                             |   |                                          |     |   |   |   |   |   |   |   |   |   |   |
| Interest-earningassets                                                                     |   |                                          |     |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                      |   | $                                             | 5,760.5  |   | $ | 320.1 |   | $ | 631.7 |   | $ | 4,422.9 |   | $ | 4,474.1 |   | $ | 15,609.3 |   |
| Investmentsecurities                                                                       |   |                                          | 3,886.1  |   |   | 944.8 |   |   | 1,774.0 |   |   | 9,870.8 |   |   | 9,613.4 |   |   | 26,089.1 |   |
| Federal                fundssold                                                           |   |                                          | 9.3      |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9.3 |   |
| Total                interest-earning                assets                                |   |                                          | 9,655.9  |   |   | 1,264.9 |   |   | 2,405.7 |   |   | 14,293.7 |   |   | 14,087.5 |   |   | 41,707.7 |   |
| Interest-bearingliabilities                                                                |   |                                          |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transactionaccounts                                                                        |   |                                          | 8,531.6  |   |   |   |   |   |   |   |   |   |   |   | 18,781.2 |   |   | 27,312.8 |   |
| Time                deposits                                                               |   |                                          | 2,252.8  |   |   | 1,656.0 |   |   | 832.8 |   |   | 296.8 |   |   | 0.2 |   |   | 5,038.6 |   |
| Other                borrowedmoney                                                         |   |                                          | 777.4    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 777.4 |   |
| Total                interest-bearingliabilities                                           |   |                                          | 11,561.8 |   |   | 1,656.0 |   |   | 832.8 |   |   | 296.8 |   |   | 18,781.4 |   |   | 33,128.8 |   |
| Period                gap                                                                  |   |                                          | (1,905.9 | ) |   | (391.1 | ) |   | 1,572.9 |   |   | 13,996.9 |   |   | (4,693.9 | ) | $ | 8,578.9 |   |
| Cumulative                gap                                                              |   | $                                             | (1,905.9 | ) | $ | (2,297.0 | ) | $ | (724.1 | ) | $ | 13,272.8 |   | $ | 8,578.9 |   |   |   |   |
| Cumulative                gap as apercentage                of totalinterest-earningassets |   |                                          | (4.6     | )% |   | (5.5 | )% |   | (1.7 | )% |   | 31.8 | % |   | 20.6 | % |   |   |   |

----

|                              |                               |
|-----------------------------------|------------------------------------|
|                              | Basis                Point Change: |
|                              | Plus                200            | Minus                100 |
| December                31, 2006: |                               |   |
| Twelve                Months      | (5.2)%                             | 2.2% |
| Twenty                Four Months | (0.1)%                             | (0.4)% |
|                              |                               |   |
| December                31, 2005: |                               |   |
| Twelve                Months      | (6.9)%                             | 3.2% |
| Twenty                Four Months | (3.9)%                             | 0.7% |

|                                 |                                  |                     |
|--------------------------------------|---------------------------------------|--------------------------|
|                                 | Market                Value of Equity | Per                Share |
|                                 |                                  |                     |
| Plus                200 basis point  | $9,230                                | $48.64                   |
| Current                Rate          | $9,700                                | $51.12                   |
| Minus                100 basis point | $8,806                                | $46.41                   |

----

**Other      Borrowed Money**

**Long-Term      Debt**

**Stockholders’      Equity and Dividends**

**Capital      Resources**

|                                      |   |                              |   |                                                          |   |
|-------------------------------------------|--------|-----------------------------------|--------|---------------------------------------------------------------|--------|
|                                      |   |  December                31, |   | Minimum                Regulatory                Requirements |   |
|                                      |   | 2006                              |   | 2005                                                          |   | 2006 |   | 2005 |   |
| Risk                based capital ratios: |   |                              |   |                                                          |   |   |   |
| Tier                1                     |   |                              | 11.73  | %                                                             |   | 11.81 | % |   | 4.00 | % |   | 4.00 | % |
| Total                capital              |   |                              | 12.44  |                                                          |   | 12.58 |   |   | 8.00 |   |   | 8.00 |   |
| Leverage                ratio             |   |                              | 6.18   |                                                          |   | 6.04 |   |   | 4.00 |   |   | 4.00 |   |

----

|                              |   |
|-----------------------------------|--------|
| Common                Share Data  |   |
|                              |   | Market                Prices |   | Dividends                Declared |   |
|                              |   | High |   | Low |   | Per                Share |   |
| 2006                Quarter Ended |   |   |   |   |   |   |   |
| December                31        |   | $ | 37.05 |   | $ | 34.51 |   | $ | 0.1300 |   |
| September                30       |   |   | 36.73 |   |   | 31.64 |   |   | 0.1200 |   |
| June                30            |   |   | 40.96 |   |   | 34.25 |   |   | 0.1200 |   |
| March                31           |   |   | 36.77 |   |   | 32.06 |   |   | 0.1200 |   |
|                              |   |   |   |   |   |   |   |   |   |   |
| 2005                Quarter Ended |   |   |   |   |   |   |   |   |   |   |
| December                31        |   | $ | 35.29 |   | $ | 28.08 |   | $ | 0.1200 |   |
| September                30       |   |   | 35.29 |   |   | 30.05 |   |   | 0.1100 |   |
| June                30            |   |   | 31.81 |   |   | 27.17 |   |   | 0.1100 |   |
| March                31           |   |   | 32.47 |   |   | 28.34 |   |   | 0.1100 |   |

**Off-Balance      Sheet Arrangements**

**Contractual      Obligations and Commitments**

|                                              |   |                                           |                            |
|---------------------------------------------------|--------|------------------------------------------------|---------------------------------|
| Contractual                Obligations            |   | Payments                Due By Period          |                            |
|                                              |   | One                Year or                Less |                            | One                to Three                Years |   | Three                to Five Years |   | BeyondFive                Years |   |  Total |   |
| (dollars                in millions)              |   |                                           |                            |   |   |   |   |   |   |   |   |
| Deposits                without a stated maturity |   | $                                              | 11,212.7                        |   |   |   |   |   |   |   | $ | 25,036.9 |   | $ | 36,249.6 |   |
| Time                deposits                      |   |                                           | 4,741.6                         |   | $ | 286.5 |   | $ | 10.3 |   |   | 0.2 |   |   | 5,038.6 |   |
| Other                borrowed money               |   |                                           | 777.4                           |   |   |   |   |   |   |   |   |   |   |   | 777.4 |   |
| Operating                leases                   |   |                                           | 72.7                            |   |   | 146.3 |   |   | 148.0 |   |   | 796.4 |   |   | 1,163.4 |   |
| Total                                             |   | $                                              | 16,804.4                        |   | $ | 432.8 |   | $ | 158.3 |   | $ | 25,833.5 |   | $ | 43,229.0 |   |
|                                              |   |                                           |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments                                       |   | Expiration                by Period            |
|                                         |   |                                           | One                Year or Less |   |   | One                to Three Years |   |   | Three                to Five Years |   |   | Beyond                Five Years |   |   | Total |   |
| (dollars                in millions)              |   |                                           |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Standby                letters of credit          |   | $                                              | 550.8                           |   | $ | 191.1 |   | $ | 348.4 |   | $ | 33.7 |   | $ | 1,124.0 |   |
| Lines                of credit                    |   |                                           | 2,208.8                         |   |   | 516.3 |   |   | 487.1 |   |   | 87.1 |   |   | 3,299.3 |   |
| Commitments                to extend credit:      |   |                                           |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction                                      |   |                                           | 293.1                           |   |   | 375.2 |   |   | 1.7 |   |   | 0.9 |   |   | 670.9 |   |
| Home                equity                        |   |                                           | 78.9                            |   |   | 157.8 |   |   | 157.8 |   |   | 788.8 |   |   | 1,183.3 |   |
| Other                                             |   |                                           | 326.9                           |   |   | 470.0 |   |   | 27.9 |   |   | 24.2 |   |   | 849.0 |   |
| Total                                             |   | $                                              | 3,458.5                         |   | $ | 1,710.4 |   | $ | 1,022.9 |   | $ | 934.7 |   | $ | 7,126.5 |   |

**Related      Parties**

** **

**Recent      Accounting Statements**

----

**Results      of Operations - 2005 versus 2004**

**Item      7A****.** **Quantitative      and Qualitative Disclosures About Market Risk**

----

**Commerce        Bancorp, Inc. **

**Report        on Management’s Assessment****of        Internal Control Over Financial Reporting**

|   | /s/                  Vernon W. Hill, II                               |
|--------|-----------------------------------------------------------------------|
|   |  Vernon                  W. Hill, II                             |
|   | President                  and Chief Executive Officer                |
|   | (Principal                  Executive Officer)                        |
|   |                                                                  |
|   |                                                                  |
|   | /s/                  Douglas J. Pauls                                 |
|   |  Douglas                  J. Pauls                               |
|   | Executive                  Vice President and Chief Financial Officer |
|   | (Principal                  Financial and Accounting Officer)         |

----

**Report      of **
**Ernst      & Young****LLP,      Independent Registered Public Accounting Firm, on Effectiveness of Internal      Control Over Financial Reporting**

|   | /s/Ernst                & Young LLP |
|--------|-----------------------------------------|

----

**Report        of Ernst & Young LLP, Independent Registered Public Accounting Firm, on        Consolidated Financial Statements**

*Share        Based Payment.*

|   | /s/Ernst                  & Young LLP |
|--------|-------------------------------------------|

----

**Item      8****.** **Financial      Statements and Supplementary Data**

**Consolidated      Balance Sheets**

|                                    |                                                                                                  |                           |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------|--------------------------------|
|                                    |                                                                                                  | **December                31** |
|                                    | *(dollars                in thousands)*                                                               |                           | **2006** |   |   | 2005 |
| **Assets**                              | Cash                and due from banks                                                                | **$**                          | **1,207,390** |   | $ | 1,284,064 |
|                                    | Federal                funds sold                                                                     |                           | **9,300** |   |   | 12,700 |
|                                    | Cash                and cash equivalents                                                              |                           | **1,216,690** |   |   | 1,296,764 |
|                                    | Loans                held for sale                                                                    |                           | **52,741** |   |   | 30,091 |
|                                    | Trading                securities                                                                     |                           | **106,007** |   |   | 143,016 |
|                                    | Securities                available for sale                                                          |                           | **11,098,113** |   |   | 9,518,821 |
|                                    | Securities                held to maturity                                                            |                           | **14,884,982** |   |   | 13,005,364 |
|                                    | (market                value 2006 - $14,617,764; 2005 - $12,758,552)                                  |                           |   |   |   |   |
|                                    | Loans                                                                                                 |                           | **15,607,049** |   |   | 12,658,652 |
|                                    | Less                allowance for loan and lease losses                                               |                           | **152,053** |   |   | 133,664 |
|                                    |                                                                                                  |                           | **15,454,996** |   |   | 12,524,988 |
|                                    | Bank                premises and equipment, net                                                       |                           | **1,753,670** |   |   | 1,378,786 |
|                                    | Goodwill                and other intangible assets                                                   |                           | **141,631** |   |   | 106,926 |
|                                    | Other                assets                                                                           |                           | **562,986** |   |   | 461,281 |
|                                    | Total                assets                                                                           | **$**                          | **45,271,816** |   | $ | 38,466,037 |
| **Liabilities**                         | Deposits:                                                                                             |                           |   |   |   |   |
|                                    | Demand:                                                                                               |                           |   |   |   |   |
|                                    | Noninterest-bearing                                                                                   | **$**                          | **8,936,824** |   | $ | 8,019,878 |
|                                    | Interest-bearing                                                                                      |                           | **16,853,457** |   |   | 13,286,678 |
|                                    | Savings                                                                                               |                           | **10,459,306** |   |   | 9,486,712 |
|                                    | Time                                                                                                  |                           | **5,038,624** |   |   | 3,933,445 |
|                                    | Total                deposits                                                                         |                           | **41,288,211** |   |   | 34,726,713 |
|                                    |                                                                                                  |                           |   |   |   |   |
|                                    | Other                borrowed money                                                                   |                           | **777,404** |   |   | 1,106,443 |
|                                    | Other                liabilities                                                                      |                           | **405,103** |   |   | 323,708 |
|                                    | Total                liabilities                                                                      |                           | **42,470,718** |   |   | 36,156,864 |
| **Stockholders'                Equity** | Common                stock, 189,738,423 shares issued (179,498,717 shares in                2005)    |                           | **189,738** |   |   | 179,499 |
|                                    | Capital                in excess of par value                                                         |                           | **1,744,691** |   |   | 1,450,843 |
|                                    | Retained                earnings                                                                      |                           | **958,770** |   |   | 750,710 |
|                                    | Accumulated                other comprehensive loss                                                   |                           | **(65,240)** |   |   | (59,169) |
|                                    |                                                                                                  |                           | **2,827,959** |   |   | 2,321,883 |
|                                    | Less                treasury stock, at cost, 1,231,081 shares (837,338 shares in                2005) |                           | **26,861** |   |   | 12,710 |
|                                    | Total                stockholders' equity                                                             |                           | **2,801,098** |   |   | 2,309,173 |
|                                    | Total                liabilities and stockholders' equity                                             | **$**                          | **45,271,816** |   | $ | 38,466,037 |
|                                    | *See                accompanying notes.*                                                              |                           |   |   |   |   |

----

**Consolidated      Statements of Income**

|            |                                                                          |                                   |
|-----------------|-------------------------------------------------------------------------------|----------------------------------------|
|            |                                                                          | Year                Ended December 31, |
|            | *(dollars                in thousands, except per share amounts)*             |                                   | **2006** |   | 2005 |   | 2004 |
| **Interest**    | Interest                and fees on loans                                     | **$**                                  | **970,270** | $ | 680,552 | $ | 483,186 |
| **Income**      | Interest                on investment securities                              |                                   | **1,301,928** |   | 981,420 |   | 754,202 |
|            | Other                interest                                                 |                                   | **6,926** |   | 3,272 |   | 903 |
|            | Total                interest income                                          |                                   | **2,279,124** |   | 1,665,244 |   | 1,238,291 |
|            |                                                                          |                                   |   |   |   |   |   |
| **Interest**    | Interest                on deposits:                                          |                                   |   |   |   |   |   |
| **Expense**     | Demand                                                                        |                                   | **495,147** |   | 252,674 |   | 95,253 |
|            | Savings                                                                       |                                   | **261,428** |   | 123,419 |   | 46,680 |
|            | Time                                                                          |                                   | **189,944** |   | 98,780 |   | 59,808 |
|            | Total                interest on deposits                                     |                                   | **946,519** |   | 474,873 |   | 201,741 |
|            | Interest                on other borrowed money                               |                                   | **58,097** |   | 28,410 |   | 6,685 |
|            | Interest                on long-term debt                                     |                                   |   |   | 8,379 |   | 12,080 |
|            | Total                interest expense                                         |                                   | **1,004,616** |   | 511,662 |   | 220,506 |
|            |                                                                          |                                   |   |   |   |   |   |
|            | Net                interest income                                            |                                   | **1,274,508** |   | 1,153,582 |   | 1,017,785 |
|            | Provision                for credit losses                                    |                                   | **33,700** |   | 19,150 |   | 39,238 |
|            | Net                interest income after provision for credit losses          |                                   | **1,240,808** |   | 1,134,432 |   | 978,547 |
| **Noninterest** | Deposit                charges and service fees                               |                                   | **374,210** |   | 282,692 |   | 218,126 |
| **Income**      | Other                operating income                                         |                                   | **214,246** |   | 174,132 |   | 154,306 |
|            | Net                investment securities gains (losses)                       |                                   | **2,697** |   | (14,030) |   | 2,639 |
|            | Total                noninterest income                                       |                                   | **591,153** |   | 442,794 |   | 375,071 |
|            |                                                                          |                                   |   |   |   |   |   |
| **Noninterest** | Salaries                and benefits                                          |                                   | **614,627** |   | 526,428 |   | 431,144 |
| **Expense**     | Occupancy                                                                     |                                   | **196,498** |   | 165,077 |   | 121,210 |
|            | Furniture                and equipment                                        |                                   | **161,075** |   | 126,986 |   | 109,242 |
|            | Office                                                                        |                                   | **62,234** |   | 55,833 |   | 46,025 |
|            | Marketing                                                                     |                                   | **42,737** |   | 37,261 |   | 36,236 |
|            | Other                                                                         |                                   | **278,590** |   | 234,795 |   | 194,921 |
|            | Total                noninterest expense                                      |                                   | **1,355,761** |   | 1,146,380 |   | 938,778 |
|            | Income                before income taxes                                     |                                   | **476,200** |   | 430,846 |   | 414,840 |
|            | Provision                for federal and state income taxes                   |                                   | **176,887** |   | 147,907 |   | 141,422 |
|            | **Net                income**                                                 | **$**                                  | **299,313** | $ | 282,939 | $ | 273,418 |
|            |                                                                          |                                   |   |   |   |   |   |
|            | Net                income per common and common equivalent share:             |                                   |   |   |   |   |   |
|            | Basic                                                                         | **$**                                  | **1.62** | $ | 1.70 | $ | 1.74 |
|            | Diluted                                                                       | **$**                                  | **1.55** | $ | 1.61 | $ | 1.63 |
|            | Average                common and common equivalent shares  outstanding: |                                   |   |   |   |   |   |
|            | Basic                                                                         |                                   | **184,919** |   | 165,974 |   | 156,625 |
|            | Diluted                                                                       |                                   | **193,674** |   | 179,135 |   | 172,603 |
|            | Dividends                declared, common stock                               | **$**                                  | **0.49** | $ | 0.45 | $ | 0.40 |
|            | *See                accompanying notes.*                                      |                                   |   |   |   |   |   |

----

**Consolidated      Statements of Cash Flows**

|           |                                                                        |                                   |
|----------------|-----------------------------------------------------------------------------|----------------------------------------|
|           |                                                                        | Year                Ended December 31, |
|           | *(dollars                in thousands)*                                     |                                   | **2006** |   |   | 2005 |   |   | 2004 |   |
| **Operating**  | Net                income                                                   | **$**                                  | **299,313** |   | $ | 282,939 |   | $ | 273,418 |   |
| **Activities** | Adjustments                to reconcile net income to net cash              |                                   |   |   |   |   |   |   |   |   |
|           | provided                by operating activities:                            |                                   |   |   |   |   |   |   |   |   |
|           | Provision                for credit losses                                  |                                   | **33,700** |   |   | 19,150 |   |   | 39,238 |   |
|           | Provision                for depreciation, amortization and accretion       |                                   | **156,560** |   |   | 163,502 |   |   | 133,535 |   |
|           | Stock-based                compensation expense                             |                                   | **7,376** |   |   |   |   |   |   |   |
|           | Net                (gain) loss on sales of securities                       |                                   | **(2,697** | **)** |   | 14,030 |   |   | (2,639 | ) |
|           | Proceeds                from sales of loans held for sale                   |                                   | **745,391** |   |   | 1,001,884 |   |   | 750,854 |   |
|           | Originations                of loans held for sale                          |                                   | **(760,691** | **)** |   | (738,402 | ) |   | (752,157 | ) |
|           | Net                decrease in trading securities                           |                                   | **37,009** |   |   | 26,087 |   |   | 1,355 |   |
|           | Increase                in other assets                                     |                                   | **(91,612** | **)** |   | (78,898 | ) |   | (58,429 | ) |
|           | Increase                in other liabilities                                |                                   | **88,134** |   |   | 32,666 |   |   | 82,851 |   |
|           | Deferred                income tax (benefit) expense                        |                                   | **(23,414** | **)** |   | (17,612 | ) |   | 16,005 |   |
|           | Net                cash provided by operating activities                    |                                   | **489,069** |   |   | 705,346 |   |   | 484,031 |   |
|           |                                                                        |                                   |   |   |   |   |   |   |   |   |
| **Investing**  | Proceeds                from the sales of securities available for sale     |                                   | **421,455** |   |   | 3,722,875 |   |   | 2,119,230 |   |
| **Activities** | Proceeds                from the sales of securities held to maturity       |                                   |   |   |   |   |   |   | 125,580 |   |
|           | Proceeds                from the maturity of securities available for sale  |                                   | **2,883,670** |   |   | 2,732,109 |   |   | 3,876,918 |   |
|           | Proceeds                from the maturity of securities held to maturity    |                                   | **2,227,077** |   |   | 2,627,750 |   |   | 1,019,449 |   |
|           | Purchase                of securities available for sale                    |                                   | **(4,897,038** | **)** |   | (8,046,583 | ) |   | (9,304,341 | ) |
|           | Purchase                of securities held to maturity                      |                                   | **(4,118,321** | **)** |   | (5,191,021 | ) |   | (3,203,025 | ) |
|           | Net                increase in loans                                        |                                   | **(2,971,024** | **)** |   | (3,160,857 | ) |   | (2,029,710 | ) |
|           | Capital                expenditures                                         |                                   | **(512,312** | **)** |   | (424,476 | ) |   | (339,956 | ) |
|           | Cash                acquired in purchase acquisition                        |                                   |   |   |   | 5,664 |   |   |   |   |
|           | Net                cash used by investing activities                        |                                   | **(6,966,493** | **)** |   | (7,734,539 | ) |   | (7,735,855 | ) |
|           |                                                                        |                                   |   |   |   |   |   |   |   |   |
| **Financing**  | Net                increase in demand and savings deposits                  |                                   | **5,456,319** |   |   | 6,138,554 |   |   | 7,129,650 |   |
| **Activities** | Net                increase (decrease) in time deposits                     |                                   | **1,105,179** |   |   | 626,949 |   |   | (172,165 | ) |
|           | Net                (decrease) increase in other borrowed money              |                                   | **(329,039** | **)** |   | 445,248 |   |   | 349,685 |   |
|           | Dividends                paid                                               |                                   | **(88,192** | **)** |   | (72,363 | ) |   | (59,205 | ) |
|           | Redemption                of long term debt                                 |                                   |   |   |   | (57,255 | ) |   |   |   |
|           | Proceeds                from issuance of common stock under                 |                                   |   |   |   |   |   |   |   |   |
|           | dividend                reinvestment and other stock plans                  |                                   | **253,050** |   |   | 194,022 |   |   | 146,057 |   |
|           | Other                                                                       |                                   | **33** |   |   | (4 | ) |   | (1,484 | ) |
|           | Net                cash provided by financing activities                    |                                   | **6,397,350** |   |   | 7,275,151 |   |   | 7,392,538 |   |
|           |                                                                        |                                   |   |   |   |   |   |   |   |   |
|           | (Decrease)                increase in cash and cash equivalents             |                                   | **(80,074** | **)** |   | 245,958 |   |   | 140,714 |   |
|           | Cash                and cash equivalents at beginning of year               |                                   | **1,296,764** |   |   | 1,050,806 |   |   | 910,092 |   |
|           | Cash                and cash equivalents at end of year                     | **$**                                  | **1,216,690** |   | $ | 1,296,764 |   | $ | 1,050,806 |   |
|           |                                                                        |                                   |   |   |   |   |   |   |   |   |
|           | Supplemental                disclosures of cash flow information:           |                                   |   |   |   |   |   |   |   |   |
|           | Cash                paid during the year for:                               |                                   |   |   |   |   |   |   |   |   |
|           | Interest                                                                    | **$**                                  | **980,656** |   | $ | 506,574 |   | $ | 218,986 |   |
|           | Income                taxes                                                 |                                   | **153,447** |   |   | 151,757 |   |   | 127,538 |   |
|           | Other                noncash activities:                                    |                                   |   |   |   |   |   |   |   |   |
|           | Transfer                of loans to held for sale                           |                                   | **7,350** |   |   | 249,500 |   |   |   |   |
|           | Transfer                of securities to securities held to maturity        |                                   |   |   |   |   |   |   | 5,919,301 |   |
|           | Fair                value of non-cash assets and liabilities acquired: |                                   |   |   |   |   |   |   |   |   |
|           | Assets                acquired                                              |                                   | **43,091** |   |   | 380,191 |   |   |   |   |
|           | Liabilities                assumed                                          |                                   | **14,091** |   |   | 366,160 |   |   |   |   |
|           | *See                accompanying notes.*                                    |                                   |   |   |   |   |   |   |   |   |

----

**Consolidated      Statements of Changes in Stockholders’ Equity**

|                                                                      |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |
|---------------------------------------------------------------------------|--------|---------------------|-------------|---------------------------------------------------|--------|--------------------------------------|--------|-----------------------|-------------|-------------------------------------------------------------------|--------|-------------|--------|
| Years                ended December 31, 2006, 2005 and 2004               |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |
|  *(in                thousands)*                                     |   | **Common****Stock** |        | **Capital                in Excess of Par Value** |   | **Retained                Earnings** |   | **Treasury****Stock** |        | **Accumulated                Other Compre-hensive Income (Loss)** |   | **Total**   |   |
| **Balances                at December 31, 2003**                          |   | **$**               | **153,739** |                                              | **$**  | **789,225**                          |   | **$**                 | **347,365** |                                                              | **$**  | **(9,339**  | **)**  | **$** | **(3,702** | **)** | **$** | **1,277,288** |   |
| Net                income                                                 |   |                |        |                                              |   |                                 |   |                  | 273,418     |                                                              |   |        |   |   |   |   |   | 273,418 |   |
| Other                comprehensive loss, net of tax                       |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| Unrealized                loss on securities (pre-tax $3,222)             |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | 1,465 |   |   | 1,465 |   |
| Reclassification                adjustment (pre-tax $35,677)              |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | 23,190 |   |   | 23,190 |   |
| Other                comprehensive loss                                   |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | 24,655 |   |
| Total                comprehensive income                                 |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | 298,073 |   |
| Cash                dividends declared                                    |   |                |        |                                              |   |                                 |   |                  | (62,258     | )                                                                 |   |        |   |   |   |   |   | (62,258 | ) |
| Shares                issued under dividend reinvestment and              |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| compensation                and benefit plans (6,898 shares)              |   |                | 6,898       |                                              |   | 139,159                              |   |                  |        |                                                              |   |        |   |   |   |   |   | 146,057 |   |
| Other                                                                     |   |                | (1          | )                                                 |   | 23,092                               |   |                  | (14,547     | )                                                                 |   | (1,999      | )      |   |   |   |   | 6,545 |   |
| **Balances                at December 31, 2004**                          |   | **$**               | **160,636** |                                              | **$**  | **951,476**                          |   | **$**                 | **543,978** |                                                              | **$**  | **(11,338** | **)**  | **$** | **20,953** |   | **$** | **1,665,705** |   |
| Net                income                                                 |   |                |        |                                              |   |                                 |   |                  | 282,939     |                                                              |   |        |   |   |   |   |   | 282,939 |   |
| Other                comprehensive loss, net of tax                       |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| Unrealized                loss on securities (pre-tax $136,027)           |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | (85,768 | ) |   | (85,768 | ) |
| Reclassification                adjustment (pre-tax $8,686)               |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | 5,646 |   |   | 5,646 |   |
| Other                comprehensive loss                                   |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | (80,122 | ) |
| Total                comprehensive income                                 |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | 202,817 |   |
| Cash                dividends declared                                    |   |                |        |                                              |   |                                 |   |                  | (76,203     | )                                                                 |   |        |   |   |   |   |   | (76,203 | ) |
| Shares                issued under dividend reinvestment and              |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| compensation                and benefit plans (7,933 shares)              |   |                | 7,933       |                                              |   | 185,144                              |   |                  |        |                                                              |   |        |   |   |   |   |   | 193,077 |   |
| Shares                issued upon redemption of Convertible Trust Capital |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |
| Securities                (7,576 shares)                                  |   |                | 7,576       |                                              |   | 187,493                              |   |                  |        |                                                              |   |        |   |   |   |   |   | 195,069 |   |
| Acquisition                of Palm Beach County Bank (3,325 shares)       |   |                | 3,325       |                                              |   | 109,309                              |   |                  |        |                                                              |   |        |   |   |   |   |   | 112,634 |   |
| Acquisition                of insurance brokerage agency (29 shares)      |   |                | 29          |                                              |   | 797                                  |   |                  |        |                                                              |   |        |   |   |   |   |   | 826 |   |
| Other                                                                     |   |                |        |                                              |   | 16,624                               |   |                  | (4          | )                                                                 |   | (1,372      | )      |   |   |   |   | 15,248 |   |
| **Balances                at December 31, 2005**                          |   | **$**               | **179,499** |                                              | **$**  | **1,450,843**                        |   | **$**                 | **750,710** |                                                              | **$**  | **(12,710** | **)**  | **$** | **(59,169** | **)** | **$** | **2,309,173** |   |
| Net                income                                                 |   |                |        |                                              |   |                                 |   |                  | 299,313     |                                                              |   |        |   |   |   |   |   | 299,313 |   |
| Other                comprehensive loss, net of tax                       |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| Unrealized                loss on securities (pre-tax $8,454)             |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | (5,010 | ) |   | (5,010 | ) |
| Reclassification                adjustment (pre-tax $1,632)               |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   | (1,061 | ) |   | (1,061 | ) |
| Other                comprehensive loss                                   |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | (6,071 | ) |
| Total                comprehensive income                                 |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   | 293,242 |   |
| Cash                dividends declared                                    |   |                |        |                                              |   |                                 |   |                  | (91,252     | )                                                                 |   |        |   |   |   |   |   | (91,252 | ) |
| Shares                issued under dividend reinvestment and              |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |
| compensation                and benefit plans (9,379 shares)              |   |                | 9,379       |                                              |   | 257,799                              |   |                  |        |                                                              |   |        |   |   |   |   |   | 267,178 |   |
| Acquisition                of eMoney Advisors (860 shares)                |   |                | 860         |                                              |   | 28,140                               |   |                  |        |                                                              |   |        |   |   |   |   |   | 29,000 |   |
| Other                                                                     |   |                |        |                                              |   | 7,909                                |   |                  | (1          | )                                                                 |   | (14,151     | )      |   |   |   |   | (6,243 | ) |
| **Balances                at December 31, 2006**                          |   | **$**               | **189,738** |                                              | **$**  | **1,744,691**                        |   | **$**                 | **958,770** |                                                              | **$**  | **(26,861** | **)**  | **$** | **(65,240** | **)** | **$**  | **2,801,098** |   |
| *See                accompanying notes.*                                  |   |                |        |                                              |   |                                 |   |                  |        |                                                              |   |        |   |   |   |   |   |   |   |

----

**Notes        to Consolidated Financial Statements**

| **1.**                                                                                                                                                                                                                                                                                                                                                                                                             | **Significant****Accounting****Policies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **Basis                of Presentation** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|
| The                consolidated financial statements include the accounts of Commerce                Bancorp, Inc. (the Company) and its consolidated subsidiaries. All                material intercompany transactions have been eliminated. Certain                amounts                from prior years have been reclassified to conform with the current                year                presentation. |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | The                Company is a multi-bank holding company headquartered in Cherry Hill,                New                Jersey, operating primarily in the metropolitan New York, metropolitan                Philadelphia, metropolitan Washington, D.C. and Southeast Florida                markets.                Through its subsidiaries, the Company provides retail and commercial                banking services, corporate trust services, insurance brokerage services,                and certain securities services.                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | The                preparation of financial statements in conformity with U.S. generally                accepted accounting principles requires management to make estimates                and                assumptions that affect the amounts reported in the financial statements                and accompanying notes. Actual results could differ from those                estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | **Stock                Split**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Per                share data and other appropriate share information for all periods                presented have been restated for the two-for-one stock split in the                form                of a 100% stock dividend effective March 7, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | **Business                Combinations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Business                combinations are accounted for under the purchase method of accounting.                Under the purchase method, assets and liabilities of the business                acquired                are recorded at their estimated fair values as of the date of acquisition                with any excess of the cost of the acquisition over the fair value                of the                net tangible and intangible assets acquired recorded as goodwill.                Results                of operations of the acquired business are included in the income                statement from the date of acquisition.                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | **Cash                and Cash Equivalents**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Cash                and cash equivalents are defined as short-term investments, which                have an                original maturity of three months or less and are readily convertible                into                cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | **Investment                Securities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Investment                securities are classified as held to maturity when the Company has                the                intent and ability to hold those securities to maturity. Securities                held                to maturity are stated at cost and adjusted for accretion of discounts                and                amortization of premiums.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Those                securities that could be sold in response to changes in market interest                rates, prepayment risk, the Company's income tax position, the need                to                increase regulatory capital, or similar other factors are classified                as                available for sale. Available for sale securities are carried at                fair                value, with unrealized gains and losses, net of tax, reported as                a                component of stockholders' equity. The amortized cost of debt securities                in this category is adjusted for accretion of discounts and amortization                of premiums. Realized gains and losses are determined on the specific                identification method and are included in noninterest                income. |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | The                Company reviews the fair value of the investment portfolio and evaluates                individual securities for declines in fair value that may be other                than                temporary. If declines are deemed other than temporary, an impairment                loss                is recognized and the security is written down to its current fair                value.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Commerce                Capital Markets, Inc. (CCMI) maintains a portfolio of trading account                securities, which are carried at market. Gains and losses, both realized                and unrealized, are included in other operating income. Trading gains                of                $3.4 million, $2.1 million, and $4.4 million were recorded in 2006,                2005,                and 2004, respectively, including an unrealized loss of $127,000                and an                unrealized gain of $54,000 at December 31, 2006 and 2005, respectively.                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                               | **Loans**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                               | Loans                are stated at principal amounts outstanding, net of deferred loan                origination fees and costs. Interest income on loans is accrued and                credited to interest income monthly as earned. Loans held for sale                are                valued on an aggregate basis at the lower of cost or fair value.                Net                deferred loan origination fees and costs are amortized over the estimated                lives of the related loans as an adjustment to the                yield.                                                                                                                                                                                                                                                                                                            |

----

**Notes      to Consolidated Financial Statements**

|   | Loans                are placed on a non-accrual status and cease accruing interest when                loan                payment performance is deemed unsatisfactory. However, all loans                past due                90 days are placed on non-accrual status, unless the loan is both                well                secured and in the process of collection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | **Allowance                for Credit Losses**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | The                Company maintains an allowance for losses inherent in the loan and                lease                portfolio and an allowance for losses on unfunded credit commitments.                During 2005, the Company reclassified the allowance related to losses                on                unfunded credit commitments out of the allowance for loan and lease                losses                to other liabilities. Prior to 2005, the Company included the portion                of                the allowance related to unfunded credit commitments in its allowance                for                loan and lease losses. The allowance for credit losses is increased                by                provisions charged to expense and reduced by charge-offs net of                recoveries. The level of the allowance for loan and lease losses                is based                on an evaluation of individual large classified loans and nonaccrual                loans, estimated losses based on risk characteristics of loans in                the                portfolio and other qualitative factors. The level of the allowance                for                losses on unfunded credit commitments is based on a risk characteristic                methodology similar to that used in determining the allowance for                loan and                lease losses, taking into consideration the probability of funding                these                commitments. While the allowance for credit losses is maintained                at a                level considered to be adequate by management for estimated credit                losses,                determination of the allowance is inherently subjective, as it requires                estimates that may be susceptible to significant                change. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | **Transfers                of Financial Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The                Company accounts for the transfers of financial assets, including                sales of                loans, as sales when control over the asset has been surrendered.                Control                over transferred assets is deemed to be surrendered when (1) the                assets                have been isolated from the Company, (2) the transferee obtains the                right                (free of conditions that constrain it from taking advantage of that                right)                to pledge or exchange the transferred assets, and (3) the Company                does not                maintain effective control over the transferred assets through an                agreement to repurchase before their maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | **Bank                Premises and Equipment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Bank                premises and equipment are carried at cost less accumulated depreciation.                Depreciation and amortization are recorded on a straight-line basis                over                the estimated useful lives of the assets for financial reporting                purposes,                and accelerated methods for income tax purposes. The estimated useful                lives range from 15 to 40 years for buildings, 3 to 5 years for furniture,                fixtures and equipment and the shorter of the lease terms or the                estimated                useful lives of leasehold improvements. When capitalizing costs for                store                construction, the Company includes the costs of purchasing the land,                developing the site, constructing the building (or leasehold improvements                if the property is leased), and furniture, fixtures and equipment                necessary to equip the store. Depreciation charges commence the month                in                which the store opens. All other pre-opening and post-opening costs                related to stores are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | **Other                Real Estate (ORE)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Real                estate acquired in satisfaction of a loan is reported in other assets                at                the lower of cost or fair value less disposition costs. Properties                acquired by foreclosure or deed in lieu of foreclosure are transferred                to                ORE and recorded at the lower of cost or fair value less disposition                costs                based on their appraised value at the date actually or constructively                received. Losses arising from the acquisition of such property are                charged                against the allowance for loan and lease losses. Subsequent adjustments                to                the carrying values of ORE properties are charged to operating expense.                Included in other noninterest expense is $615,000, $851,000, and                $916,000                related to ORE expenses for 2006, 2005, and 2004, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | **Other                Investments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The                Company makes investments directly in low-income housing tax credit                (LIHTC) operating partnerships, private venture capital funds and                Small                Business Investment Companies (SBIC). At December 31, 2006 and 2005,                the                Company’s investment in these entities totaled $68.7 million and $53.5                million, respectively. The majority of these investments are accounted                for                under the equity method of                accounting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

**Notes      to Consolidated Financial Statements**

|   | **Goodwill                and Other Intangible Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Goodwill,                the excess of cost over fair value of net assets acquired, amounted                to                $125.8 million and $96.9 million at December 31, 2006 and 2005,                respectively. Goodwill is not amortized into net income but rather                is                tested at least annually for impairment. Other intangible assets,                which                include core deposit intangibles, totaled $15.8 million and $10.0                million                at December 31, 2006 and 2005, respectively. These amounts are amortized                over their estimated useful lives, generally 7-10 years, and also                continue                to be subject to impairment testing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Amortization                expense of other intangible assets amounted to $2.3 million, $614,000,                and                $591,000 for 2006, 2005, and 2004, respectively. The estimated                amortization expense for the next five years is $2.4 million per                year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Advertising                Costs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Advertising                costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Income                Taxes**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The                provision for income taxes is based on current taxable income. Deferred                income taxes are provided on temporary differences between amounts                reported for financial statement and tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Income                Tax Contingencies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The                Company is subject to the income tax laws of the United States, as                well as                its states and municipalities. These tax laws are complex and subject                to                different interpretations by taxpayers and the relevant taxing                authorities. In establishing its provision for income tax expense,                the                Company must make judgments and interpretations about the application                of                these inherently complex tax laws.Actual                income taxes paid may vary from estimates depending upon changes                in income                tax laws, actual results of operations, and the final audit of tax                returns                by taxing authorities. Tax assessments may arise several years after                tax                returns have been filed. The Company reviews its tax balances quarterly                as                new information becomes available, the balances are adjusted, as                appropriate. The Company believes that its recorded tax liabilities                adequately provide for the probable outcome of these assessments;                however,                revisions of its estimate of accrued income taxes could materially                effect                its operating results.                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Restriction                on Cash and Due From Banks**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The                Company's banking subsidiaries are required to maintain reserve balances                with the Federal Reserve Bank. The weighted average amount of the                reserve                balances for 2006 and 2005 were approximately $109.8 million and                $138.4                million, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Derivative                Financial Instruments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | As                part of CCMI’s broker-dealer activities, CCMI maintains a trading                securities portfolio for distribution to customers in order to meet                those                customers’ needs. Derivative instruments, primarily interest rate futures                and options, are used in order to reduce the exposure to interest                rate                risk relating to the trading portfolio. These contracts are carried                at                fair value with changes in fair value included in other operating                income                and recorded in the same period as changes in fair value of the trading                portfolio. As an accommodation to its loan customers, the Company                enters                into interest rate swap agreements. The Company minimizes its risk                by                matching these positions with a counterparty. These swaps are carried                at                fair value with changes in fair value included in noninterest                income.                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | **Recent                Accounting Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In                September 2006, the Securities and Exchange Commission (SEC) issued                Staff                Accounting Bulletin No. 108, “Considering the Effects of Prior Year                Misstatements when Quantifying Misstatements in Current Year Financial                Statements” (SAB 108), which provides guidance regarding the process of                quantifying financial misstatements. SAB 108 requires misstatements                to be                quantified using both an income statement and balance sheet approach                and                evaluated as to whether either approach results in a misstatement                that is                material. A registrant’s financial statements would require adjustment                when either approach results in quantifying a misstatement that is                material, after considering all relevant factors. SAB 108 permits                initial                adoption of its provisions by either restating prior financial statements                or through a cumulative effect transition method, which records any                adjustments made to the 2007 opening balance of retained earnings.                The                Company adopted SAB 108 during the fourth quarter of 2006. The adoption                of                SAB 108 did not result in the identification of any material financial                misstatements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | In                September 2006, the Financial Accounting Standards Board (FASB) issued                Statement No. 157, “Fair Value Measurements” (FAS 157). FAS 157 provides a                single definition of fair value, establishes a framework for measuring                fair value, and expands disclosures about fair value measurements.                It is                required to be applied whenever another financial accounting standard                requires or permits an asset or liability to be measured at fair                value.                The Company will be required to adopt FAS 157 on January 1, 2008,                and does                not believe its adoption will have a material impact on its results                of                operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

**Notes      to Consolidated Financial Statements**

|   | In                June 2006, the FASB issued Interpretation No. 48, “Accounting for                Uncertainty in Income Taxes” (FIN 48). FIN 48 is an interpretation of FASB                Statement No. 109, “Accounting for Income Taxes”, and seeks to reduce the                diversity in practice associated with certain aspects of measurement                and                recognition in accounting for income taxes. FIN 48 prescribes a minimum                threshold a tax position is required to meet before being recognized                in                the financial statements. In addition, FIN 48 requires expanded disclosure                with respect to uncertain tax positions and is effective as of January                1,                2007. The Company is still evaluating the impact, if                any, the adoption of FIN 48 will have on its financial position or                results of operations.                                                                                                                                                                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | In                February 2006, the FASB issued Statement No. 155, “Accounting for Certain                Hybrid Financial Instruments - an amendment to FASB Statements No.                133 and                140” (FAS 155). FAS 155 requires entities to evaluate and identify whether                interests in securitized financial assets are freestanding derivatives,                hybrid financial instruments that contain an embedded derivative                requiring                bifurcation, or hybrid financial instruments that contain embedded                derivatives that do not require bifurcation. FAS 155 also permits                fair                value measurement for any hybrid financial instrument that contains                an                embedded derivative that otherwise would require bifurcation. This                statement is effective for financial instruments acquired or issued                by the                Company on or after January 1, 2007. The Company does not believe                the                adoption of FAS 155 will have a material impact on its results of                operations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **2.** | **Mergers                and Acquisitions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | On                December 5, 2005, the Company completed the acquisition of Palm Beach                County Bank (PBCB), based in West Palm Beach, Florida. PBCB was a                privately held bank with approximately $370.0 million in assets and                seven                retail stores. The Company issued approximately 3.3 million shares                of                common stock in exchange for the outstanding PBCB shares. The purchase                price was approximately $110.0 million based on the value of common                stock                exchanged. In connection with the acquisition, the Company recorded                $90.9                million of goodwill and $6.0 million of core deposit intangible.                The core                deposit intangible is being amortized over ten years, the estimated                useful                life, on a straight-line basis. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | On                February 1, 2006, the Company completed the acquisition of eMoney                Advisors, Inc. (eMoney), a provider of web-enabled wealth and financial                planning solutions. The Company issued approximately 900,000 shares                of                common stock in exchange for the outstanding eMoney shares. In connection                with the acquisition, the Company recorded $25.5 million of goodwill                and                $8.1 million of other intangible assets, which are being amortized                over                estimated useful lives of seven years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
| **3.** | **Investment****Securities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | A                summary of the amortized cost and market value of securities available                for                sale and securities held to maturity (in thousands) at December 31,                2006                and 2005 follows: |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

|                                                                                 |                        |
|--------------------------------------------------------------------------------------|-----------------------------|
|                                                                                 | December                31, |
|                                                                                 | **2006**                    | 2005 |
|                                                                                 | **Amortized****Cost**       | **Gross****Unrealized****Gains** | **Gross****Unrealized                Losses** |  **Market****Value** |  AmortizedCost | GrossUnrealizedGains | GrossUnrealizedLosses |  Market                Value |
| U.S.                Government agency and                mortgage-backed obligations |   **$11,098,131** |   **$16,047** |   **$(129,931)** |   **$10,984,247** |   $9,529,645 |   $5,779 |   $(112,946) |   $9,422,478 |
| Obligations                of state andpolitical                subdivisions         |  **54,517**            |  **229** |  **(1)** |  **54,745** |  59,517 |  41 |  (431) |  59,127 |
| Equity                securities                                                     | **9,679**                   | **9,392** |   | **19,071** | 9,679 | 13,093 |   | 22,772 |
| Other                                                                                | **40,221**                  |   | **(171)** | **40,050** | 14,330 | 116 | (2) | 14,444 |
| Securities                available for                sale                          |  **$11,202,548**       |  **$25,668** |  **$(130,103)** |  **$11,098,113** |  $9,613,171 |  $19,029 |  $(113,379) |  $9,518,821 |
| U.S.                Government agency and                mortgage-backed obligations |   **$14,205,534** |   **$14,843** |   **$(283,519)** |   **$13,936,858** |   $12,415,587 |   $5,191 |   $(252,231) |   $12,168,547 |
| Obligations                of state andpolitical                subdivisions         |  **554,189**           |  **1,881** |  **(422)** |  **555,648** |  490,257 |  1,216 |  (988) |  490,485 |
| Other                                                                                | **125,259**                 |   |   | **125,259** | 99,520 |   |   | 99,520 |
| Securities                held to maturity                                           |  **$14,884,982**       |  **$16,724** |  **$(283,941)** |  **$14,617,765** |  $13,005,364 |  $6,407 |  $(253,219) |  $12,758,552 |

|   | The                Company’s investment portfolio consists primarily of U.S. Government                agency and mortgage-backed obligations. These securities have little,                if                any, credit risk since they are either backed by the full faith and                credit                of the U.S. Government, or are guaranteed by an agency of the U.S.                Government, or are AAA rated. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Notes to Consolidated Financial      Statements**

|   | The                amortized cost and estimated market value of investment securities                (in                thousands) at December 31, 2006, by contractual maturity are shown                below.                Actual maturities will differ from contractual maturities because                obligors                have the right to repay obligations without prepayment                penalties. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                  |   |                                  |       |                                |   |
|-------------------------------------------------------|--------|---------------------------------------|------------|-------------------------------------|--------|
|                                                  |   | **Available                for Sale** |       | **Held                to Maturity** |   |
|                                                  |   | **Amortized****Cost**                 |       | **Market****Value**                 |   | **Amortized****Cost** |   | **Market****Value** |   |
| Due                in one year or less                |   | $                                     | 35,670     |                                | $      | 35,670 |   | $ | 559,400 |   | $ | 559,334 |   |
| Due                after one year through five years  |   |                                  | 206,275    |                                |   | 205,101 |   |   | 491,361 |   |   | 475,942 |   |
| Due                after five years through ten years |   |                                  | 465,611    |                                |   | 461,503 |   |   | 1,033,730 |   |   | 1,023,705 |   |
| Due                after ten years                    |   |                                  | 100,727    |                                |   | 100,134 |   |   | 126,626 |   |   | 126,812 |   |
| Mortgage-backed                securities             |   |                                  | 10,384,586 |                                |   | 10,276,634 |   |   | 12,673,865 |   |   | 12,431,972 |   |
| Equity                securities                      |   |                                  | 9,679      |                                |   | 19,071 |   |   |   |   |   |   |   |
|                                                  |   | $                                     | 11,202,548 |                                | $      | 11,098,113 |   | $ | 14,884,982 |   | $ | 14,617,765 |   |

|   | Proceeds                from sales of securities available for sale during 2006, 2005 and                2004                were $418.7 million, $3.7 billion and $2.1 billion, respectively.                Gross                gains of $2.7 million, $12.5 million and $16.7 million were realized                on                the sales in 2006, 2005, and 2004, respectively, and gross losses                of $0,                $26.6 million and $14.1 million were realized in 2006, 2005 and 2004,                respectively.                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | During                the fourth quarter of 2005, the Company, as a protective measure                against                further net interest margin compression due to the flat yield curve,                repositioned a portion of its investment portfolio by selling fixed                rate                securities and purchasing approximately $1.5 billion of floating                rate                securities. In order to complete the repositioning, the Company incurred                an after-tax charge of approximately $17.0 million, or $.09 per share,                during the fourth quarter of 2005. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | At                December 31, 2006 and 2005, investment securities with a carrying                value of                $9.2 billion and $7.8 billion, respectively, were pledged to secure                deposits of public funds.                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The                unrealized losses and related fair value of investments with unrealized                losses less than 12 months and those with unrealized losses 12 months                or                longer (in thousands) as of December 31, 2006 are shown                below.                                                                                                                                                                                                                                                                                                                                               |

|                                                                                  |                                   |                                 |                                |                                 |                                |
|---------------------------------------------------------------------------------------|----------------------------------------|--------------------------------------|-------------------------------------|--------------------------------------|-------------------------------------|
|                                                                                  | **Less                than 12 months** | **12                months or more** | **Totals**                          |
|                                                                                  |  **Fair                Value**    | **Unrealized                Losses** |  **Fair                Value** | **Unrealized                Losses** |  **Fair                Value** | **Unrealized                Losses** |
| **Available                for sale:**                                                |                                   |                                 |                                |                                 |                                |   |
| U.S.                Government agency and mortgage- backed                obligations |  $1,561,310                       |  $7,200                         |  $6,312,710                    |  $122,731                       |  $7,874,020                    |  $129,931 |
| Obligations                of state and political subdivisions/other                  |  27,848                           |  152                            |  1,439                         |  21                             |  29,287                        |  173 |
| **Securities                available** **for                sale**              | $1,589,158                             | $7,352                               | $6,314,149                          | $122,752                             | $7,903,307                          | $130,104 |
|                                                                                  |                                   |                                 |                                |                                 |                                |   |
| **Held                to maturity:**                                                  |                                   |                                 |                                |                                 |                                |   |
| U.S.                Government agency and mortgage- backed                obligations |  $2,068,128                       |  $28,430                        |  $9,563,628                    |  $255,089                       |  $11,631,756                   |  $283,519 |
| Obligations                of state and politicalsubdivisions/other                   |  180,371                          |  150                            |  9,955                         |  272                            |  190,326                       |  422 |
| **Securities                held to maturity**                                        | $2,248,499                             | $28,580                              | $9,573,583                          | $255,361                             | $11,822,082                         | $283,941 |

|   | As                described in Note 1 - Significant Accounting Policies, the Company                reviews                the investment securities portfolio to determine if other-than-temporary                impairment has occurred. Management does not believe any individual                unrealized loss as of December 31, 2006 represents an other-than-temporary                impairment. The unrealized losses on these securities are caused                by the                changes in general market interest rates and not by material changes                in                the credit characteristics of the investment securities portfolio.                The                duration and average life of securities with unrealized losses at                December                31, 2006 was 3.4 years and 5.3 years, respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | During                2006, no securities were sold which had unrealized losses at December                31,                2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

**Notes to Consolidated Financial Statements**
| **4.** | **Loans** | The                following is a summary of loans outstanding (in thousands) at December                31,                2006 and 2005: |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   |                          |           |
|-----------------------------------------------------|--------|-------------------------------|----------------|
|                                                |   | December                  31, |           |
|                                                |   | **2006**                      |           | 2005 |   |
| Commercial:                                         |   |                          |           |   |   |
| Term                                                |   | **$**                         | **2,392,889**  |   | $ | 1,781,148 |   |
| Line                  of credit                     |   |                          | **1,843,545**  |   |   | 1,517,347 |   |
|                                                |   |                          | **4,236,434**  |   |   | 3,298,495 |   |
|                                                |   |                          |           |   |   |   |   |
| Owner-occupied                                      |   |                          | **2,845,791**  |   |   | 2,402,300 |   |
|                                                |   |                          |           |   |   |   |   |
| Consumer:                                           |   |                          |           |   |   |   |   |
| Mortgages                  (1-4 family residential) |   |                          | **2,235,247**  |   |   | 2,000,309 |   |
| Installment                                         |   |                          | **287,151**    |   |   | 211,332 |   |
| Home                  equity                        |   |                          | **2,958,893**  |   |   | 2,353,581 |   |
| Credit                  lines                       |   |                          | **137,429**    |   |   | 100,431 |   |
|                                                |   |                          | **5,618,720**  |   |   | 4,665,653 |   |
| Commercial                  real estate:            |   |                          |           |   |   |   |   |
| Investor                  developer                 |   |                          | **2,625,628**  |   |   | 2,001,674 |   |
| Construction                                        |   |                          | **280,476**    |   |   | 290,530 |   |
|                                                |   |                          | **2,906,104**  |   |   | 2,292,204 |   |
|                                                |   | **$**                         | **15,607,049** |   | $ | 12,658,652 |   |

| **5.** | **Allowance****for                Credit****Losses** | The                following is an analysis of changes in the allowance for credit losses                (in                thousands) for 2006, 2005 and 2004: |
|--------|------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   |                                     |        |   |   |    |   |
|----------------------------------------------------------------|--------|------------------------------------------|-------------|--------|--------|---------|--------|
|                                                           |   | Year                  Ended December 31, |        |
|                                                           |   | **2006**                                 |        | 2005   |   | 2004    |   |
|                                                           |   |                                     |        |   |   |    |   |
| Balance,                  January 1                            |   | **$**                                    | **141,464** |   | $      | 135,620 |   | $ | 112,057 |   |
| Provision                  charged to operating expense        |   |                                     | **33,700**  |   |   | 19,150  |   |   | 39,238 |   |
| Recoveries                  of loans previously charged off    |   |                                     | **7,976**   |   |   | 5,192   |   |   | 2,175 |   |
| Loan                  charge-offs                              |   |                                     | **(22,871** | **)**  |   | (20,992 | )      |   | (17,850 | ) |
| Allowance                  for credit losses acquired bank     |   |                                     |        |   |   | 2,494   |   |   |   |   |
| Balance,                  December 31                          |   | **$**                                    | **160,269** |   | $      | 141,464 |   | $ | 135,620 |   |
| Amount                  reclassified as allowance for unfunded |   |                                     |        |   |   |    |   |   |   |   |
| credit                  commitments                            |   |                                     | **8,216**   |   |   | 7,800   |   |   |   |   |
| Allowance                  for loan and lease losses           |   | **$**                                    | **152,053** |   | $      | 133,664 |   | $ | 135,620 |   |

|   |                                                                                                                          | During                2005, the Company reclassified the allowance related to unfunded                credit                commitments out of the allowance for loan and lease losses to other                liabilities. Prior to 2005, the Company included the portion of the                allowance related to unfunded credit commitments in its allowance                for loan                and lease losses. Because of this reclassification, the Company now                refers                to its allowance for loan and lease losses and its liability for                unfunded                credit commitments as the allowance for credit losses.                                                                                                                                                                                                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **6.** | **Non-****Performing****Loans                and****Other                Real****Estate                / Fore-closed Assets** | Total                non-performing loans (non-accrual and restructured loans) were $50.6                million and $34.8 million at December 31, 2006 and 2005, respectively.                Non-performing loans of $4.4 million and $748 thousand were transferred                to                other real estate/foreclosed assets during 2006 and 2005, respectively.                Other real estate/foreclosed assets ($2.6 million and $279 thousand                at                December 31, 2006 and 2005, respectively) are included in other assets.                Non-performing assets (non-performing loans and other real estate,                excluding loans past due 90 days or more and still accruing interest)                at                December 31, 2006 were $53.2 million or .12% of total assets, as                compared                to $35.1 million or .09% of total assets at December 31,                2005. |
|   |                                                                                                                          |

----

**Notes to Consolidated Financial Statements**
|   | At                December 31, 2006 and 2005, the recorded investment in loans considered                to                be impaired under FASB Statement No. 114 "Accounting by Creditors                for                Impairment of a Loan" totaled $34.7 million and $26.0 million,                respectively, all of which are included in non-performing loans.                The                reserve for loan and lease losses related to impaired loans totaled                approximately $4.5 million and $6.6 million at December 31, 2006                and 2005,                respectively. As permitted, all homogenous smaller balance consumer,                commercial and residential mortgage loans are excluded from individual                review for impairment. The majority of impaired loans were measured                using                the fair market value of collateral. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Impaired                loans averaged approximately $30.2 million and $25.6 million during                2006                and 2005, respectively. Interest income of approximately $2.8 million,                $2.8 million, and $2.9 million would have been recorded on non-performing                loans (including impaired loans) in accordance with their original                terms                in 2006, 2005, and 2004, respectively. Actual interest income recorded                on                these loans amounted to $1.5 million, $809 thousand, and $1.1 million                during 2006, 2005, and 2004, respectively.                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| **7.** | **Bank****Premises,****Equipment,****and                Leases**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | A                summary of bank premises and equipment (in thousands) is as                follows: |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |

|                                                       |   |                          |          |   |   |
|------------------------------------------------------------|--------|-------------------------------|---------------|--------|--------|
|                                                       |   | December                  31, |          |
|                                                       |   | **2006**                      |          | 2005   |   |
| Land                                                       |   | **$**                         | **370,974**   |   | $      | 297,644 |   |
| Buildings                                                  |   |                          | **750,551**   |   |   | 570,905 |   |
| Leasehold                  improvements                    |   |                          | **260,116**   |   |   | 207,193 |   |
| Furniture,                  fixtures and equipment         |   |                          | **691,551**   |   |   | 541,106 |   |
| Leased                  property under capital leases      |   |                          | **124**       |   |   | 124 |   |
|                                                       |   |                          | **2,073,316** |   |   | 1,616,972 |   |
| Accumulated                  depreciation and amortization |   |                          | **(571,062**  | **)**  |   | (437,247 | ) |
|                                                       |   |                          | **1,502,254** |   |   | 1,179,725 |   |
| Premises                  and equipment in progress        |   |                          | **251,416**   |   |   | 199,061 |   |
|                                                       |   | **$**                         | **1,753,670** |   | $      | 1,378,786 |   |
|                                                       |   |                          |          |   |   |   |   |

|   | Total                rent expense charged to operations under operating leases was                approximately $73.1 million in 2006, $60.0 million in 2005, and $40.1                million in 2004. Total depreciation expense charged to operations                was                $137.4 million, $112.5 million and $91.9 million in 2006, 2005 and                2004,                respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                future minimum rental commitments, by year, under the non-cancelable                leases, including escalation clauses, are as follows (in thousands)                at                December 31, 2006: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   |      |      |
|-------------------------------------------|--------|-----------|-----------|
|                                      |   | Operating |      |
| 2007                                      |   | $         | 72,688    |   |
| 2008                                      |   |      | 73,646    |   |
| 2009                                      |   |      | 72,620    |   |
| 2010                                      |   |      | 73,170    |   |
| 2011                                      |   |      | 74,786    |   |
| Later                years                |   |      | 796,488   |   |
| Net                minimum lease payments |   | $         | 1,163,398 |   |

| **8.** | **Deposits**                   | The                aggregate amount of time certificates of deposits in denominations                of                $100,000 or more was $2.6 billion and $2.1 billion at December 31,                2006                and 2005, respectively.                                                                                                 |
|--------|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                           |                                                                                                                                                                                                                                                                                                                                                 |
| **9.** | **Other****Borrowed****Money** | Other                borrowed money consists primarily of securities sold under agreements                to                repurchase, federal funds purchased, and lines of credit. The following                table represents information for other borrowed money (in thousands)                at                December 31, 2006 and 2005: |

----

**Notes to Consolidated Financial Statements**
|                                                                         |   |                        |          |
|------------------------------------------------------------------------------|--------|-----------------------------|---------------|
|                                                                         |   | December                31, |          |
|                                                                         |   | **2006**                    |          | 2005 |   |
|                                                                         |   |  **Amount**            |          | **Average****Rate** |   |  Amount |   | Average                Rate |   |
| Securities                sold under agreements                to repurchase |   | **$**                       | **662,404**   |   |   | **5.29** | **%** | $ | 981,443 |   |   | 4.31 | % |
| Federal                funds purchased                                       |   |                        | **115,000**   |   |   | **5.28** | **%** |   | 125,000 |   |   | 4.36 | % |
| Total                                                                        |   | **$**                       | **777,404**   |   |   | **5.29** | **%** | $ | 1,106,443 |   |   | 4.32 | % |
|                                                                         |   |                        |          |   |   |   |   |   |   |   |   |   |   |
| Average                amount outstanding                                    |   | **$**                       | **1,186,068** |   |   | **4.90** | **%** | $ | 826,400 |   |   | 3.44 | % |
| Maximum                month-end balance                                     |   |                        | **2,568,445** |   |   |   |   |   | 1,244,059 |   |   |   |   |

|   | As                of December 31, 2006, the Company had a line of credit of $1.6 billion                from the Federal Home Loan Bank of Pittsburgh, a line of credit of                $121.3                million from the Federal Home Loan Bank of New York, and a $125.0                million                line of credit from a group of other banks, all of which was available. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10.** | **Long-Term****Debt** | Effective                September 14, 2005, the Company redeemed all $200.0 million of its                5.95%                Convertible Trust Capital Securities issued through Commerce Capital                Trust                II, a Delaware business trust, on March 11, 2002. Each outstanding                security was converted into 1.8956 shares of the Company’s common stock,                resulting in the issuance of approximately 7.6 million shares. |
|---------|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                  |
| **11.** | **Income****Taxes**   | The                provision for income taxes consists of the following (in                thousands):                                                                                                                                                                                                                                                                                                                                                                                  |

|      |   |                            |        |
|-----------|--------|---------------------------------|-------------|
|      |   | **December                31,** |        |
|      |   | **2006**                        |        | 2005 |   | 2004 |   |
| Current:  |   |                            |        |   |   |   |   |
| Federal   |   | **$**                           | **167,106** |   | $ | 156,805 |   | $ | 118,301 |   |
| State     |   |                            | **33,195**  |   |   | 8,714 |   |   | 7,116 |   |
| Deferred: |   |                            |        |   |   |   |   |   |   |   |
| Federal   |   |                            | **(23,414** | **)** |   | (17,612 | ) |   | 16,005 |   |
|      |   | **$**                           | **176,887** |   | $ | 147,907 |   | $ | 141,422 |   |

|   | The                above provision includes income tax expense of $900,000 related to                net                investment security gains recorded in 2006, an income tax benefit                of $4.9                million related to net investment security losses recorded in 2005                and                income tax expense of $900,000 related to net investment security                gains                recorded in 2004. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As                a result of an analysis of the tax structures of certain wholly-owned                subsidiaries, the Company recorded an additional estimated state                income                tax liability of $24.4 million during the fourth quarter of 2006                in                anticipation of potential settlements with various taxing                authorities.  The final settlement of this matter may be                materially different from this estimate.  The impact on net income,                net of federal tax benefits, is $15.8 million. The impact on the                Company’s                effective tax rate is presented in the table below.  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The                provision for income taxes differs from the expected statutory provision                as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|                                                       |   |                            |     |
|------------------------------------------------------------|--------|---------------------------------|----------|
|                                                       |   | **December                31,** |     |
|                                                       |   | **2006**                        |     | 2005 |   | 2004 |   |
| Expected                provision at statutory rate:       |   |                            | **35.0** | **%** |   | 35.0 | % |   | 35.0 | % |
| Difference                resulting from:                  |   |                            |     |   |   |   |   |   |   |   |
| Tax-exempt                interest on loans                |   |                            | **(1.2** | **)** |   | (1.3 | ) |   | (1.2 | ) |
| Tax-exempt                interest on securities           |   |                            | **(1.1** | **)** |   | (1.0 | ) |   | (1.4 | ) |
| State                income taxes (net of federal benefit) |   |                            | **4.5**  |   |   | 1.3 |   |   | 1.1 |   |
| Other                                                      |   |                            | **(0.1** | **)** |   | 0.3 |   |   | 0.6 |   |
|                                                       |   |                            | **37.1** | **%** |   | 34.3 | % |   | 34.1 | % |

|   | The                amounts payable for federal income taxes for 2006 and 2005 were reduced                by                approximately $26.3 million and $14.6 million, respectively, due                to the                exercise of stock options.                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                         |
|   | Deferred                income taxes reflect the net tax effects of temporary differences                between                the carrying amounts of assets and liabilities for financial reporting                purposes and the amounts used for income tax purposes. |
|   |                                                                                                                                                                                                                                                                         |

----

**Notes to Consolidated Financial Statements**
|   | The                significant components of the Company's deferred tax liabilities                and                assets as of December 31, 2006 and 2005 are as follows (in                thousands):  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                |   |                            |    |
|---------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                |   | **December                31,** |    |
|                                                                |   | **2006**                        |    | 2005 |   |
| Deferred                tax assets:                                 |   |                            |    |   |   |
| Loan                loss reserves                                   |   | $                               | 56,094  |   | $ | 48,640 |   |
| Intangibles                                                         |   |                            |    |   |   | 1,832 |   |
| Deferred                rents                                       |   |                            | 17,010  |   |   | 11,460 |   |
| Net                operating loss carryforwards                     |   |                            | 6,384   |   |   |   |   |
| Fair                value adjustment, available for sale securities |   |                            | 39,195  |   |   | 35,181 |   |
| Federal                benefit on state taxes                       |   |                            | 8,527   |   |   |   |   |
| Other                reserves                                       |   |                            | 4,481   |   |   | 3,024 |   |
| Total                deferred tax assets                            |   |                            | 131,691 |   |   | 100,137 |   |
| Deferred                tax liabilities:                            |   |                            |    |   |   |   |   |
| Depreciation                                                        |   |                            | (47,388 | ) |   | (51,996 | ) |
| Intangibles                                                         |   |                            | (2,711  | ) |   |   |   |
| Other                                                               |   |                            | (10,249 | ) |   | (9,028 | ) |
| Total                deferred tax liabilities                       |   |                            | (60,348 | ) |   | (61,024 | ) |
| Net                deferred assets (liabilities)                    |   | $                               | 71,343  |   | $ | 39,113 |   |

|    | No                valuation allowance was recognized for the deferred tax assets at                December                31, 2006 or 2005.                                                                                                                                                                                                                                                                                                                          |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| **12.** | **Commitments,****Letters                of****Credit                and****Guarantees**                                                                                                                                                                                                                                                                                                                                                                              | In                the normal course of business, there are various outstanding commitments                to extend credit, such as letters of credit, which are not reflected                in                the accompanying consolidated financial statements. These arrangements                have credit risk essentially the same as that involved in extending                loans                to customers and are subject to the Company's normal credit policies.                Collateral is obtained based on management's credit assessment of                the                borrower. At December 31, 2006, the Company had outstanding standby                letters of credit in the amount of $1.1 billion. Fees associated                with                standby letters of credit have been deferred and recorded in other                liabilities on the Consolidated Balance Sheets. These fees are immaterial                to the Company’s consolidated financial statements at December 31,                2006. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | In                addition, the Company is committed as of December 31, 2006 to advance                $670.9 million on construction loans, $1.2 billion on home equity                lines of                credit and $3.3 billion on other lines of credit. All other commitments                total approximately $849.0 million. The Company does not anticipate                any                material losses as a result of these transactions.  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | The                Company has commitments to fund LIHTC partnerships, private venture                capital funds and SBICs that total approximately $43.7 million at                December                31, 2006.                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **13.** | **Common****Stock**                                                                                                                                                                                                                                                                                                                                                                                                                                                   | At                December 31, 2006, the Company's common stock had a par value of                $1.00.                The Company is authorized to issue 500,000,000 shares as of this                date. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | On                December 20, 2006, the Board of Directors declared a cash dividend                of                $0.13 for each share of common stock outstanding, payable January                19, 2007                to stockholders of record on January 5, 2007.                                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | On                February 15, 2005, the Board of Directors declared a two-for-one                stock                split in the form of a 100% stock dividend, distributed on March                7, 2005                to stockholders of record on February 25, 2005.                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

----

**Notes to Consolidated Financial Statements**
| **14.** | **Related                Party Transactions** | **Loans** Loans                to executive officers and directors of the Company and its subsidiaries,                and companies with which they are associated, are made in the ordinary                course of business and on substantially the same terms as comparable                unrelated transactions. The following table summarizes the Company’s                related party loans (in millions) at December 31, 2006 and                2005: |
|---------|-----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                              |   |                        |     |
|-----------------------------------|--------|-----------------------------|----------|
|                              |   | December                31, |     |
|                              |   | **2006**                    |     | 2005 |   |
|                              |   |                        |     |   |   |
| Executive                officers |   | **$**                       | **3.8**  |   | $ | 2.2 |   |
| Bancorp                directors  |   |                        | **7.2**  |   |   | 4.4 |   |
|                              |   | **$**                       | **11.0** |   | $ | 6.6 |   |

|   |   | In                  addition, the Company had loans to directors of its subsidiary                  banks                  totaling $4.4 million and $4.6 million at December 31, 2006 and                  2005,                  respectively. **Leases** The                Company has nineteen operating leases with related parties, from                2002 and                prior, for land and bank premises. Rents paid under these agreements                are                approved by the independent members of the Board of Directors and                supported by independent appraisals. The aggregate annual rental                under                these leases was approximately $1.9 million, $1.9 million, and $1.7                million in 2006, 2005, and 2004, respectively. These leases expire                periodically beginning in 2008 but are renewable through                2042. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | **Other                Services** The                Company has obtained architectural design and facilities management                services for over 25 years from a business owned by the spouse of                the                Chairman of the Board of the Company. The Company spent $9.2 million,                $7.5                million, and $6.5 million in 2006, 2005, and 2004, respectively,                for such                services and related costs.  The                Company conducts business with related parties that perform legal                services                and provide facilities for the purpose of business development.                Disbursements aggregated $1.2 million, $1.4 million, and $1.9 million,                in                2006, 2005, and 2004, respectively, for these services.                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

**Notes to Consolidated Financial Statements**
| **15.** | **Earnings****Per                Share** | The                calculation of earnings per share follows (in thousands, except for                per                share amounts): |
|---------|------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                  |   |                                   |        |
|---------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|
|                                                                                  |   | Year                Ended December 31, |        |
|                                                                                  |   | **2006**                               |        | 2005 |   | 2004 |   |
| **Basic:**                                                                            |   |                                   |        |   |   |   |   |
| Net                income applicable to common stock                                  |   | **$**                                  | **299,313** |   | $ | 282,939 |   | $ | 273,418 |   |
| Average                common shares outstanding                                      |   |                                   | **184,919** |   |   | 165,974 |   |   | 156,625 |   |
| Net                income per common share                                            |   | **$**                                  | **1.62**    |   | $ | 1.70 |   | $ | 1.74 |   |
|                                                                                  |   |                                   |        |   |   |   |   |   |   |   |
| **Diluted:**                                                                          |   |                                   |        |   |   |   |   |   |   |   |
| Net                income applicable to common stockon                a diluted basis |   | **$**                                  | **299,313** |   | $ | 282,939 |   | $ | 273,418 |   |
| Add:                Interest expense on Convertible Trust Capital Securities          |   |                                   |        |   |   | 5,446 |   |   | 7,852 |   |
|                                                                                  |   | **$**                                  | **299,313** |   | $ | 288,385 |   | $ | 281,270 |   |
|                                                                                  |   |                                   |        |   |   |   |   |   |   |   |
| Average                common shares outstanding                                      |   |                                   | **184,919** |   |   | 165,974 |   |   | 156,625 |   |
| Additional                shares considered in diluted                                |   |                                   |        |   |   |   |   |   |   |   |
| computation                assuming:                                                  |   |                                   |        |   |   |   |   |   |   |   |
| Exercise                of stock options                                              |   |                                   | **8,755**   |   |   | 7,843 |   |   | 8,396 |   |
| Conversion                of trust capital securities                                 |   |                                   |        |   |   | 5,318 |   |   | 7,582 |   |
| Average                common and common equivalentshares                outstanding  |   |                                   | **193,674** |   |   | 179,135 |   |   | 172,603 |   |
| Net                income per common and common equivalent                share       |   | **$**                                  | **1.55**    |   | $  | 1.61 |   | $ | 1.63 |   |

| **16.** | **Stock-Based                Compensation** | In                2004, the Board of Directors adopted and Company shareholders approved                the                2004 Employee Stock Option Plan (the 2004 Plan) for the officers                and                employees of the Company and its subsidiaries. The 2004 Plan authorizes                the issuance of up to 30,000,000 shares of common stock (as adjusted                for                all stock splits and stock dividends) upon the exercise of options.                As of                December 31, 2006, options to purchase 8,016,143 shares of common                stock                have been issued under the 2004 Plan. In addition to the 2004 Plan,                the                Company has a plan for its non-employee directors. The option price                for                options issued under the Company’s plans must be at least equal to 100% of                the fair market value of the Company's common stock as of the date                the                option is granted. All options granted will vest evenly over four                years                from the date of grant.                The                options expire not later than 10 years from the date of grant. In                addition, there are options outstanding from prior stock option plans                of                the Company, which were granted under similar terms. No additional                options                may be issued under these prior plans.                                                                                                                     |
|---------|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                        | Prior                to January 1, 2006, the Company accounted for its stock option plans                in                accordance with APB Opinion No. 25, “Accounting for Stock Issued to                Employees” (APB 25) and related Interpretations. Typically, stock-based                compensation expense was not recognized in the Consolidated Statements                of                Income as all options granted under the Company’s option plans had an                exercise price equal to the market value on the date of grant. Effective                January 1, 2006, the Company adopted FASB Statement No. 123 (revised                2004), “Share-Based Payment” (FAS 123R), which is a revision of FASB                Statement No. 123, “Accounting for Stock-Based Compensation” (FAS 123).                FAS 123R was adopted using the modified prospective method. Under                the                modified prospective method, compensation cost for the year ended                December                31, 2006 included (a) compensation cost for all share-based awards                granted                prior to, but not yet vested as of January 1, 2006, based on the                grant                date fair value net of estimated forfeitures, and (b) compensation                cost                for all share-based payments granted subsequent to January 1, 2006,                based                on the grant date fair value net of estimated forfeitures. Results                for                prior periods have not been restated. |
|    |                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                        | As                a result of adopting FAS 123R on January 1, 2006, the Company recorded                compensation expense of approximately $7.4 million during the year                ended                December 31, 2006, which decreased net income per share by $.03.                There was                no material impact to cash flows resulting from the adoption of FAS                123R                as compared to what would have been recorded under APB 25. As of                December                31, 2006, the total remaining unrecognized compensation cost related                to                stock options granted under the Company’s plans was $29.8 million, which                is expected to be recognized over a weighted-average vesting period                of 3.2                years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

**Notes to Consolidated Financial Statements**
|   |   | The                Company uses the Black-Scholes option pricing model to estimate an                option’s fair value. The fair value of options included in the                compensation charge recorded in 2006 was estimated using the following                assumptions: a risk-free interest rates of 4.68%, a dividend yield                of                1.32%, an expected volatility of 25.4%, and a weighted average expected                life of 4.63 years. The risk-free interest rate is based on the 5-year                U.S. Treasury yield in effect at the time of grant. The dividend                yields                reflect the Company’s actual dividend yield at the date of grant. Expected                volatility is based on the historical volatility of the Company’s stock                over the 5-year period prior to the grant date. The weighted average                expected lives represents the weighted average period of time that                options                granted are expected to be outstanding giving consideration to vesting                schedules and the Company’s historical exercise patterns. All options vest                evenly over four years from the date of grant and expire 10 years                from the                date of grant. Compensation cost is recognized, net of estimated                forfeitures, over the vesting period of the options on a straight-line                basis. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | The                Black-Scholes option valuation model was developed for use in estimating                the fair value of traded options which have no vesting restrictions                and                are fully transferable. In addition, option valuation models require                the                input of highly subjective assumptions including the expected stock                price                volatility. Because the Company’s stock options have characteristics                significantly different from those of traded options, and because                changes                in the subjective input assumptions can materially affect the fair                value                estimate, in management’s opinion, the existing models do not necessarily                provide a reliable single measure of the fair value of its stock                options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | Through                December 31, 2005, the Company accounted for share-based payments                to                employees using APB 25’s intrinsic value method and therefore did not                typically recognize compensation expense for employee stock options.                Had                the Company adopted FAS 123R in prior periods, the impact would have                approximated the impact of FAS 123 as described in the disclosure                of pro                forma net income and pro forma net income per share below (in thousands,                except per share amounts):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|                                                          |   |                                   |    |
|---------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                          |   | Year                Ended December 31, |    |
|                                                          |   | 2005                                   |    | 2004 |   |
| Reported                net income                            |   | $                                      | 282,939 |   | $ | 273,418 |   |
| Less:                Stock option compensation expense        |   |                                   |    |   |   |   |   |
| determined                under fair value method, net of tax |   |                                   | (55,541 | ) |   | (11,849 | ) |
|                                                          |   |                                   |    |   |   |   |   |
| Pro                forma net income, basic                    |   |                                   | 227,398 |   |   | 261,569 |   |
|                                                          |   |                                   |    |   |   |   |   |
| Add:                Interest expense on Convertible Trust     |   |                                   |    |   |   |   |   |
| Capital                Securities, net of tax                 |   |                                   | 5,446   |   |   | 7,852 |   |
|                                                          |   |                                   |    |   |   |   |   |
| Pro                forma net income, diluted                  |   | $                                      | 232,844 |   | $ | 269,421 |   |
|                                                          |   |                                   |    |   |   |   |   |
| Reported                net income per share:                 |   |                                   |    |   |   |   |   |
| Basic                                                         |   | $                                      | 1.70    |   | $ | 1.74 |   |
| Diluted                                                       |   |                                   | 1.61    |   |   | 1.63 |   |
|                                                          |   |                                   |    |   |   |   |   |
| Pro                forma net income per share:                |   |                                   |    |   |   |   |   |
| Basic                                                         |   | $                                      | 1.37    |   | $ | 1.67 |   |
| Diluted                                                       |   |                                   | 1.30    |   |   | 1.56 |   |

|   |   | On                December 8, 2005, the Company’s board of directors approved the                acceleration of vesting of all outstanding unvested stock options                awarded                prior to July 1, 2005 to employees and directors. This acceleration                was                effective as of December 16, 2005. As a result of the acceleration,                options to purchase approximately 10.6 million shares of common stock                became immediately exercisable. The future unrecognized compensation                expense related to the accelerated options, approximately $41.0 million,                net of tax, is reflected in the 2005 pro forma amounts above. The                purpose                of the acceleration was to eliminate this future compensation expense                that                otherwise would have been recognized under FAS 123R. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Notes to Consolidated Financial      Statements**

|                                            |   |                              |           |                                           |   |
|-------------------------------------------------|--------|-----------------------------------|----------------|------------------------------------------------|--------|
|                                            |   | Shares                UnderOption |           | Weighted                Average Exercise Price |   |
| Balance                at January 1, 2004       |   |                              | 23,915,204     |                                           |   | $4.38 |   |
| Options                granted                  |   |                              | 6,112,444      |                                           |   | 29.37 |   |
| Options                exercised                |   |                              | 3,064,024      |                                           |   | 12.39 |   |
| Options                canceled                 |   |                              | 439,488        |                                           |   | 24.92 |   |
| Balance                at December 31, 2004     |   |                              | 26,524,136     |                                           |   | 17.89 |   |
| Options                granted                  |   |                              | 3,807,829      |                                           |   | 31.17 |   |
| Options                exercised                |   |                              | 2,869,666      |                                           |   | 14.25 |   |
| Options                canceled                 |   |                              | 568,223        |                                           |   | 27.77 |   |
| Balance                at December 31, 2005     |   |                              | 26,894,076     |                                           |   | 19.88 |   |
| **Options                granted**              |   |                              | **4,260,062**  |                                           |   | **36.48** |   |
| **Options                exercised**            |   |                              | **4,556,325**  |                                           |   | **16.80** |   |
| **Options                canceled**             |   |                              | **224,377**    |                                           |   | **34.55** |   |
| **Balance                at December 31, 2006** |   |                              | **26,373,436** |                                           |   | **22.91** |   |

|   | The                weighted-average fair value of options granted during the year ended                December 31, 2006 was $9.61.                                                                                                                                                                                                                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Cash                received from option exercises for the year ended December 31, 2006                was                approximately $70.4 million. The intrinsic value of stock options                exercised during the year ended December 31, 2006 was approximately                $85.9                million. The aggregate intrinsic value for stock options, both outstanding                and exercisable, at December 31, 2006 was $330.5                million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Additional                information concerning options outstanding as of December 31, 2006                is as                follows:                                                                                                                                                                                                                                                                                                                                             |

|                                                    |   |                                   |       |                                                                 |   |
|---------------------------------------------------------|--------|----------------------------------------|------------|----------------------------------------------------------------------|--------|
|                                                    |   | **Options                Outstanding** |       | **Options                Exercisable**                               |   |
|   **Range                of exercise prices** |   |  **Number****Outstanding**        |       | **Weighted-Average****Remaining****Contractual                Life** |   | **Weighted-****Average****Exercise                Price** |   | **Exercisable****as                of****12/31/2006** |   | **Weighted-****Average****Exercise                Price** |   |
| $3.44                to $5.00                           |   |                                   | 1,984      |                                                                 |   | 0.1 |   | $ | 4.62 |   |   | 1,984 |   | $ | 4.62 |   |
| $5.01                to $10.00                          |   |                                   | 3,226,293  |                                                                 |   | 2.2 |   |   | 8.95 |   |   | 3,226,293 |   |   | 8.95 |   |
| $10.01                to $17.50                         |   |                                   | 5,262,661  |                                                                 |   | 3.0 |   |   | 13.00 |   |   | 5,262,661 |   |   | 13.00 |   |
| $17.51                to $25.00                         |   |                                   | 6,160,536  |                                                                 |   | 5.7 |   |   | 20.84 |   |   | 6,153,264 |   |   | 20.84 |   |
| $25.01                to $40.12                         |   |                                   | 11,721,962 |                                                                 |   | 8.1 |   |   | 32.30 |   |   | 7,707,135 |   |   | 30.15 |   |

| **17.** | **Benefit****Plans**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | *Employee                401(k) Plan*The                Company has a defined contribution plan under Section 401(k) of the                Internal Revenue Code. The plan allows all eligible employees to                defer a                percentage of their income on a pretax basis through contributions                to the                plan. Under the provisions of the plan, the Company may match a percentage                of the employees' contributions subject to a maximum limit. The charge                to                operations for Company matching contributions was $6.4 million, $5.5                million and $3.3 million for 2006, 2005 and 2004, respectively. As                part of                the 401(k) plan, the Company maintains an Employee Stock Ownership                Plan                (ESOP) component for all eligible employees. As of December 31, 2006,                the                ESOP held 2,690,044 shares of the Company’s common stock, all of which                were allocated to participant accounts. Employer contributions are                determined at the discretion of the Board of Directors. No contribution                expense was recorded for the ESOP in 2006, 2005 or                2004. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | *Supplemental                Executive Retirement Plan*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | Effective                January 1, 2004, the Company’s Board of Directors formalized a                Supplemental Executive Retirement Plan (SERP), which was previously                approved January 1, 1992, for certain designated executives in order                to                provide supplemental retirement income. The SERP is a defined contribution                plan, is unfunded, and contributions are made at the Company’s discretion.                For the years ended December 31, 2006, 2005 and 2004, the Company                expensed                $374,000, $355,000 and $7.2 million, respectively, for the                SERP. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    | *Post-employment                or Post-retirement Benefits*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    | The                Company offers no post-employment or post-retirement                benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

**Notes to Consolidated Financial      Statements**

| **18.** | **Fair****Value                of****Financial****Instruments**                                                                                                                                                                                                                                             | FASB                Statement No. 107, "Disclosures about Fair Value of Financial Instruments"                (FAS 107), requires disclosure of fair value information about financial                instruments, whether or not recognized in the balance sheet, for                which it                is practicable to estimate that value. In cases where quoted market                prices                are not available, fair values are based on estimates using present                value                or other valuation techniques. Those techniques are significantly                affected                by the assumptions used, including the discount rate and estimates                of                future cash flows. In that regard, the derived fair value estimates                cannot                be substantiated by comparison to independent markets and, in many                cases,                could not be realized in immediate settlement of the instrument. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                        |
|    | FAS                107 excludes certain financial instruments and all non-financial                instruments from its disclosure requirements. Accordingly, the aggregate                fair value amounts presented do not represent the underlying value                of the                Company. |
|    |                                                                                                                                                                                                                                                                                                        |
|    | The                following table represents the carrying amounts and fair values of                the                Company's financial instruments at December 31, 2006 and                2005:                                                                                                       |

|                                          |   |                               |           |
|-----------------------------------------------|--------|------------------------------------|----------------|
|                                          |   | **December                31,**    |           |
|                                          |   | **2006**                           |           | 2005 |   |
|                                          |   | **Carrying                Amount** |           | **Fair****Value** |   | Carrying                Amount |   | FairValue |   |
| Financial                assets:              |   |                               |           |   |   |   |   |   |   |
| Cash                and cash equivalents      |   | **$**                              | **1,216,690**  |   | **$** | **1,216,690** |   | $ | 1,296,764 |   | $ | 1,296,764 |   |
| Loans                held for sale            |   |                               | **52,741**     |   |   | **52,741** |   |   | 30,091 |   |   | 30,091 |   |
| Trading                securities             |   |                               | **106,007**    |   |   | **106,007** |   |   | 143,016 |   |   | 143,016 |   |
| Investment                securities          |   |                               | **25,983,095** |   |   | **25,715,877** |   |   | 22,524,185 |   |   | 22,277,373 |   |
| Loans                (net)                    |   |                               | **15,454,996** |   |   | **15,377,817** |   |   | 12,524,988 |   |   | 12,729,831 |   |
|                                          |   |                               |           |   |   |   |   |   |   |   |   |   |   |
| Financial                liabilities:         |   |                               |           |   |   |   |   |   |   |   |   |   |   |
| Deposits                                      |   |                               | **41,288,211** |   |   | **41,334,666** |   |   | 34,726,713 |   |   | 34,740,409 |   |
| Other                borrowed money           |   |                               | **777,404**    |   |   | **777,404** |   |   | 1,106,443 |   |   | 1,106,443 |   |
| Off-balance                sheet instruments: |   |                               |           |   |   |   |   |   |   |   |   |   |   |
| Standby                letters of credit      |   | **$**                              | **2,952**      |   | **$** | **2,952** |   | $ | 2,605 |   | $ | 2,605 |   |
| Commitments                to extend credit   |   |                               |           |   |   | **124** |   |   |   |   |   | 1,283 |   |

|   | Refer                to Note 22 - Derivative Financial Instruments for fair value information                on derivative financial                instruments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                following methods and assumptions were used by the Company in estimating                its fair value disclosures for financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | *Cash                and cash equivalents, loans held for sale and trading securities:*The                carrying amounts reported approximate those assets' fair                value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | *Investment                securities:*Fair                values for investment securities are based on quoted market prices,                where                available. If quoted market prices are not available, fair values                are                based on quoted market prices of comparable                instruments.                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | *Loans:*For                variable-rate loans that reprice frequently and with no significant                change                in credit risk, fair values are based on carrying values. The fair                values                for other loans receivable were estimated using discounted cash flow                analyses, using interest rates currently being offered for loans                with                similar terms to borrowers of similar credit quality. Loans with                significant collectibility concerns were fair valued on a loan-by-loan                basis utilizing a discounted cash flow method. |

----

**Notes to Consolidated Financial      Statements**

|   | *Deposit                liabilities:*The                fair values disclosed for demand deposits (e.g., interest-bearing                and                noninterest-bearing checking, passbook savings, and certain types                of money                market accounts) are, by definition, equal to the amount payable                on demand                at the reporting date (i.e., their carrying amounts). Fair values                for                fixed-rate certificates of deposit are estimated using a discounted                cash                flow calculation that applies interest rates currently being offered                on                certificates of deposit to a schedule of aggregated expected monthly                maturities on time deposits. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | *Other                borrowed money:*The                carrying amounts reported approximate fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | *Off-balance                sheet liabilities:*Off-balance                sheet liabilities of the Company consist of letters of credit, loan                commitments and unfunded lines of credit. Fair values for the Company's                off-balance sheet liabilities are based on fees currently charged                to enter                into similar agreements, taking into account the remaining terms                of the                agreements and the counterparties' credit                standing.                                                                                                                                                                                                                                                                           |

| **19.** | **Quarterly****Financial****Data****(unaudited)** | The                following represents summarized unaudited quarterly financial data                of the                Company which, in the opinion of management, reflects adjustments                (comprising only normal recurring accruals) necessary for fair                presentation. As described in Note 11 - Income Taxes, the Company                recorded                an additional estimated net tax liability of $15.8 million during                the                fourth quarter of 2006. |
|---------|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                       |   |                                  |    |
|----------------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                                       |   | Three                Months Ended     |    |
|                                                                       |   | December                31            |    | September                30 |   | June                30 |   | March                31 |   |
|                                                                       |   | (dollars                in thousands) |    |
| **2006**                                                                   |   |                                  |    |   |   |   |   |   |   |
| Interest                income                                             |   | $                                     | 609,093 |   | $ | 597,406 |   | $ | 562,162 |   | $ | 510,463 |   |
| Interest                expense                                            |   |                                  | 283,422 |   |   | 275,436 |   |   | 243,225 |   |   | 202,533 |   |
| Net                interest income                                         |   |                                  | 325,671 |   |   | 321,970 |   |   | 318,937 |   |   | 307,930 |   |
| Provision                for credit losses                                 |   |                                  | 10,200  |   |   | 9,499 |   |   | 7,500 |   |   | 6,501 |   |
| Provision                for federal and state income                taxes |   |                                  | 56,108  |   |   | 39,890 |   |   | 41,089 |   |   | 39,800 |   |
| Net                income                                                  |   |                                  | 62,827  |   |   | 79,669 |   |   | 79,520 |   |   | 77,297 |   |
|                                                                       |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Net                income per common share:                                |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                      |   | $                                     | 0.33    |   | $ | 0.43 |   | $ | 0.43 |   | $ | 0.43 |   |
| Diluted                                                                    |   |                                  | 0.32    |   |   | 0.41 |   |   | 0.41 |   |   | 0.41 |   |
|                                                                       |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| **2005**                                                                   |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Interest                income                                             |   | $                                     | 473,227 |   | $ | 423,839 |   | $ | 397,698 |   | $ | 370,480 |   |
| Interest                expense                                            |   |                                  | 174,387 |   |   | 136,465 |   |   | 109,231 |   |   | 91,579 |   |
| Net                interest income                                         |   |                                  | 298,840 |   |   | 287,374 |   |   | 288,467 |   |   | 278,901 |   |
| Provision                for credit losses                                 |   |                                  | 5,400   |   |   | 3,000 |   |   | 4,500 |   |   | 6,250 |   |
| Provision                for federal and state income                taxes |   |                                  | 24,292  |   |   | 41,116 |   |   | 41,702 |   |   | 40,797 |   |
| Net                income                                                  |   |                                  | 46,938  |   |   | 79,455 |   |   | 79,409 |   |   | 77,137 |   |
|                                                                       |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Net                income per common share:                                |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                      |   | $                                     | 0.27    |   | $ | 0.48 |   | $ | 0.49 |   | $ | 0.48 |   |
| Diluted                                                                    |   |                                  | 0.26    |   |   | 0.45 |   |   | 0.46 |   |   | 0.45 |   |

----

**Notes to Consolidated Financial      Statements**

| **20.** | **Condensed**                |        |   |
|---------|------------------------------|--------|--------|
|    | **Financial**                |   |   |
|    | **Statements**               |   |   |
|    | **of                the**    |   |   |   |
|    | **Parent**                   |   |   |   |
|    | **Company**                  |   |   |   |   |   |
|    | **and                Other** |   |   |   |   |   |
|    | **Matters**                  |   |   |   |   |   |

| **Balance                    Sheets**                         |                            |
|---------------------------------------------------------------|---------------------------------|
|                                                          |                            |
|                                                          | December                    31, |
| *(dollars                    in thousands)*                   | **2006**                        | 2005 |
| **Assets**                                                    |                            |   |
| Cash                                                          | **$**                           | **5,488** | $ | 4,530 |
| Securities                    available for sale              |                            | **39,034** |   | 82,754 |
| Investment                    in subsidiaries                 |                            | **2,754,104** |   | 2,278,869 |
| Other                    assets                               |                            | **25,890** |   | 21,496 |
| Total                    assets                               | **$**                           | **2,824,516** | $ | 2,387,649 |
| **Liabilities**                                               |                            |   |
| Other                    liabilities                          | **$**                           | **23,418** | $ | 78,476 |
| Total                    liabilities                          |                            | **23,418** |   | 78,476 |
| **Stockholders'                    equity**                   |                            |   |
| Common                    stock                               |                            | **189,738** |   | 179,499 |
| Capital                    in excess of par value             |                            | **1,744,691** |   | 1,450,843 |
| Retained                    earnings                          |                            | **958,770** |   | 750,710 |
| Accumulated                    other comprehensive loss       |                            | **(65,240)** |   | (59,169) |
|                                                          |                            | **2,827,959** |   | 2,321,883 |
| Less                    treasury stock, at cost               |                            | **26,861** |   | 12,710 |
| Total                    stockholders' equity                 |                            | **2,801,098** |   | 2,309,173 |
| Total                    liabilities and stockholders' equity | **$**                           | **2,824,516** | $ | 2,387,649 |

| **Statements                of Income**                                                                    |   |                                   |        |   |   |    |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|--------|--------|---------|--------|
|                                                                                                       |   |                                   |        |   |   |    |   |
|                                                                                                       |   | Year                Ended December 31, |        |
| *(dollars                in thousands)*                                                                    |   | **2006**                               |        | 2005   |   | 2004    |   |
| Income:                                                                                                    |   |                                   |        |   |   |    |   |
| Dividends                from subsidiaries                                                                 |   | **$**                                  | **17,000**  |   | $      | 25,000  |   | $ | 20,000 |   |
| Interest                income                                                                             |   |                                   | **289**     |   |   | 438     |   |   | 499 |   |
| Other                                                                                                      |   |                                   | **5,774**   |   |   | 3,659   |   |   | 8,028 |   |
|                                                                                                       |   |                                   | **23,063**  |   |   | 29,097  |   |   | 28,527 |   |
| Expenses:                                                                                                  |   |                                   |        |   |   |    |   |   |   |   |
| Interest                expense                                                                            |   |                                   |        |   |   | 8,639   |   |   | 12,448 |   |
| Operating                expenses                                                                          |   |                                   | **15,432**  |   |   | 1,728   |   |   | 10,370 |   |
|                                                                                                       |   |                                   | **15,432**  |   |   | 10,367  |   |   | 22,818 |   |
| Income                before income taxes and equityin                undistributed income of subsidiaries |   |                                   | **7,631**   |   |   | 18,730  |   |   | 5,709 |   |
| Income                tax benefit                                                                          |   |                                   | **(2,973**  | **)**  |   | (2,220  | )      |   | (5,025 | ) |
|                                                                                                       |   |                                   | **10,604**  |   |   | 20,950  |   |   | 10,734 |   |
| Equity                in undistributed income of subsidiaries                                              |   |                                   | **288,709** |   |   | 261,989 |   |   | 262,684 |   |
| Net                income                                                                                  |   | **$**                                  | **299,313** |   | $      | 282,939 |   | $ | 273,418 |   |

----

**Notes to Consolidated Financial      Statements**

| **Statements                of Cash Flows**                                                                    |   |                                   |         |
|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------------|
|                                                                                                           |   |                                   |         |
|                                                                                                           |   | Year                Ended December 31, |         |
| *(dollars                in thousands)*                                                                        |   | **2006**                               |         | 2005 |   | 2004 |   |
|                                                                                                           |   |                                   |         |   |   |   |   |
| Operating                activities:                                                                           |   |                                   |         |   |   |   |   |
| Net                income                                                                                      |   | **$**                                  | **299,313**  |   | $ | 282,939 |   | $ | 273,418 |   |
| Adjustments                to reconcile net income to netcash                provided by operating activities: |   |                                   |         |   |   |   |   |   |   |   |
| Provision                for depreciation, amortization and accretion                                          |   |                                   | **34**       |   |   | 152 |   |   | 189 |   |
| Stock-based                compensation expense                                                                |   |                                   | **7,376**    |   |   |   |   |   |   |   |
| Undistributed                income of subsidiaries                                                            |   |                                   | **(288,709** | **)** |   | (261,989 | ) |   | (262,684 | ) |
| Increase                in other assets                                                                        |   |                                   | **(4,618**   | **)** |   | (4,601 | ) |   | (13,278 | ) |
| (Decrease)                increase in other liabilities                                                        |   |                                   | **(56,346**  | **)** |   | 35,453 |   |   | 45,072 |   |
| Net                cash (used) provided by operating activities                                                |   |                                   | **(42,950**  | **)** |   | 51,954 |   |   | 42,717 |   |
| Investing                activities:                                                                           |   |                                   |         |   |   |   |   |   |   |   |
| Investments                in subsidiaries                                                                     |   |                                   | **(161,193** | **)** |   | (155,000 | ) |   | (168,700 | ) |
| Proceeds                from the maturity of securities available for sale                                     |   |                                   | **245,000**  |   |   | 158,000 |   |   | 198,000 |   |
| Purchase                of securities available for sale                                                       |   |                                   | **(204,790** | **)** |   | (177,451 | ) |   | (154,528 | ) |
| Net                cash used by investing activities                                                           |   |                                   | **(120,983** | **)** |   | (174,451 | ) |   | (125,228 | ) |
| Financing                activities:                                                                           |   |                                   |         |   |   |   |   |   |   |   |
| Proceeds                from issuance of common stock                                                          |   |                                   |         |   |   |   |   |   |   |   |
| under                dividend reinvestment and other stock plans                                               |   |                                   | **253,050**  |   |   | 194,022 |   |   | 146,057 |   |
| Dividends                paid                                                                                  |   |                                   | **(88,192**  | **)** |   | (72,363 | ) |   | (59,205 | ) |
| Redemption                of long-term debt                                                                    |   |                                   |         |   |   | (155 | ) |   |   |   |
| Other                                                                                                          |   |                                   | **33**       |   |   | (1 | ) |   | (1,484 | ) |
| Net                cash provided by financing activities                                                       |   |                                   | **164,891**  |   |   | 121,503 |   |   | 85,368 |   |
| Increase                (decrease) in cash and cash equivalents                                                |   |                                   | **958**      |   |   | (994 | ) |   | 2,857 |   |
| Cash                and cash equivalents at beginning of year                                                  |   |                                   | **4,530**    |   |   | 5,524 |   |   | 2,667 |   |
| Cash                and cash equivalents at end of year                                                        |   | **$**                                  | **5,488**    |   | $ | 4,530 |   | $ | 5,524 |   |
| Supplemental                disclosures of cash flow information:                                              |   |                                   |         |   |   |   |   |   |   |   |
| Cash                paid during the period for:                                                                |   |                                   |         |   |   |   |   |   |   |   |
| Interest                                                                                                       |   |                                   |              |   | $ | 9,201 |   | $ | 12,268 |   |
| Income                taxes                                                                                    |   | **$**                                  | **145,183**  |   |   | 144,479 |   |   | 121,766 |   |

|   | Holders                of common stock of the Company are entitled to receive dividends                when                declared by the Board of Directors out of funds legally available.                Under                the New Jersey Business Corporation Act, the Company may pay dividends                only if it is solvent and would not be rendered insolvent by the                dividend                payment and only to the extent of surplus (the excess of the net                assets of                the Company over its stated capital).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The                approval of the Comptroller of the Currency is required for a national                bank to pay dividends if the total of all dividends declared in any                calendar year exceeds net profits (as defined) for that year combined                with                its retained net profits for the preceding two calendar years. New                Jersey                state banks are subject to similar dividend restrictions.* *Commerce                N.A. and Commerce North can declare dividends in 2007 without additional                approval of approximately $468.4 million and $83.2 million, respectively,                plus an additional amount equal to each bank's net profit for 2007                up to                the date of any such dividend declaration.                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The                Federal Reserve Act requires the extension of credit by any of the                Company’s banking subsidiaries to certain affiliates, including Commerce                Bancorp, Inc. (parent), be secured by readily marketable securities,                that                extension of credit to any one affiliate be limited to 10% of the                capital                and capital in excess of par or stated value, as defined, and that                extensions of credit to all such affiliates be limited to 20% of                capital                and capital in excess of par or stated value. At December 31, 2006                and                2005, the Company complied with these guidelines.                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The                Company and its subsidiaries are subject to various regulatory capital                requirements administered by the federal banking agencies. Failure                to meet                minimum capital requirements can initiate certain mandatory and possibly                additional discretionary actions by regulators that, if undertaken,                could                have a direct material effect on the Company's financial statements.                Under                capital adequacy guidelines and the regulatory framework for prompt                corrective action, the Company must meet specific guidelines that                involve                quantitative measures of the Company's assets, liabilities, and certain                off-balance-sheet items as calculated under regulatory accounting                practices. The Company's capital amounts and classification are also                subject to qualitative judgments by the regulators about components,                risk                weightings, and other factors. |

----

**Notes to Consolidated Financial      Statements**

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As                of December 31, 2006 and 2005, the Company and each of its subsidiary                banks were categorized as “well-capitalized” under the regulatory                framework for prompt corrective action. There are no conditions or                events                since December 31, 2006 that management believes have changed any                subsidiary bank's capital category.                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Quantitative                measures established by regulation to ensure capital adequacy require the                Company and its subsidiaries to maintain minimum amounts and ratios                of                total and Tier I capital (as defined in the regulations) to risk-based                assets (as defined in the regulations) and of Tier I capital to average                assets (as defined in the regulations), or leverage. Management believes,                as of December 31, 2006, that the Company and its subsidiaries meet                all                capital adequacy requirements to which they are                subject. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The                following table presents the Company's and Commerce N.A.'s risk-based                and                leverage capital ratios at December 31, 2006 and                2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

|                                      |   |       |      |                                         |   |
|-------------------------------------------|--------|------------|-----------|----------------------------------------------|--------|
|                                      |   |       |      | **Per                Regulatory Guidelines** |   |
|                                      |   | **Actual** |      | **Minimum**                                  |   | **“Well                Capitalized”** |   |
|                                      |   | **Amount** |      | **Ratio**                                    |   | **Amount** |   | **Ratio** |   | **Amount** |   | **Ratio** |   |
|                                      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |
| **December                31, 2006**      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |
| Company                                   |   |       |      |                                         |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |       |      |                                         |   |   |   |   |   |   |   |   |   |
| Tier                I                     |   | $          | 2,724,708 |                                         |   | 11.73 | % | $ | 929,142 |   |   | 4.00 | % | $ | 1,393,712 |   |   | 6.00 | % |
| Total                capital              |   |       | 2,889,203 |                                         |   | 12.44 |   |   | 1,858,283 |   |   | 8.00 |   |   | 2,322,854 |   |   | 10.00 |   |
| Leverage                ratio             |   |       | 2,724,708 |                                         |   | 6.18 |   |   | 1,762,755 |   |   | 4.00 |   |   | 2,203,443 |   |   | 5.00 |   |
|                                      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commerce                N.A.              |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                     |   | $          | 2,403,663 |                                         |   | 11.30 | % | $ | 850,791 |   |   | 4.00 | % | $ | 1,276,187 |   |   | 6.00 | % |
| Total                capital              |   |       | 2,546,651 |                                         |   | 11.97 |   |   | 1,701,583 |   |   | 8.00 |   |   | 2,126,979 |   |   | 10.00 |   |
| Leverage                ratio             |   |       | 2,403,663 |                                         |   | 6.00 |   |   | 1,602,556 |   |   | 4.00 |   |   | 2,003,196 |   |   | 5.00 |   |
|                                      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **December                31, 2005**      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                   |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                I                     |   | $          | 2,261,416 |                                         |   | 11.81 | % | $ | 765,812 |   |   | 4.00 | % | $ | 1,148,718 |   |   | 6.00 | % |
| Total                capital              |   |       | 2,408,772 |                                         |   | 12.58 |   |   | 1,531,625 |   |   | 8.00 |   |   | 1,914,531 |   |   | 10.00 |   |
| Leverage                ratio             |   |       | 2,261,416 |                                         |   | 6.04 |   |   | 1,497,889 |   |   | 4.00 |   |   | 1,872,362 |   |   | 5.00 |   |
|                                      |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commerce                N.A.              |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |       |      |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                     |   | $          | 2,004,448 |                                         |   | 11.46 | % | $ | 699,719 |   |   | 4.00 | % | $ | 1,049,578 |   |   | 6.00 | % |
| Total                capital              |   |       | 2,130,878 |                                         |   | 12.18 |   |   | 1,399,438 |   |   | 8.00 |   |   | 1,749,297 |   |   | 10.00 |   |
| Leverage                ratio             |   |       | 2,004,448 |                                         |   | 5.92 |   |   | 1,354,615 |   |   | 4.00 |   |   | 1,693,269 |   |   | 5.00 |   |

| **21.** | **Segment****Reporting** | The                Company operates one reportable segment of business, Community Banks,                which includes Commerce N.A. and Commerce North. Through its Community                Banks, the Company provides a broad range of retail and commercial                banking                services, and corporate trust services. Parent/Other includes the                holding                company, Commerce Banc Insurance (whose noninterest revenues of $83.5                million, $76.2 million and $72.5 million in 2006, 2005, and 2004,                respectively, were reported in other operating income), and CCMI                (whose                noninterest revenues of $29.6 million, $25.4 million, and $28.1 million                in                2006, 2005, and 2004, respectively, were reported in other operating                income). |
|---------|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Notes to Consolidated Financial      Statements**

|   | Selected                segment information for each of the three years ended December 31                is as                follows (in thousands): |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   |                               |          |                 |   |            |   |
|-------------------------------------------------------------------|--------|------------------------------------|---------------|----------------------|--------|-----------------|--------|
|                                                              |   | **2006**                           |          | 2005                 |   | 2004            |   |
|                                                              |   | **Community                Banks** |          | **Parent/****Other** |   |  **Total** |   | CommunityBanks |   | Parent/Other |   |  Total |   | CommunityBanks |   | Parent/Other |   |  Total |   |
| Net                interest income (expense)                      |   | **$**                              | **1,271,050** |                 | **$**  | **3,458**       |   | **$** | **1,274,508** |   | $ | 1,157,208 |   | $ | (3,626 | ) | $ | 1,153,582 |   | $ | 1,024,092 |   | $ | (6,307 | ) | $ | 1,017,785 |   |
| Provision                for credit losses                        |   |                               | **33,700**    |                 |   |            |   |   | **33,700** |   |   | 19,150 |   |   |   |   |   | 19,150 |   |   | 39,238 |   |   |   |   |   | 39,238 |   |
| Net                interest income after                provision |   |                               | **1,237,350** |                 |   | **3,458**       |   |   | **1,240,808** |   |   | 1,138,058 |   |   | (3,626 | ) |   | 1,134,432 |   |   | 984,854 |   |   | (6,307 | ) |   | 978,547 |   |
| Noninterest                income                                 |   |                               | **463,873**   |                 |   | **127,280**     |   |   | **591,153** |   |   | 337,979 |   |   | 104,815 |   |   | 442,794 |   |   | 267,912 |   |   | 107,159 |   |   | 375,071 |   |
| Noninterest                expense                                |   |                               | **1,241,873** |                 |   | **113,888**     |   |   | **1,355,761** |   |   | 1,063,467 |   |   | 82,913 |   |   | 1,146,380 |   |   | 846,421 |   |   | 92,357 |   |   | 938,778 |   |
| Income                beforeincome                taxes           |   |                               | **459,350**   |                 |   | **16,850**      |   |   | **476,200** |   |   | 412,570 |   |   | 18,276 |   |   | 430,846 |   |   | 406,345 |   |   | 8,495 |   |   | 414,840 |   |
| Income                tax expense                                 |   |                               | **170,122**   |                 |   | **6,765**       |   |   | **176,887** |   |   | 141,610 |   |   | 6,297 |   |   | 147,907 |   |   | 138,879 |   |   | 2,543 |   |   | 141,422 |   |
| Net                income                                         |   | **$**                              | **289,228**   |                 | **$**  | **10,085**      |   | **$** | **299,313** |   | $ | 270,960 |   | $ | 11,979 |   | $ | 282,939 |   | $ | 267,466 |   | $ | 5,952 |   | $ | 273,418 |   |
| Average                assets(in                millions)         |   | **$**                              | **39,260**    |                 | **$**  | **2,902**       |   | **$** | **42,162** |   | $ | 31,534 |   | $ | 2,472 |   | $ | 34,006 |   | $ | 24,452 |   | $ | 2,167 |   | $ | 26,619 |   |

|   | The                financial information for each segment is reported on the basis used                internally by the Company’s management to evaluate performance.                Measurement of the performance of each segment is based on the management                structure of the Company and is not necessarily comparable with financial                information from other entities. The information presented is not                necessarily indicative of the segment’s results of operations if each of                the Community Banks were independent                entities. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **22.** | **Derivative****Financial****Instruments** | As                part of CCMI’s broker-dealer activities, CCMI maintains a trading                securities portfolio for distribution to its customers in order to                meet                those customers’ needs. In order to reduce the exposure to market risk                relating to the trading securities portfolio, CCMI buys and sells                derivative financial instruments, primarily interest rate futures                and                option contracts. Realized and unrealized gains and losses on derivative                financial instruments are included in other operating income. As                of                December 31, 2006 and 2005, the notional amount of interest rate                futures                and option contract positions was $39.0 million and $8.0 million,                with                aggregate fair values of $262 thousand and $0,                respectively. |
|---------|--------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                       | As                an accommodation to its loan customers, the Company enters into interest                rate swap agreements. The Company minimizes its market risk by                concurrently entering into offsetting swap agreements with counterparties.                The offsetting swap agreements generally have identical notional                values                and terms. These swaps are carried at estimated fair value with changes                in                estimated fair value included in other operating income. As of December                31, 2006 and 2005, the notional amount of interest rate swap positions                was                $1.3 billion and $510.5 million with aggregate fair values of $5.7                million                and $1.4 million, respectively.                                                                                                                                         |
|    |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                       | As                part of the Company’s residential mortgage activities, the Company enters                into interest rate lock commitments with its customers. The interest                rate                lock commitments on residential mortgage loans intended to be held                for                sale are considered free standing derivative instruments. The option                to                sell the mortgage loans at the time the commitments are made are                also free                standing derivative instruments. Generally, the change in fair value                of                these derivative instruments due to changes in interest rates offset                each                other.                                                                                                                                                                                                                 |

----

**Item      9A****.      Controls and Procedures**

***Evaluation        of disclosure controls and procedures.***

***Management’s        evaluation of internal control over financial        reporting.***

***Changes        in internal control over financial reporting.***

**Item      9B****.** **Other      Information**

**Part      III**

**Item      10****.      Directors and Executive Officers of the Registrant**

**Item      11****.      Executive Compensation**

----

**Item      12****.      Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters**

|                                                                                           | (a)                                                                                                                                                   | (b)                                                                                                     | (c)                                                                                                                                                                                       |
|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                           |   Number                of securities to be issued upon exercise of outstanding options,                warrants                and rights  |   Weighted-average                exercise price of outstanding options, warrants and rights  | Number                of securities remaining available for future issuance under equity                compensation plans (excluding securities reflected in column                (a))  |
| Equity                compensation plans approved by security                holders      | 26,373,436                                                                                                                                            | $22.91                                                                                                  | 22,440,413                                                                                                                                                                                |
| Equity                compensation plans not approved by                security holders  |  N/A                                                                                                                                             |  N/A                                                                                               |  N/A                                                                                                                                                                                 |
|  Total                                                                               |  26,373,436                                                                                                                                      |  $22.91                                                                                            |  22,440,413                                                                                                                                                                          |

**Item      13****.      Certain Relationships and Related Transactions**

**Item      14****.      Principal Accounting Fees and Services**

**Part      IV**

**Item      15****.** **Exhibits      and Financial Statement Schedules**

----

|   | ExhibitNumber    |  Description                of Exhibit                                                                                                                                                                                                                                                                    |  Location                                                                                                                                                                                  |
|--------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  3.1   |  Restated                Certificate of Incorporation of the Company, as amended.                                                                                                                                                                                                                    |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2004.                             |
|   |  3.2   |  By-laws                of the Company, as amended.                                                                                                                                                                                                                                                  |  Incorporated                by reference from the Company’s Form 10-Q for the quarter ended June 30,                2004.                                                      |
|   |  10.1  |  Ground                lease, dated July 1, 1984, among Commerce N.A. and Group Four Equities,                relating to the store in Gloucester Township, New Jersey.                                                                                                                              |  Incorporated                by reference from the Company’s Registration Statement on Form S-1, and                Amendments Nos. 1 and 2 thereto (Registration No. 2-94189)  |
|   |  10.2  |  Ground                lease, dated April 15, 1986, between Commerce N.A. and Mount Holly                Equities, relating to Commerce N.A.'s store in Mt. Holly, New Jersey.                                                                                                                       |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1987.                             |
|   |  10.3  |  Ground                lease, dated February 15, 1988, between Commerce N.A. and Holly Ravine                Equities of New Jersey, relating to one of the Commerce N.A.’s stores in                Cherry Hill, New Jersey.                                                                  |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1988.                             |
|   |  10.4  |  Ground                lease, dated June 1, 1994, between Commerce N.A. and Absecon Associates,                L.L.C., relating to Commerce N.A.’s branch office in Absecon, New                Jersey.                                                                                        |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                             |
|   |  10.5  |  Ground                lease, dated September 11, 1995, between Commerce Shore (merged with                and                into Commerce N.A. in 2004) and Whiting Equities, L.L.C., relating                to                Commerce Shore’s stores in Manchester Township, New Jersey.  |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                             |
|   |  10.6  |  Ground                lease, dated November 1, 1995, between Commerce N.A. and Evesboro                Associates, L.L.C., relating to Commerce N.A.’s stores in Evesham                Township, New Jersey.                                                                                 |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                             |
|   |  10.7  |  Ground                lease, dated October 1, 1996, between Commerce N.A. and Triad Equities,                L.L.C., relating to one of Commerce N.A.’s stores in Gloucester Township,                New Jersey.                                                                             |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                             |
|   |  10.8  |  Ground                lease, dated January 16, 1998, between Commerce N.A. and Ewing Equities,                L.L.C., relating to Commerce N.A.’s store in Ewing, New                Jersey.                                                                                                  |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1998.                             |
|   |  10.9  |  Ground                lease, dated November 30, 1998, between Commerce Shore (merged with                and                into Commerce N.A. in 2004) and Brick/Burnt Tavern Equities, L.L.C.,                relating to Commerce Shore’s stores in Brick, New Jersey.                          |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1999.                             |

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|          | 10.10        | Ground                lease, dated November 30, 1998, between Commerce Shore (merged with                and                into Commerce N.A. in 2004) and Aberdeen Equities, L.L.C., relating                to                Commerce Shore’s store in Aberdeen, New Jersey.               | Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1999.                                   |
|---------------|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |  10.11  |  Ground                lease, dated November 30, 1998, between Commerce N.A. and Hamilton/Wash                Properties, L.L.C., relating to Commerce N.A.’s store in Hamilton                Township, New Jersey.                                                                      |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1999.                             |
|          |  10.12  |  Ground                lease, dated April 2, 1999, between Commerce PA (merged with and                into                Commerce N.A. in 2005) and Abington Equities, L.L.C., relating to                Commerce                PA’s store in Abington Township, Pennsylvania.        |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1999.                             |
|          |  10.13  |  Ground                lease, dated October 1999, between Commerce PA (merged with and into                Commerce N.A. in 2005) and Bensalem Equities, L.L.C., relating to                Commerce                PA’s store in Bensalem, Pennsylvania.                                 |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2000.                             |
|          |  10.14  |  Ground                lease, dated March 10, 2000, between Commerce PA (merged with and                into                Commerce N.A. in 2005) and Chalfont Equities, L.L.C., relating to                Commerce                PA’s store in New Britain Township, Pennsylvania.    |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2001.                             |
|          |  10.15  |  Ground                lease, dated January 4, 2001, between Commerce PA (merged with and                into                Commerce N.A. in 2005) and Warminster Equities, L.L.C., relating                to                Commerce PA’s store in Warminster Township, Pennsylvania.  |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2001.                             |
|          |  10.16  |  Ground                lease dated January 1, 2001, between Commerce N.A. and Willingboro                Equities, L.L.C., relating to Commerce N.A.’s store in Willingboro, New                Jersey.                                                                                   |  Incorporated                by reference to the Company’s Form 10-Q for the quarter ended March 31,                2003.                                                       |
|          |  10.17  |  Ground                lease dated November 27, 2001, between Commerce PA (merged with and                into                Commerce N.A. in 2005) and Warrington Equities, L.L.C., relating                to                Commerce PA’s store in Warrington, Pennsylvania.          |  Incorporated                by reference to the Company’s Form 10-Q for the quarter ended March 31,                2003.                                                       |
|  *  |  10.18  |  A                copy of the Retirement Plan for Outside Directors of Commerce Bancorp,                Inc.                                                                                                                                                                                    |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1992.                             |
|  *  |  10.19  |  The                Company's 1989 Stock Option Plan for Non-Employee Directors.                                                                                                                                                                                                                |  Incorporated                by reference from the Company’s Registration Statement on Form S-2 and                Amendments Nos. 1 and 2 thereto (Registration No. 33-31042)  |
|  *  |  10.20  |  The                Company’s 1998 Stock Option Plan for Non-Employee Directors.                                                                                                                                                                                                          |  Incorporated                by reference from the Company’s Definitive Proxy Statement for its 1998                Annual Meeting of Shareholders, Exhibit A thereto.          |
|  *  |  10.21  |  A                copy of employment contract with Dennis M. DiFlorio dated January                1,                1998.                                                                                                                                                                      |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                             |
|  *  |  10.22  |  A                copy of employment contract with Robert D. Falese dated January 1,                1998.                                                                                                                                                                                       |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1997.                                  |

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| *        | 10.23        | A                copy of employment contract with George E. Norcross, III dated November                15, 1996.                                                                                                                                               | Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2005.                           |
|---------------|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  *  |  10.24  |  A                copy of amended and restated employment contract with Vernon W. Hill,                II                entered into on March 14, 2006, with an effective date of January                1,                2006.                          |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2005.                     |
|  *  |  10.25  |  A                copy of employment contract with Douglas J. Pauls,                dated January 1, 2005.                                                                                                                                                 |                                                                                                                                                                                    |
|  *  |  10.26  |  The                Company's Employee Stock Ownership Plan.                                                                                                                                                                                               |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 1989.                     |
|  *  |  10.27  |  The                Company’s Supplemental Executive Retirement Plan.                                                                                                                                                                                |  Incorporated                by reference from the Company’s Annual Report on Form 10-K for the fiscal                year ended December 31, 2003.                     |
|  *  |  10.28  |  The                Company's 1997 Employee Stock Option Plan.                                                                                                                                                                                             |  Incorporated                by reference from the Company’s Definitive Proxy Statement for its 1997                Annual Meeting of Shareholders, Exhibit A thereto.  |
|  *  |  10.29  |  The                Company's 2004 Employee Stock Option Plan.                                                                                                                                                                                             |  Incorporated                by reference from the Company’s Form 10-Q for the quarter ended June 30,                2004.                                              |
|  *  |  10.30  |  Description                of Directors’ and Named Executive Officers’ Compensation                                                                                                                                                           |  Incorporated                by reference from the Company’s Form 10-Q for the quarter ended March 31,                2006.                                             |
|          |  21.1   |  Subsidiaries                of the Company.                                                                                                                                                                                                               |  Incorporated                by reference from PART 1, Item 1. “BUSINESS” of this Report on Form                10-K.                                             |
|          |  23.1   |  Consent                of Ernst & Young LLP.                                                                                                                                                                                                          |                                                                                                                                                                                    |
|          |  31.1   |  Certification                of the Company’s Chief Executive Officer                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                        |                                                                                                                                                                                    |
|          |  31.2   |  Certification                of the Company’s Chief Financial Officer                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                        |                                                                                                                                                                                    |
|          |  32     |  Certification                of the Company’s Chief Executive Officer and                Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |                                                                                                                                                                                    |

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**SIGNATURES**

|                                |  Commerce                Bancorp, Inc. |
|-------------------------------------|---------------------------------------------|
|                                |                                        |   |
|                                | By                                          | /s/                Vernon W. Hill, II |
|                                |                                        |  **Vernon                W. Hill, II** |
| Date:                March 16, 2007 |                                        | **Chairman                of the Board and Chief Executive Officer** |
|                                |                                        | **(Principal                Executive Officer)** |
|                                |                                        |   |
|                                | By                                          | /s/                Douglas J. Pauls |
|                                |                                        | **Douglas                J. Pauls** |
|                                |                                        | **Executive                Vice President and Chief Financial Officer** |
|                                |                                        | **(Principal                Financial and Accounting                Officer)** |

| **Signature**                                                           |   | **Title**                                                    | **Date**                        |
|-------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------------------------------|
|                                                                    |   |                                                         |                            |
| /s/ Vernon                W. Hill, II                              |   | Chairman                of the Board, President and Director | March                16, 2007   |
| **Vernon                W. Hill, II**                                   |   | (Principal                Executive Officer)                 |                            |
|                                                                    |   |                                                         |                            |
|                                                                    |   | Director                                                     | March                  16, 2007 |
| **Jack                R Bershad**                                       |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ Joseph                Buckelew                                 |   | Director                                                     | March                  16, 2007 |
| **Joseph                Buckelew**                                      |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ Donald                T. DiFrancesco                           |   | Director                                                     | March                  16, 2007 |
| **Donald                T. DiFrancesco**                                |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ Morton                N. Kerr                                  |   | Director                                                     | March                  16, 2007 |
| **Morton                N. Kerr**                                       |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
|    /s/              Steven M. Lewis                      |   | Director                                                     | March                  16, 2007 |
| **Steven                M. Lewis**                                      |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
|                                                                    |   | Director                                                     | March                  16, 2007 |
| **John                K. Lloyd**                                        |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
|    /s/              George E. Norcross,              III |   | Director                                                     | March                  16, 2007 |
| **George                E. Norcross, III**                              |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ Daniel                J. Ragone                                |   | Director                                                     | March                  16, 2007 |
| **Daniel                J. Ragone**                                     |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ William                A. Schwartz Jr.                         |   | Director                                                     | March                  16, 2007 |
| **William                A. Schwartz Jr.**                              |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
| /s/ Joseph                T. Tarquini Jr.                          |   | Director                                                     | March                  16, 2007 |
| **Joseph                T. Tarquini Jr.**                               |   |                                                         |                            |
|                                                                    |   |                                                         |                            |
|                                                                    |   | Director                                                     | March                  16, 2007 |
| **Joseph                S. Vassalluzzo**                                |   |                                                         |                            |

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