**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K**





**[
                X ]**
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**For
                the fiscal year endedDecember
                31, 2005.**or****[   
                ]**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**For
                the transition period from ________to
                ________.





Commission
      file number 000-50961





PENNSYLVANIA
      COMMERCE BANCORP, INC.


(Exact
      name of registrant as specified in its charter)





Pennsylvania
            
            25-1834776(State
                or other jurisdiction of
            
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)





100
                Senate Avenue, P.O. Box 8599, Camp Hill, Pennsylvania
            17001-8599(Address
                of principal executive offices)
            (Zip
                Code)





Registrant’s
      telephone number, including area code: (717)
      975-5630





Securities
      registered pursuant to Section 12(b) of the Act: None





Title
                of each class
            Name
                of each exchange on which registered___________________________________
            ______________________________________________________________________
            ___________________________________





Securities
      registered pursuant to Section 12(g) of the Act:


Common
      Stock, $1.00 par value


(Title
      of
      Class)


Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.
 Yes
              X
              No
  Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 of Section 15(d) of the Act.
 Yes
              X
              No
  
  
  Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
        for
        the past 90 days.
 X
              Yes
              
              No
  Indicate
        by check mark if disclosure of delinquent filers pursuant to Item 405 of
        Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
        be contained, to the best of registrant’s knowledge, in definitive proxy or
        information statements incorporated by reference in Part III of this Form
        10-K
        or any amendment to this Form 10-K.
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of
        the
        Exchange Act).
  Large
                  accelerated filer
              
              Accelerated
                  filer
              X
              Non-accelerated
                  filer
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
 Yes
              X
              No
  The
        aggregate market value of voting stock held by non-affiliates of the registrant
        as of the last business day of the Company’s most recently completed second
        fiscal quarter, June 30, 2005, was $129,425,315.
  The
        number of shares of the registrant’s common stock, par value $1.00 per share,
        outstanding as of February 28, 2006 was 6,061,243.




**DOCUMENTS
      INCORPORATED BY REFERENCE:**





Part
      II
      incorporates certain information by reference to the registrant’s Annual Report
      to Shareholders for the fiscal year ended December 31, 2005 (the “Annual
      Report”). Part III incorporates certain information by reference to the
      registrant’s Proxy Statement for the 2006 Annual Meeting of
      Shareholders.





1


**PENNSYLVANIA
      COMMERCE BANCORP, INC.**


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






**Page****Part
                  I.**Item
                  1.
              Business
              1Item
                  1A.
              Risk
                  Factors
              8Item
                  1B.
              Unresolved
                  Staff Comments
              11Item
                  2.
              Properties
              11Item
                  3.
              Legal
                  Proceedings
              11Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              11**Part
                  II.**Item
                  5.
              Market
                  for Registrant’s Common Equity, Related Stockholder Matters andIssuer
                  Purchases of Equity Securities
              11Item
                  6.
              Selected
                  Financial Data
              13Item
                  7.
              Management’s
                  Discussion and Analysis of Financial Condition andResults
                  of Operations
              14(The
                  information required by this item is incorporated by reference
                  from theCompany’s
                  2005 Annual Report.)Item
                  7A.
              Quantitative
                  and Qualitative Disclosures about Market Risk
              14(The
                  information required by this item is incorporated by reference
                  from
                  theCompany’s
                  2005 Annual Report.)Item
                  8.
              Financial
                  Statements and Supplementary Data
              14(The
                  information required by this item is incorporated by reference
                  from the
                  Company’s 2005 Annual Report.)Item
                  9.
              Changes
                  In and Disagreements with Accountants on Accounting andFinancial
                  Disclosure (This item is omitted since it is not
                  applicable.)Item
                  9A.
              Controls
                  and Procedures
              14Item
                  9B.
              Other
                  Information
              16**Part
                  III.**Item
                  10.
              Directors
                  and Executive Officers of the Registrant
              16Item
                  11.
              Executive
                  Compensation
              16Item
                  12.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              16Item
                  13.
              Certain
                  Relationships and Related Transactions
              16Item
                  14.
              Principal
                  Accountant Fees and Services
              16**Part
                  IV.**Item
                  15.
              Exhibits,
                  Financial Statement Schedules
              17Signatures













**Part
      I.**




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




***Forward-Looking
      Statements***




The
      Company may, from time to time, make written or oral “forward-looking
      statements”, including statements contained in the Company’s filings with the
      Securities and Exchange Commission (including the annual report on Form 10-K
      and
      the exhibits thereto), in its reports to stockholders and in other
      communications by the Company, which are made in good faith by the Company
      pursuant to the “safe harbor” provisions of the Private Securities Litigation
      Reform Act of 1995.




These
      forward-looking statements include statements with respect to the Company’s
      beliefs, plans, objectives, goals, expectations, anticipations, estimates and
      intentions that are subject to significant risks and uncertainties and are
      subject to change based on various factors (some of which are beyond the
      Company’s control). The words “may”, “could”, “should”, “would”, “believe”,
“anticipate”, “estimate”, “expect”, “intend”, “plan” and similar expressions are
      intended to identify forward-looking statements. The following factors, among
      others, could cause the Company’s financial performance to differ materially
      from that expressed in such forward-looking statements: the strength of the
      United States economy in general and the strength of the local economies in
      which the Company conducts operations; the effects of, and changes in, trade,
      monetary and fiscal policies, including interest rate policies of the Board
      of
      Governors of the Federal Reserve System; inflation; interest rate, market and
      monetary fluctuations; the timely development of competitive new products and
      services by the Company and the acceptance of such products and services by
      customers; the willingness of customers to substitute competitors’ products and
      services for the Company’s products and services and vice versa; the impact of
      changes in financial services’ laws and regulations (including laws concerning
      taxes, banking, securities and insurance); the impact of the rapid growth of
      the
      Company; the Company’s dependence on Commerce Bancorp, Inc. to provide various
      services to the Company; changes in the Company’s allowance for loan losses;
      effect of terrorists attacks and threats of actual war; unanticipated regulatory
      or judicial proceedings; changes in consumer spending and saving habits; and
      the
      success of the Company at managing the risks involved in the
      foregoing.




The
      Company cautions that the foregoing list of important factors is not exclusive.
      The Company does not undertake to update any forward-looking statements, whether
      written or oral, that may be made from time to time by or on behalf of the
      Company. For further information, refer to the Company’s filings with the
      Securities and Exchange Commission (“SEC”).




***General***




Pennsylvania
      Commerce Bancorp, Inc. (the “Company”) is a Pennsylvania business corporation,
      which is registered as a bank holding company under the Bank Holding Company
      Act
      of 1956, as amended (the “Holding Company Act”). The Company was incorporated on
      April 23, 1999 and became an active bank holding company on July 1, 1999 through
      the acquisition of 100% of the outstanding shares of Commerce Bank/Harrisburg,
      N.A. (the “Bank”). On June 15, 2000, the Company issued $5 million of 11.00%
      Trust Capital Securities through Commerce Harrisburg Capital Trust I, a newly
      formed Delaware business trust subsidiary of the Company. Proceeds of this
      offering were invested in Commerce Bank/Harrisburg, N.A., the company’s wholly
      owned banking subsidiary. All $5 million of the Trust Capital Securities qualify
      as Tier 1 capital for regulatory capital purposes. On September 28, 2001, the
      Company issued $8 million of 10.00% Trust Capital Securities through Commerce
      Harrisburg Capital Trust II (“Trust II”), a newly formed Delaware business trust
      subsidiary of the Company. Proceeds of this offering were invested in Commerce
      Bank/Harrisburg, N.A., the company’s wholly owned banking subsidiary. All $8
      million of the Trust Capital Securities qualify as Tier 1 capital for regulatory
      capital purposes.






1




The
      Company is a member of the Commerce Bancorp, Inc. Network (the “Network”) and
      has the exclusive right to use the “Commerce Bank” name and the “America’s Most
      Convenient Bank” logo within its primary service area. The Network provides
      certain marketing and support services to the Bank.




As
      of
      December 31, 2005, the Company had approximately $1.6 billion in assets, $1.4
      billion in deposits, $826.0 million in total net loans (including loans held
      for
      sale), and $91.6 million in stockholders’ equity. The Bank is a member of the
      Federal Reserve System and substantially all of the Bank’s deposits are insured
      up to applicable limits by the Bank Insurance Fund (BIF) of the Federal Deposit
      Insurance Corporation (FDIC) to the fullest extent permitted by law. The
      Company’s total revenues (net interest income plus noninterest income) were
      $65.1 million and the Company recorded $8.8 million in net income for the year
      ended December 31, 2005.




The
      Company’s principal executive offices are located at 100 Senate Avenue, Camp
      Hill, Pennsylvania 17011, and its telephone number is (717) 975-5630. In late
      March of 2006, the Company will be relocating its principal executive office
      to
      3801 Paxton Street, Harrisburg, Pennsylvania 17111.




As
      of
      December 31, 2005, the Company had 779 employees, of which 688 were full-time
      employees. Management believes the Company’s relationship with its employees is
      good.




***Commerce
      Bank/Harrisburg***




The
      Company has one reportable segment, consisting of Commerce Bank/Harrisburg,
      N.A., as described in Note 1of the Notes to Consolidated Financial Statements
      included at Item 8 of this Report.




On
      July
      13, 1984, Commerce Bank/Harrisburg filed an application to establish a
      state-chartered banking institution with the Pennsylvania Department of Banking.
      On September 7, 1984, the Bank was granted preliminary approval of its
      application, and on September 11, 1984, was incorporated as a Pennsylvania
      state-chartered banking institution under the laws of the Commonwealth of
      Pennsylvania. The Bank opened for business on June 1, 1985.




On
      October 7, 1994, the Bank was converted from a Pennsylvania state-chartered
      banking institution to a national banking association under the laws of the
      United States of America and changed its name to “Commerce Bank/Harrisburg,
      National Association.” The Bank’s conversion was consummated pursuant to
      preliminary and conditional approval of the conversion granted by the Office
      of
      the Comptroller of the Currency (OCC) on July 5, 1994 in response to a letter
      of
      intent to convert to a national bank filed by the Bank with the OCC on April
      6,
      1994.




The
      Bank
      provides a full range of retail and commercial banking services for consumers
      and small and mid-sized companies. The Bank’s lending and investment activities
      are funded principally by retail deposits gathered through its retail store
      office network.






2




*Service
      Area*




The
      Bank
      offers its lending and depository services from its main office in Camp Hill,
      Pennsylvania, and its twenty-seven full-service stores located in Cumberland,
      Dauphin, York, Berks, and Lebanon Counties, Pennsylvania.




*Retail
      and Commercial Banking Activities*




The
      Bank
      provides a broad range of retail banking services and products including free
      personal checking accounts and business checking accounts (subject to a minimum
      balance), regular savings accounts, money market accounts, interest checking
      accounts, fixed rate certificates of deposit, individual retirement accounts,
      club accounts, debit card services, and safe deposit facilities. Its services
      also include a full range of lending activities including commercial
      construction and real estate loans, land development and business loans,
      commercial lines of credit, consumer loan programs (including installment loans
      for home improvement and the purchase of consumer goods and automobiles), home
      equity and Visa Gold card revolving lines of credit, overdraft checking
      protection, student loans and automated teller facilities. The Bank also offers
      construction loans and permanent mortgages for homes. The Bank is a participant
      in the Small Business Administration Loan Program and is an approved lender
      for
      qualified applicants.




The
      Bank
      directs its commercial lending principally toward businesses that require funds
      within the Bank’s legal lending limit, as determined from time to time, and that
      otherwise do business and/or are depositors with the Bank. The Bank also
      participates in inter-bank credit arrangements in order to take part in loans
      for amounts that are in excess of its lending limit or to limit the
      concentration of lending to any individual. In consumer lending, the Bank offers
      various types of loans, including revolving credit lines, automobile loans,
      and
      home improvement loans.




The
      Company has focused its strategy for growth primarily on the further development
      of its community-based retail-banking network. The objective of this corporate
      strategy is to build earnings growth potential for the future as the retail
      store network matures. The Company’s store concept uses a prototype or
      standardized store office building, convenient locations and active marketing,
      all designed to attract retail deposits. Using this prototype store concept,
      the
      Company plans to open three new stores in 2006 and will relocate its Main Office
      store at 100 Senate Avenue in Camp Hill, Pennsylvania to 1249 Market Street
      in
      Lemoyne, Pennsylvania during April 2006. Additionally, the Company intends
      to
      continue to open multiple stores over the next five years. It has been the
      Company’s experience that each newly opened store office incurs operating losses
      during the first 12 to 15 months of operations and becomes profitable
      thereafter. The Company’s retail approach to banking emphasizes a combination of
      long-term customer relationships, quick responses to customer needs, active
      marketing, convenient locations, free checking for customers maintaining certain
      minimum balances and extended hours of operation.




The
      Company is not dependent on any one or more major customers, and its business
      is
      not seasonal.




***Competitive
      Business Conditions / Competitive Position***




The
      Company’s current primary service area, the south central Pennsylvania area,
      including portions of Cumberland, Dauphin, York, Berks, and Lebanon Counties,
      is
      characterized by intense competition for banking business. The Bank competes
      with local commercial banks as well as numerous regionally based commercial
      banks, most of which have assets, capital, and lending limits larger than that
      of the Bank. The Bank competes with respect to its lending activities as well
      as
      in attracting demand, savings, and time deposits with other commercial banks,
      savings banks, insurance companies, regulated small loan companies, credit
      unions, and with issuers of commercial paper and other securities such as shares
      in money market funds. Among those institutions, the Bank has a share of
      approximately 6% of the bank deposits in its market area.






3




Other
      institutions may have the ability to finance wide-ranging advertising campaigns,
      and to allocate investment assets to regions of highest yield and demand. Many
      institutions offer services, such as trust services and international banking,
      which the Bank does not directly offer (but which the Bank may offer indirectly
      through other institutions). Many institutions, by virtue of their greater
      total
      capital, can have substantially higher lending limits than the
      Bank.




In
      commercial transactions, the Bank’s legal lending limit to a single borrower
      (approximately $17.6 million as of December 31, 2005) enables it to compete
      effectively for the business of smaller companies. However, this legal lending
      limit is considerably lower than that of various competing institutions and
      thus
      may act as a constraint on the Bank’s effectiveness in competing for financing
      in excess of these limits.




In
      consumer transactions, the Bank believes it is able to compete on a
      substantially equal basis with larger financial institutions because it offers
      longer hours of operation, personalized service and competitive interest rates
      on savings and time accounts with low minimum deposit requirements.




In
      order
      to compete with other financial institutions both within and beyond its primary
      service area, the Bank uses, to the fullest extent possible, the flexibility
      which independent status permits. This includes an emphasis on specialized
      services for the small businessperson and professional contacts by the Bank’s
      officers, directors and employees, and the greatest possible efforts to
      understand fully the financial situation of relatively small borrowers. The
      size
      of such borrowers, in management’s opinion, often inhibits close attention to
      their needs by larger institutions. The Bank may seek to arrange for loans
      in
      excess of its lending limit on a participation basis with other financial
      institutions. As of the end of 2005, all participations totaled approximately
      $17.9 million. Participations are used to more fully service customers whose
      loan demands exceed the Bank’s lending limit.




The
      Bank
      endeavors to be competitive with all competing financial institutions in its
      primary service area with respect to interest rates paid on time and savings
      deposits, its overdraft charges on deposit accounts, and interest rates charged
      on loans.




***Supervision
      and Regulation***




The
      following discussion sets forth certain of the material elements of the
      regulatory framework applicable to bank holding companies and their subsidiaries
      and provides certain specific information relevant to the Company. The
      regulatory framework is intended primarily for the protection of depositors,
      other customers and the Federal Deposit Insurance Funds and not for the
      protection of security holders. To the extent that the following information
      describes statutory and regulatory provisions, it is qualified in its entirety
      by reference to the particular statutory and regulatory provisions. A change
      in
      applicable statutes, regulations or regulatory policy may have a material effect
      on the business of the Company.






4




*The
      Company*




The
      Company is subject to the jurisdiction of the Securities and Exchange Commission
      (“SEC”) and of state securities commissions for matters relating to the offering
      and sale of its securities and is subject to the SEC’s rules and regulations
      relating to periodic reporting, reporting to shareholders, proxy solicitation
      and insider trading.




The
      Sarbanes-Oxley Act of 2002 implemented a broad range of corporate governance,
      accounting and reporting measures for companies that have securities registered
      under the Securities Exchange Act of 1934, such as the Company. Specifically,
      the Sarbanes-Oxley Act and the various regulations promulgated thereunder,
      established, among other things: (i) new requirements for audit committees,
      including independence, expertise, and responsibilities; (ii) additional
      responsibilities regarding financial statements for the Chief Executive Officer
      and Chief Financial Officer of the reporting company; (iii) new standards
      for auditors and the regulation of audits, including independence provisions
      that restrict non-audit services that accountants may provide to their audit
      clients; (iv) increased disclosure and reporting obligations for the
      reporting company and their directors and executive officers, including
      accelerated reporting of stock transactions and a prohibition on trading during
      pension blackout periods; (v) a prohibition on personal loans to directors
      and officers, except certain loans made by insured financial institutions on
      non-preferential terms and in compliance with other bank regulatory
      requirements; and (vi) a range of new and increased civil and criminal
      penalties for fraud and other violations of the securities laws . The
      Company has addressed the requirements imposed by regulations relating to the
      Sarbanes-Oxley Act, including forming a Nominating and Corporate Governance
      Committee (and establishing its charter), adopting a Code of Ethics applicable
      to the Company’s Chief Executive Officer, Chief Financial Officer and principal
      accounting officer (in addition to the Code of Conduct already in place for
      all
      employees and Board Members of the Company), and meeting NASDAQ’s and the SEC’s
      procedural and disclosure requirements.




In
      1999,
      the Gramm-Leach-Bliley Act (better known as the Financial Services Modernization
      Act of 1999) became law. The law permits bank holding companies to become
      financial holding companies and thereby affiliate with securities firms and
      insurance companies and engage in other activities that are financial in nature.
      A bank holding company may become a financial holding company if each of its
      subsidiary banks is well capitalized, is well managed and has at least a
      satisfactory rating under the Community Reinvestment Act, by filing a
      declaration that the bank holding company wishes to become a financial holding
      company. Also, no regulatory approval is required for a financial holding
      company to acquire a company, other than a bank or savings association, engaged
      in activities that are financial in nature or incidental to activities that
      are
      financial in nature, as determined by the Federal Reserve Board. The Financial
      Services Modernization Act defines "financial in nature" to include: securities
      underwriting, dealing and market making; sponsoring mutual funds and investment
      companies; insurance underwriting and agency; merchant banking activities;
      and
      activities that the Federal Reserve Board has determined to be closely related
      to banking. A national bank also may engage, subject to limitations on
      investment, in activities that are financial in nature, other than insurance
      underwriting, insurance company portfolio investment, real estate development
      and real estate investment, through a financial subsidiary of the bank, if
      the
      bank is well capitalized, well managed and has at least a satisfactory Community
      Reinvestment Act rating. Except for the increase in competitive pressures faced
      by all banking organizations that is a likely consequence of the Act, the
      Company believes that the legislation and implementing regulations are likely
      to
      have a more immediate impact on large regional and national institutions than
      on
      community-based institutions engaged principally in traditional banking
      activities. Because the legislation permits bank holding companies to engage
      in
      activities previously prohibited altogether or severely restricted because
      of
      the risks they posed to the banking system, implementing regulations impose
      strict and detailed prudential safeguards on affiliations among banking and
      non-banking companies in a holding company organization.






5






The
      Company is subject to the provisions of the Bank Holding Company Act of 1956,
      as
      amended and to supervision and examination by the FRB. Under the Bank Holding
      Company Act, the Company must secure the prior approval of the FRB before it
      may
      own or control, directly or indirectly, more than 5% of the voting shares or
      substantially all of the assets of any institution, including another bank
      (unless it already owns a majority of the voting stock of the
      bank).




Satisfactory
      financial condition, particularly with regard to capital adequacy, and
      satisfactory Community Reinvestment Act ratings are generally prerequisites
      to
      obtaining federal regulatory approval to make acquisitions. The Bank is
      currently rated “satisfactory” under the Community Reinvestment
      Act.




The
      Company is required to file an annual report with the Federal Reserve Board
      and
      any additional information that the Federal Reserve Board may require pursuant
      to the Bank Holding Company Act. The Federal Reserve Board may also make
      examinations of the Company and any or all of its subsidiaries. Further, a
      bank
      holding company and its subsidiaries are prohibited from engaging in certain
      tying arrangements in connection with the extension of credit or provision
      for
      any property or service. Thus, an affiliate of the Company, such as the Bank,
      may not condition the extension of credit, the lease or sale of property or
      furnishing of any services on (i) the customer’s obtaining or providing some
      additional credit, property or services from or to the Bank or other
      subsidiaries of the Company, or (ii) the customer’s refraining from doing
      business with a competitor of the Bank, the Company or of its subsidiaries.
      The
      Company or the Bank may impose conditions to the extent necessary to reasonably
      assure the soundness of credit extended.




Subsidiary
      banks of a bank holding company are subject to certain restrictions imposed
      by
      the Federal Reserve Act on (i) any extension of credit to the bank holding
      company or any of its subsidiaries, (ii) investments in the stock or other
      securities of the bank holding company, and (iii) taking the stock or securities
      of the bank holding company as collateral for loans to any
      borrower.




*The
      Bank*




As
      a
      nationally chartered commercial banking association, the Bank is subject to
      regulation, supervision and regular examination by the Office of the Comptroller
      of the Currency (OCC) and is required to furnish quarterly reports to the OCC.
      The Bank is a member of the Federal Reserve System. The Bank’s deposits are
      insured by the FDIC up to applicable legal limits. Some of the aspects of the
      lending and deposit business of the Bank that are regulated by these agencies
      include personal lending, mortgage lending and reserve requirements. The Bank
      is
      also subject to numerous federal, state and local laws and regulations which
      set
      forth specific restrictions and procedural requirements with respect to the
      extension of credit, credit practices, the disclosure of credit terms and
      discrimination in credit transactions. The approval of the OCC is required
      for
      the establishment of additional store offices.






6




Under
      the
      Change in Banking Control Act of 1978, subject to certain exceptions, no person
      may acquire control of the Bank without giving at least sixty days’ prior
      written notice to the OCC. Under this Act and its regulations, control of the
      Bank is generally presumed to be the power to vote ten percent (10%) or more
      of
      the Common Stock. The OCC is empowered to disapprove any such acquisition of
      control.




The
      amount of funds that the Bank may lend to a single borrower is limited generally
      under the National Bank Act to 15% of the aggregate of its capital, surplus
      and
      undivided profits and capital securities (all as defined by statute and
      regulation).




The
      OCC
      has authority under the Financial Institutions Supervisory Act to prohibit
      national banks from engaging in any activity, which, in the OCC’s opinion,
      constitutes an unsafe or unsound practice in conducting their businesses. The
      Federal Reserve Board has similar authority with respect to the
      Company.




As
      a
      consequence of the extensive regulation of commercial banking activities in
      the
      United States, the Company’s business is particularly susceptible to being
      affected by federal and state legislation and regulations, which may affect
      the
      cost of doing business.




The
      Uniting and Strengthening America by Providing Appropriate Tools Required to
      Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”) imposes
      additional obligations on U.S. financial institutions, including banks, to
      implement policies, procedures and controls, which are reasonably designed
      to
      detect and report instances of money laundering and the financing of terrorism.
      In addition, provisions of the USA Patriot Act require the federal financial
      institution regulatory agencies to consider the effectiveness of a financial
      institution's anti-money laundering activities when reviewing bank
      applications.




***National
      Monetary Policy***




In
      addition to being affected by general economic conditions, the earnings and
      growth of the Company are affected by the policies of regulatory authorities,
      including the OCC, the FRB and the FDIC. An important function of the FRB is
      to
      regulate the money supply and credit conditions. Among the instruments used
      to
      implement these objectives are open market operations in U.S. Government
      securities, setting the discount rate, and changes in reserve requirements
      against bank deposits. These instruments are used in varying combinations to
      influence overall growth and distribution of credit, bank loans, investments
      and
      deposits, and their use may also affect interest rates charged on loans or
      paid
      on deposits.




The
      monetary policies and regulations of the FRB have had a significant effect
      on
      the operating results of commercial banks in the past and are expected to
      continue to do so in the future. The effects of such policies upon the future
      business, earnings, and growth of the Company cannot be predicted.




***Environmental
      Laws***




The
      costs
      and effects of compliance with environmental laws, federal, state and local,
      on
      the Company are minimal.




7


***Available
      Information***




The
      Company makes available free of charge under the Investor Relations link on
      the
      Company’s website, *www.commercepc.com* ,
      its
      annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
      on
      Form 8-K, and amendments to those reports filed or furnished pursuant to Section
      13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after
      the
      Company electronically files such material with, or furnishes to, the SEC.
      Additionally, the SEC maintains an Internet site that contains reports, proxy
      and information statements, and other information regarding issuers that file
      electronically with the SEC at the web address, *www.sec.gov* .




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




The
      Company’s financial results are subject to a number of risks. The factors
      discussed below highlight risks that management believes are most relevant
      to
      the Company’s current operations. This list does not capture all risks
      associated with the Company’s business. Additional risks, including those that
      generally affect the banking and financial services industries and those that
      management currently believes are immaterial may also negatively impact the
      Company’s liquidity, financial position, or results of operations.




**We
      plan to continue to grow rapidly and there are risks associated with rapid
      growth.**




Over
      the
      past five years we have experienced significant growth in net income, assets,
      loans and deposits, all of which have been achieved through organic growth.
      We
      intend to continue to rapidly expand our business and operations.




Subject
      to regulatory approvals, we are targeting to open 30 new stores over the next
      six years. The cost to construct and furnish a new store will be approximately
      $1.7 million, excluding the cost to lease or purchase the land on which the
      store is located. In addition, we are currently constructing a new headquarters,
      operations and training center in Harrisburg, which we will open at the end
      of
      March 2006. The total anticipated cost to construct and furnish our new
      headquarters, operations and training center in Harrisburg will be approximately
      $19.0 million. Our ability to manage growth successfully will depend on our
      ability to attract qualified personnel and maintain cost controls and asset
      quality while attracting additional loans and deposits on favorable terms,
      as
      well as on factors beyond our control, such as economic conditions and
      competition. If we grow too quickly and are not able to attract qualified
      personnel, control costs and maintain asset quality, this continued rapid growth
      could materially adversely affect our financial performance.




**We
      are dependent on Commerce Bancorp, Inc. (“Bancorp”).**




Pursuant
      to the Network Agreement between us, the Bank, and Bancorp, which was last
      amended in September 2004, we have the right to use the "Commerce Bank" name
      and
      the "America's Most Convenient Bank" logo, among others, within the territory
      prescribed by the Network Agreement (the Pennsylvania counties of Adams, Berks,
      Bradford, Carbon, Centre, Clinton, Columbia, Cumberland, Dauphin, Franklin,
      Fulton, Huntingdon, Juniata, Lackawanna, Lancaster, Lebanon, Luzerne, Lycoming,
      Mifflin, Monroe, Montour, Northumberland, Perry, Pike, Potter, Schuylkill,
      Snyder, Sullivan, Susquehanna, Tioga, Union, Wayne, Wyoming, and York). As
      of
      December 31, 2005, Bancorp owned approximately 11.1% of our common stock, 100%
      of our Series A preferred stock, warrants that entitle Commerce of New Jersey
      to
      purchase 143,666 shares (adjusted for common stock dividends) of our common
      stock only upon our "change of control" (as defined in "Description of Our
      Capital Stock - Warrants") and 100% of our Trust Capital Securities. Under
      the
      Network Agreement, Bancorp, through its subsidiary, Commerce Bank, N.A., a
      national bank located in Cherry Hill, New Jersey, provides various services
      to
      the Bank including: maintaining the computer wide area network; proof and
      encoding services; deposit and loan account statement rendering; data
      processing; and advertising support. The Bank may only use these services in
      the
      territory prescribed by the Network Agreement. This restriction limits our
      growth to these areas as long as we are a party to the Network
      Agreement.






8




Bancorp
      can terminate the Network Agreement upon 360 days prior notice (a) on a fifth
      anniversary date of the Network Agreement (the next fifth anniversary date
      is
      January 1, 2010); (b) upon our change of control; or (c) upon the occurrence
      of
      specified events. If the Network Agreement is terminated, we will no longer
      be
      able to continue to operate under the Commerce name or logos. In addition,
      if
      the Network Agreement is terminated, there can be no assurance that our
      operations would not be disrupted or that we could obtain or provide these
      services at similar cost, which could materially and adversely affect our
      business, results of operations and financial condition. Any material adverse
      change to the business, results of operations and financial condition of Bancorp
      could have a material adverse effect on our business, results of operations
      and
      financial condition. In addition, any acquisition of Bancorp or similar
      transaction could have an adverse effect on us.




**Changes
      in interest rates could reduce our income and cash flows.**




Our
      operating income and net income depend to a great extent on our net interest
      margin, i.e., the difference between the interest yields we receive on loans,
      securities and other interest earning assets and the interest rates we pay
      on
      interest-bearing deposits and other liabilities. These rates are highly
      sensitive to many factors beyond our control, including competition, general
      economic conditions and monetary and fiscal policies of various governmental
      and
      regulatory authorities, including the Board of Governors of the Federal Reserve
      System, referred to as "FRB." If the rate of interest we pay on our
      interest-bearing deposits and other liabilities increases more than the rate
      of
      interest we receive on loans, securities and other interest earning assets,
      our
      net interest income, and therefore our earnings, could be adversely affected.
      Our earnings could also be adversely affected if the rates on our loans and
      other investments fall more quickly than those on our deposits and other
      liabilities.




**We
      operate in a highly regulated environment; changes in laws and regulations
      and
      accounting principles may adversely affect us.**




We
      are
      subject to extensive regulation, supervision, and legislation which govern
      almost all aspects of our operations. The laws and regulations applicable to
      the
      banking industry could change at any time and are primarily intended for the
      protection of customers, depositors and the deposit insurance funds. Any changes
      to these laws or any applicable accounting principles may negatively impact
      our
      results of operations and financial condition. While we cannot predict what
      effect any presently contemplated or future changes in the laws or regulations
      or their interpretations would have on us, these changes could be materially
      adverse to our investors and shareholders.






9




**"Anti-takeover"
      provisions may make it more difficult for a third party to acquire control
      of
      us, even if the change in control would be beneficial to
      shareholders.**




We
      are a
      Pennsylvania corporation. Anti-takeover provisions in Pennsylvania law and
      our
      articles of incorporation and bylaws could make it more difficult for a third
      party to acquire control of us. These provisions could adversely affect the
      market price of our common stock and could reduce the amount that shareholders
      might receive if we are sold. For example, our articles of incorporation provide
      that our board of directors may issue up to 960,000 shares of preferred stock
      without shareholder approval, subject to the rights of the outstanding preferred
      shares. In addition, "anti-takeover" provisions of our articles of
      incorporation, federal and state laws, and Pennsylvania law may restrict a
      third
      party's ability to obtain control of Pennsylvania Commerce and may prevent
      shareholders from receiving a premium for their shares of our common
      stock.




**Our
      common stock is not insured by any governmental agency and, therefore,
      investment in it involves risk.**




Our
      common stock is not a deposit account or other obligation of any bank, and
      is
      not insured by the FDIC, or any other governmental agency, and is subject to
      investment risk, including possible loss.




Our
      common stock is currently traded on the NASDAQ National Market. Prior to October
      13, 2004, our common stock was traded on the NASDAQ Small Cap Market. During
      the
      twelve months ended December 31, 2005, the average daily trading volume for
      our
      common stock was approximately 7,000 shares.




The
      sale
      of a large number of these shares could adversely affect our stock price and
      could impair our ability to raise capital through the sale of equity securities.
      Sales of our common stock could adversely affect the market price of our common
      stock and could impair our future ability to raise capital through the sale
      of
      equity securities. As of December 31, 2005, there were 6,013,859 shares of
      our
      common stock outstanding. Most of these shares are available for resale in
      the
      public market without restriction, except for shares held by our affiliates.
      Generally, our affiliates may either sell their shares under a registration
      statement or in compliance with the volume limitations and other requirements
      imposed by Rule 144 adopted by the SEC.




In
      addition, as of December 31, 2005, we had the authority to issue up to
      approximately 125,134 shares of our common stock under our stock option plans
      and 390,000 shares under our Dividend Reinvestment and Stock Purchase Plan.
      Additionally, we had outstanding warrants to purchase 287,332 shares of our
      common stock.




**Our
      executive officers, directors and other five percent or greater shareholders
      own
      a large percentage of our company, and could influence matters requiring
      approval by our shareholders.**




As
      of
      December 31, 2005, our executive officers and directors owned and had the right
      to vote approximately 27.25% of our outstanding stock and other five percent
      or
      greater shareholders owned and had the right to vote approximately 19.85% of
      our
      outstanding common stock. These shareholders, acting together, would be able
      to
      influence matters requiring approval by our shareholders, including the election
      of directors. This concentration of ownership might also have the effect of
      delaying or preventing a change of control of Pennsylvania
      Commerce.






10




**Item** **1B.
      Unresolved Staff Comments**




None.




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




As
      of
      December 31, 2005, the Company owns 15 properties and leases 25 other
      properties. The properties owned are not subject to any liens, encumbrances,
      or
      collateral assignments. The principal executive office of the Company is leased
      and located at 100 Senate Avenue, Camp Hill, Pennsylvania 17011. In late March
      2006, the Company will be relocating its principal executive office to a newly
      constructed building at 3801 Paxton Street, Harrisburg, Pennsylvania, 17111.
      The
      Bank presently has 28 stores located in the following Pennsylvania counties:
      Cumberland, Berks, Dauphin, Lebanon, and York.




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




The
      Company is subject to certain legal proceedings and claims arising in the
      ordinary course of business. It is management’s opinion that the ultimate
      resolution of these claims will not have a material adverse effect on the
      Company’s financial position and results of operations. The Company is not
      required to make any disclosures pursuant to Section 6707A(e) of the Internal
      Revenue Code.




**Item** **4.** **Submission
      of Matters to a Vote of Security Holders**




There
      were no matters submitted to a vote of security holders in the fourth quarter
      of
      2005.




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




Prior
      to
      October 13, 2004, shares of Pennsylvania Commerce Bancorp, Inc. common stock
      were traded on the NASDAQ Small Cap Market under the symbol COBH. The stock
      currently trades on the NASDAQ National Market under the symbol COBH. The table
      below sets forth the prices on the NASDAQ Small Cap Market (adjusted for stock
      dividends) known to us for each full quarterly period for the period January
      1,
      2004 through October 12, 2004. The table also includes the prices on the NASDAQ
      National Market known to us for the period beginning October 13, 2004 through
      December 31, 2005. As of December 31, 2005, there were approximately 2,200
      holders of record of the Company’s common stock.






Sales
                PriceQuarter
                Ended:
            
            
            
            High
            
            LowDecember
                31, 2005
            
            
            
            
            $
            36.00
            
            $
            30.72September
                30, 2005
            
            
            
            
            
            36.68
            
            
            33.05June
                30, 2005
            
            
            
            
            
            38.00
            
            
            29.11March
                31, 2005
            
            
            
            
            
            33.97
            
            
            28.93December
                31, 2004
            
            
            
            
            $
            31.50
            
            $
            22.00September
                30, 2004
            
            
            
            
            
            25.05
            
            
            21.88June
                30, 2004
            
            
            
            
            
            25.63
            
            
            23.26March
                31, 2004
            
            
            
            
            
            27.50
            
            
            23.35


11


***Dividends
      and Dividend History***




The
      Company distributed to stockholders 5% stock dividends in December 1992, and
      annually from February 1994 through February 2004. The Company also distributed
      to stockholders a two-for-one stock split (payable in the form of a 100% stock
      dividend) on August 7, 1995, and on February 25, 2005. Neither the Company
      nor
      the Bank has declared or paid cash dividends on its common stock since the
      Bank
      began operations in June 1985. The Board of Directors intends to follow a policy
      of retaining earnings for the purpose of increasing the Company’s and the Bank’s
      capital for the foreseeable future. Although the Board of Directors anticipates
      establishing a cash dividend policy in the future, no assurance can be given
      that cash dividends will be paid.




The
      holders of Common Stock of the Company are entitled to receive dividends as
      may
      be declared by the Board of Directors with respect to the Common Stock out
      of
      funds of the Company. While the Company is not subject to certain restrictions
      on dividends and stock redemptions applicable to a bank, the ability of the
      Company to pay dividends to the holders of its Common Stock will depend to
      a
      large extent upon the amount of dividends paid by the Bank to the Company.
      Regulatory authorities restrict the amount of cash dividends the Bank can
      declare without prior regulatory approval. Presently, the Bank cannot declare
      dividends in one year in excess of its net profits for the current year plus
      its
      retained net profits for the two preceding years, less any required transfers
      to
      surplus.




The
      ability of the Company to pay dividends on its Common Stock in the future will
      depend on the earnings and the financial condition of the Bank and the Company.
      The Company’s ability to pay dividends will be subject to the prior payment by
      the Company of principal and interest on any debt obligations it may incur
      in
      the future as well as other factors that may exist at the time.







12


**Item
      6. Selected Financial Data**


**Pennsylvania
                  Commerce Bancorp, Inc.****Selected
                  Consolidated Financial Data****At
                  or For the Year Ended December 31,***(dollars
                  in thousands, except per share data)*
              
              
              
              **2005**
              
              2004
              
              2003
              
              2002
              
              2001**BALANCE
                  SHEET DATA:**Total
                  assets
              
              
              
              
              **$**
              **1,641,121**
              
              $
              1,277,367
              
              $
              1,051,989
              
              $
              786,598
              
              $
              609,890Loans
                  held for sale
              
              
              
              
              
              **10,585**
              
              
              14,287
              
              
              9,164
              
              
              10,514
              
              
              7,661Loans
                  receivable (net)
              
              
              
              
              
              **815,439**
              
              
              638,496
              
              
              469,937
              
              
              363,735
              
              
              338,130Securities
                  available for sale
              
              
              
              
              
              **380,836**
              
              
              314,065
              
              
              275,400
              
              
              205,436
              
              
              104,722Securities
                  held to maturity
              
              
              
              
              
              **306,266**
              
              
              209,917
              
              
              199,863
              
              
              97,625
              
              
              103,349Federal
                  funds sold
              
              
              
              
              
              **0**
              
              
              12,000
              
              
              0
              
              
              44,500
              
              
              4,300Deposits
              
              
              
              
              
              **1,371,062**
              
              
              1,160,547
              
              
              906,527
              
              
              726,955
              
              
              561,738Short-term
                  borrowings and long-term debt
              
              
              
              
              
              **171,500**
              
              
              13,600
              
              
              79,000
              
              
              0
              
              
              0Trust
                  capital securities
              
              
              
              
              
              **0**
              
              
              0
              
              
              13,000
              
              
              13,000
              
              
              13,000Stockholders'
                  equity
              
              
              
              
              
              **91,643**
              
              
              85,039
              
              
              49,724
              
              
              42,812
              
              
              32,593**INCOME
                  STATEMENT DATA:**Net
                  interest income
              
              
              
              
              **$**
              **50,905**
              
              $
              46,585
              
              $
              33,890
              
              $
              27,701
              
              $
              22,054Provision
                  for loan losses
              
              
              
              
              
              **1,560**
              
              
              2,646
              
              
              1,695
              
              
              1,435
              
              
              1,469Noninterest
                  income
              
              
              
              
              
              **14,156**
              
              
              11,296
              
              
              9,990
              
              
              7,707
              
              
              6,607Noninterest
                  operating expenses
              
              
              
              
              
              **50,403**
              
              
              42,466
              
              
              32,510
              
              
              25,428
              
              
              20,512Income
                  before income taxes
              
              
              
              
              
              **13,098**
              
              
              12,769
              
              
              9,675
              
              
              8,545
              
              
              6,680Net
                  income
              
              
              
              
              
              **8,817**
              
              
              8,591
              
              
              6,557
              
              
              5,674
              
              
              4,448**COMMON
                  SHARE DATA:**Net
                  income per share:  *Basic*
              
              
              
              
              **$**
              **1.47**
              
              $
              1.75
              
              $
              1.44
              
              $
              1.29
              
              $
              1.07*Diluted*
              
              
              
              
              
              **1.38**
              
              
              1.63
              
              
              1.34
              
              
              1.18
              
              
              0.97Book
                  Value per share
              
              
              
              
              
              **15.07**
              
              
              14.31
              
              
              10.62
              
              
              9.40
              
              
              7.61**SELECTED
                  RATIOS:****PERFORMANCE:**Return
                  on average assets
              
              
              
              
              
              **0.61**
              %
              
              0.73
              %
              
              0.74
              %
              
              0.81
              %
              
              0.82
              %Return
                  on average stockholders' equity
              
              
              
              
              
              **9.91**
              
              
              14.78
              
              
              14.27
              
              
              14.86
              
              
              14.85Net
                  interest margin
              
              
              
              
              
              **3.77**
              
              
              4.28
              
              
              4.20
              
              
              4.29
              
              
              4.40**LIQUIDITY
                  AND CAPITAL:**Average
                  loans to average deposits
              
              
              
              
              
              **58.87**
              %
              
              57.20
              %
              
              52.23
              %
              
              56.91
              %
              
              63.25
              %Average
                  stockholders' equity to average total assets
              
              
              
              
              
              **6.12**
              
              
              4.96
              
              
              5.22
              
              
              5.49
              
              
              5.54Risk
                  based capital:   *Tier
                  1*
              
              
              
              
              
              **9.79**
              
              
              11.57
              
              
              9.57
              
              
              11.16
              
              
              10.22*Total*
              
              
              
              
              
              **10.61**
              
              
              12.49
              
              
              10.49
              
              
              12.22
              
              
              11.78*Leverage
                  Capital*
              
              
              
              
              
              **6.69**
              
              
              7.79
              
              
              6.19
              
              
              7.00
              
              
              7.33**ASSET
                  QUALITY:**Net
                  charge-offs to average loans outstanding
              
              
              
              
              
              **0.02**
              %
              
              0.14
              %
              
              0.20
              %
              
              0.23
              %
              
              0.21
              %Non-performing
                  loans to total year-end loans
              
              
              
              
              
              **0.31**
              
              
              0.13
              
              
              0.25
              
              
              0.45
              
              
              0.26Non-performing
                  assets to total year-end assets
              
              
              
              
              
              **0.16**
              
              
              0.11
              
              
              0.13
              
              
              0.23
              
              
              0.15Allowance
                  for loan losses to total year-end loans
              
              
              
              
              
              **1.12**
              
              
              1.21
              
              
              1.26
              
              
              1.40
              
              
              1.33Allowance
                  for loan losses to non-performing loans
              
              
              
              
              
              **364**
              
              
              916
              
              
              513
              
              
              311
              
              
              519




13


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




The
      information required by this item is incorporated by reference to the Company’s
      2005 Annual Report, which is attached to this Form 10-K as Exhibit
      13.




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




The
      information required by this item is incorporated by reference to the Company’s
      2005 Annual Report, which is attached to this Form 10-K as Exhibit
      13.




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




The
      information required by this item is incorporated by reference to the Company’s
      2005 Annual Report, which is attached to this Form 10-K as Exhibit
      13.




**Item
      9.** **Changes
      and Disagreements with Accountants on** **Accounting
      and Financial Disclosure**




None.




**Item
      9A. Controls and Procedures**




The
      Company, under supervision and with the participation of its management,
      including its principal executive officer and principal financial officer,
      evaluated the effectiveness of the design and operation of its disclosure
      controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) promulgated
      under the Securities Exchange Act of 1934 (Exchange Act). Based on this
      evaluation, the principal executive officer and principal financial officer
      concluded that the Company’s disclosure controls and procedures are adequate and
      effective as of December 31, 2005. There have not been any significant changes
      in the Company’s disclosure controls and procedures during 2005. The Report on
      Management’s Assessment of Internal Control Over Financial Reporting is provided
      in the next section. The attestation report of Beard Miller Company LLP, the
      Company’s independent registered public accounting firm, regarding the
      effectiveness of the Company’s internal control over financial reporting as of
      December 31, 2005 is provided in the Company’s 2005 Annual Report.




A
      control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the control system are met.
      Further, the design of a control system must reflect the fact that there are
      resource constraints, and the benefits of controls must be considered relative
      to their costs. Because of the inherent limitations in all control systems,
      no
      evaluation of controls can provide absolute assurance that all control issues
      and instances of fraud, if any, within the Company have been detected. Because
      of the inherent limitations in a cost-effective control system, misstatements
      due to error or fraud may occur and not be detected. The Company conducts
      periodic evaluations to enhance, where necessary, its procedures and
      controls.




**Management’s
      Report on Internal Control over Financial Reporting**




Pennsylvania
      Commerce Bancorp, Inc. is responsible for the preparation, integrity, and fair
      presentation of the consolidated financial statements included in this annual
      report. The consolidated financial statements and notes included in this annual
      report have been prepared in conformity with United States generally accepted
      accounting principles and necessarily include some amounts that are based on
      management’s best estimates and judgments.






14





We,
      as
      management of Pennsylvania Commerce Bancorp, Inc., are responsible for
      establishing and maintaining effective internal control over financial reporting
      that is designed to produce reliable financial statements in conformity with
      United States generally accepted accounting principles. Internal control over
      financial reporting includes those policies and procedures that pertain to
      the
      maintenance of records that in reasonable detail accurately and fairly reflect
      the transactions and dispositions of the assets of the Company; provide
      reasonable assurance that the transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the Company are
      only being made in accordance with authorizations of management and directors
      of
      the Company; and provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use, or disposition of the Company’s
      assets that could have a material effect on the financial statements. The system
      of internal control over financial reporting as it relates to the financial
      statements is evaluated for effectiveness by management and tested for liability
      through a program of internal audits. Actions are taken to correct potential
      deficiencies as they are identified.





Any
      system of internal control, no matter how well designed, has inherent
      limitations, including the possibility that a control can be circumvented or
      overridden and misstatements due to error or fraud may occur and not be
      detected. Also, because of changes in conditions, internal control effectiveness
      may vary over time. Accordingly, even an effective system of internal control
      will provide only reasonable assurance with respect to financial statement
      preparation.





Management
      assessed the Company’s system of internal control over financial reporting as of
      December 31, 2005, in relation to criteria for effective internal control over
      financial reporting as described in *Internal
      Control - Integrated Framework* ,
      issued
      by the Committee of Sponsoring Organizations of the Treadway Commission. Based
      on this assessment, management concludes that, as of December 31, 2005, its
      system of internal control over financial reporting is effective and meets
      the
      criteria of the *Internal
      Control - Integrated Framework.* Beard
      Miller Company LLP, independent registered public accounting firm, has issued
      an
      attestation report on management’s assessment of the effectiveness of the
      Company’s internal control over financial reporting as of December 31,
      2005.





/s/
      Gary L. Nalbandian


Gary
      L.
      Nalbandian


Chairman,
      President and Chief Executive Officer


(Principal
      Executive Officer)





/s/
      Mark A. Zody


Mark
      A.
      Zody


Executive
      Vice President and Chief Financial Officer


(Principal
      Financial and Accounting Officer)





March
      13,
      2006








15




**Item
      9B. Other Information**




None.




**Part**  **III.**




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




Information
      responsive to this item is incorporated by reference to the Company’s definitive
      proxy statement for the 2006 Annual Meeting of Shareholders, which will be
      filed
      with the Securities and Exchange Commission on or before April 30, 2006. In
      addition to a Code of Business Conduct and Ethics applicable to all employees
      and the Board of Directors, the Company has adopted a Code of Ethics for Senior
      Financial Officers that is specifically applicable to its Chief Executive
      Officer, Chief Financial Officer and Principal Accounting Officer. Both of
      these
      codes are posted under the Investor Relations link on the Company’s website, *www.commercepc.com* .




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




Information
      responsive to this item is incorporated by reference to the Company’s definitive
      proxy statement for the 2006 Annual Meeting of Shareholders, which will be
      filed
      with the Securities and Exchange Commission on or before April 30,
      2006.




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




Information
      responsive to this item is incorporated by reference to the Company’s definitive
      proxy statement for the 2006 Annual Meeting of Shareholders, which will be
      filed
      with the Securities and Exchange Commission on or before April 30, 2006.




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




Information
      responsive to this item is incorporated by reference to the Company’s definitive
      proxy statement for the 2006 Annual Meeting of Shareholders, which will be
      filed
      with the Securities and Exchange Commission on or before April 30,
      2006.




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




Information
      responsive to this item is incorporated by reference to the Company’s definitive
      proxy statement for the 2006 Annual Meeting of Shareholders, which will be
      filed
      with the Securities and Exchange Commission on or before April 30,
      2006.






16




**Part**  **IV.**




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




(a)(1)  The
      following financial statements are incorporated by reference in Part II, Item
      8
      hereof:




Consolidated
      Balance Sheets as of December 31, 2005 and 2004




Consolidated
      Statements of Income for the years ended December 31, 2005, 2004 and
      2003




Consolidated
      Statements of Stockholders’ Equity for the years ended December 31, 2005, 2004
      and 2003




Consolidated
      Statements of Cash Flows for the years ended December 31, 2005, 2004 and
      2003




Notes
      to
      Consolidated Financial Statements




Report
      of
      Independent Registered Public Accounting Firm




(a)(2)  Financial
      Statement Schedules (This item is omitted since information required is either
      not applicable or is included in the footnotes to the Annual Financial
      Statements.)




(a)(3)   List
      of
      Exhibits:




3.1.
            Articles
                of Incorporation of the Company as amended (incorporated by reference
                to
                Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the
                SEC on February 22, 2006)3.2.
            By-Laws
                of the Company as amended (incorporated by reference to Exhibit 99.2
                to
                the Company’s Current Report on Form 8-K, filed with the SEC on February
                22, 2006)4.
            Registration
                Rights Agreement dated as of September 29, 2004 between the Company
                and
                Commerce Bancorp, Inc. (incorporated by reference to Exhibit 4.1
                to the
                Company’s Current Report on Form 8-K, filed with the SEC on October 1,
                2004)10.1.
            The
                Company’s 1990 Directors Stock Option Plan (incorporated by reference to
                Exhibit 4 to the Company’s Registration Statement on Form S-4, filed with
                the SEC on July 1, 1999) *10.2.
            The
                Company’s 1996 Employee Stock Option Plan (incorporated by reference to
                Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the
                SEC on December 23, 2004)10.3.
            Warrant
                Agreement and Warrant No. 1 of Commerce Bank/Harrisburg, N.A. dated
                October 7, 1988 (incorporated by reference to Exhibit 10.3 to the
                Company’s Annual Report on Form 10-K, filed with the SEC on March 30,
                2000)10.4.
            Amendment
                No. 1 to the Stock and Warrant Purchase Agreement (incorporated by
                reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K,
                filed with the SEC on March 30, 2000)10.5.
            The
                Company’s 2001 Directors Stock Option Plan (incorporated by reference to
                Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the
                SEC on December 23, 2004)*10.6.
            Amendment
                No. 1 to Network Agreement, including original Network Agreement,
                by and
                among Commerce Bancorp, Inc., Pennsylvania Commerce Bancorp, Inc.,
                and
                Commerce Bank/Harrisburg, N.A. (incorporated by reference to Exhibit
                10 to
                the Company’s Quarterly Report on Form 10-Q, filed with the SEC on
                November 14, 2003)








17








10.7.
            Amendment
                No. 2 to Network Agreement, including original Network Agreement,
                by and
                among Commerce Bancorp, Inc., Pennsylvania Commerce Bancorp, Inc.,
                and
                Commerce Bank/Harrisburg, N.A. (incorporated by reference to Exhibit
                10.1
                to the Company’s Current Report on Form 8-K, filed with the SEC on October
                1, 2004)10.8.
            Stock
                Purchase Agreement dated as of September 29, 2004 between Pennsylvania
                Commerce Bancorp, Inc. and Commerce Bancorp, Inc. (incorporated by
                reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K,
                filed with the SEC on October 1, 2004)10.9.
            The
                Company’s 2006 Employee Stock Option Plan (incorporated by reference to
                Appendix A to the Company’s Definitive Proxy Statement (Form DEF 14-A),
                filed with the SEC on April 22, 2005)11.
            Calculation
                of EPS(The
                information required by this item appears in Note 13 of the Consolidated
                Financial Statements of the Company’s 2005 Annual Report to Shareholders
                and is incorporated by reference herein.)13.
            Pennsylvania
                Commerce Bancorp, Inc. 2005 Annual Report to Shareholders21.
            Subsidiaries
                of the Company23.
            Consent
                of Beard Miller Company LLP.31.1.
            Certification
                of CEO, required by SEC Rule 13a-14(a)/15d-14(a)31.2.
            Certification
                of CFO, required by SEC Rule 13a-14(a)/15d-14(a)32.
            Section
                1350 Certification by CEO and CFO99.
            Agreement
                to Furnish Debt Instruments(b)
            Exhibits
                - The exhibits required to be filed as part of this report are submitted
                as a separate section of this report.(c)
            Financial
                Statement Schedules - None required.


**
      Denotes a compensatory plan or arrangement*






18


**Signatures**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




Pennsylvania
                Commerce Bancorp, Inc. (Registrant)Date:
                March 16, 2006
            By/s/
                Gary L. Nalbandian**Gary
                L. Nalbandian****Chairman
                and President**Date:
                March 16, 2006
            By/s/
                Mark A. Zody**Mark
                A. Zody****Chief
                Financial Officer****(Principal
                Accounting Officer)**





Pursuant
      to the requirements of the Securities and Exchange Act of 1934, this report
      has
      been signed below by the following persons on behalf of the registrant and
      in
      the capacities and on the dates indicated.





**Signature**
            **Title**
            **Date**/s/
                Gary L. Nalbandian
            Chairman
                of the Board, President and Director (Principal Executive
                Officer)
            March
                16, 2006**Gary
                L. Nalbandian**/s/
                Mark A. Zody
            Chief
                Financial Officer (Principal Financial Officer and Principal Accounting
                Officer)
            March
                16, 2006**Mark
                A. Zody**/s/
                James R. Adair
            Director
            March
                16, 2006**James
                R. Adair**/s/
                John J. Cardello
            Director
            March
                16, 2006**John
                J. Cardello**/s/
                Douglas S. Gelder
            Director
            March
                16, 2006**Douglas
                S. Gelder**/s/
                Alan R. Hassman
            Director
            March
                16, 2006**Alan
                R. Hassman**/s/
                Howell C. Mette
            Director
            March
                16, 2006**Howell
                C. Mette**/s/
                Michael A. Serluco
            Director
            March
                16, 2006**Michael
                A. Serluco**/s/
                Samir J. Srouji, M.D.
            Director
            March
                16, 2006**Samir
                J. Srouji, M.D.**





19