UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form 10-Q

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the quarterly period ended June 30, 2004
                                               --------------
                                       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 #1-12069
                                           ----------

                        [COMMERCE BANCORP LOGO OMITTED]
             (Exact name of registrant as specified in its charter)

               New Jersey                               22-2433468
--------------------------------------------------------------------------------
   (State or other jurisdiction of             (IRS Employer Identification
     incorporation or organization)                       Number)

     Commerce Atrium, 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400
--------------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (856) 751-9000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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  report(s),  and (2) has  been  subject  to such  filing
requirements for the past 90 days.

                       Yes  X                          No __

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                        Yes X                          No __

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

  Indicate the number of shares outstanding of each of the issuer's classes of
                common stock, as of the latest practicable date.

             Common Stock                          78,585,388
--------------------------------------------------------------------------------
           (Title of Class)                (No. of Shares Outstanding
                                               as of August 2, 2004)


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                      INDEX

                                                                            Page
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets (unaudited)
         June 30, 2004 and December 31, 2003...................................1

         Consolidated  Statements of Income  (unaudited)
         Three months ended June 30, 2004 and June 30, 2003 and
         six months ended June 30, 2004 and June 30, 2003......................2

         Consolidated Statements of Cash Flows (unaudited)
         Six months ended June 30, 2004 and June 30, 2003......................3

         Consolidated Statement of Changes in Stockholders' Equity (unaudited)
         Six months ended June 30, 2004........................................4

         Notes to Consolidated Financial Statements (unaudited)................5

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operation...................................10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........22

Item 4.  Controls and Procedures..............................................22

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings....................................................23

Item 2.  Changes in Securities, Use of Proceeds and Purchases of
         Certain Equity Securities by the Issuer and Others...................23

Item 4.  Submission of Matters to a Vote of Security Holders..................24

Item 6.  Exhibits and Reports on Form 8-K.....................................25


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<TABLE>
<CAPTION>

                  ------------------------------------------------------------------------------------------------
                                                                                   June 30,        December 31,
                                                                                 ---------------------------------
                  (dollars in thousands)                                             2004              2003
                  ------------------------------------------------------------------------------------------------
<S>                                                                              <C>              <C>
Assets            Cash and due from banks                                        $   1,081,459    $      910,092
                  Federal funds sold                                                     8,500
                                                                                 --------------   --------------
                       Cash and cash equivalents                                     1,089,959          910,092
                  Loans held for sale                                                   41,047           42,769
                  Trading securities                                                   182,105          170,458
                  Securities available for sale                                     12,131,104       10,650,655
                  Securities held to maturity                                        3,772,204        2,490,484
                      (market value 06/04-$3,696,221; 12/03-$2,467,192)
                  Loans                                                              8,330,456        7,440,576
                       Less allowance for loan losses                                  124,688          112,057
                                                                                 --------------   --------------
                                                                                     8,205,768        7,328,519
                  Bank premises and equipment, net                                     906,455          811,451
                  Other assets                                                         410,029          307,752
                                                                                 --------------   --------------
                                                                                 $  26,738,671     $ 22,712,180
                                                                                 ==============   ==============
Liabilities       Deposits:
                       Demand:

                         Noninterest-bearing                                     $   5,622,574     $  4,574,714
                         Interest-bearing                                            9,632,178        8,574,297
                       Savings                                                       5,597,767        4,222,282
                       Time                                                          3,209,229        3,330,107
                                                                                 --------------   --------------
                           Total deposits                                           24,061,748       20,701,400
                  Other borrowed money                                                 944,040          311,510
                  Other liabilities                                                    204,768          221,982
                  Long-term debt                                                       200,000          200,000
                                                                                 --------------   --------------
                                                                                    25,410,556       21,434,892

Stockholders'     Common stock, 78,658,414 shares
Equity                 issued (76,869,415 shares at December 31, 2003)                  78,658           76,869
                  Capital in excess of par value                                       936,539          866,095
                  Retained earnings                                                    446,260          347,365
                  Accumulated other comprehensive loss                                (122,003)          (3,702)
                                                                                 --------------   --------------
                                                                                     1,339,454        1,286,627

                  Less treasury stock, at cost, 397,859 shares
                        issued (363,076 shares at December 31, 2003)                    11,339            9,339
                                                                                 --------------   --------------
                           Total stockholders' equity                                1,328,115        1,277,288
                                                                                 --------------   --------------
                                                                                  $ 26,738,671     $ 22,712,180
                                                                                 ==============   ==============
</TABLE>

                             See accompanying notes.

                                       1


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
<TABLE>
<CAPTION>

              ---------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended              Six Months Ended
                                                                      June 30,                       June 30,
                                                             ----------------------------------------------------------
              (dollars in thousands, except per share
              amounts)                                            2004           2003           2004           2003
              ---------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>           <C>             <C>
Interest      Interest and fees on loans                         $113,947       $ 95,548      $ 222,160       $188,669
income        Interest on investments                             177,929        123,098        341,428        236,759
              Other interest                                          154             98            494            177
                                                             -------------   ------------   ------------   ------------
                       Total interest income                      292,030        218,744        564,082        425,605
                                                             -------------   ------------   ------------   ------------

Interest      Interest on deposits:
expense            Demand                                          18,729         11,961         34,672         24,358
                   Savings                                         10,216          6,754         18,002         13,109
                   Time                                            14,264         17,387         28,907         34,233
                                                             -------------   ------------   ------------   ------------
                       Total interest on deposits                  43,209         36,102         81,581         71,700
              Interest on other borrowed money                      1,052            318          1,500          1,232
              Interest on long-term debt                            3,020          3,020          6,040          6,040
                                                             -------------   ------------   ------------   ------------
                       Total interest expense                      47,281         39,440         89,121         78,972
                                                             -------------   ------------   ------------   ------------

              Net interest income                                 244,749        179,304        474,961        346,633
              Provision for loan losses                            10,748          6,900         20,248         13,800
                                                             -------------   ------------   ------------   ------------
              Net interest income after provision for
                   loan losses                                    234,001        172,404        454,713        332,833

Noninterest   Deposit charges and service fees                     52,717         38,765         98,198         73,607
income        Other operating income                               38,923         43,388         79,250         84,748
              Net investment securities gains                         635          1,217          1,059          1,081
                                                             -------------   ------------   ------------   ------------
                       Total noninterest income                    92,275         83,370        178,507        159,436
                                                             -------------   ------------   ------------   ------------

Noninterest   Salaries and benefits                               104,110         86,338        201,450        168,420
expense       Occupancy                                            27,949         22,695         56,059         43,183
              Furniture and equipment                              27,001         20,556         51,180         41,782
              Office                                               10,920          9,233         21,840         18,419
              Marketing                                             9,278          9,198         17,974         14,474
              Other                                                46,997         39,658         90,002         73,521
                                                             -------------   ------------   ------------   ------------
                       Total noninterest expenses                 226,255        187,678        438,505        359,799
                                                             -------------   ------------   ------------   ------------

              Income before income taxes                          100,021         68,096        194,715        132,470
              Provision for federal and state income taxes         33,786         22,779         66,505         44,263
                                                             -------------   ------------   ------------   ------------
              Net income                                         $ 66,235       $ 45,317      $ 128,210       $ 88,207
                                                             =============   ============   ============   ============

              Net  income per common and common equivalent share:
                       Basic                                      $  0.85       $   0.65        $  1.65       $   1.28
                       Diluted                                    $  0.79       $   0.63        $  1.54       $   1.23
              Average common and common equivalent shares outstanding:
                       Basic                                       77,980         69,193         77,572         68,758
                       Diluted                                     86,260         72,128         85,893         71,944
              Cash dividends, common stock                        $  0.19       $   0.16        $  0.38       $   0.33

</TABLE>

                             See accompanying notes.


                                       2


<PAGE>

<TABLE>
<CAPTION>

                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                  ----------------------------------------------------------------------------------------------------
                                                                                                Six Months Ended
                                                                                                     June 30,
                                                                                       -------------------------------
                  (dollars in thousands)                                                       2004             2003
                  ----------------------------------------------------------------------------------------------------
<S>                                                                                       <C>                <C>
Operating         Net income                                                              $  128,210         $ 88,207
activities        Adjustments to reconcile net income to net cash
                     provided by operating activities:
                       Provision for loan losses                                              20,248           13,800
                       Provision for depreciation, amortization and accretion                 63,429           60,943
                       Gain on sales of securities available for sale                         (1,059)          (1,081)
                       Proceeds from sales of loans held for sale                            408,006          854,984
                       Originations of loans held for sale                                  (406,284)        (849,349)
                       Net (increase) decrease in trading securities                         (11,647)         117,028
                       Increase in other assets, net                                         (35,859)         (18,039)
                       Decrease in other liabilities                                         (14,414)         (13,724)
                  ----------------------------------------------------------------------------------------------------
                             Net cash provided by operating activities                       150,630          252,769

Investing         Proceeds from the sales of securities available for sale                 1,656,912        2,072,409
activities        Proceeds from the maturity of securities available for sale              2,228,796        2,493,675
                  Proceeds from the maturity of securities held to maturity                  407,486          279,923
                  Purchase of securities available for sale                               (5,569,909)      (7,207,889)
                  Purchase of securities held to maturity                                 (1,690,817)        (358,633)
                  Net increase in loans                                                     (897,497)        (561,249)
                  Capital expenditures                                                      (136,731)        (151,499)
                  ----------------------------------------------------------------------------------------------------
                             Net cash used by investing activities                        (4,001,760)      (3,433,263)

Financing         Net increase in demand and savings deposits                              3,481,226        2,848,174
activities        Net (decrease) increase in time deposits                                  (120,878)         390,067
                  Net increase in other borrowed money                                       632,530          116,334
                  Dividends paid                                                             (29,315)         (22,569)
                  Proceeds from issuance of common stock under
                     dividend reinvestment and other stock plans                              69,433           52,251
                  Other                                                                       (1,999)          (1,312)
                  ----------------------------------------------------------------------------------------------------
                             Net cash provided by financing activities                     4,030,997        3,382,945

                  Increase in cash and cash equivalents                                      179,867          202,451
                  Cash and cash equivalents at beginning of year                             910,092          811,434
                  ----------------------------------------------------------------------------------------------------
                  Cash and cash equivalents at end of period                             $ 1,089,959      $ 1,013,885
                  ====================================================================================================

                  Supplemental  disclosures of cash flow information:
                     Cash paid during the period for:
                       Interest                                                             $ 89,705         $ 79,741
                       Income taxes                                                           63,339           36,462

</TABLE>

                             See accompanying notes.


                                       3


<PAGE>

<TABLE>
<CAPTION>

                                      COMMERCE BANCORP, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                   (unaudited)

Six months ended June 30, 2004
(in thousands)
------------------------------------------------------------------------------------------------------------------------------------
                                                                   Capital in                            Accumulated
                                                                   Excess of                                Other
                                                         Common       Par        Retained   Treasury    Comprehensive
                                                          Stock      Value       Earnings     Stock     Income (Loss)      Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                       <C>         <C>         <C>        <C>              <C>        <C>
Balances at December 31, 2003                             $76,869     $866,095    $347,365   $ (9,339)        $ (3,702)  $1,277,288
Net income                                                                         128,210                                  128,210
   Other comprehensive income(loss), net of tax
     Unrealized loss on securities (pre-tax $217,801)                                                         (139,612)    (139,612)
     Reclassification adjustment (pre-tax $32,786)                                                              21,311       21,311
                                                                                                                        ------------
   Other comprehensive income (loss)                                                                                       (118,301)
Total comprehensive income                                                                                                    9,909
Cash dividends paid                                                                (29,315)                                 (29,315)
Shares issued under dividend reinvestment
   and compensation and benefit plans (1,789 shares)        1,789       67,644                                               69,433
Other                                                                    2,800                 (2,000)                          800
------------------------------------------------------------------------------------------------------------------------------------
Balances at June 30, 2004                                 $78,658     $936,539    $446,260   $(11,339)       $(122,003)  $1,328,115
====================================================================================================================================

</TABLE>


                             See accompanying notes.


                                       4


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

A.       Consolidated Financial Statements

The consolidated financial statements included herein have been prepared without
audit  pursuant to the rules and  regulations  of the  Securities  and  Exchange
Commission.  Certain information and footnote  disclosures  normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United  States have been  condensed or omitted  pursuant to such
rules and regulations.  These consolidated financial statements were prepared in
accordance  with  the  accounting  policies  set  forth  in note 1  (Significant
Accounting Policies) of the Notes to Consolidated  Financial Statements included
in the  Company's  Annual  Report on Form 10-K for the year ended  December  31,
2003. The accompanying consolidated financial statements reflect all adjustments
that are, in the opinion of management, necessary to reflect a fair statement of
the results for the interim periods presented.  Such adjustments are of a normal
recurring nature.

These consolidated  financial  statements should be read in conjunction with the
audited financial  statements and the notes thereto included in the registrant's
Annual Report on Form 10-K for the year ended December 31, 2003. The results for
the three and six months ended June 30, 2004 are not  necessarily  indicative of
the results that may be expected for the year ended December 31, 2004.

The consolidated  financial statements include the accounts of Commerce Bancorp,
Inc. and its consolidated  subsidiaries.  All material intercompany transactions
have been eliminated. Certain amounts from prior years have been reclassified to
conform with 2004 presentation.

B.       Legal Proceedings

On June  29,  2004  the U.S.  Attorney  General  indicted  two  officers  of the
Company's  Philadelphia  bank subsidiary in connection with its investigation of
certain  Philadelphia  city  government  officials.  The Company  confirms  that
neither it, nor any of its  subsidiaries  or other  officers and  employees  are
targets  of the  investigation.  The  Company  has  fully  cooperated  with this
investigation and believes it will have no material negative financial impact on
the Company.

During  July 2004,  class  action  complaints  were  filed in the United  States
District  Court for the  District  of New Jersey  and the  Eastern  District  of
Pennsylvania against the Company and certain Company (or subsidiary) current and
former  officers  and  directors.  The  complaints  allege  that the  defendants
violated the federal securities laws, specifically Sections 10 (b) and 20 (a) of
the  Securities  Exchange  Act of 1934 and  Rule  10b-5  of the  Securities  and
Exchange  Commission.  The plaintiffs  seek  unspecified  damages on behalf of a
purported  class  of  purchasers  of the  Company's  securities  during  various
periods.  The Company believes that the complaints  against it are without merit
and intends to vigorously defend itself.

C.       Long Term Debt

On April 1,  2004,  the  Company's  $200.0  million of 5.95%  Convertible  Trust
Capital  Securities,  recorded on the  consolidated  balance  sheet as long term
debt,  became  convertible  at the  option of the  holder.  The  holders  of the
Convertible  Trust  Capital  Securities  may convert each  security  into 0.9478
shares of Company  common stock.  The Company has calculated the effect of these
securities  on diluted  net income per share by using the  if-converted  method.
Under the if-converted  method,  the related interest charges on the Convertible
Trust Capital Securities, adjusted for income taxes, have been added back to the
numerator and the common shares to be issued upon  conversion have been added to
the denominator.

The Convertible  Trust Capital  Securities were issued on March 11, 2002 through
Commerce  Capital Trust II, a Delaware  business trust.  The  Convertible  Trust
Capital Securities mature in 2032.


                                       5


<PAGE>


D.       Bank Premises and Equipment

In  accordance  with  accounting  principles  generally  accepted  in the United
States,  when capitalizing costs for branch  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  branch.  All  other  pre-opening  and
post-opening costs related to branches are expensed as incurred.  As of June 30,
2004 and December 31, 2003,  Bank  premises and  equipment in progress was $87.6
million and $87.2 million, respectively.

E.       Commitments

In the normal course of business,  there are various outstanding  commitments to
extend  credit,  such as  letters  of credit and  unadvanced  loan  commitments.
Management  does  not  anticipate  any  material  losses  as a  result  of these
transactions.  In  accordance  with FASB  Interpretation  No.  45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others" (FIN 45),  the Company  defers the fees
associated   with  standby   letters  of  credit  and  records  them  in  "Other
liabilities" on the consolidated balance sheet. These fees are immaterial to the
Company's consolidated financial statements at June 30, 2004.

F.       Comprehensive Income (Loss)

Total comprehensive income (loss), which for the Company included net income and
changes in  unrealized  gains and  losses on the  Company's  available  for sale
securities,  amounted to $(133.8) million and $41.6 million,  respectively,  for
the three months ended June 30, 2004 and 2003. For the six months ended June 30,
2004 and 2003,  total  comprehensive  income was $9.9 million and $64.1 million,
respectively.

G.       New Accounting Standards

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable  Interest  Entities"  (FIN 46). In December 2003, the FASB deferred the
implementation  date of FIN 46 to periods  ending  after  March 15, 2004 for all
variable interest entities with the exception of special-purpose entities, which
were  subject to  adoption in periods  ending  after  December  15,  2003.  This
interpretation  provides  guidance on how to identify a variable interest entity
(VIE) and determine when the assets, liabilities,  noncontrolling interests, and
results of operations  of a VIE need to be included in a company's  consolidated
financial  statements.  The adoption of FIN 46 did not have a material impact on
the Company's financial condition or operating results.

The Company makes investments  directly in low-income housing tax credit (LIHTC)
operating  partnerships,  private  venture  capital  funds  and  Small  Business
Investment  Companies  (SBIC).  The Company has determined these entities do not
meet the  consolidation  criteria of FIN 46. At June 30, 2004 and  December  31,
2003, the Company's investment in these entities totaled $38.8 million and $30.1
million, respectively.


                                       6


<PAGE>


H.       Stock-Based Compensation

The  Company  follows  APB  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees"  and  related   Interpretations   to  account  for  its   stock-based
compensation  plans.  If the Company had  accounted  for stock options under the
fair value provisions of FAS 123, "Accounting for Stock-Based Compensation", net
income and net income per share would have been as follows (in thousands, except
per share amounts):

<TABLE>
<CAPTION>


-------------------------------------------------------------------------------------------------------------------
                                                        Three Months Ended                 Six Months Ended
                                                             June 30,                          June 30,
-------------------------------------------------------------------------------------------------------------------
                                                        2004             2003            2004             2003
-------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>             <C>              <C>
Reported net income                                    $66,235         $45,317         $128,210         $88,207
Less:  Stock option compensation expense
   determined under fair value method, net of tax       (3,090)         (2,233)          (6,510)         (4,613)
                                                  ---------------  ---------------  --------------  ---------------
Pro forma net income, basic                            $63,145         $43,084         $121,700         $83,594
                                                                   ===============                  ===============
Add:  Interest expense on Convertible Trust
   Capital Securities, net of tax                        1,963                            3,926
                                                  ---------------                   --------------
Pro forma net income, diluted                          $65,108                         $125,626
                                                  ===============                   ==============

Reported net income per share:
   Basic                                             $    0.85       $    0.65         $   1.65       $    1.28
   Diluted                                           $    0.79       $    0.63         $   1.54       $    1.23

Pro forma net income per share:
   Basic                                             $    0.81       $    0.62         $   1.57       $    1.22
   Diluted                                           $    0.75       $    0.60         $   1.46       $    1.16
-------------------------------------------------------------------------------------------------------------------
</TABLE>


The fair value of options  granted in 2004 and 2003 was estimated at the date of
grant using a  Black-Scholes  option  pricing model with the following  weighted
average assumptions: risk-free interest rates of 3.09% to 3.00%, dividend yields
of 1.33% to  1.50%,  volatility  factors  of the  expected  market  price of the
Company's  common stock of .255 to .304 and weighted  average  expected lives of
the options of 5.27 and 5.22 years.

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.


                                       7


<PAGE>


I.       Segment Information

The Company operates one reportable segment of business,  Community Banks, which
includes all of the Company's banking subsidiaries. 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 Insurance Services, Inc. and Commerce Capital Markets, Inc.

Selected segment information is as follows (in thousands):

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
                                                 Three Months Ended                       Three Months Ended
                                                    June 30, 2004                            June 30, 2003
                                        Community      Parent/                   Community      Parent/
                                          Banks         Other        Total         Banks         Other        Total
-------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>          <C>           <C>           <C>          <C>
Net interest income                   $    246,385  $   (1,636)  $    244,749  $   180,729   $    (1,425) $   179,304
Provision for loan losses                   10,748           -         10,748        6,900                      6,900
                                      -----------------------------------------------------------------------------------
Net interest income after provision        235,637      (1,636)       234,001      173,829        (1,425)     172,404
Noninterest income                          66,836      25,439         92,275       56,009        27,361       83,370
Noninterest expense                        203,155      23,100        226,255      166,136        21,542      187,678
                                      -----------------------------------------------------------------------------------
Income before income taxes                  99,318         703        100,021       63,702         4,394       68,096
Income tax expense                          33,917        (131)        33,786       21,317         1,462       22,779
                                      -----------------------------------------------------------------------------------
Net income                            $     65,401  $      834   $     66,235  $    42,385   $     2,932  $    45,317
                                      ===================================================================================

Average assets (in millions)          $     23,778  $    2,044   $     25,822  $    16,715   $     1,784  $    18,499
                                      ===================================================================================

-------------------------------------------------------------------------------------------------------------------------
                                                  Six Months Ended                         Six Months Ended
                                                    June 30, 2004                            June 30, 2003
-------------------------------------------------------------------------------------------------------------------------
                                        Community      Parent/                   Community      Parent/
                                          Banks         Other        Total         Banks         Other        Total
-------------------------------------------------------------------------------------------------------------------------
Net interest income                   $   478,221   $   (3,260)  $   474,961   $   348,958   $    (2,325) $   346,633
Provision for loan losses                  20,248                     20,248        13,800                     13,800
                                      -----------------------------------------------------------------------------------
Net interest income after provision       457,973       (3,260)      454,713       335,158        (2,325)     332,833
Noninterest income                        124,969       53,538       178,507       106,004        53,432      159,436
Noninterest expense                       392,508       45,997       438,505       315,586        44,213      359,799
                                      -----------------------------------------------------------------------------------
Income before income taxes                190,434        4,281       194,715       125,576         6,894      132,470
Income tax expense                         65,124        1,381        66,505        42,292         1,971       44,263
                                      -----------------------------------------------------------------------------------
Net income                            $   125,310   $    2,900   $   128,210   $    83,284   $     4,923  $    88,207
                                      ===================================================================================


Average assets (in millions)          $    22,596   $    2,060   $    24,656   $    15,858   $     1,812  $    17,670
                                      ===================================================================================

</TABLE>


                                       8


<PAGE>



J.       Net Income Per Share

<TABLE>
<CAPTION>

The  calculation of net income per share follows (in  thousands,  except for per
share amounts):

-------------------------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended              Six Months Ended
                                                                      June 30,                       June 30,
-------------------------------------------------------------------------------------------------------------------------
                                                                 2004           2003           2004            2003
-------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>          <C>               <C>
Basic:
Net income available to common shareholders - basic              $66,235        $45,317      $128,210          $88,207
                                                             ============== ============= ===============  ==============

Average common shares outstanding                                 77,980         69,193        77,572           68,758
                                                             ============== ============= ===============  ==============

Net income per common share - basic                              $  0.85        $  0.65      $   1.65          $  1.28
                                                             ============== ============= ===============  ==============


Diluted:
Net income                                                       $66,235        $45,317      $128,210          $88,207
Add interest expense on Convertible Trust Capital Securities,
   net of tax                                                      1,963                        3,926
                                                             -------------- ------------- ---------------  --------------
Net income available to common shareholders - diluted            $68,198        $45,317      $132,136          $88,207
                                                             ============== ============= ===============  ==============


Average common shares outstanding                                 77,980         69,193        77,572           68,758
Additional shares considered in diluted computation assuming:
   Exercise of stock options                                       4,489          2,935         4,530            3,186
   Conversion of Convertible Trust Capital Securities              3,791                        3,791
                                                             -------------- ------------- ---------------  --------------
Average common shares outstanding - diluted                       86,260         72,128        85,893           71,944
                                                             ============== ============= ===============  ==============

Net income per common share - diluted                            $  0.79        $  0.63       $  1.54          $  1.23
                                                             ============== ============= ===============  ==============

</TABLE>

                                       9


<PAGE>


Item 2. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operation
------------

Executive Summary
-----------------

During the first six months of 2004,  the  Company  experienced  strong  deposit
growth and positive  operating  leverage as year over year revenue growth of 29%
exceeded non-interest expense growth of 22% during the same period. Total assets
grew to $26.7  billion,  an  increase  of 35% over June 30,  2003,  while  total
deposits  grew 35%. Net income  increased 46% to $66.2 million and 45% to $128.2
million during the second quarter and first six months of 2004, respectively, as
compared to the same periods in 2003.  Diluted net income per share increased by
25% to $0.79 and $1.54  during the second  quarter and first six months of 2004,
respectively,  as compared  the same  periods in 2003.  The net income per share
calculations  for 2004 include 5.0 million shares issued in connection  with the
Company's September 2003 secondary offering and an additional 3.8 million shares
assuming the conversion of the Company's  Convertible Trust Capital  Securities,
neither of which were included in the calculations for 2003.

The Company has  identified  two  critical  accounting  policies:  the  policies
related to the allowance for loan losses and capitalization of branch costs. The
foregoing critical accounting policies are more fully described in the Company's
annual  report on Form 10-K for the year ended  December  31,  2003.  During the
first six months of 2004,  there were no material  changes to the  estimates  or
methods by which  estimates  are derived with regard to the critical  accounting
policies.

Capital Resources
-----------------

At June 30, 2004,  stockholders'  equity  totaled $1.3 billion or 4.97% of total
assets, compared to $1.3 billion or 5.62% of total assets at December 31, 2003.

The Company and its  subsidiaries  are subject to risk-based  capital  standards
issued by bank regulatory  authorities.  Under these  standards,  Tier 1 capital
includes  stockholders' equity, as adjusted for certain items. The Company makes
two  significant  adjustments  in  calculating  regulatory  capital.  The  first
adjustment  is  to  exclude  from  capital  the   unrealized   appreciation   or
depreciation  in  its  available  for  sale  securities  portfolio.  The  second
adjustment is to add to capital the Convertible Trust Capital Securities.  Total
capital is comprised of all the  components of Tier 1 capital plus the allowance
for loan losses.

The table below presents  Commerce  Bancorp and Commerce  N.A.'s  risk-based and
leverage ratios at June 30, 2004 and 2003:

<TABLE>
<CAPTION>

                                                                              Per Regulatory Guidelines
                                                                  --------------------------------------------------
                                               Actual                    Minimum               "Well Capitalized"
                                          Amount      Ratio         Amount      Ratio          Amount      Ratio
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>        <C>             <C>        <C>            <C>
June 30, 2004:
Commerce Bancorp
     Risk based capital ratios:
       Tier 1                            $1,640,555      12.37%      $530,388       4.00%       $795,582       6.00%
       Total capital                      1,765,243      13.31      1,060,776       8.00       1,325,970      10.00
     Leverage ratio                       1,640,555       6.33      1,036,022       4.00       1,295,028       5.00
Commerce N.A.
     Risk based capital ratios:
       Tier 1                            $1,088,255      11.16%      $390,195       4.00%       $585,292       6.00%
       Total capital                      1,184,593      12.14        780,389       8.00         975,486      10.00
     Leverage ratio                       1,088,255       6.03        722,139       4.00         902,674       5.00

</TABLE>

                                       10


<PAGE>

<TABLE>
<CAPTION>

                                                                              Per Regulatory Guidelines
                                                                  --------------------------------------------------
                                          Actual                         Minimum               "Well Capitalized"
                                          Amount         Ratio       Amount        Ratio        Amount        Ratio
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>         <C>            <C>         <C>           <C>
June 30, 2003:
Commerce Bancorp
     Risk based capital ratios:
       Tier 1                            $1,110,820      11.13%      $399,313       4.00%       $598,970       6.00%
       Total capital                      1,210,138      12.12        798,627       8.00         998,283      10.00
     Leverage ratio                       1,110,820       6.04        735,335       4.00         919,169       5.00
Commerce N.A.
     Risk based capital ratios:
       Tier 1                              $756,909      10.29%      $294,114       4.00%       $441,171       6.00%
       Total capital                        832,704      11.32        588,228       8.00         735,285      10.00
     Leverage ratio                         756,909       5.75        526,680       4.00         658,349       5.00

</TABLE>

At June 30, 2004,  the  Company's  consolidated  capital  levels and each of the
Company's  bank   subsidiaries   met  the  regulatory   definition  of  a  "well
capitalized" financial institution, i.e., a leverage capital ratio exceeding 5%,
a Tier 1 risk-based  capital ratio exceeding 6%, and a total risk-based  capital
ratio exceeding 10%.  Management  believes that as of June 30, 2004, the Company
and its subsidiaries  meet all capital  adequacy  requirements to which they are
subject.

Deposits
--------

Total deposits at June 30, 2004 were $24.1 billion, up $6.3 billion, or 35% over
total deposits of $17.8 billion at June 30, 2003, and up by $3.4 billion, or 16%
from year-end 2003.  Deposit growth during the first six months of 2004 included
core deposit  growth in all categories as well as growth from the public sector.
Same-store  core  deposit  growth is measured  as the year over year  percentage
increase in core  deposits  for  branches  open two years or more at the balance
sheet date.  The Company  experienced  same-store  core deposit growth of 25% at
June 30, 2004.

Interest Rate Sensitivity and Liquidity
---------------------------------------

The Company's risk of loss arising from adverse changes in the fair market value
of financial instruments, or market risk, is composed primarily of interest rate
risk.  The  primary  objective  of  the  Company's  asset/liability   management
activities  is to maximize net interest  income,  while  maintaining  acceptable
levels of interest rate risk. The Company's  Asset/Liability Committee (ALCO) is
responsible for  establishing  policies to limit exposure to interest rate risk,
and to ensure  procedures  are  established  to  monitor  compliance  with these
policies. The guidelines established by ALCO are reviewed by the Company's Board
of Directors.

Management considers the simulation of net interest income in different interest
rate environments to be the best indicator of the Company's  interest rate risk.
Income  simulation  analysis  captures not only the  potential of all assets and
liabilities to mature or reprice, but also the probability that they will do so.
Income  simulation also attends to the relative  interest rate  sensitivities of
these  items,  and  projects  their  behavior  over an extended  period of time.
Finally,  income simulation permits management to assess the probable effects on
the balance  sheet not only of changes in interest  rates,  but also of proposed
strategies for responding to them.


                                       11


<PAGE>


The Company's  income  simulation  model analyzes  interest rate  sensitivity by
projecting net income over the next 24 months in a flat rate scenario versus net
income in alternative  interest rate scenarios.  Management  continually reviews
and  refines  its  interest  rate risk  management  process in  response  to the
changing   economic   climate.   Currently,   the  Company's  model  projects  a
proportionate  plus 200 and minus 100 basis point  change  during the next year,
with rates remaining  constant in the second year. The Company's ALCO policy has
established that interest income  sensitivity  will be considered  acceptable if
net income in the above  interest  rate  scenario is within 10% of net income in
the flat rate  scenario  in the first year and within 15% over the two year time
frame.  Net  income  in the flat rate  scenario  is  projected  to  increase  by
approximately  25% per year.  The  following  table  illustrates  the  impact on
projected net income at June 30, 2004 and 2003 of a plus 200 and minus 100 basis
point change in interest rates.

        ------------------------------------------------------------------------
                                                    Basis Point Change
        ------------------------------------------------------------------------
                                               Plus 200             Minus 100
        ------------------------------------------------------------------------

        June 30, 2004:
           Twelve Months                          4.06%               1.45%
           Twenty Four Months                    11.38%              (0.31)%

        June 30, 2003:
           Twelve Months                          1.34%              (9.47)%
           Twenty Four Months                    11.09%             (15.03)%


All of these net income  projections are within an acceptable  level of interest
rate risk pursuant to the policy established by ALCO.

In the event the Company's  interest rate risk models  indicate an  unacceptable
level of risk, the Company could undertake a number of actions that would reduce
this risk, including the use of risk management strategies such as interest rate
swaps and caps or the extension of the maturities of its short-term borrowings.

Management  also  monitors  interest  rate risk by  utilizing a market  value of
equity model (MVE).  The model assesses the impact of a change in interest rates
on the market value of all the Company's assets and liabilities,  as well as any
off balance sheet items.  The model calculates the market value of the Company's
assets and liabilities in excess of book value in the current rate scenario, and
then compares the excess of market value over book value given an immediate plus
200 and minus 100  basis  point  change in  rates.  The  Company's  ALCO  policy
indicates that the level of interest rate risk is  unacceptable if the immediate
plus 200 and minus 100 basis  point  change  would  result in the loss of 45% or
more of the excess of market value over book value in the current rate scenario.
At June 30, 2004, the market value of equity model indicates an acceptable level
of interest rate risk.

The MVE reflects certain  estimates and assumptions  regarding the impact on the
market value of the Company's assets and liabilities given an immediate plus 200
or minus 100 basis point change in interest rates. One of the key assumptions is
the market value assigned to the Company's  core  deposits,  or the core deposit
premium.  Utilizing an  independent  consultant,  the Company has  completed and
updated  comprehensive  core  deposit  studies  in order to assign  its own core
deposit  premiums as  permitted by the  Company's  regulatory  authorities.  The
studies have consistently  confirmed  management's  assertion that the Company's
core  deposits  have stable  balances  over long periods of time,  are generally
insensitive to changes in interest rates and have  significantly  longer average
lives and durations than the Company's loans and investment securities.  At June
30, 2004, the average life of the Company's deposits was 13.3 years. Thus, these
core deposit balances provide an internal hedge to market value  fluctuations in
the Company's fixed rate assets.


                                       12


<PAGE>


The MVE  analyzes  both sides of the  balance  sheet and,  as  indicated  below,
demonstrates  the inherent value of the Company's core deposits in a rising rate
environment.  As rates rise, the value of the Company's core deposits  increases
which  offsets the decrease in value of the  Company's  fixed rate  assets.  The
following  table  summarizes  the  market  value of equity at June 30,  2004 (in
millions, except for per share amounts):

          ----------------------------------------------------------------------
                                            Market Value
                                             Of Equity              Per Share
          ----------------------------------------------------------------------

          Plus 200 basis points                $5,569                $70.81

          Current Rate                         $5,906                $75.09

          Minus 100 basis points               $5,347                $67.97

Liquidity  involves the Company's ability to raise funds to support asset growth
or decrease assets to meet deposit  withdrawals  and other  borrowing  needs, to
maintain reserve requirements and to otherwise operate the Company on an ongoing
basis.  The  Company's  liquidity  needs  are  primarily  met by  growth in core
deposits,  its  cash  and  federal  funds  sold  position,  cash  flow  from its
amortizing  investment  and loan  portfolios,  as well as the use of  short-term
borrowings,  as  required.  If  necessary,  the Company has the ability to raise
liquidity through collateralized  borrowings or Federal Home Loan Bank advances.
As of June 30, 2004 the Company  had in excess of $11.8  billion in  immediately
available   liquidity   which  includes   securities  that  could  be  used  for
collateralized borrowings, cash on hand, and borrowing capacities under existing
lines of  credit.  During  the first  six  months of 2004,  deposit  growth  and
short-term  borrowings  were  used to fund  growth  in the  loan  portfolio  and
purchase additional investment securities.

Short-Term Borrowings
---------------------

Short-term borrowings,  or other borrowed money, consist primarily of securities
sold under agreements to repurchase and overnight lines of credit,  and are used
to meet  short-term  funding  needs.  At June 30,  2004,  short-term  borrowings
aggregated  $944.0  million  and had an average  rate of 1.68%,  as  compared to
$311.5 million at an average rate of 0.77% at December 31, 2003. The increase in
short-term  borrowings primarily occurred towards the end of the second quarter,
as the Company  took  advantage of an  opportunity  to purchase  investments  by
pre-funding  anticipated  deposit growth. The Company anticipates the short-term
borrowings will be paid down during the third quarter of 2004.

Interest Earning Assets
-----------------------

The Company's cash flow from deposit  growth and repayments  from its investment
portfolio totaled  approximately  $6.0 billion for the first six months of 2004.
This  significant  cash flow  provides  the Company  with  ongoing  reinvestment
opportunities as interest rates change.  For the six month period ended June 30,
2004, interest earning assets increased $3.7 billion from $20.8 billion to $24.5
billion.  This  increase was  primarily in  investment  securities  and the loan
portfolio as described below.


                                       13


<PAGE>


Loans
-----

During the first six months of 2004,  loans  increased  $889.9 million from $7.4
billion to $8.3 billion.  All segments of the loan portfolio  experienced growth
in the first six months of 2004,  including  loans  secured by  commercial  real
estate properties, commercial loans, and consumer loans.

The following table summarizes the loan portfolio of the Company by type of loan
as of the dates shown.

                                                 June 30,         December 31,
                                         ---------------------------------------
                                                  2004                 2003
                                         ---------------------------------------
                                                       (in thousands)
Commercial:
   Term                                       $ 1,111,848           $ 1,027,526
   Line of credit                               1,046,104               959,158
   Demand                                                                 1,077
                                         ----------------- ---------------------
                                                2,157,952             1,987,761

Owner-occupied                                  1,805,336             1,619,079
                                         ----------------- ---------------------
                                                3,963,288             3,606,840

Consumer:
   Mortgages (1-4 family residential)           1,111,049               918,686
   Installment                                    134,710               138,437
   Home equity                                  1,573,454             1,405,795
   Credit lines                                    65,421                60,579
                                         ----------------- ---------------------
                                                2,884,634             2,523,497
Commercial real estate:
   Investor developer                           1,308,103             1,167,672
   Construction                                   174,431               142,567
                                         ----------------- ---------------------
                                                1,482,534             1,310,239
                                         ----------------- ---------------------
     Total loans                              $ 8,330,456           $ 7,440,576
                                         ================= =====================


Investments
-----------

In total,  for the first six months of 2004,  securities  increased $2.8 billion
from $13.3 billion to $16.1 billion.  The available for sale portfolio increased
$1.4  billion to $12.1  billion at June 30, 2004 from $10.7  billion at December
31, 2003, and the securities held to maturity  portfolio  increased $1.3 million
to $3.8  billion  at June 30,  2004 from $2.5  billion  at  year-end  2003.  The
portfolio of trading  securities  increased  $11.6 million from year-end 2003 to
$182.1  million at June 30,  2004.  At June 30,  2004,  the average  life of the
investment  portfolio  was  approximately  5.19  years,  and  the  duration  was
approximately  4.20 years. The yield on the total portfolio  decreased  slightly
from 4.86% at December 31, 2003 to 4.79% at June 30, 2004.


                                       14


<PAGE>


The following table  summarizes the book value of securities  available for sale
and securities held to maturity by the Company as of the dates shown.

<TABLE>
<CAPTION>

                      ----------------------------------------------------- -----------------------------------------------------
                                        At June 30, 2004                                    At December 31, 2003
                      ----------------------------------------------------- -----------------------------------------------------
                                        Gross       Gross                                     Gross       Gross
                        Amortized    Unrealized   Unrealized    Market        Amortized    Unrealized   Unrealized    Market
                           Cost         Gains       Losses       Value           Cost         Gains       Losses       Value
                      ----------------------------------------------------- -----------------------------------------------------
<S>                      <C>            <C>        <C>         <C>             <C>            <C>         <C>        <C>
U.S. Government
   agency and
   mortgage-backed       $12,172,873    $29,290    $(227,915)  $11,974,248     $10,528,396    $82,057     $(98,908)  $10,511,545
   obligations
Obligations of
   state and
   political
   subdivisions              104,281        548       (1,708)      103,121          30,223        821         (117)       30,927
Other                         44,874      8,861                     53,735          97,943     10,240                    108,183
                      ----------------------------------------------------- -----------------------------------------------------
Securities
   available             $12,322,028    $38,699    $(229,623)  $12,131,104     $10,656,562    $93,118     $(99,025)  $10,650,655
   for sale
                      ----------------------------------------------------- -----------------------------------------------------
U.S. Government
   agency and
   mortgage-backed        $3,424,051    $ 9,310     $(77,506)   $3,355,855      $2,193,577    $15,209     $(27,088)   $2,181,698
   obligations
Obligations of
   state and                 258,985                  (7,787)      251,198         227,199         30      (11,443)      215,786
   political
   subdivisions
Other                         89,168                                89,168          69,708                                69,708
                      ----------------------------------------------------- -----------------------------------------------------
Securities held to
   maturity               $3,772,204    $ 9,310     $(85,293)   $3,696,221      $2,490,484    $15,239     $(38,531)   $2,467,192
                      ----------------------------------------------------- -----------------------------------------------------

</TABLE>

Gross gains and losses on securities sold during the second quarter of 2004 were
$635  thousand  and $0,  respectively.  For the first six months of 2004,  gross
gains and losses on securities sold amounted to $12.8 million and $11.8 million,
respectively.

As of August 6, 2004, with the yield on the 10 year Treasury Note at 4.22%,  the
after-tax  depreciation  of the  Company's  available  for  sale  portfolio  was
approximately $6.6 million.


Detailed below is information  regarding the composition and  characteristics of
the Company's investment portfolio, excluding trading securities, as of June 30,
2004.

<TABLE>
<CAPTION>

                                                            Average       Average        Average        Average
           Product Description               Amount          Yield       Book Price      Duration        Life
-------------------------------------------------------------------------------------------------------------------
                                         (in millions)                                         (in years)
<S>                                          <C>                 <C>      <C>               <C>            <C>
Mortgage-backed Securities:
    Federal Agencies Pass Through
     Certificates (AAA Rated)                 $4,349             4.88%    $ 101.17          4.39           5.58

    Collateralized Mortgage
     Obligations (AAA Rated)                  10,226             4.85       100.84          4.04           4.97

U.S. Government agencies/Other                 1,328             4.01       100.24          4.79           5.56
                                         ---------------  ------------ --------------- ------------- --------------

                  Total                      $15,903             4.79%    $ 100.88          4.20           5.19
                                         ===============  ============ =============== ============= ==============
</TABLE>


The Company's  mortgage-backed  securities (MBS) portfolio  comprises 91% of the
total  investment  portfolio.  The MBS  portfolio  consists of Federal  Agencies
Pass-Through  Certificates and Collateralized Mortgage Obligations (CMO's) which
are  issued by  federal  agencies  and other  private  sponsors.  The  Company's
investment policy does not permit  investments in inverse  floaters,  IO's, PO's
and other similar issues.


                                       15


<PAGE>


Net Income
----------

Net income for the second  quarter of 2004 was $66.2  million,  an  increase  of
$20.9 million or 46% over the $45.3 million  recorded for the second  quarter of
2003.  Net income for the first six months of 2004 totaled  $128.2  million,  an
increase of $40.0  million or 45% from $88.2  million in the first six months of
2003. On a per share basis,  diluted net income for the second quarter and first
six months of 2004 was $0.79 and $1.54 per common  share  compared  to $0.63 and
$1.23 per common  share for the same  periods in 2003.  Net income per share for
the second  quarter and first six months of 2004  reflects  the  addition of 5.0
million  shares from the  secondary  offering in September  2003 and 3.8 million
shares assuming conversion of the Convertible Trust Capital Securities.

Return on average assets (ROA) and return on average equity (ROE) for the second
quarter  of 2004 were  1.03% and  19.86%,  respectively,  compared  to 0.98% and
17.91%,  respectively,  for the same 2003 period.  ROA and ROE for the first six
months  of 2004 were  1.04%  and  18.87%,  respectively,  compared  to 1.00% and
17.92%,  respectively,  for the same 2003 period.  The increases in both ROA and
ROE are due to net income growth that has exceeded  growth in average assets and
average  equity during the three month and six month periods ended June 30, 2004
as compared to the same periods in 2003.  As noted  above,  net income has grown
46%  and  45%  during  the  second   quarter  and  first  six  months  of  2004,
respectively,  as compared to the same 2003 periods.  Average assets and average
equity  have  grown 40% and 32%,  respectively,  from June 30,  2003 to June 30,
2004.

Net Interest Income
-------------------

Net interest  income  totaled  $244.7 million for the second quarter of 2004, an
increase of $65.4  million or 36% from $179.3  million in the second  quarter of
2003. Net interest  income for the first six months of 2004 was $475.0  million,
up $128.4  million or 37% from $346.6  million for the first six months of 2003.
The  increases  in net  interest  income for the quarter and first six months of
2004 were due to the volume  increases in interest earning assets resulting from
the Company's strong, low-cost core deposit growth.

The increase in net interest income on a tax equivalent basis is shown below (in
thousands).
<TABLE>
<CAPTION>

                                                               Net Interest Income
                                       ---------------------------------------------------------------------

                                            Volume             Rate            Total               %
                  2004 vs. 2003            Increase           Change          Increase          Increase
         ---------------------------------------------------------------------------------------------------

<S>                                        <C>              <C>               <C>                  <C>
         Quarter Ended June 30              $72,797          ($6,873)          $65,924             36%

         Six Months Ended June 30          $142,325         ($13,124)         $129,201             36%

</TABLE>

The net interest  margin for the second  quarter of 2004 was 4.29% down 10 basis
points from the 4.39% margin for the first quarter of 2004.  The decrease in the
margin was  attributed  primarily  to a decrease in the yield on the  investment
portfolio of 10 basis points,  which was caused by the spike in  mortgage-backed
security prepayments experienced in the second quarter.

The following  table sets forth balance sheet items on a daily average basis for
the three  months  ended June 30,  2004,  March 31,  2004 and June 30,  2003 and
presents the daily average interest earned on assets and paid on liabilities for
such periods.


                                       16


<PAGE>

<TABLE>
<CAPTION>

                                              Average Balances and Net Interest Income

                               -----------------------------------------------------------------------------------------------------
                                           June 2004                          March 2004                       June 2003
                               ----------------------------------  --------------------------------  -------------------------------
                                 Average                 Average     Average               Average     Average             Average
(dollars in thousands)           Balance      Interest    Rate       Balance     Interest   Rate       Balance   Interest    Rate
                               ----------------------------------  --------------------------------  -------------------------------
<S>                             <C>           <C>           <C>     <C>          <C>          <C>     <C>         <C>          <C>
Earning Assets
-------------------------------
Investment securities
   Taxable                      $14,747,643   $  173,678    4.74%   $13,295,903  $ 159,648    4.83%   $10,026,080 $119,147     4.77%
   Tax-exempt                       290,200        4,465    6.19        256,628      3,860    6.05        192,892    3,689     7.67
   Trading                          174,578        2,075    4.78        161,701      2,065    5.14        158,297    2,389     6.05
                               ------------- --------------------  --------------------------------  -------------------------------
Total investment securities      15,212,421      180,218    4.76     13,714,232    165,573    4.86     10,377,269  125,225     4.84
Federal funds sold                   62,357          154    0.99        144,297        340    0.95         32,095       97     1.21
Loans
   Commercial mortgages           3,021,768       45,333    6.03      2,793,159     42,782    6.16      2,319,945   37,156     6.42
   Commercial                     1,961,351       25,477    5.22      1,878,353     24,535    5.25      1,552,400   21,587     5.58
   Consumer                       2,767,826       39,079    5.68      2,603,037     36,936    5.71      2,109,143   33,336     6.34
   Tax-exempt                       335,505        6,243    7.48        337,313      6,092    7.26        264,737    5,338     8.09
                               ------------- --------------------  --------------------------------  -------------------------------
Total loans                       8,086,450      116,132    5.78      7,611,862    110,345    5.83      6,246,225   97,417     6.26
                               ------------- --------------------  --------------------------------  -------------------------------
Total earning assets            $23,361,228     $296,504    5.10%   $21,470,391  $ 276,258    5.17%   $16,655,589 $222,739     5.36%
                               =============                       =============                     =============

Sources of Funds
-------------------------------
Interest-bearing liabilities
   Regular savings               $5,276,657     $ 10,216    0.78%    $4,492,847    $ 7,786    0.70%    $3,477,229  $ 6,754     0.78%
   Interest bearing demand        9,643,771       18,729    0.78      8,986,070     15,943    0.71      6,427,333   11,961     0.75
   Time deposits                  2,507,526       11,378    1.82      2,430,589     11,323    1.87      2,313,690   14,093     2.44
   Public funds                     856,683        2,886    1.35        968,513      3,320    1.38        878,005    3,294     1.50
                               ------------- ----------- --------  ------------ -------------------  ------------ -------- ---------
     Total deposits              18,284,637       43,209    0.95     16,878,019     38,372    0.91     13,096,257   36,102     1.11

   Other borrowed money             523,931        1,052    0.81        174,746        448    1.03        278,780      318     0.46
   Long-term debt                   200,000        3,020    6.07        200,000      3,020    6.07        200,000    3,020     6.06
                               ------------- ----------- --------  ------------ ---------- --------  ------------ -------- ---------
Total deposits and
interest-bearing
   liabilities                   19,008,568       47,281    1.00     17,252,765     41,840    0.98     13,575,037   39,440     1.17
Noninterest-bearing funds (net)   4,352,660                           4,217,626                         3,080,552
                               ------------- ----------- --------  ------------ ---------- --------  ------------ -------- ---------
Total sources to fund earning
assets                          $23,361,228       47,281    0.81    $21,470,391     41,840    0.78    $16,655,589   39,440     0.95
                               ============= ----------- --------  ============ ---------- --------  ============ -------- ---------

Net interest income and
   margin tax-equivalent basis                  $249,223    4.29%                $ 234,418    4.39%               $183,299     4.41%
                                             =========== ========               ========== ========               ======== =========

Other Balances
-------------------------------
Cash and due from banks          $1,163,942                          $1,007,182                          $945,600
Other assets                      1,419,098                           1,129,880                           994,784
Total assets                     25,822,157                          23,491,544                        18,498,841
Total deposits                   23,541,453                          21,478,730                        16,734,886
Demand deposits (noninterest-
     bearing)                     5,256,816                           4,600,711                         3,638,629
Other liabilities                   222,779                             253,890                           273,183
Stockholders' equity              1,333,994                           1,384,178                         1,011,992
</TABLE>



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.
      - Investment securities includes investments available for sale.
      - Consumer loans include mortgage loans held for sale.


                                       17


<PAGE>


Noninterest Income
------------------

Noninterest  income  totaled  $92.3  million for the second  quarter of 2004, an
increase  of $8.9  million  or 11% from $83.4  million in the second  quarter of
2003.  Noninterest  income for the first six months of 2004  increased to $178.5
million  from $159.4  million in the first six months of 2003,  a 12%  increase.
During the second quarter and first six months of 2004, the increases of 11% and
12%, respectively,  were primarily due to increased deposit charges and services
fees,  which rose $13.9  million,  or 36%, and $24.6  million,  or 33%, over the
second quarter and first six months of 2003, respectively.

The  increases in deposit  charges and  services  fees are  attributable  to the
Company's 35% deposit growth rate during this same period.  These increases were
offset by decreases in both Commerce Capital  Markets,  Inc. (CCMI) revenues and
loan brokerage fees, which decreased in total by $6.9 million, or 40%, and $12.0
million,  or 34%,  during  the  second  quarter  and first  six  months of 2004,
respectively,  compared  to the same  periods  in  2003.  The  decrease  in CCMI
revenues was related primarily to volatility in interest rates during the second
quarter of 2004 and the resulting impact on the trading and sales function.  The
decrease in loan brokerage  fees resulted from declines in mortgage  refinancing
activity during 2004.

<TABLE>
<CAPTION>

                                                    Three Months Ended                      Six Months Ended
                                            ------------------------------------  --------------------------------------
                                             6/30/04     6/30/03    % Increase     6/30/04      6/30/03     % Increase
                                            ------------------------------------  --------------------------------------
                                                 (Dollars in thousands)                 (Dollars in thousands)
<S>                                           <C>         <C>              <C>       <C>          <C>              <C>
Deposit charges & service fees                $52,717     $38,765          36%       $98,198      $73,607          33%
Other operating income:
   Insurance                                   18,570      17,190           8         36,906       33,245          11
   Capital Markets                              6,622       9,695         (32)        16,349       19,698         (17)
   Loan Brokerage Fees                          3,725       7,545         (51)         6,778       15,468         (56)
   Other                                       10,006       8,958          12         19,217       16,337          18
                                            ----------  ----------   ---------    -----------  -----------  ----------
     Total other                               38,923      43,388         (10)        79,250       84,748          (6)
                                            ----------  ----------   ---------    -----------  -----------  ----------
Net investment securities gains                   635       1,217         (48)         1,059        1,081          (2)
                                            ----------  ----------   ---------    -----------  -----------  ----------
Total non-interest income                     $92,275     $83,370          11%      $178,507     $159,436          12%
                                            ==========  ==========   =========    ===========  ===========  ==========
</TABLE>

Noninterest Expense
-------------------

For the second quarter of 2004,  noninterest  expense totaled $226.3 million, an
increase of $38.6 million or 21% over the same period in 2003. For the first six
months of 2004, noninterest expense totaled $438.5 million, an increase of $78.7
million  or  22%  over  $359.8  million  for  the  first  six  months  of  2003.
Contributing  to this  increase  was new branch  activity  over the past  twelve
months,  with the number of branches increasing from 243 at June 30, 2003 to 289
at June 30, 2004. With the addition of these new offices, staff, facilities, and
related expenses rose accordingly.  Other noninterest expenses rose $7.3 million
during the second quarter of 2004 over the same period in 2003 and $16.5 million
during  the  first  six  months  of 2004  over the same  period  in 2003.  These
increases  resulted  primarily from higher bank  card-related  service  charges,
increased  business   development   expenses,   and  increased   provisions  for
non-credit-related losses.

The Company continued to experience  positive  operating  leverage in the second
quarter, as revenue growth of 28% exceeded  non-interest  expense growth of 21%.
One important factor influencing the growth in non-interest expenses is that the
Company absorbed  significant start-up expenses related to the New York City and
Long Island  markets in prior  years.  As a result,  the impact of the growth in
non-interest expenses in these markets is declining in 2004.


                                       18


<PAGE>


The Company's operating efficiency ratio (noninterest expenses,  less other real
estate expense, divided by net interest income plus noninterest income excluding
non-recurring  gains) was 67.5% for the first six months of 2004 as  compared to
71.3% for the same 2003 period.  This  improvement  in the operating  efficiency
ratio is due to the positive  operating  leverage  ratio  discussed  above.  The
Company's  efficiency  ratio remains  above its peer group  primarily due to its
aggressive growth expansion activities.

Loan and Asset Quality
----------------------

Total  non-performing  assets  (non-performing  loans  and  other  real  estate,
excluding  loans past due 90 days or more and still  accruing  interest) at June
30, 2004 were $30.4 million,  or 0.11% of total assets compared to $23.6 million
or 0.10% of total  assets at  December  31,  2003 and $24.1  million or 0.12% of
total assets at June 30, 2003.

Total non-performing loans (non-accrual loans and restructured loans,  excluding
loans past due 90 days or more and still  accruing  interest)  at June 30,  2004
were $29.7 million or 0.36% of total loans compared to $21.7 million or 0.29% of
total  loans at December  31, 2003 and $22.5  million or 0.35% of total loans at
June  30,  2003.  At June 30,  2004,  loans  past due 90 days or more and  still
accruing  interest  amounted  to $318  thousand  compared  to $538  thousand  at
December  31,  2003  and  $434  thousand  at June  30,  2003.  Additional  loans
considered  as potential  problem  loans by the  Company's  internal loan review
department  ($38.1  million  at June 30,  2004) have been  evaluated  as to risk
exposure in determining the adequacy of the allowance for loan losses.

The increase in commercial  non-accrual  loans during 2004 is the result of four
credits that  experienced  difficulties in the first quarter of 2004 and were in
the process of collection  and/or  liquidation at the end of the second quarter.
This increase in commercial non-accrual loans has led to the overall increase in
non-performing  assets  noted  during  the  first  six  months  of  2004.  Total
non-performing assets and loans past due 90 days or more decreased slightly from
March 31, 2004 to June 30, 2004 primarily as a result of collections on existing
commercial non-accrual loans.


                                       19


<PAGE>


The following summary presents  information  regarding  non-performing loans and
assets as of June 30, 2004 and the preceding  four quarters  (dollar  amounts in
thousands).


<TABLE>
<CAPTION>


                                               June 30,         March 31,    December 31,   September 30,    June 30,
                                                 2004              2004          2003           2003           2003
                                           ---------------------------------------------------------------------------
<S>                                              <C>             <C>           <C>            <C>            <C>
Non-accrual loans:
   Commercial                                    $17,382         $19,701       $ 6,867        $ 7,295        $ 7,049
   Consumer                                       11,675           9,984         9,242          8,295          9,517
   Commercial real estate:
     Construction                                                                  138
     Mortgage                                        675             810         5,494          7,502          5,970
                                           ---------------------------------------------------------------------------
         Total non-accrual loans                  29,732          30,495        21,741         23,092         22,536
                                           ---------------------------------------------------------------------------
Restructured loans:
   Commercial                                          1               1             1              2              3
   Consumer
   Commercial real estate:
     Construction
     Mortgage
                                           ---------------------------------------------------------------------------
         Total restructured loans                      1               1             1              2              3
                                           ---------------------------------------------------------------------------
Total non-performing loans                        29,733          30,496        21,742         23,094         22,539
                                           ---------------------------------------------------------------------------
Other real estate                                    653           1,890         1,831          1,670          1,540
                                           ---------------------------------------------------------------------------
Total non-performing assets                       30,386          32,386        23,573         24,764         24,079
                                           ---------------------------------------------------------------------------
Loans past due 90 days or more
   and still accruing                                318             696           538            649            434
                                           ---------------------------------------------------------------------------
Total non-performing assets and
   loans past due 90 days or more                $30,704         $33,082       $24,111        $25,413        $24,513
                                           ===========================================================================

Total non-performing loans as a
   percentage of total period-end loans            0.36%           0.39%         0.29%          0.34%          0.35%

Total non-performing assets as a
   percentage of total period-end assets           0.11%           0.13%         0.10%          0.12%          0.12%

Total non-performing assets and loans
   past due 90 days or more as a
   percentage of total period-end assets           0.11%           0.13%         0.11%          0.12%          0.12%

Allowance for loan losses as a percentage
   of total non-performing loans                    419%            385%          515%           449%           441%

Allowance for loan losses as a percentage
   of total period-end loans                       1.50%           1.51%         1.51%          1.52%          1.56%

Total non-performing assets and loans
   past due 90 days or more as a
   percentage of stockholders' equity and
   allowance for loan losses                          2%              2%            2%             2%             2%

</TABLE>

                                       20


<PAGE>


The following  table  presents,  for the periods  indicated,  an analysis of the
allowance for loan losses and other related data (dollar amounts in thousands).
<TABLE>
<CAPTION>

                                                                                                           Year
                                              Three Months Ended              Six Months Ended             Ended
                                            06/30/04        06/30/03       06/30/04       06/30/03        12/31/03
                                          ------------    -----------    ------------   ------------    ------------
<S>                                          <C>             <C>            <C>             <C>             <C>
Balance at beginning of period               $117,329        $94,731        $112,057        $90,733         $90,733
Provisions charged to operating expenses       10,748          6,900          20,248         13,800          31,850
                                          ------------    -----------    ------------   ------------    ------------
                                              128,077        101,631         132,305        104,533         122,583

Recoveries on loans charged-off:
   Commercial                                     104            141             260            345             669
   Consumer                                       101            146             371            277             584
   Commercial real estate                           1              -              48              -              11
                                          ------------    -----------    ------------   ------------    ------------
Total recoveries                                  206            287             679            622           1,264

Loans charged-off:
   Commercial                                  (2,587)        (1,197)         (4,880)        (3,065)         (5,601)
   Consumer                                    (1,004)        (1,390)         (1,776)        (2,755)         (5,950)
   Commercial real estate                          (4)           (13)         (1,640)           (17)           (239)
                                          ------------    -----------    ------------   ------------    ------------
Total charge-offs                              (3,595)        (2,600)         (8,296)        (5,837)        (11,790)
                                          ------------    -----------    ------------   ------------    ------------
Net charge-offs                                (3,389)        (2,313)         (7,617)        (5,215)        (10,526)
                                          ------------    -----------    ------------   ------------    ------------

Balance at end of period                     $124,688        $99,318        $124,688        $99,318        $112,057
                                          ============    ===========    ============   ============    ============

Net charge-offs as a percentage of
   average loans outstanding                     0.17%          0.15%           0.19%          0.17%           0.16%

Net reserve additions                         $ 7,359        $ 4,587         $12,631         $8,585         $21,324
</TABLE>

During the first six months of 2004,  there was an  increase in  commercial  and
commercial real estate loan charge-offs.  These increases are related to a large
credit  that  experienced  difficulties  during  the first  quarter  of 2004 and
another  credit with both a real estate as well as a commercial  component.  The
real estate  component  of this credit was sold and  resulted in a $1.5  million
charge-off. Consumer loan charge-offs continued to decrease during the first six
months of 2004,  Consumer loan charge-offs during 2003 reflect charge-offs which
arose as a result of attempts to defraud the Company and several other financial
institutions and mortgage companies. The net reserve additions for the first six
months  and  second  quarter  of 2004 are  reflective  of the  increases  in the
non-performing  assets since December 31, 2003 and increases in the overall loan
portfolio.

The Company  considers the allowance for loan losses of $124.7 million  adequate
to cover  probable  losses  inherent in the loan portfolio at June 30, 2004. The
Company's determination of the level of the allowance for loan losses rests upon
various judgments and assumptions surrounding the risk characteristics  included
in the loan portfolio.  Such risk characteristics  include changes in levels and
trends of charge-offs, delinquencies, and nonaccrual loans, trends in volume and
terms of loans, changes in underwriting standards and practices,  portfolio mix,
tenure of loan officers and  management,  entrance into new geographic  markets,
changes in credit  concentrations,  and national and local  economic  trends and
conditions,  and other  relevant  factors,  all of which may be  susceptible  to
significant change.


                                       21


<PAGE>


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 this Form 10-Q), 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 (the "FRB"); inflation;  interest rates,
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);   technological
changes; future acquisitions;  the expense savings and revenue enhancements from
acquisitions  being less than  expected;  the growth  and  profitability  of the
Company's  noninterest  or fee income  being less than  expected;  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
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Company.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk
         ----------------------------------------------------------

See Item 2 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operation, Interest Rate Sensitivity and Liquidity.


Item 4.   Controls and Procedures
          -----------------------
Quarterly evaluation of the Company's Disclosure Controls and Internal Controls.
As of the end of the period  covered by this quarterly  report,  the Company has
evaluated  the  effectiveness  of the design and  operation  of its  "disclosure
controls and procedures"  ("Disclosure  Controls").  This evaluation  ("Controls
Evaluation")  was done  under  the  supervision  and with the  participation  of
management,  including the Chief  Executive  Officer ("CEO") and Chief Financial
Officer ("CFO").

Limitations  on  the  Effectiveness  of  Controls.   The  Company's  management,
including the CEO and CFO, does not expect that its  Disclosure  Controls or its
"internal controls and procedures for financial reporting" ("Internal Controls")
will  prevent  all error and all  fraud.  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.  These inherent  limitations include
the  realities  that  judgments  in  decision-making  can be  faulty,  and  that
breakdowns can occur because of simple error or mistake. Additionally,  controls
can be circumvented by the individual acts of some persons,  by collusion of two
or more people,  or by  management  override of the  control.  The design of any
system of  controls  also is based in part upon  certain  assumptions  about the
likelihood of future events,  and there can be no assurance that any design will
succeed in achieving  its stated goals under all  potential  future  conditions;
over time,  control may become


                                       22


<PAGE>


inadequate because of changes in conditions, or the degree of compliance with
the policies or procedures may deteriorate. 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 of its
internal controls to enhance, where necessary, its procedures and controls.

Conclusions.  Based upon the Controls Evaluation, the CEO and CFO have concluded
that,  subject to the  limitations  noted  above,  the  Disclosure  Controls are
effective in reaching a reasonable level of assurance that information  required
to be disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed,  summarized and reported
within the time period specified in the SEC's rules and forms.

During the quarter ended June 30, 2004,  there has not occurred any  significant
change in Internal Controls that has materially affected or is reasonably likely
to materially affect Internal Controls.


PART II. OTHER INFORMATION

Item 1. Legal Proceedings
-------------------------

On June  29,  2004  the U.S.  Attorney  General  indicted  two  officers  of the
Company's  Philadelphia  bank subsidiary in connection with its investigation of
certain  Philadelphia  city  government  officials.  The Company  confirms  that
neither it, nor any of its  subsidiaries  or other  officers and  employees  are
targets  of the  investigation.  The  Company  has  fully  cooperated  with this
investigation and believes it will have no material negative financial impact on
the Company.

During  July 2004,  class  action  complaints  were  filed in the United  States
District  Court for the  District  of New Jersey  and the  Eastern  District  of
Pennsylvania against the Company and certain Company (or subsidiary) current and
former  officers  and  directors.  The  complaints  allege  that the  defendants
violated the federal securities laws, specifically Sections 10 (b) and 20 (a) of
the  Securities  Exchange  Act of 1934 and  Rule  10b-5  of the  Securities  and
Exchange  Commission.  The plaintiffs  seek  unspecified  damages on behalf of a
purported  class  of  purchasers  of the  Company's  securities  during  various
periods.  The Company believes that the complaints  against it are without merit
and intends to vigorously defend itself.


Item 2. Changes in Securities, Use of Proceeds and Purchases of Certain Equity
------------------------------------------------------------------------------
Securities by the Issuer and Others
-----------------------------------

There were no purchases of equity  securities  by the Company  during the second
quarter of 2004.


                                       23


<PAGE>


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

The Annual Meeting of the  Registrant's  Shareholders was held on June 11, 2004.
Proxies  representing  70,951,587 shares were received (total shares outstanding
as of the record date were 77,907,957).  The items of business acted upon at the
Annual  Meeting were (i) the election of 13 directors  for one year terms;  (ii)
approval of the Commerce Bancorp,  Inc.'s 2004 Employee Stock Option Plan; (iii)
approval of the amendment to Bancorp's Restated  Certificate of Incorporation to
increase  the number of shares of Common  Stock that  Bancorp is  authorized  to
issue by  350,000,000  shares;  and (iv) approval of the  appointment of Ernst &
Young LLP as Bancorp's  independent auditors for the fiscal year ending December
31, 2004.  The number of votes cast for,  against,  or withheld,  as well as the
number of abstentions and broker non-votes was as follows:

(i) Election of directors:

Name of                                                   (Withhold Authority)
Nominee                                  For                     Against
-------                                  ---                     -------

Vernon W. Hill, II                  69,187,219                 1,764,368
Robert C. Beck                      64,560,038                 6,391,549
Jack R Bershad                      65,585,542                 5,366,045
Joseph E. Buckelew                  69,073,581                 1,878,006
Donald T. DiFrancesco               64,468,447                 6,483,140
John P. Ferguson                    70,034,043                   917,544
Morton N. Kerr                      66,435,444                 4,516,143
Steven M. Lewis                     69,277,641                 1,673,946
George E. Norcross, III             68,958,279                 1,993,308
Joseph J. Plumeri, II               70,024,804                   926,783
Daniel J. Ragone                    67,905,369                 3,046,218
William A. Schwartz, Jr.            70,034,493                   917,094
Joseph T. Tarquini, Jr.             68,144,986                 2,806,601

(ii) Approval of Commerce Bancorp, Inc.'s 2004 Employee Stock Option:

                                                               Broker
       For               Against             Abstain          Non-Vote
       ---               -------             -------          --------

   28,378,564          21,971,757            284,459         27,273,177

(iii)   Approval  of  the  amendment  to  Bancorp's   Restated   Certificate  of
Incorporation  to increase  the number of shares of Common Stock that Bancorp is
authorized to issue by 350,000,000 shares:

                                                                Broker
       For                Against             Abstain          Non-Vote
       ---                -------             -------          --------
   52,451,292           18,288,419            211,876         6,956,370

(iv) Approval of the  appointment of Ernst & Young LLP as Bancorp's  independent
auditors for the fiscal year ending December 31, 2004:

                                                                Broker
        For               Against             Abstain          Non-Vote
        ---               -------             -------          --------
    70,146,667            631,760             173,161         6,956,369


                                       24


<PAGE>


Item 6. Exhibits and Reports on Form 8-K
----------------------------------------

Exhibits
--------


Exhibit 3.2       By-laws of the Company, as amended.

Exhibit 10.37     The Company's 2004 Employee Stock Option Plan.

Exhibit 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.

Exhibit 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.

Exhibit 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.


Reports on Form 8-K
-------------------

On April 13,  2004,  we filed a Current  Report  on Form 8-K which  included  as
exhibits a press release, issued by us on April 13, 2004, announcing our results
for the first quarter of 2004 and certain supplemental information.

On June 2, 2004, we filed a Current Report on Form 8-K,  which included  certain
questions and answers regarding corporate information.

On June 29, 2004,  we filed a Current  Report on Form 8-K,  which  announced the
indictment of two officers of the Company in connection  with the U.S.  Attorney
General's investigation of certain Philadelphia government officials.


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                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  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.



                                           COMMERCE BANCORP, INC.
                                        ----------------------------
                                                 (Registrant)






  AUGUST 9, 2004                               /s/ DOUGLAS J. PAULS
-------------------                    ----------------------------------
     (Date)                                      DOUGLAS J. PAULS
                                             SENIOR VICE PRESIDENT AND
                                              CHIEF FINANCIAL OFFICER
                                    (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)



                                       26


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