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, 2003

                                       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 #0-12874
                                            --------

                             [COMPANY 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 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 last practical date.

         Common Stock                                          69,895,566
 -------------------------------------------------------------------------------
        (Title of Class)                              (No. of Shares Outstanding
                                                        as of August 1, 2003)


<PAGE>
<TABLE>
<CAPTION>



                                COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                                 INDEX

                                                                                                       Page
<S>                                                                                                    <C>
PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

              Consolidated Balance Sheets (unaudited)
              June 30, 2003 and December 31, 2002........................................................1

              Consolidated Statements of Income (unaudited) Three months ended
              June 30, 2003 and June 30, 2002 and
              six months ended June 30, 2003 and June 30, 2002...........................................2

              Consolidated Statements of Cash Flows (unaudited)
              Six months ended June 30, 2003 and June 30, 2002...........................................3

              Consolidated Statement of Changes in Stockholders' Equity (unaudited)
              Six months ended June 30, 2003.............................................................4

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

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operation.........................................................9

Item 3.       Quantitative and Qualitative Disclosures About Market Risk................................18

Item 4.       Control and Procedures....................................................................19

PART II.      OTHER INFORMATION

Item 4.       Submission of Matters to a Vote of Security Holders.......................................20

Item 6.       Exhibits and Reports on Form 8-K..........................................................20

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                                      CONSOLIDATED BALANCE SHEETS
                                                              (unaudited)

                  ---------------------------------------------------------------------------------------------------
                                                                                    June 30,          December 31,
                                                                                 ------------------------------------
                                                                                                    -----------------
                  (dollars in thousands)                                              2003                2002
                  ---------------------------------------------------------------------------------------------------
<S>                                                                                <C>                 <C>
Assets            Cash and due from banks                                          $   1,013,885       $   811,434
                  Federal funds sold                                                           -                 -
                                                                                 ----------------   ---------------
                       Cash and cash equivalents                                       1,013,885           811,434
                  Loans held for sale                                                     91,285            96,920
                  Trading securities                                                     209,451           326,479
                  Securities available for sale                                       10,259,811         7,806,779
                  Securities held to maturity                                            841,752           763,026
                       (market value 06/03-$855,444; 12/02-$791,889)
                  Loans                                                                6,378,623         5,822,589
                       Less allowance for loan losses                                     99,318            90,733
                                                                                 ----------------   ---------------
                                                                                       6,279,305         5,731,856
                  Bank premises and equipment, net                                       701,246           580,818
                  Other assets                                                           440,577           286,669
                                                                                 ----------------   ---------------
                  Total assets                                                       $19,837,312       $16,403,981
                                                                                 ================   ===============

Liabilities       Deposits:
                       Demand:
                           Interest-bearing                                          $ 6,616,309       $ 5,635,351
                           Noninterest-bearing                                         4,185,186         3,243,091
                       Savings                                                         3,786,798         2,861,677
                       Time                                                            3,198,789         2,808,722
                                                                                 ----------------   ---------------
                           Total deposits                                             17,787,082        14,548,841

                  Other borrowed money                                                   507,975           391,641
                  Other liabilities                                                      331,765           345,489
                  Convertible Trust Capital Securities - Commerce Capital
                       Trust II                                                          200,000           200,000
                                                                                 ----------------   ---------------
                  Total liabilities                                                   18,826,822        15,485,971

Stockholders'     Common stock, 69,920,679 shares
Equity                 issued (68,043,171 shares at December 31, 2002)                    69,921            68,043
                  Capital in excess of par or stated value                               591,060           538,795
                  Retained earnings                                                      265,239           199,604
                  Accumulated other comprehensive income                                  89,515           113,614
                                                                                 ----------------   ---------------
                                                                                       1,015,735           920,056

                  Less treasury stock, at cost, 286,358 shares
                       (209,794 shares at December 31, 2002)                               5,245             2,046
                                                                                 ----------------   ---------------
                           Total stockholders' equity                                  1,010,490           918,010
                                                                                 ----------------   ---------------

                  Total liabilities and stockholders' equity                         $19,837,312       $16,403,981
                                                                                 ================   ===============

</TABLE>

                             See accompanying notes.


                                       1
<PAGE>
<TABLE>
<CAPTION>


                                                 COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                                    CONSOLIDATED STATEMENTS OF INCOME
                                                               (unaudited)
              ---------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended              Six Months Ended
                                                                      June 30,                       June 30,
                                                             ----------------------------------------------------------
              (dollars in thousands, except per share            2003           2002           2003           2002
              amounts)
              ---------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>            <C>            <C>
Interest      Interest and fees on loans                         $ 95,548       $ 86,959       $188,669       $168,782
income        Interest on investments                             123,098        101,293        236,759        187,510
              Other interest                                           98            116            177            280
                                                             -------------   ------------   ------------   ------------
                       Total interest income                      218,744        188,368        425,605        356,572
                                                             -------------   ------------   ------------   ------------

Interest      Interest on deposits:
expense            Demand                                          11,961         14,707         24,358         27,615
                   Savings                                          6,754          8,133         13,109         15,211
                   Time                                            17,387         21,538         34,233         42,819
                                                             -------------   ------------   ------------   ------------
                       Total interest on deposits                  36,102         44,378         71,700         85,645
              Interest on other borrowed money                        318            282          1,232            708
              Interest on long-term debt                            3,020          5,082          6,040          7,514
                                                             -------------   ------------   ------------   ------------
                       Total interest expense                      39,440         49,742         78,972         93,867
                                                             -------------   ------------   ------------   ------------

              Net interest income                                 179,304        138,626        346,633        262,705
              Provision for loan losses                             6,900         10,250         13,800         17,150
                                                             -------------   ------------   ------------   ------------
              Net interest income after provision for
                   loan losses                                    172,404        128,376        332,833        245,555

Noninterest   Deposit charges and service fees                     38,765         31,629         73,607         60,592
income        Other operating income                               43,388         30,100         84,748         57,027
              Net investment securities gains                       1,217              -          1,081              -
                                                             -------------   ------------   ------------   ------------
                       Total noninterest income                    83,370         61,729        159,436        117,619
                                                             -------------   ------------   ------------   ------------

Noninterest   Salaries and benefits                                86,338         64,178        168,420        124,323
expense       Occupancy                                            22,695         13,083         43,183         25,181
              Furniture and equipment                              20,556         15,588         41,782         30,693
              Office                                                9,233          7,454         18,419         14,370
              Marketing                                             9,198          6,112         14,474         10,973
              Other                                                39,658         31,125         73,521         57,921
                                                             -------------   ------------   ------------   ------------
                       Total noninterest expenses                 187,678        137,540        359,799        263,461
                                                             -------------   ------------   ------------   ------------

              Income before income taxes                           68,096         52,565        132,470         99,713
              Provision for federal and state income taxes         22,779         17,763         44,263         33,161
                                                             -------------   ------------   ------------   ------------
              Net income                                         $ 45,317       $ 34,802       $ 88,207       $ 66,552
                                                             =============   ============   ============   ============


              Net  income per common and common
                equivalent share:
                       Basic                                     $   0.65       $   0.52       $   1.28       $   1.00
                       Diluted                                   $   0.63       $   0.49       $   1.23       $   0.94
              Average common and common equivalent
                shares outstanding:
                       Basic                                       69,193         66,552         68,758         66,275
                       Diluted                                     72,128         71,007         71,944         70,510
              Cash dividends, common stock                       $   0.16       $   0.15       $   0.33       $   0.30

</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)                                                   2003               2002
                  ------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>               <C>
Operating         Net income                                                              $  88,207         $    66,552
activities        Adjustments to reconcile net income to net cash
                     provided by operating activities:
                       Provision for loan losses                                              13,800             17,150
                       Provision for depreciation, amortization and accretion                 60,943             27,989
                       Gain on sales of securities available for sale                          1,081                  -
                       Proceeds from sales of loans held for sale                            802,737            777,526
                       Originations of loans held for sale                                  (757,102)          (739,023)
                       Net decrease in trading securities                                    117,028             63,957
                       Increase in other assets                                              (18,039)           (12,152)
                       Decrease in other liabilities                                         (13,724)            (3,358)
                  ------------------------------------------------------------------------------------------------------
                             Net cash provided by operating activities                       294,931            198,641

Investing         Proceeds from the sales of securities available for sale                 2,070,247            609,481
activities        Proceeds from the maturity of securities available for sale              2,493,675            760,908
                  Proceeds from the maturity of securities held to maturity                  279,923            242,799
                  Purchase of securities available for sale                               (7,207,889)        (3,078,553)
                  Purchase of securities held to maturity                                   (358,633)           (32,604)
                  Net increase in loans                                                     (653,496)          (690,378)
                  Proceeds from sales of loans                                                52,247             10,214
                  Capital expenditures                                                      (151,499)           (79,594)
                  ------------------------------------------------------------------------------------------------------
                             Net cash used by investing activities                        (3,475,425)        (2,257,727)

Financing         Net increase in demand and savings deposits                              2,848,174          1,509,026
activities        Net increase in time deposits                                              390,067            692,769
                  Net increase (decrease) in other borrowed money                            116,334           (146,063)
                  Redemption of long term debt                                                     -            (23,000)
`                 Proceeds from issuance of Trust Capital Securities                               -            200,000
                  Dividends paid                                                             (22,569)           (19,792)
                  Proceeds from issuance of common stock under
                     dividend reinvestment and other stock plans                              52,251             33,067
                  Other                                                                       (1,312)                 8
                  ------------------------------------------------------------------------------------------------------
                             Net cash provided by financing activities                     3,382,945          2,246,015

                  Increase in cash and cash equivalents                                      202,451            186,929
                  Cash and cash equivalents at beginning of year                             811,434            557,738
                  ------------------------------------------------------------------------------------------------------
                  Cash and cash equivalents at end of period                             $ 1,013,885        $   744,667
                  ======================================================================================================

                  Supplemental disclosures of cash flow information:
                        Cash paid during the period for:
                       Interest                                                            $  79,741        $    94,301
                       Income taxes                                                           36,462             29,200

                             See accompanying notes.

</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>


                                          COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                 Consolidated Statement of Changes in Stockholders' Equity
                                                        (unaudited)

Six months ended June 30, 2003
(in thousands)
------------------------------------------------------------------------------------------------------------------------------------
                                                                  Capital in                           Accumulated
                                                                  Excess of                               Other
                                                         Common     Par or       Retained   Treasury  Comprehensive
                                                         Stock   Stated Value    Earnings    Stock        Income         Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                     <C>         <C>          <C>        <C>            <C>          <C>
Balances at December 31, 2002                            $68,043     $538,795     $199,604   $(2,046)       $113,614     $918,010
Net income                                                                          88,207                                 88,207
  Other Comprehensive Income, net of tax
   Unrealized loss on securities                                                                              (5,786)      (5,786)
   Reclassification adjustment                                                                               (18,313)     (18,313)
                                                                                                                      ------------
  Other comprehensive income                                                                                             (24,099)
Total comprehensive income                                                                                                 64,108
Cash dividends paid                                                                (22,569)                               (22,569)
Shares issued under dividend reinvestment
   and compensation and benefit plans (1,834 shares)       1,834       50,417                                              52,251
Acquisition of insurance brokerage agencies (44 shares)       44        1,848                                               1,892
Other                                                                                   (3)   (3,199)                      (3,202)
------------------------------------------------------------------------------------------------------------------------------------
Balances at June 30, 2003                                $69,921     $591,060     $265,239   $(5,245)        $89,515   $1,010,490
------------------------------------------------------------------------------------------------------------------------------------

                             See accompanying notes.


</TABLE>



                                       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 has been  condensed  or omitted  pursuant to such
rules  and  regulations.   The  accompanying  condensed  consolidated  financial
statements  reflect all  adjustments  which 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 condensed  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, 2002.
The results for the three and six months ended June 30, 2003 are not necessarily
indicative  of the results that may be expected for the year ended  December 31,
2003.

The consolidated  financial statements include the accounts of Commerce Bancorp,
Inc. (the Company) and all of its  subsidiaries,  including  Commerce Bank, N.A.
(Commerce NJ), Commerce  Bank/Pennsylvania,  N.A.,  Commerce  Bank/Shore,  N.A.,
Commerce Bank/North, Commerce Bank/Delaware,  N.A., Commerce Insurance Services,
Inc.  (CIS),  Commerce  Capital  Trust II, and Commerce  Capital  Markets,  Inc.
(CCMI).  All material  intercompany  transactions have been eliminated.  Certain
amounts  from  prior  years  have  been   reclassified   to  conform  with  2003
presentation.

B. Recent Announcements

On August 8, 2003,  the Company  filed a Form S-3 shelf  registration  statement
with the Securities and Exchange  Commission (SEC).  Once declared  effective by
the SEC, the shelf registration statement will allow the Company to periodically
offer and sell,  individually  or in any  combination,  common stock,  preferred
stock, debt securities,  trust preferred securities,  warrants to purchase other
securities  and units  (which  include  a  combination  of any of the  preceding
securities) up to a total of $500 million,  subject to market conditions and the
Company's capital needs.

C. 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.

During the second quarter of 2003, the Company  reclassed  capital  expenditures
for bank  premises  and  equipment  in  progress,  previously  reported in Other
assets,  to Bank premises and  equipment,  net. As of June 30, 2003 and December
31, 2002,  Bank  premises and  equipment in progress was $98.1 million and $81.6
million, respectively.

D. Commitments

In the normal course of business, there are various commitments to extend credit
outstanding,  such  as  letters  of  credit,  which  are  not  reflected  in the
accompanying consolidated financial statements. Management does not anticipate
any material losses as a result of these transactions.

E. Comprehensive Income

Total  comprehensive  income,  which for the  Company  included  net  income and
unrealized  gains and losses on the  Company's  available  for sale  securities,
amounted to $41.6 million and $116.2 million, respectively, for the three months
ended June 30, 2003 and 2002.  For the six months  ended June 30, 2003 and 2002,
total comprehensive income was $64.1 million and $122.7 million, respectively.



                                       5
<PAGE>

F. New Accounting Standards

In May 2003, the Financial  Accounting  Standards Board (FASB) issued  Statement
No. 150,  "Accounting for Certain Financial  Instruments with Characteristics of
both  Liabilities  and Equity" (FAS 150),  which the Company  adopted on July 1,
2003.  This  statement   establishes   standards  for  the   classification  and
measurement  of  certain  financial  instruments  with  characteristics  of both
liabilities and equity.  Financial instruments that fall within the scope of FAS
150 are to be classified as liabilities, or an asset in some circumstances. This
statement became effective upon issuance for financial  instruments entered into
or modified  after May 31,  2003 and for all  financial  instruments  previously
entered into at the beginning of the first interim period  beginning  after June
15, 2003.  Management does not expect the adoption of FAS 150 to have a material
impact on the Company's results of operations and financial position.

In April 2003, the FASB issued Statement No. 149, "Amendment of Statement 133 on
Derivative  Instruments  and Hedging  Activities"  (FAS 149),  which the Company
adopted  on  July  1,  2003.  This  statement  amends  and  clarifies  financial
accounting  and  reporting  for  derivative   instruments,   including   certain
derivative  instruments embedded in other contracts,  and for hedging activities
under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities".  This statement is effective for contracts entered into or modified
and for hedging  relationships  designated after June 30, 2003.  Management does
not expect the  adoption of FAS 149 to have a material  impact on the  Company's
results of operations and financial position.

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable Interest Entities" (FIN 46), which the Company adopted on July 1, 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.  FIN 46's consolidation criteria are based on
an analysis of risks and rewards,  not control,  and represent a significant and
complex  modification of previous  accounting  principles.  Management is in the
process  of  reviewing  the  application  of FIN 46 to all of its  interests  in
operating  entities that are not  presently  consolidated.  Management  does not
expect  the  adoption  of FIN 46 to  have a  material  impact  on the  Company's
consolidated financial statements.

In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based
Compensation - Transition and  Disclosure"  (FAS 148).  This statement  provides
alternative methods of transition for a voluntary change to the fair value based
method of  accounting  for  stock-based  employee  compensation  and  amends the
disclosure  requirements of FASB Statement No. 123,  "Accounting for Stock-Based
Compensation"  (FAS 123).  This  statement is effective  for fiscal years ending
after December 15, 2002 and did not have an impact on the financial condition or
operating results of the Company.

The Company will  continue to follow 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, 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
       ---------------------------------------------------------------------------------------------------
                                            2003             2002              2003             2002
       ---------------------------------------------------------------------------------------------------

<S>                                           <C>              <C>               <C>              <C>
       Net income, as reported                $45,317          $34,802           $85,207          $66,552

       Pro forma net income                   $43,084          $32,695           $83,594          $62,338

       Pro forma net income per share:
       Basic                                   $ 0.62           $ 0.49            $ 1.22           $ 0.94
       Diluted                                 $ 0.60           $ 0.46            $ 1.16           $ 0.88
</TABLE>

The fair value of options  granted in 2003 and 2002 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 3.00% to 4.41%, dividend yields
of 1.50% to  2.50%,  volatility  factors  of the  expected  market  price of the
Company's  common  stock  of .304 and  weighted  average  expected  lives of the
options of 5.22 and 4.75 years.

                                       6
<PAGE>

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.

G. Segment Information

Selected segment information is as follows:
<TABLE>
<CAPTION>

        -------------------------------------------------------------------------------------------------------------------------
                                                         Three Months Ended                       Three Months Ended
                                                           June 30, 2003                             June 30, 2002
        -------------------------------------------------------------------------------------------------------------------------
                                               Community      Parent/                    Community     Parent/
                                                 Banks         Other         Total         Banks        Other         Total
        -------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>           <C>           <C>          <C>           <C>
        Net interest income                  $   180,729   $    (1,425)  $   179,304   $   142,291  $    (3,665)  $   138,626
        Provision for loan losses                  6,900                       6,900        10,250                     10,250
                                             ------------------------------------------------------------------------------------

        Net interest income after provision      173,829        (1,425)      172,404       132,041       (3,665)      128,376
        Noninterest income                        56,009        27,361        83,370        39,893       21,836        61,729
        Noninterest expense                      166,136        21,542       187,678       118,295       19,245       137,540
                                             ------------------------------------------------------------------------------------
        Income before income taxes                63,702         4,394        68,096        53,639       (1,074)       52,565
        Income tax expense                        21,317         1,462        22,779        19,034       (1,271)       17,763
                                             ------------------------------------------------------------------------------------
        Net income                           $    42,385   $     2,932   $    45,317   $    34,605  $       197   $    34,802
                                             ====================================================================================

        Average assets (in millions)         $    16,715   $     1,784   $    18,499   $    11,505  $     1,661   $    13,166
                                             ====================================================================================

        -------------------------------------------------------------------------------------------------------------------------
                                                          Six Months Ended                         Six Months Ended
                                                           June 30, 2003                             June 30, 2002
        -------------------------------------------------------------------------------------------------------------------------
                                               Community      Parent/                    Community     Parent/
                                                 Banks         Other         Total         Banks        Other         Total
        -------------------------------------------------------------------------------------------------------------------------
        Net interest income                  $   348,958   $    (2,325)  $   346,633   $   267,761  $    (5,056)  $   262,705
        Provision for loan losses                 13,800                      13,800        17,150                     17,150
                                             ------------------------------------------------------------------------------------

        Net interest income after provision      335,158        (2,325)      332,833       250,611       (5,056)      245,555
        Noninterest income                       106,004        53,432       159,436        75,941       41,678       117,619
        Noninterest expense                      315,586        44,213       359,799       226,147       37,314       263,461
                                             ------------------------------------------------------------------------------------
        Income before income taxes               125,576         6,894       132,470       100,405         (692)       99,713
        Income tax expense                        42,292         1,971        44,263        34,290       (1,129)       33,161
                                             ------------------------------------------------------------------------------------
        Net income                           $    83,284   $     4,923   $    88,207   $    66,115  $       437   $    66,552
                                             ====================================================================================

        Average assets (in millions)         $    15,858   $     1,812   $    17,670   $    11,002  $     1,431   $    12,433
                                             ====================================================================================


</TABLE>



                                       7
<PAGE>



H. Trust Capital Securities

On March 11, 2002 the Company  issued $200  million of 5.95%  Convertible  Trust
Capital  Securities  through  Commerce Capital Trust II, a newly formed Delaware
business  trust  subsidiary  of  the  Company.  The  Convertible  Trust  Capital
Securities mature in 2032.  Holders of the Convertible Trust Capital  Securities
may convert each security into 0.9478 shares of Company common stock, subject to
adjustment,  if (1) the closing sale price of Company  common stock for at least
20 trading  days in a period of 30  consecutive  trading days ending on the last
trading day of any calendar  quarter  beginning with the quarter ending June 30,
2002 is more than 110% of the Convertible  Trust Capital  Securities  conversion
price  ($52.75 at June 30, 2003) then in effect on the last day of such calendar
quarter,  (2) the assigned  credit  rating by Moody's of the  Convertible  Trust
Capital  Securities  is at or  below  Bal,  (3) the  Convertible  Trust  Capital
Securities are called for redemption,  or (4) specified  corporate  transactions
have occurred.  All $200.0 million of the Convertible  Trust Capital  Securities
qualify as Tier 1 capital for regulatory  capital purposes.  As of June 30, 2003
the Convertible Trust Capital Securities were not convertible.  The net proceeds
of this  offering  were  used for  general  corporate  purposes,  including  the
redemption of the Company's  $57.5 million of 8.75% Trust Capital  Securities on
July  1,  2002  and the  repayment  of the  Company's  $23.0  million  of 8 3/8%
subordinated notes on May 20, 2002.

I.   Earnings Per Share

The  calculation  of earnings per share  follows (in  thousands,  except for per
share amounts):
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                                         Three Months Ended                  Six Months Ended
                                                               June 30                            June 30
----------------------------------------------------------------------------------------------------------------------
                                                       2003              2002             2003              2002
----------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>              <C>               <C>

Basic:
Net income                                               $45,317           $34,802          $88,207           $66,552
                                                   ==============    ==============   ==============    ==============
Average common shares outstanding                         69,193            66,552           68,758            66,275
                                                   ==============    ==============   ==============    ==============
Net income per share of common stock                     $  0.65           $  0.52          $  1.28           $  1.00
                                                   ==============    ==============   ==============    ==============

Diluted:
Net income                                               $45,317           $34,802          $88,207           $66,552
                                                   ==============    ==============   ==============    ==============

Average common shares outstanding                         69,193            66,552           68,758            66,275
Additional shares considered in diluted
   computation assuming:
     Exercise of stock options                             2,935             4,455            3,186             4,235
                                                   --------------    --------------   --------------    --------------
Average common shares outstanding
   on a diluted basis                                     72,128            71,007           71,944            70,510
                                                   ==============    ==============   ==============    ==============
Net income per common share - diluted                    $  0.63           $  0.49          $  1.23           $  0.94
                                                   ==============    ==============   ==============    ==============

</TABLE>


                                       8
<PAGE>



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

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

At June 30, 2003,  stockholders'  equity  totaled  $1,010.5  million or 5.09% of
total  assets,  compared to $918.0  million or 5.60% of total assets at December
31, 2002.

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 reserve
for possible loan losses.

The table below presents the Company's and Commerce NJ's risk-based and leverage
ratios at June 30, 2003 and 2002:

<TABLE>
<CAPTION>

                                                                               Per Regulatory Guidelines
                                                                   --------------------------------------------------
                                                Actual                     Minimum              "Well Capitalized"
                                          Amount       Ratio         Amount      Ratio          Amount      Ratio
---------------------------------------------------------------------------------------------------------------------
<S>         <C>                           <C>             <C>         <C>             <C>        <C>            <C>
June 30, 2003
Company
     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 NJ
     Risk based capital ratios:
       Tier 1                               $638,338      10.00%      $255,361        4.00%      $383,042       6.00%
       Total capital                         704,660      11.04        510,722        8.00        638,403      10.00
     Leverage ratio                          638,338       5.50        464,104        4.00        580,130       5.00

June 30, 2002
Company
     Risk based capital ratios:
       Tier 1                             $  931,146      12.54%      $296,929        4.00%      $445,393       6.00%
       Total capital                       1,035,198      13.95        593,858        8.00        742,322      10.00
     Leverage ratio                          931,146       7.10        524,807        4.00        656,009       5.00

Commerce NJ
      Risk based capital ratios:
       Tier 1                             $  463,215      10.39%      $178,329        4.00%      $267,494       6.00%
       Total capital                         515,483      11.56        356,658        8.00        445,823      10.00
     Leverage ratio                          463,215       6.25        296,235        4.00        370,294       5.00
</TABLE>

At June 30, 2003,  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, 2003, the Company
and its subsidiaries  meet all capital  adequacy  requirements to which they are
subject.

Deposits
--------

Total deposits at June 30, 2003 were $17.8 billion, up $5.4 billion, or 44% over
total deposits of $12.4 billion at June 30, 2002, and up by $3.3 billion, or 23%
from year-end 2002.  Deposit growth during the first six months of 2003 included
core deposit  growth in all categories as well as growth from the public sector.
The Company experienced "same-store core deposit growth" of 29% at June 30, 2003
as compared to the same period in 2002 for those branches open for more than two
years.




                                       9
<PAGE>



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.

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 a 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 15% of net income in
the flat rate  scenario  in the first year and within 30% over the two year time
frame.  At June 30, 2003, the Company's  income  simulation  model indicates net
income  would  decrease  by 9.47% and by 15.03% in the first year and over a two
year time frame,  respectively,  if rates decreased as described  above. At June
30, 2002,  the Company's  income  simulation  model was run assuming a 200 basis
point  decrease and indicated net income would decrease by 0.35% and by 9.62% in
the first year and over a two year time frame,  respectively.  At June 30, 2003,
the model  projects that net income would increase by 1.34% and by 11.09% in the
first year and over a two year time frame,  respectively,  if rates increased as
described  above,  as  compared  to a  decrease  by 0.18%  and  increase  5.71%,
respectively,  at June 30, 2002. 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 sale of a portion of its available for sale portfolio,
the use of risk  management  strategies such as interest rate swaps and caps, or
the extension of the maturities of its short-term borrowings.

Since June 30, 2003, longer-term interest rates have risen sharply, resulting in
a steeper yield curve.  If interest  rates remain at current levels for the next
12 months,  the  Company's  models  project  that the net  interest  margin will
increase,  resulting in increased net income. In addition,  the Company's market
value of equity (MVE) would increase as more fully described below.

Management  also  monitors  interest  rate risk by  utilizing a market  value of
equity at risk  model.  The model  assesses  the impact of a change in  interest
rates on the market value of all the Company's assets and liabilities. 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 or 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 or 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, 2003, the market value
of equity model indicates an acceptable level of interest rate risk.




                                       10
<PAGE>



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.  Thus,
these  core  deposit   balances  provide  an  internal  hedge  to  market  value
fluctuations in the Company's fixed rate assets. The following table depicts the
average lives of the Company's loans, investments and deposits at June 30, 2003:

                  ---------------------------------------------------
                                                   Average Life
                                                    (in years)
                  ---------------------------------------------------

                  Loans                                3.5

                  Investments                          3.8

                  Deposits                             14.3

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
more  than the  decrease  in value  of the  Company's  fixed  rate  assets.  The
following  table  summarizes  the  market  value of equity at June 30,  2003 (in
millions, except for per share amounts):

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

          Plus 200 basis point          $4,183               $60.07

          Current Rate                  $3,804               $54.63

          Minus 100 basis point         $2,885               $41.43

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,  FHLB advances, or the sale of its
available for sale investment portfolio.  As of June 30, 2003 the Company had in
excess  of $8.7  billion  in  immediately  available  liquidity  which  includes
securities  that could be sold or used for  collateralized  borrowings,  cash on
hand, and borrowing capacities under existing lines of credit.  During the first
six months of 2003, deposit growth was 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,  2003,  short-term  borrowings
aggregated  $508.0  million  and had an average  rate of 0.70%,  as  compared to
$391.6 million at an average rate of 1.55% at December 31, 2002.

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

For the six month period ended June 30, 2003,  interest earning assets increased
$3.0 billion from $14.8 billion to $17.8 billion. This increase was primarily in
investment securities and the loan portfolio as described below.


                                       11
<PAGE>

Loans
-----

During the first six months of 2003,  loans  increased  $556.0 million from $5.8
billion  to $6.4  billion.  At June 30,  2003,  loans  represented  36% of total
deposits and 32% of total assets. All segments of the loan portfolio experienced
growth in the first six months of 2003,  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.

<TABLE>
<CAPTION>

                                                        June 30,         December 31,
                                                    ---------------------------------------
                                                          2003                2002
                                                    ---------------------------------------
<S>                                                     <C>                   <C>
(dollars in thousands)
Commercial real estate:
   Owner-occupied                                       $  1,486,464          $  1,345,306
   Investor developer                                        981,657               885,276
   Construction                                              113,931               102,080
                                                    ---------------------------------------
                                                           2,582,052             2,332,662
Commercial:
   Term                                                      897,252               842,869
   Line of credit                                            787,084               683,640
   Demand                                                      1,512                   317
                                                    ---------------------------------------
                                                           1,685,848             1,526,826
Consumer:
   Mortgages (1-4 family residential)                        676,350               626,652
   Installment                                               135,750               140,493
   Home equity                                             1,239,553             1,139,589
   Credit lines                                               59,070                56,367
                                                    ---------------------------------------
                                                           2,110,723             1,963,101
                                                    ---------------------------------------
     Total loans                                          $6,378,623            $5,822,589
                                                    =======================================
</TABLE>




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

For the first six months of 2003, total  securities  increased $2.4 billion from
$8.9 billion to $11.3 billion.  The available for sale portfolio  increased $2.5
billion to $10.3  billion at June 30,  2003 from $7.8  billion at  December  31,
2002, and the securities held to maturity  portfolio  increased $78.8 million to
$841.8  million at June 30,  2003 from  $763.0  million at  year-end  2002.  The
portfolio of trading  securities  decreased $117.0 million from year-end 2002 to
$209.5  million at June 30,  2003.  At June 30,  2003,  the average  life of the
investment   portfolio  was  approximately  3.8  years,  and  the  duration  was
approximately  3.1 years. At June 30, 2003, total securities  represented 57% of
total assets.

During the second quarter of 2003, the Company  continued its ongoing review and
repositioning  of the portfolio to adjust for current and  anticipated  interest
rate and yield curve levels.  This repositioning of the portfolio involved sales
of  approximately  $1.4  billion for the second  quarter  which  reduced  future
prepayment  risk,  provided  enhanced  yields on new  purchases  and had minimal
effect on the duration of the portfolio.



                                       12
<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>

                                                               June 30,      December 31,
                                                           ---------------------------------
                                                                2003             2002
                                                           ---------------------------------
                                                                (dollars in thousands)
<S>                                                            <C>               <C>
U.S. Government agency and mortgage backed obligations         $10,119,546       $7,659,737
Obligations of state and political subdivisions                     30,438           23,185
Equity securities                                                   14,276           24,054
Other                                                               95,551           99,803
                                                           ---------------------------------
     Securities available for sale                             $10,259,811       $7,806,779
                                                           =================================

U.S. Government agency and mortgage backed obligations            $595,518         $624,688
Obligations of state and political subdivisions                    181,511           91,204
Other                                                               64,723           47,134
                                                           ---------------------------------
     Securities held to maturity                                  $841,752         $763,026
                                                           =================================
</TABLE>

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

Net income for the second  quarter of 2003 was $45.3  million,  an  increase  of
$10.5 million or 30% over the $34.8 million  recorded for the second  quarter of
2002.  Net income for the first six months of 2003  totaled  $88.2  million,  an
increase of $21.7  million or 32% from $66.5  million in the first six months of
2002. On a per share basis,  diluted net income for the second quarter and first
six months of 2003 was $0.63 and $1.23 per common  share  compared  to $0.49 and
$0.94 per common share for the same periods in 2002.

Return on average assets (ROA) and return on average equity (ROE) for the second
quarter  of 2003 were  0.98% and  17.91%,  respectively,  compared  to 1.06% and
18.99%,  respectively,  for the same 2002 period.  ROA and ROE for the first six
months  of 2003 were  1.00%  and  17.92%,  respectively,  compared  to 1.07% and
18.99%, respectively, for the same 2002 period.

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

Net interest  income  totaled  $179.3 million for the second quarter of 2003, an
increase of $40.7  million or 29% from $138.6  million in the second  quarter of
2002. Net interest  income for the first six months of 2003 was $346.6  million,
up $83.9  million or 32% from  $262.7  million for the first six months of 2002.
The  improvement  in net  interest  income was due  primarily  to the  Company's
continued ability to grow deposits and its loan and investment portfolios.

The following  table sets forth balance sheet items on a daily average basis for
the three  months  ended June 30,  2003,  March 31,  2003 and June 30,  2002 and
presents the daily average interest earned on assets and paid on liabilities for
such periods.


                                       13
<PAGE>
<TABLE>
<CAPTION>



                                             Average Balances and Net Interest Income

                            --------------------------------------------------------------------------------------------------------
                                         June 2003                          March 2003                         June 2002
                            ------------------------------------ ---------------------------------- --------------------------------
                              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                   $10,026,080     $119,147      4.77%  $  8,681,675   $109,916     5.13%    $6,484,728  $97,970     6.06%
   Tax-exempt                    192,892        3,689      7.67        140,307      2,545     7.36        128,237    2,043     6.39
   Trading                       158,297        2,389      6.05        270,299      3,215     4.82        225,231    3,069     5.47
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
Total investment securities   10,377,269      125,225      4.84      9,092,281    115,676     5.16      6,838,196  103,082     6.05
Federal funds sold                32,095           97      1.21         27,154         80     1.19         27,592      116     1.69
Loans
   Commercial mortgages        2,319,945       37,156      6.42      2,177,008     35,125     6.54      1,928,153   33,683     7.01
   Commercial                  1,552,400       21,587      5.58      1,496,039     20,943     5.68      1,194,310   17,952     6.03
   Consumer                    2,109,143       33,336      6.34      2,075,256     33,719     6.59      1,787,395   32,026     7.19
   Tax-exempt                    264,737        5,338      8.09        258,614      5,129     8.04        241,226    5,073     8.43
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
Total loans                    6,246,225       97,417      6.26      6,006,917     94,916     6.41      5,151,084   88,734     6.91
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
Total earning assets         $16,655,589     $222,739      5.36%   $15,126,352   $210,672     5.65%   $12,016,872 $191,932     6.41%
                            =============                        ==============                     =============
Sources of Funds
-----------------------------
Interest-bearing
liabilities
   Regular savings            $3,477,229       $6,755      0.78%  $  3,021,219     $6,355     0.85%    $2,304,839   $8,133     1.42%
   N.O.W. accounts               437,455          734      0.67        403,415        813     0.82        331,878    1,152     1.39
   Money market plus           5,989,878       11,226      0.75      5,472,788     11,584     0.86      3,858,362   13,555     1.41
   Time deposits               2,313,690       14,093      2.44      2,148,534     13,731     2.59      1,840,499   15,992     3.49
   Public funds                  878,005        3,294      1.50        793,437      3,115     1.59        984,503    5,546     2.26
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
     Total deposits           13,096,257       36,102      1.11     11,839,393     35,598     1.22      9,320,081   44,378     1.91

   Other borrowed money          278,780          318      0.46        272,304        914     1.36         70,078      282     1.61
   Long-term debt                200,000        3,020      6.06        200,000      3,020     6.12        269,885    5,082     7.55
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
Total deposits and
interest-bearing
   liabilities                13,575,037       39,440      1.17     12,311,697     39,532     1.30      9,660,044   49,742     2.07
Noninterest-bearing
 funds (net)                   3,080,552                             2,814,655                          2,356,828
                            -------------  ------------ --------- -------------- ---------- --------- ------------ --------- -------
Total sources to
 fund earning                $16,655,589       39,440      0.95   $ 15,126,352     39,532     1.06    $12,016,872   49,742     1.66
                            =============  ------------ --------- ============== ---------- --------- ============ --------- -------

Net interest income and
   margin tax-equivalent
   basis                                     $183,299      4.41%                 $171,140     4.59%               $142,190     4.75%
                                          ============= ==========             ==========   =========            ============ ======
Other Balances
-----------------------------
Cash and due from banks         $945,600                            $  865,209                           $547,088
Other assets                     994,784                               933,321                            677,551
Total assets                  18,498,841                            16,831,542                         13,166,040
Total deposits                16,734,886                            15,033,367                         11,885,164
Demand deposits (noninterest-
   bearing)                    3,638,629                             3,193,974                          2,565,083
Other liabilities                273,183                               369,691                            207,939
Stockholders' equity           1,011,992                               956,180                            732,974

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.

</TABLE>

                                       14
<PAGE>

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

Noninterest  income  totaled  $83.4  million for the second  quarter of 2003, an
increase  of $21.7  million or 35% from $61.7  million in the second  quarter of
2002.  Noninterest  income for the first six months of 2003  increased to $159.4
million from $117.6 million in the first six months of 2002, a 36% increase.

Increased  deposit  charges and service fees of $7.1  million and $13.0  million
during the three and six  months  ended June 30,  2003,  respectively,  resulted
primarily from higher transaction  volumes. In addition,  other operating income
increased  $13.3  million  during the second  quarter of 2003 and $27.7  million
during the first six  months of 2003 as  compared  to the same  periods in 2002.
Included in these  increases  are increased  revenues  from CCMI,  the Company's
municipal public finance subsidiary, of $1.6 million and $5.2 million during the
three and six  months  ended  June 30,  2003,  respectively,  and from CIS,  the
Company's  insurance  brokerage  subsidiary,  of $2.9  million and $5.6  million
during the three and six months ended June 30, 2003,  respectively,  as compared
to the same periods in 2002.

The  growth in  non-interest  income for the  second  quarter  and the first six
months of 2003 is more fully depicted below:

<TABLE>
<CAPTION>

                                                    Three Months Ended                      Six Months Ended
                                            ------------------------------------  --------------------------------------
                                             6/30/03     6/30/02    % Increase     6/30/03      6/30/02     % Increase
                                            ------------------------------------  --------------------------------------
                                                 (Dollars in thousands)                 (Dollars in thousands)
<S>                                           <C>         <C>              <C>       <C>          <C>              <C>
Deposit charges & service fees                $38,765     $31,629          23%       $73,607      $60,592          21%
Other operating income:
   Insurance                                   17,190      14,241          21         33,245       27,629          20
   Capital Markets                              9,695       8,082          20         19,698       14,528          36
   Loan Brokerage Fees                          7,545       4,118          83         15,468        8,143          90
   Other                                        8,958       3,659         145         16,337        6,727         143
                                            ----------  ----------   ---------    -----------  -----------  ----------
     Total other                               43,388      30,100          44         84,748       57,027          49
                                            ----------  ----------   ---------    -----------  -----------  ----------
Net investment security gains                   1,217           -           -          1,081            -           -
                                            ----------  ----------   ---------    -----------  -----------  ----------
Total non-interest income                     $83,370     $61,729          35%      $159,436     $117,619          36%
                                            ==========  ==========   =========    ===========  ===========  ==========
</TABLE>

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

For the second quarter of 2003,  noninterest  expense totaled $187.7 million, an
increase of $50.1 million or 36% over the second  quarter in 2002. For the first
six months of 2003,  noninterest  expense totaled $359.8 million, an increase of
$96.3  million  or 37% over  $263.5  million  for the first six  months of 2002.
Contributing  to these  increases  was new branch  activity over the past twelve
months,  with the number of branches increasing from 196 at June 30, 2002 to 243
at June 30, 2003. With the addition of these new offices, staff, facilities, and
related expenses rose accordingly. The increases reflect the rapid growth during
each respective period and also reflect substantial  infrastructure  investments
made by the Company to support future growth.

For the second  quarter of 2003,  other  noninterest  expenses rose $8.5 million
over the  second  quarter  of 2002.  For the  first six  months  of 2003,  other
noninterest  expense rose $15.6 million over the first six months of 2002. 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's operating efficiency ratio (noninterest expenses,  less other real
estate expense, divided by net interest income plus noninterest income excluding
non-recurring  gains) was 71.3 % for the first six months of 2003 as compared to
69.11% for the same 2002 period.  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, 2003 were $24.1 million,  or 0.12% of total assets compared to $17.8 million
or 0.11% of total  assets at  December  31,  2002 and $17.6  million or 0.13% of
total assets at June 30, 2002.




                                       15
<PAGE>


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,  2003
were $22.5 million or 0.35% of total loans compared to $14.2 million or 0.24% of
total  loans at December  31, 2002 and $15.1  million or 0.29% of total loans at
June  30,  2002.  At June 30,  2003,  loans  past due 90 days or more and  still
accruing  interest  amounted  to $434  thousand  compared  to $620  thousand  at
December  31,  2002  and  $834  thousand  at June  30,  2002.  Additional  loans
considered  as potential  problem  loans by the  Company's  internal loan review
department  ($32.0  million  at June 30,  2003) have been  evaluated  as to risk
exposure in determining the adequacy of the allowance for loan losses.

Other real estate (ORE) at June 30, 2003  totaled $1.5 million  compared to $3.6
million at December 31, 2002 and $2.5 million at June 30, 2002. These properties
have been  written  down to the  lower of cost or fair  value  less  disposition
costs.

The following summary presents  information  regarding  non-performing loans and
assets as of June 30, 2003 and the preceding  four quarters  (dollar  amounts in
thousands).

<TABLE>
<CAPTION>

                                           ---------------------------------------------------------------------------
                                               June 30,      March 31,    December 31,   September 30,    June 30,
                                                 2003           2003          2002           2002           2002
                                           ---------------------------------------------------------------------------
<S>                                               <C>             <C>           <C>            <C>            <C>
Non-accrual loans:
   Commercial                                     $7,049          $4,874        $5,412         $7,213         $7,581
   Consumer                                        9,517           9,860         6,326          5,512          4,944
   Real estate:
     Construction                                      -               -           131            131            181
     Mortgage                                      5,970           4,249         2,299          2,389          2,391
                                           ---------------------------------------------------------------------------
         Total non-accrual loans                  22,536          18,983        14,168         15,245         15,097
                                           ---------------------------------------------------------------------------

Restructured loans:
   Commercial                                          3               4             5              6              6
   Consumer
   Real estate:
     Construction
     Mortgage
                                           ---------------------------------------------------------------------------
         Total restructured loans                      3               4             5              6              6
                                           ---------------------------------------------------------------------------

Total non-performing loans                        22,539          18,987        14,173         15,251         15,103
                                           ---------------------------------------------------------------------------

Other real estate                                  1,540           3,553         3,589          2,367          2,471
                                           ---------------------------------------------------------------------------

Total non-performing assets                       24,079          22,540        17,762         17,618         17,574
                                           ---------------------------------------------------------------------------

Loans past due 90 days or more
   and still accruing                                434             376           620            900            834
                                           ---------------------------------------------------------------------------

Total non-performing assets and
   loans past due 90 days or more                $24,513         $22,916       $18,382        $18,518        $18,408
                                           ===========================================================================

Total non-performing loans as a
   percentage of total period-end loans            0.35%           0.32%         0.24%          0.28%          0.29%

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

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


</TABLE>

                                       16
<PAGE>
<TABLE>
<CAPTION>




                                               June 30,      March 31,    December 31,   September 30,    June 30,
                                                 2003           2003          2002           2002           2002
                                           ---------------------------------------------------------------------------
<S>                                                 <C>             <C>           <C>            <C>            <C>

Allowance for loan losses as a percentage
   of total non-performing loans                    441%            499%          640%           560%           530%

Allowance for loan losses as a percentage
   of total period-end loans                       1.56%           1.58%         1.56%          1.54%          1.52%

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>

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
                                           06/30/03        06/30/02       06/30/03       06/30/02        12/31/02
                                          ------------    -----------    ------------   ------------    ------------
<S>                                           <C>            <C>             <C>            <C>             <C>
Balance at beginning of period                $94,731        $72,253         $90,733        $66,981         $66,981
Provisions charged to operating expenses        6,900         10,250          13,800         17,150          33,150
                                          ------------    -----------    ------------   ------------    ------------
                                              101,631         82,503         104,533         84,131         100,131

Recoveries on loans charged-off:
Commercial                                        141            215             345            405             815
Consumer                                          146            105             277            220             339
Real estate                                         -              -               -              1             176
                                          ------------    -----------    ------------   ------------    ------------
Total recoveries                                  287            320             622            626           1,330

Loans charged-off:
Commercial                                     (1,197)        (1,874)         (3,065)        (3,061)         (7,181)
Consumer                                       (1,390)          (841)         (2,755)        (1,565)         (3,514)
Real estate                                       (13)           (10)            (17)           (33)            (33)
                                          ------------    -----------    ------------   ------------    ------------
Total charge-offs                              (2,600)        (2,725)         (5,837)        (4,659)        (10,728)
                                          ------------    -----------    ------------   ------------    ------------
Net charge-offs                                (2,313)        (2,405)         (5,215)        (4,033)         (9,398)
                                          ------------    -----------    ------------   ------------    ------------

Balance at end of period                      $99,318        $80,098         $99,318        $80,098         $90,733
                                          ============    ===========    ============   ============    ============


Net charge-offs as a percentage of
   average loans outstanding                     0.15%          0.19%           0.17%          0.16%           0.18%

Net reserve additions                          $4,587         $7,845          $8,585        $13,117         $23,752


</TABLE>


Recent Announcements
--------------------

On August 8, 2003,  the Company  filed a Form S-3 shelf  registration  statement
with the Securities and Exchange  Commission (SEC).  Once declared  effective by
the SEC, the shelf registration statement will allow the Company to periodically
offer and sell,  individually  or in any  combination,  common stock,  preferred
stock, debt securities,  trust preferred securities,  warrants to purchase other
securities  and units  (which  include  a  combination  of any of the  preceding
securities) up to a total of $500 million,  subject to market conditions and the
Company's capital needs.




                                       17
<PAGE>



To support its growth,  which has  exceeded 40% per year for the last two years,
the Company expects to complete an initial offering under the shelf registration
during 2003,  which could  include up to $250 million in equity.  If the Company
had completed such an equity offering at June 30, 2003, its pro-forma regulatory
capital ratios would be as follows:

                      ----------------------------------------------------------
                                          June 30,              "Well
                                            2003             Capitalized"
                      ----------------------------------------------------------

                      Leverage              7.40 %              5.00%

                      Tier 1                13.56 %             6.00%

                      Total Capital         14.55 %            10.00%

In addition, management projects that the Company's book value would increase by
approximately $2.00 per share.

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.



                                       18
<PAGE>



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 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 management is timely
alerted to material  information  relating to the Company during the period when
its periodic reports are being prepared.

In accordance with SEC  requirements,  the CEO and CFO note that, since the date
of the Controls Evaluation to the date of this Quarterly Report, there have been
no  significant  changes in  Internal  Controls or in other  factors  that could
significantly  affect Internal  Controls,  including any corrective actions with
regard to significant deficiencies and material weaknesses.



                                       19
<PAGE>



PART II. OTHER INFORMATION

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

The Annual Meeting of the  Registrant's  Shareholders  was held on May 20, 2003.
Proxies  representing  61,477,881 shares were received (total shares outstanding
as of the record date were 68,797,955). The only items of business acted upon at
the Annual Meeting were (i) the election of 12 directors for one year terms; and
(ii)  approval of the  amendment of Commerce  Bancorp,  Inc.'s 1998 Stock Option
Plan for  Non-Employee  Directors  to increase  the number of shares that may be
issued under such plan by 500,000 shares. 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                    59,135,267                   2,342,614
Robert C. Beck                        59,136,642                   2,341,239
Donald T. DiFrancesco                 59,032,096                   2,445,785
Jack R Bershad                        51,084,929                  10,392,952
Morton N. Kerr                        58,311,655                   3,166,226
Steven M. Lewis                       59,210,052                   2,267,829
George E. Norcross, III               58,986,721                   2,491,160
Daniel J. Ragone                      58,188,561                   3,289,320
William A. Schwartz Jr.               59,209,794                   2,268,087
Joseph T. Tarquini Jr.                59,040,761                   2,437,120
Joseph M. Buckelew                    59,199,780                   2,278,101
Frank C. Videon Sr.                   59,153,381                   2,324,500

(ii) Approval of the  amendment  of Commerce  Bancorp,  Inc.'s 1998 Stock Option
     Plan for  Non-Employee  Directors to increase the number of shares that may
     be issued under such plan by 500,000 shares:

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

                43,975,139       17,165,927        462,591           7,194,298


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

Exhibits
--------

Exhibit 31      -   302 Certification

Exhibit 32      -   906 Certification

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

On April 11,  2003,  we filed a Current  Report  on Form 8-K which  included  as
exhibits a press release, issued by us on April 10, 2003, announcing our results
for the second quarter of 2003 and certain supplemental information.

On April 29,  2003,  we filed a Current  Report  on Form 8-K which  included  as
exhibits a press release, issued by us on April 24, 2003, announcing an Investor
Conference to be held on Tuesday, April 29, 2003 and the slide package presented
at the Investor Conference.


                                       20
<PAGE>



                                   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 8, 2003                          /s/ DOUGLAS J. PAULS
-------------------------------   ----------------------------------------------
         (Date)                                 DOUGLAS J. PAULS
                                           SENIOR VICE PRESIDENT AND
                                             CHIEF FINANCIAL OFFICER
                                  (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)



                                       21
<PAGE>