**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,                2007                                                           |

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

| New                Jersey                      | 22-2433468                                  |
|------------------------------------------------|---------------------------------------------|
| (State                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)              |

| Yes                  X | No     |
|----------------------------------|----------------------------|

| Large                accelerated filer X | Accelerated                filer | Non-accelerated                filer |
|------------------------------------------|----------------------------------|--------------------------------------|

| Yes      | No                X |
|-----------------------------------|---------------------|

| Common                Stock     | 192,863,475                                                                   |
|---------------------------------|-------------------------------------------------------------------------------|
| (Title                of Class) | (No.                of Shares Outstandingas                of August 6, 2007) |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

|                    |                                                                                                      | Page   |
|-------------------------|-----------------------------------------------------------------------------------------------------------|--------|
| PART                I.  | FINANCIAL                INFORMATION                                                                      |   |
|                    |                                                                                                      |   |
| Item                1.  | Financial                Statements                                                                       |   |
|                    |                                                                                                      |   |
|                    | Consolidated                Balance Sheets (unaudited)                                                    |   |
|                    | June                30, 2007 and December 31, 2006                                                        | 1      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statements of Income                (unaudited)                               |   |
|                    | Three                months ended June 30, 2007 and June 30, 2006                and                      |   |
|                    | six                months ended June 30, 2007 and June 30,                2006                            | 2      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statements of Cash Flows                (unaudited)                           |   |
|                    | Six                months ended June 30, 2007 and June 30,                2006                            | 3      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statement of Changes in Stockholders’ Equity                (unaudited) |   |
|                    | Six                months ended June 30, 2007                                                             | 4      |
|                    |                                                                                                      |   |
|                    | Notes                to Consolidated Financial Statements                (unaudited)                      | 5      |
|                    |                                                                                                      |   |
| Item                2.  | Management’s                Discussion and Analysis of                Financial                     |   |
|                    | Condition                and Results of Operation                                                         | 8      |
|                    |                                                                                                      |   |
| Item                3.  | Quantitative                and Qualitative Disclosures About Market                Risk                  | 21     |
|                    |                                                                                                      |   |
| Item                4.  | Controls                and Procedures                                                                    | 22     |
|                    |                                                                                                      |   |
| PART                II. | OTHER                INFORMATION                                                                          |   |
|                    |                                                                                                      |   |
| Item                1.  | Legal                Proceedings                                                                          | 23     |
|                    |                                                                                                      |   |
| Item                1A. | Risk                Factors                                                                               | 24     |
|                    |                                                                                                      |   |
| Item                4.  | Submission                of Matters to a Vote of Security                Holders                    | 24     |
|                    |                                                                                                      |   |
| Item                6.  | Exhibits                                                                                                  | 25     |
|                    |                                                                                                      |   |

----

**PART      1.                      FINANCIAL      INFORMATION**

**Item      1.                 Financial      Statements**

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

|                    |                                                                              |   |                        |           |   |                            |   |
|-------------------------|-----------------------------------------------------------------------------------|--------|-----------------------------|----------------|--------|---------------------------------|--------|
|                    |                                                                              |   | **June                30,** |           |   | **December                31,** |   |
|                    | (dollars                in thousands)                                             |   | **2007**                    |           |   | **2006**                        |   |
| **Assets**              | Cash                and due from banks                                            |   | **$**                       | **1,405,696**  |   |                            | $      | 1,207,390 |   |
|                    | Federal                funds sold                                                 |   | ** **                  | **9,700**      |   |                            |   | 9,300 |   |
|                    | Cash                and cash                equivalents                           |   | ** **                  | **1,415,396**  |   |                            |   | 1,216,690 |   |
|                    | Loans                held for sale                                                |   | ** **                  | **31,618**     |   |                            |   | 52,741 |   |
|                    | Trading                securities                                                 |   | ** **                  | **77,472**     |   |                            |   | 106,007 |   |
|                    | Securities                available for sale                                      |   | ** **                  | **13,221,171** |   |                            |   | 11,098,113 |   |
|                    | Securities                held to maturity                                        |   | ** **                  | **14,585,714** |   |                            |   | 14,884,982 |   |
|                    | (market                value 06/07-$14,171,224;                12/06-$14,617,765) |   |                        |           |   |                            |   |   |   |
|                    | Loans                                                                             |   | ** **                  | **16,367,579** |   |                            |   | 15,607,049 |   |
|                    | Less                allowance for loan and lease                losses            |   | ** **                  | **160,694**    |   |                            |   | 152,053 |   |
|                    |                                                                              |   | ** **                  | **16,206,885** |   |                            |   | 15,454,996 |   |
|                    | Bank                premises and equipment, net                                   |   | ** **                  | **1,882,287**  |   |                            |   | 1,753,670 |   |
|                    | Goodwill                and other intangible assets                               |   | ** **                  | **145,335**    |   |                            |   | 141,631 |   |
|                    | Other                assets                                                       |   | ** **                  | **609,647**    |   |                            |   | 562,986 |   |
|                    | Total                assets                                                       |   | **$**                       | **48,175,525** |   |                            | $      | 45,271,816 |   |
|                    |                                                                              |   |                        |           |   |                            |   |   |   |
| **Liabilities**         | Deposits:                                                                         |   |                        |           |   |                            |   |   |   |
|                    | Demand:                                                                           |   |                        |           |   |                            |   |   |   |
|                    | Noninterest-bearing                                                               |   | **$**                       | **9,376,914**  |   |                            | $      | 8,936,824 |   |
|                    | Interest-bearing                                                                  |   | ** **                  | **18,859,695** |   |                            |   | 16,853,457 |   |
|                    | Savings                                                                           |   | ** **                  | **10,524,414** |   |                            |   | 10,459,306 |   |
|                    | Time                                                                              |   | ** **                  | **5,627,242**  |   |                            |   | 5,038,624 |   |
|                    | Total                deposits                                                     |   | ** **                  | **44,388,265** |   |                            |   | 41,288,211 |   |
|                    | Other                borrowed money                                               |   | ** **                  | **545,310**    |   |                            |   | 777,404 |   |
|                    | Other                liabilities                                                  |   | ** **                  | **349,226**    |   |                            |   | 405,103 |   |
|                    | Total                liabilities                                                  |   | ** **                  | **45,282,801** |   |                            |   | 42,470,718 |   |
|                    |                                                                              |   |                        |           |   |                            |   |   |   |
| **Stockholders’** | Common                stock,  194,119,379 shares                        |   |                        |           |   |                            |   |   |   |
| **Equity**              | issued                (189,738,423 shares in                2006)                 |   | ** **                  | **194,119**    |   |                            |   | 189,738 |   |
|                    | Capital                in excess of par value                                     |   | ** **                  | **1,812,341**  |   |                            |   | 1,744,691 |   |
|                    | Retained                earnings                                                  |   | ** **                  | **1,059,127**  |   |                            |   | 958,770 |   |
|                    | Accumulated                other comprehensive loss                               |   | ** **                  | **(123,847**   | **)**  |                            |   | (65,240 | ) |
|                    |                                                                              |   | ** **                  | **2,941,740**  |   |                            |   | 2,827,959 |   |
|                    |                                                                              |   |                        |           |   |                            |   |   |   |
|                    | Less                treasury stock, at cost, 1,874,923 shares                     |   |                        |           |   |                            |   |   |   |
|                    | (                1,231,081 shares in                2006)                         |   | ** **                  | **49,016**     |   |                            |   | 26,861 |   |
|                    | Total                stockholders’                equity                    |   | ** **                  | **2,892,724**  |   |                            |   | 2,801,098 |   |
|                    | Total                liabilities and stockholders’ equity                   |   | **$**                       | **48,175,525** |   |                            | $      | 45,271,816 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF INCOME**

|            |                                                            |   |                                                             |        |   |                                                           |   |
|-----------------|-----------------------------------------------------------------|--------|------------------------------------------------------------------|-------------|--------|----------------------------------------------------------------|--------|
|            |                                                            |   | **Three                Months Ended****June                30,** |        |   | **Six                Months Ended****June                30,** |   |
|            | (dollars                in thousands, except per share amounts) |   | **2007**                                                         |        |   | **2006**                                                       |   |   | **2007** |   |   | **2006** |   |
| **Interest**    | Interest                and fees on loans                       |   | **$**                                                            | **278,863** |   |                                                           | $      | 236,890 |   |   | **$** | **549,633** |   |   | $ | 451,864 |   |
| **income**      | Interest                on investments                          |   | ** **                                                       | **376,245** |   |                                                           |   | 325,022 |   |   | ** ** | **731,553** |   |   |   | 620,098 |   |
|            | Other                interest                                   |   | ** **                                                       | **2,000**   |   |                                                           |   | 250 |   |   | ** ** | **7,733** |   |   |   | 663 |   |
|            | Total                interest                income             |   | ** **                                                       | **657,108** |   |                                                           |   | 562,162 |   |   | ** ** | **1,288,919** |   |   |   | 1,072,625 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| **Interest**    | Interest                on deposits:                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| **expense**     | Demand                                                          |   | ** **                                                       | **177,289** |   |                                                           |   | 118,085 |   |   | ** ** | **341,031** |   |   |   | 216,025 |   |
|            | Savings                                                         |   | ** **                                                       | **72,954**  |   |                                                           |   | 64,157 |   |   | ** ** | **145,072** |   |   |   | 118,161 |   |
|            | Time                                                            |   | ** **                                                       | **60,521**  |   |                                                           |   | 41,174 |   |   | ** ** | **119,384** |   |   |   | 77,435 |   |
|            | Total                interest on                deposits        |   | ** **                                                       | **310,764** |   |                                                           |   | 223,416 |   |   | ** ** | **605,487** |   |   |   | 411,621 |   |
|            | Interest                on other borrowed money                 |   | ** **                                                       | **3,519**   |   |                                                           |   | 19,809 |   |   | ** ** | **7,651** |   |   |   | 34,137 |   |
|            | Total                interest                expense            |   | ** **                                                       | **314,283** |   |                                                           |   | 243,225 |   |   | ** ** | **613,138** |   |   |   | 445,758 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | Net                interest income                              |   | ** **                                                       | **342,825** |   |                                                           |   | 318,937 |   |   | ** ** | **675,781** |   |   |   | 626,867 |   |
|            | Provision                for credit losses                      |   | ** **                                                       | **12,550**  |   |                                                           |   | 7,500 |   |   | ** ** | **22,550** |   |   |   | 14,001 |   |
|            | Net                interest income after provision for          |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | credit                losses                                    |   | ** **                                                       | **330,275** |   |                                                           |   | 311,437 |   |   | ** ** | **653,231** |   |   |   | 612,866 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| **Noninterest** | Deposit                charges and service fees                 |   | ** **                                                       | **116,913** |   |                                                           |   | 91,653 |   |   | ** ** | **222,119** |   |   |   | 173,934 |   |
| **income**      | Other                operating income                           |   | ** **                                                       | **59,659**  |   |                                                           |   | 51,303 |   |   | ** ** | **111,025** |   |   |   | 100,024 |   |
|            | Net                investment securities gains                  |   |                                                             |        |   |                                                           |   |   |   |   | ** ** | **2,879** |   |   |   |   |   |
|            | Total                noninterest                income          |   | ** **                                                       | **176,572** |   |                                                           |   | 142,956 |   |   | ** ** | **336,023** |   |   |   | 273,958 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| **Noninterest** | Salaries                and benefits                            |   | ** **                                                       | **171,494** |   |                                                           |   | 150,630 |   |   | ** ** | **339,253** |   |   |   | 295,455 |   |
| **expense**     | Occupancy                                                       |   | ** **                                                       | **58,626**  |   |                                                           |   | 45,487 |   |   | ** ** | **116,698** |   |   |   | 91,727 |   |
|            | Furniture                and equipment                          |   | ** **                                                       | **45,271**  |   |                                                           |   | 39,656 |   |   | ** ** | **88,123** |   |   |   | 75,616 |   |
|            | Office                                                          |   | ** **                                                       | **16,808**  |   |                                                           |   | 14,398 |   |   | ** ** | **33,111** |   |   |   | 29,871 |   |
|            | Marketing                                                       |   | ** **                                                       | **10,694**  |   |                                                           |   | 11,699 |   |   | ** ** | **21,127** |   |   |   | 19,510 |   |
|            | Other                                                           |   | ** **                                                       | **85,002**  |   |                                                           |   | 71,914 |   |   | ** ** | **152,368** |   |   |   | 136,939 |   |
|            | Total                noninterest                expenses        |   | ** **                                                       | **387,895** |   |                                                           |   | 333,784 |   |   | ** ** | **750,680** |   |   |   | 649,118 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | Income                before income taxes                       |   | ** **                                                       | **118,952** |   |                                                           |   | 120,609 |   |   | ** ** | **238,574** |   |   |   | 237,706 |   |
|            | Provision                for federal and state income taxes     |   | ** **                                                       | **42,049**  |   |                                                           |   | 41,089 |   |   | ** ** | **83,735** |   |   |   | 80,889 |   |
|            | Net                income                                       |   | **$**                                                            | **76,903**  |   |                                                           | $      | 79,520 |   |   | **$** | **154,839** |   |   | $ | 156,817 |   |
|            |                                                            |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | Net                income per common and common                 |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | equivalent                share:                                |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | Basic                                                           |   | **$**                                                            | **0.40**    |   |                                                           | $      | 0.43 |   |   | **$** | **0.81** |   |   | $ | 0.86 |   |
|            | Diluted                                                         |   | **$**                                                            | **0.39**    |   |                                                           | $      | 0.41 |   |   | **$** | **0.79** |   |   | $ | 0.82 |   |
|            | Average                common and common equivalent             |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | shares                outstanding:                              |   |                                                             |        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
|            | Basic                                                           |   | ** **                                                       | **191,552** |   |                                                           |   | 184,437 |   |   | ** ** | **190,421** |   |   |   | 182,686 |   |
|            | Diluted                                                         |   | ** **                                                       | **197,462** |   |                                                           |   | 193,842 |   |   | ** ** | **196,987** |   |   |   | 191,914 |   |
|            | Dividends                declared, common stock                 |   | **$**                                                            | **0.13**    |   |                                                           | $      | 0.12 |   |   | **$** | **0.26** |   |   | $ | 0.24 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|           |                                                                                                                                          |   |                                                           |   |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|           |                                                                                                                                          |   | **Six                Months Ended****June                30,** |   |
|           | (dollars                in thousands)                                                                                                         |   | **2007**                                                       |   |   | **2006** |   |
| **Operating**  | Net                income                                                                                                                     | **$**  | **154,839**                                                    |   | $ | 156,817 |   |
| **activities** | Adjustments                to reconcile net income to net cash                                                                                |   |                                                           |   |   |   |   |
|           | provided                by operating                activities:                                                                               |   |                                                           |   |   |   |   |
|           | Provision                for credit                losses                                                                                     |   | **22,550**                                                     |   |   | 14,001 |   |
|           | Provision                for depreciation,                amortization and accretion                                                          |   | **83,749**                                                     |   |   | 76,179 |   |
|           | Stock-based                compensation                expense                                                                                |   | **6,458**                                                      |   |   | 2,733 |   |
|           | Gain                on sales of                securities                                                                                     |   | **(2,879**                                                     | **)**  |   |   |   |
|           | Proceeds                from sales of loans held                for sale                                                                      |   | **444,112**                                                    |   |   | 291,142 |   |
|           | Originations                of loans held for                sale                                                                             |   | **(422,989**                                                   | **)**  |   | (304,876 | ) |
|           | Net                decrease in trading                securities                                                                              |   | **28,535**                                                     |   |   | 51,868 |   |
|           | Increase                in other assets,                net                                                                                   |   | **(4,832**                                                     | **)**  |   | (49,605 | ) |
|           | Decrease                in other                liabilities                                                                                   |   | **(60,973**                                                    | **)**  |   | (46,437 | ) |
|           | Net                cash provided by operating                activities                                                                       |   | **248,570**                                                    |   |   | 191,822 |   |
|           |                                                                                                                                          |   |                                                           |   |   |   |   |
| **Investing**  | Proceeds                from the sales of securities available for sale                                                                       |   | **457,890**                                                    |   |   |   |   |
| **activities** | Proceeds                from the maturity of securities available for sale                                                                    |   | **1,519,771**                                                  |   |   | 969,424 |   |
|           | Proceeds                from the maturity of securities held to maturity                                                                      |   | **1,560,172**                                                  |   |   | 1,096,533 |   |
|           | Purchase                of securities available for sale                                                                                      |   | **(4,197,095**                                                 | **)**  |   | (2,681,109 | ) |
|           | Purchase                of securities held to maturity                                                                                        |   | **(1,265,069**                                                 | **)**  |   | (2,514,270 | ) |
|           | Net                increase in loans                                                                                                          |   | **(774,357**                                                   | **)**  |   | (1,621,793 | ) |
|           | Capital                expenditures                                                                                                           |   | **(205,843**                                                   | **)**  |   | (180,169 | ) |
|           | Net                cash used by investing                activities                                                                           |   | **(2,904,531**                                                 | **)**  |   | (4,931,384 | ) |
|           |                                                                                                                                          |   |                                                           |   |   |   |   |
| **Financing**  | Net                increase in demand and savings deposits                                                                                    |   | **2,511,436**                                                  |   |   | 2,895,458 |   |
| **activities** | Net                increase in time deposits                                                                                                  |   | **588,618**                                                    |   |   | 427,591 |   |
|           | Net                (decrease) increase in other borrowed money                                                                                |   | **(232,094**                                                   | **)**  |   | 1,462,002 |   |
|           | Dividends                paid                                                                                                                 |   | **(49,411**                                                    | **)**  |   | (43,452 | ) |
|           | Proceeds                from issuance of common stock under    dividend                reinvestment and other stock plans |   |  **36,118**                                               |   |   |  167,300 |   |
|           | Other                                                                                                                                         |   |                                                           |   |   | 36 |   |
|           | Net                cash provided by financing                activities                                                                       |   | **2,854,667**                                                  |   |   | 4,908,935 |   |
|           |                                                                                                                                          |   |                                                           |   |   |   |   |
|           | Increase                in cash and cash equivalents                                                                                          |   | **198,706**                                                    |   |   | 169,373 |   |
|           | Cash                and cash equivalents at beginning of year                                                                                 |   | **1,216,690**                                                  |   |   | 1,296,764 |   |
|           | Cash                and cash equivalents at end of period                                                                                     | **$**  | **1,415,396**                                                  |   | $ | 1,466,137 |   |
|           |                                                                                                                                          |   |                                                           |   |   |   |   |
|           | Supplemental                disclosures of cash flow information:                                                                             |   |                                                           |   |   |   |   |
|           | Cash                paid during the period                for:                                                                                |   |                                                           |   |   |   |   |
|           | Interest                                                                                                                                      | **$**  | **610,212**                                                    |   | $ | 441,040 |   |
|           | Income                taxes                                                                                                                   |   | **87,406**                                                     |   |   | 77,279 |   |
|           | Other                noncash                activities:                                                                                       |   |                                                           |   |   |   |   |
|           | Fair                value of noncash assets and liabilities acquired:                                                                         |   |                                                           |   |   |   |   |
|           | Assets                acquired                                                                                                                |   | **75**                                                         |   |   | 680 |   |
|           | Liabilities                assumed                                                                                                            |   | **24**                                                         |   |   | 10,076 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**

| Six                months ended June 30, 2007                                                                                                             |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|-------------|--------|-------------------------------|--------|---------------|--------------|--------|--------|---------------|--------|--------|-------------------|-------------|--------|-----------|--------|
| (in                thousands)                                                                                                                             |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |
|                                                                                                                                                      |   |       |        |   | **Capital                in** |   |          |         |   |   |          |   |   | **Accumulated**   |        |   |      |   |
|                                                                                                                                                      |   |       |        |   | **Excess                of**  |   |          |         |   |   |          |   |   | **Other**         |        |   |      |   |
|                                                                                                                                                      |   | **Common** |        |   | **Par**                       |   |          | **Retained** |   |   | **Treasury**  |   |   | **Comprehensive** |        |   |      |   |
|                                                                                                                                                      |   | **Stock**  |        |   | **Value**                     |   |          | **Earnings** |   |   | **Stock**     |   |   | **Loss**          |        |   | **Total** |   |
|                                                                                                                                                      |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |
| **Balances                at December 31, 2006**                                                                                                          |   | **$**      | **189,738** |   |                          | **$**  | **1,744,691** |         |   | **$**  | **958,770**   |   |   | **$**             | **(26,861** | **)**  |      | **$**  | **(65,240** | **)** |   | **$** | **2,801,098** |   |
| Net                income                                                                                                                                 |   |       |        |   |                          |   |          |         |   |   | 154,839       |   |   |              |        |   |      |   |   |   |   |   | 154,839 |   |
| Other                comprehensive loss, net of                tax                                                                                        |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |   |   |   |   |   |   |
| Unrealized                loss on securities                                          (pre-tax $95,732) |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   | (57,045 | ) |   |   | (57,045 | ) |
| Reclassification                adjustment                     (pre-tax $2,403)                                                       |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   | (1,562 | ) |   |   | (1,562 | ) |
| Other                comprehensive loss                                                                                                                   |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |   |   |   |   | (58,607 | ) |
| Total                comprehensive income                                                                                                                 |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |   |   |   |   | 96,232 |   |
| Cash                dividends                                                                                                                             |   |       |        |   |                          |   |          |         |   |   | (49,896       | )      |   |              |        |   |      |   |   |   |   |   | (49,896 | ) |
| Shares                issued under dividend reinvestment                                                                                                  |   |       |        |   |                          |   |          |         |   |   |          |   |   |              |        |   |      |   |   |   |   |   |   |   |
| and                compensation and benefit plans                (4,155                shares)                                                            |   |       | 4,155       |   |                          |   | 54,118        |         |   |   |          |   |   |              | (22,155     | )      |      |   |   |   |   |   | 36,118 |   |
| Acquisition                of insurance brokerage agency (226                shares)                                                                      |   |       | 226         |   |                          |   | 7,074         |         |   |   |          |   |   |              |        |   |      |   |   |   |   |   | 7,300 |   |
| Other                                                                                                                                                     |   |       |        |   |                          |   | 6,458         |         |   |   | (4,586        | )      |   |              |        |   |      |   |   |   |   |   | 1,872 |   |
| **Balances                at June 30, 2007**                                                                                                              |   | **$**      | **194,119** |   |                          | **$**  | **1,812,341** |         |   | **$**  | **1,059,127** |   |   | **$**             | **(49,016** | **)**  |      | **$**  | **(123,847** | **)** |   | **$** | **2,892,724** |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**A.      Consolidated      Financial Statements**

| **B.  ** | **   Income                Taxes** |
|--------------------|---------------------------------------------------|

**C.      Commitments**

----

**D.      Comprehensive      Income**

**E.      Segment      Information**

|                                               |                                                                  |      |                                                                  |        |
|----------------------------------------------------|-----------------------------------------------------------------------|-----------|-----------------------------------------------------------------------|-------------|
|                                               | **Three                Months Ended****June                30, 2007** |      | **Three                Months Ended****June                30, 2006** |        |
|                                               | **Community**                                                         |      |                                                                  | **Parent/** |   |   |   |   | **Community** |   |   | **Parent/** |   |   |   |   |
|                                               |                                                                  | **Banks** |                                                                  |        | **Other** |   |   | **Total** |   |   | **Banks** |   |   | **Other** |   |   | **Total** |   |
| Net                interest income                 | $                                                                     | 341,600   |                                                                  | $           | 1,225 |   | $ | 342,825 |   | $ | 317,861 |   | $ | 1,076 |   | $ | 318,937 |   |
| Provision                for credit losses         |                                                                  | 12,550    |                                                                  |        |   |   |   | 12,550 |   |   | 7,500 |   |   |   |   |   | 7,500 |   |
| Net                interest income after provision |                                                                  | 329,050   |                                                                  |        | 1,225 |   |   | 330,275 |   |   | 310,361 |   |   | 1,076 |   |   | 311,437 |   |
| Noninterest                income                  |                                                                  | 139,532   |                                                                  |        | 37,040 |   |   | 176,572 |   |   | 112,306 |   |   | 30,650 |   |   | 142,956 |   |
| Noninterest                expense                 |                                                                  | 357,018   |                                                                  |        | 30,877 |   |   | 387,895 |   |   | 305,867 |   |   | 27,917 |   |   | 333,784 |   |
| Income                before income taxes          |                                                                  | 111,564   |                                                                  |        | 7,388 |   |   | 118,952 |   |   | 116,800 |   |   | 3,809 |   |   | 120,609 |   |
| Income                tax expense                  |                                                                  | 39,288    |                                                                  |        | 2,761 |   |   | 42,049 |   |   | 39,691 |   |   | 1,398 |   |   | 41,089 |   |
| Net                income                          | $                                                                     | 72,276    |                                                                  | $           | 4,627 |   | $ | 76,903 |   | $ | 77,109 |   | $ | 2,411 |   | $ | 79,520 |   |
|                                               |                                                                  |      |                                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                assets (in millions)        | $                                                                     | 44,118    |                                                                  | $           | 3,312 |   | $ | 47,430 |   | $ | 39,080 |   | $ | 2,809 |   | $ | 41,889 |   |

|                                               |                                                                |      |                                                                |        |
|----------------------------------------------------|---------------------------------------------------------------------|-----------|---------------------------------------------------------------------|-------------|
|                                               | **Six                Months Ended****June                30, 2007** |      | **Six                Months Ended****June                30, 2006** |        |
|                                               | **Community**                                                       |      |                                                                | **Parent/** |   |   |   |   | **Community** |   |   | **Parent/** |   |   |   |   |
|                                               |                                                                | **Banks** |                                                                |        | **Other** |   |   | **Total** |   |   | **Banks** |   |   | **Other** |   |   | **Total** |   |
| Net                interest income                 | $                                                                   | 673,517   |                                                                | $           | 2,264 |   | $ | 675,781 |   | $ | 624,918 |   | $ | 1,949 |   | $ | 626,867 |   |
| Provision                for credit losses         |                                                                | 22,550    |                                                                |        |   |   |   | 22,550 |   |   | 14,001 |   |   |   |   |   | 14,001 |   |
| Net                interest income after provision |                                                                | 650,967   |                                                                |        | 2,264 |   |   | 653,231 |   |   | 610,917 |   |   | 1,949 |   |   | 612,866 |   |
| Noninterest                income                  |                                                                | 269,847   |                                                                |        | 66,176 |   |   | 336,023 |   |   | 212,590 |   |   | 61,368 |   |   | 273,958 |   |
| Noninterest                expense                 |                                                                | 691,893   |                                                                |        | 58,787 |   |   | 750,680 |   |   | 595,751 |   |   | 53,367 |   |   | 649,118 |   |
| Income                before income taxes          |                                                                | 228,921   |                                                                |        | 9,653 |   |   | 238,574 |   |   | 227,756 |   |   | 9,950 |   |   | 237,706 |   |
| Income                tax expense                  |                                                                | 79,949    |                                                                |        | 3,786 |   |   | 83,735 |   |   | 77,190 |   |   | 3,699 |   |   | 80,889 |   |
| Net                income                          | $                                                                   | 148,972   |                                                                | $           | 5,867 |   | $ | 154,839 |   | $ | 150,566 |   | $ | 6,251 |   | $ | 156,817 |   |
|                                               |                                                                |      |                                                                |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                assets (in millions)        | $                                                                   | 43,373    |                                                                | $           | 3,249 |   | $ | 46,622 |   | $ | 37,846 |   | $ | 2,750 |   | $ | 40,596 |   |

----

| **F.  ** | **Net                Income Per Share** |
|--------------------|-----------------------------------------|

|                                                                         |                                                             |     |                                                           |   |
|------------------------------------------------------------------------------|------------------------------------------------------------------|----------|----------------------------------------------------------------|--------|
|                                                                         | **Three                Months Ended****June                30,** |     | **Six                Months Ended****June                30,** |   |
|                                                                         |                                                             | **2007** |                                                           |   | **2006** |   |   | **2007** |   |   | **2006** |   |
|                                                                         |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| **Basic:**                                                                   |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| Net                income available to common shareholders – basic     | $                                                                | 76,903   |                                                           | $      | 79,520 |   | $ | 154,839 |   | $ | 156,817 |   |
| Average                common shares outstanding – basic               |                                                             | 191,552  |                                                           |   | 184,437 |   |   | 190,421 |   |   | 182,686 |   |
| Net                income per common share – basic                     | $                                                                | 0.40     |                                                           | $      | 0.43 |   | $ | 0.81 |   | $ | 0.86 |   |
|                                                                         |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| **Diluted:**                                                                 |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| Net                income available to common shareholders – diluted   | $                                                                | 76,903   |                                                           | $      | 79,520 |   | $ | 154,839 |   | $ | 156,817 |   |
|                                                                         |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| Average                common shares outstanding                             |                                                             | 191,552  |                                                           |   | 184,437 |   |   | 190,421 |   |   | 182,686 |   |
| Additional                shares considered in diluted computation assuming: |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| Exercise                of stock options                                     |                                                             | 5,910    |                                                           |   | 9,405 |   |   | 6,566 |   |   | 9,228 |   |
| Average                common shares outstanding – diluted             |                                                             | 197,462  |                                                           |   | 193,842 |   |   | 196,987 |   |   | 191,914 |   |
|                                                                         |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |
| Net                income per common share – diluted                   | $                                                                | 0.39     |                                                           | $      | 0.41 |   | $ | 0.79 |   | $ | 0.82 |   |
|                                                                         |                                                             |     |                                                           |   |   |   |   |   |   |   |   |   |

| **G.  ** | **New                Accounting Pronouncement** |
|--------------------|-------------------------------------------------|

| **H.  ** | **Subsequent                Event** |
|--------------------|-------------------------------------|

----

**Item      2.    Management’s      Discussion and Analysis of Financial Condition and Results of      Operation**

**Executive      Summary**

**Critical      Accounting Policy**

**Capital      Resources**

|                                                     |   |   |      |   | Per                Regulatory Guidelines |   |
|----------------------------------------------------------|--------|--------|-----------|--------|------------------------------------------|--------|
|                                                     |   | Actual |      |   | Minimum                                  |   |   | “Well                Capitalized” |   |
|                                                     |   | Amount |      |   | Ratio                                    |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                                     |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **June                30, 2007:**                        |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company                                                  |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital                ratios: |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                                    |   | $      | 2,871,236 |   |                                     |   | 11.69 | % |   | $ | 982,701 |   |   |   | 4.00 | % |   | $ | 1,474,051 |   |   |   | 6.00 | % |
| Total                capital                             |   |   | 3,045,522 |   |                                     |   | 12.40 |   |   |   | 1,965,402 |   |   |   | 8.00 |   |   |   | 2,456,752 |   |   |   | 10.00 |   |
| Leverage                ratio                            |   |   | 2,871,236 |   |                                     |   | 6.06 |   |   |   | 1,896,024 |   |   |   | 4.00 |   |   |   | 2,370,031 |   |   |   | 5.00 |   |
| Commerce                N.A.                             |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital                ratios: |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                                    |   | $      | 2,517,264 |   |                                     |   | 11.17 | % |   | $ | 901,627 |   |   |   | 4.00 | % |   | $ | 1,352,441 |   |   |   | 6.00 | % |
| Total                capital                             |   |   | 2,667,255 |   |                                     |   | 11.83 |   |   |   | 1,803,254 |   |   |   | 8.00 |   |   |   | 2,254,068 |   |   |   | 10.00 |   |
| Leverage                ratio                            |   |   | 2,517,264 |   |                                     |   | 5.85 |   |   |   | 1,722,225 |   |   |   | 4.00 |   |   |   | 2,152,781 |   |   |   | 5.00 |   |
|                                                     |   |   |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                     |   |   |      |   |    |   |   | Per                Regulatory Guidelines      |   |
|----------------------------------------------------------|--------|--------|-----------|--------|---------|--------|--------|-----------------------------------------------|--------|
|                                                     |   | Actual |      |   | Minimum |   |   | “Well                Capitalized” |   |
|                                                     |   | Amount |      |   | Ratio   |   |   | Amount                                        |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                                     |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |
| **June                30, 2006:**                        |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Company                                                  |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital                ratios: |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Tier                1                                    |   | $      | 2,531,557 |   |    |   | 11.81  | %                                             |   | $ | 857,391 |   |   |   | 4.00 | % |   | $ | 1,286,086 |   |   |   | 6.00 | % |
| Total                capital                             |   |   | 2,685,877 |   |    |   | 12.53  |                                          |   |   | 1,714,781 |   |   |   | 8.00 |   |   |   | 2,143,477 |   |   |   | 10.00 |   |
| Leverage                ratio                            |   |   | 2,531,557 |   |    |   | 6.03   |                                          |   |   | 1,678,616 |   |   |   | 4.00 |   |   |   | 2,098,270 |   |   |   | 5.00 |   |
| Commerce                N.A.                             |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital                ratios: |   |   |      |   |    |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                                    |   | $      | 2,287,048 |   |    |   | 11.62  | %                                             |   | $ | 787,446 |   |   |   | 4.00 | % |   | $ | 1,181,169 |   |   |   | 6.00 | % |
| Total                capital                             |   |   | 2,417,485 |   |    |   | 12.28  |                                          |   |   | 1,574,892 |   |   |   | 8.00 |   |   |   | 1,968,616 |   |   |   | 10.00 |   |
| Leverage                ratio                            |   |   | 2,287,048 |   |    |   | 6.00   |                                          |   |   | 1,524,734 |   |   |   | 4.00 |   |   |   | 1,905,918 |   |   |   | 5.00 |   |

**Deposits**

|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |
|------------|--------|-------------------------------------|------------|--------|----------------------------------|--------|--------|-------------------------------------|--------|--------|----------------------------------|--------|--------|---------------------------------------|--------|
|       |   | **June                30,****2007** |       |   | **%                of****Total** |   |   | **June                30,****2006** |   |   | **%                of****Total** |   |   | **Annual****Growth                %** |   |
|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |
| Consumer   |   | $                                   | 18,156,197 |   |                             |   | 42     | %                                   |   | $      | 15,765,786                       |   |   |                                  | 43     | % |   |   | 15 | % |
|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |   |   |   |   |   |
| Commercial |   |                                | 17,318,606 |   |                             |   | 40     |                                |   |   | 14,637,257                       |   |   |                                  | 40     |   |   |   | 18 |   |
|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |   |   |   |   |   |
| Government |   |                                | 7,539,003  |   |                             |   | 18     |                                |   |   | 6,380,831                        |   |   |                                  | 17     |   |   |   | 18 |   |
|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |   |   |   |   |   |
| Total      |   | $                                   | 43,013,806 |   |                             |   | 100    | %                                   |   | $      | 36,783,874                       |   |   |                                  | 100    | % |   |   | 17 | % |
|       |   |                                |       |   |                             |   |   |                                |   |   |                             |   |   |                                  |   |   |   |   |   |   |

**Interest      Rate Sensitivity and Liquidity**

----

|                          |   |                                  |   |   |                         |   |
|-------------------------------|--------|---------------------------------------|--------|--------|------------------------------|--------|
|                          |   | **Basis                Point Change** |   |
|                          |   | **Plus                200**           |   |   | **Minus                100** |   |
| June                30, 2007: |   |                                  |   |   |                         |   |
| Twelve                Months  |   |                                  | (8.1   | )%     |                         |   | 3.2 | % |
|                          |   |                                  |   |   |                         |   |   |   |
| June                30, 2006: |   |                                  |   |   |                         |   |   |   |
| Twelve                Months  |   |                                  | (3.4   | )%     |                         |   | 1.2 | % |
|                          |   |                                  |   |   |                         |   |   |   |

----

|                                  |   |                            |   |   |                         |   |
|---------------------------------------|--------|---------------------------------|--------|--------|------------------------------|--------|
|                                  |   | **Market                Value** |   |   |                         |   |
|                                  |   | **of                Equity**    |   |   | **Per                Share** |   |
|                                  |   |                            |   |   |                         |   |
| Plus                200 basis points  |   | $                               | 9,171  |   |                         | $      | 47.24 |   |
|                                  |   |                            |   |   |                         |   |   |   |
| Current                Rate           |   | $                               | 10,317 |   |                         | $      | 53.15 |   |
|                                  |   |                            |   |   |                         |   |   |   |
| Minus                100 basis points |   | $                               | 9,949  |   |                         | $      | 51.25 |   |

**Short-Term      Borrowings**

**Interest      Earning Assets**

----

**Loans**

|                                                             |   | **June                30,**   |       |   | **December                31,** |   |
|------------------------------------------------------------------|--------|-------------------------------|------------|--------|---------------------------------|--------|
|                                                             |   | **2007**                      |       |   | **2006**                        |   |
|                                                             |   | (in                thousands) |       |
| Commercial:                                                      |   |                          |       |   |                            |   |
| Term                                                             |   | $                             | 2,627,535  |   |                            | $      | 2,392,889 |   |
|     Line                of credit            |   |                          | 1,830,054  |   |                            |   | 1,843,545 |   |
|                                                             |   |                          | 4,457,589  |   |                            |   | 4,236,434 |   |
|                                                             |   |                          |       |   |                            |   |   |   |
| Owner-occupied                                                   |   |                          | 3,000,421  |   |                            |   | 2,845,791 |   |
|                                                             |   |                          | 7,458,010  |   |                            |   | 7,082,225 |   |
|                                                             |   |                          |       |   |                            |   |   |   |
| Consumer:                                                        |   |                          |       |   |                            |   |   |   |
| Mortgages                (1-4 family                residential) |   |                          | 2,299,516  |   |                            |   | 2,235,247 |   |
| Installment                                                      |   |                          | 283,717    |   |                            |   | 287,151 |   |
| Home                equity                                       |   |                          | 3,299,510  |   |                            |   | 2,958,893 |   |
| Credit                lines                                      |   |                          | 153,114    |   |                            |   | 137,429 |   |
|                                                             |   |                          | 6,035,857  |   |                            |   | 5,618,720 |   |
| Commercial                real estate:                           |   |                          |       |   |                            |   |   |   |
| Investor                developer                                |   |                          | 2,376,510  |   |                            |   | 2,625,628 |   |
| Construction                                                     |   |                          | 497,202    |   |                            |   | 280,476 |   |
|                                                             |   |                          | 2,873,712  |   |                            |   | 2,906,104 |   |
| Total                loans                                       |   | $                             | 16,367,579 |   |                            | $      | 15,607,049 |   |

**Investments**

----

|                                                  |   |                          |       |   |                       |   |       |      |   |
|-------------------------------------------------------|--------|-------------------------------|------------|--------|----------------------------|--------|------------|-----------|--------|
|                                                  |   | **Available**                 |       |   | **Held                to** |   |       |      |   |
| **Product                Description**                |   | **For                Sale**   |       |   | **Maturity**               |   |       | **Total** |   |
|                                                  |   | (in                thousands) |       |
| Mortgage-backed                Securities:            |   |                          |       |   |                       |   |       |      |   |
| Federal                Agencies Pass Through          |   |                          |       |   |                       |   |       |      |   |
| Certificates                (AAA Rated)               |   | $                             | 1,545,562  |   |                       | $      | 1,949,096  |      |   | $ | 3,494,658 |   |
|                                                  |   |                          |       |   |                       |   |       |      |   |   |   |   |
| Collateralized                Mortgage                |   |                          |       |   |                       |   |       |      |   |   |   |   |
| Obligations                (AAA Rated)                |   |                          | 10,518,878 |   |                       |   | 10,514,333 |      |   |   | 21,033,211 |   |
|                                                  |   |                          |       |   |                       |   |       |      |   |   |   |   |
| U.S.                Government agencies/Other         |   |                          | 1,156,731  |   |                       |   | 2,122,285  |      |   |   | 3,279,016 |   |
|                                                  |   |                          |       |   |                       |   |       |      |   |   |   |   |
|         Total |   | $                             | 13,221,171 |   |                       | $      | 14,585,714 |      |   | $ | 27,806,885 |   |
|                                                  |   |                          |       |   |                       |   |       |      |   |   |   |   |
| Duration                (in years)                    |   |                          | 3.73       |   |                       |   | 4.36       |      |   |   | 4.06 |   |
| Average                Life (in years)                |   |                          | 6.42       |   |                       |   | 6.44       |      |   |   | 6.43 |   |
| Quarterly                Average Yield                |   |                          | 5.74       | %      |                       |   | 5.42       | %         |   |   | 5.57 | % |

|                                                                 |   |                                |       |
|----------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                 |   | **At                June 30, 2007** |       |
|                                                                 |   | **Amortized**** Cost**         |       |   | **Gross****Unrealized****Gains** |   |   | **Gross****Unrealized****Losses** |   |   | **Market****Value** |   |
| U.S.                Government agency and mortgage-backedobligations |   | $                                   | 13,302,184 |   |   | $ | 11,700 |   |   | $ | (222,803 | ) |   | $ | 13,091,081 |   |
| Obligations                of state and political subdivisions       |   |                                | 54,347     |   |   |   | 5 |   |   |   | (1,721 | ) |   |   | 52,631 |   |
| Equity                securities                                     |   |                                | 9,679      |   |   |   | 10,726 |   |   |   |   |   |   |   | 20,405 |   |
| Other                                                                |   |                                | 57,532     |   |   |   |   |   |   |   | (478 | ) |   |   | 57,054 |   |
| Securities                available for sale                         |   | $                                   | 13,423,742 |   |   | $ | 22,431 |   |   | $ | (225,002 | ) |   | $ | 13,221,171 |   |
|                                                                 |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backedobligations |   | $                                   | 14,075,770 |   |   | $ | 6,795 |   |   | $ | (420,351 | ) |   | $ | 13,662,214 |   |
| Obligations                of state and political subdivisions       |   |                                | 368,751    |   |   |   | 483 |   |   |   | (1,417 | ) |   |   | 367,817 |   |
| Other                                                                |   |                                | 141,193    |   |   |   |   |   |   |   |   |   |   |   | 141,193 |   |
| Securities                held to maturity                           |   | $                                   | 14,585,714 |   |   | $ | 7,278 |   |   | $ | (421,768 | ) |   | $ | 14,171,224 |   |

----

|                                                                 |   |                                    |       |
|----------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                 |   | **At                December 31, 2006** |       |
|                                                                 |   | **Amortized**** Cost**             |       |   | **Gross****Unrealized****Gains** |   |   | **Gross****Unrealized****Losses** |   |   | **Market****Value** |   |
| U.S.                Government agency and mortgage-backedobligations |   | $                                       | 11,098,131 |   |   | $ | 16,047 |   |   | $ | (129,931 | ) |   | $ | 10,984,247 |   |
| Obligations                of state and political subdivisions       |   |                                    | 54,517     |   |   |   | 229 |   |   |   | (1 | ) |   |   | 54,745 |   |
| Equity                securities                                     |   |                                    | 9,679      |   |   |   | 9,392 |   |   |   |   |   |   |   | 19,071 |   |
| Other                                                                |   |                                    | 40,221     |   |   |   |   |   |   |   | (171 | ) |   |   | 40,050 |   |
| Securities                available for sale                         |   | $                                       | 11,202,548 |   |   | $ | 25,668 |   |   | $ | (130,103 | ) |   | $ | 11,098,113 |   |
|                                                                 |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backedobligations |   | $                                       | 14,205,534 |   |   | $ | 14,843 |   |   | $ | (283,519 | ) |   | $ | 13,936,858 |   |
| Obligations                of state and political subdivisions       |   |                                    | 554,189    |   |   |   | 1,881 |   |   |   | (422 | ) |   |   | 555,648 |   |
| Other                                                                |   |                                    | 125,259    |   |   |   |   |   |   |   |   |   |   |   | 125,259 |   |
| Securities                held to maturity                           |   | $                                       | 14,884,982 |   |   | $ | 16,724 |   |   | $ | (283,941 | ) |   | $ | 14,617,765 |   |

**Net      Income**

----

**Net      Interest Income**

|                                        |   | **Net                Interest Income** |   |
|---------------------------------------------|--------|----------------------------------------|--------|
|                                        |   | **Volume**                             |   |   | **Rate** |   |   | **Total** |   |   | **%** |   |
| **2007                vs. 2006**            |   | **Increase**                           |   |   | **Change** |   |   | **Increase** |   |   | **Increase** |   |
|                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| **Quarter                Ended June 30**    |   | $                                      | 44,950 |   |   | $ | (19,826 | ) |   | $ | 25,124 |   |   |   | 8 | % |
|                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Six                Months Ended June 30** |   | $                                      | 95,718 |   |   | $ | (43,897 | ) |   | $ | 51,821 |   |   |   | 8 | % |
|                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Average      Balances and Net Interest Income**

|                                                                                    |   | June                  2007 |       |   | March                  2007 |   |    | June                  2006 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|-----------------------------|--------|---------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Average                    |       |   |                        |   |    | Average                    |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| *(dollars                  in thousands)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Balance                    |       |   | Interest                    |   |    | Rate                       |   |   | Balance |   |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| **Earning                  Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                  securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                          | 26,645,741 |   |                        | $      | 369,794 |                       |   |   | 5.57 | % |   | $ | 25,237,398 |   |   | $ | 348,630 |   |   |   | 5.60 | % |   | $ | 23,851,645 |   |   | $ | 319,271 |   |   |   | 5.37 | % |
| Tax-exempt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                       | 571,408    |   |                        |   | 8,415   |                       |   |   | 5.91 |   |   |   | 611,725 |   |   |   | 8,984 |   |   |   | 5.96 |   |   |   | 559,733 |   |   |   | 7,322 |   |   |   | 5.25 |   |
| Trading                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                       | 105,198    |   |                        |   | 1,509   |                       |   |   | 5.75 |   |   |   | 96,838 |   |   |   | 1,290 |   |   |   | 5.40 |   |   |   | 113,049 |   |   |   | 1,525 |   |   |   | 5.41 |   |
| Total                  investment securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                       | 27,322,347 |   |                        |   | 379,718 |                       |   |   | 5.57 |   |   |   | 25,945,961 |   |   |   | 358,904 |   |   |   | 5.61 |   |   |   | 24,524,427 |   |   |   | 328,118 |   |   |   | 5.37 |   |
| Federal                  funds sold                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                       | 150,675    |   |                        |   | 2,000   |                       |   |   | 5.32 |   |   |   | 436,031 |   |   |   | 5,733 |   |   |   | 5.33 |   |   |   | 19,898 |   |   |   | 250 |   |   |   | 5.04 |   |
| Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                  mortgages                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                       | 5,443,872  |   |                        |   | 96,125  |                       |   |   | 7.08 |   |   |   | 5,447,516 |   |   |   | 95,522 |   |   |   | 7.11 |   |   |   | 4,784,584 |   |   |   | 83,903 |   |   |   | 7.03 |   |
| Commercial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                       | 4,143,332  |   |                        |   | 80,595  |                       |   |   | 7.80 |   |   |   | 4,024,615 |   |   |   | 77,457 |   |   |   | 7.81 |   |   |   | 3,492,946 |   |   |   | 66,879 |   |   |   | 7.68 |   |
| Consumer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                       | 5,947,306  |   |                        |   | 95,002  |                       |   |   | 6.41 |   |   |   | 5,711,130 |   |   |   | 90,500 |   |   |   | 6.43 |   |   |   | 5,115,609 |   |   |   | 80,560 |   |   |   | 6.32 |   |
| Tax-exempt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                       | 615,035    |   |                        |   | 10,987  |                       |   |   | 7.17 |   |   |   | 599,202 |   |   |   | 11,217 |   |   |   | 7.59 |   |   |   | 498,492 |   |   |   | 8,535 |   |   |   | 6.87 |   |
| Total                  loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                       | 16,149,545 |   |                        |   | 282,709 |                       |   |   | 7.02 |   |   |   | 15,782,463 |   |   |   | 274,696 |   |   |   | 7.06 |   |   |   | 13,891,631 |   |   |   | 239,877 |   |   |   | 6.93 |   |
| Total                  earning assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                          | 43,622,567 |   |                        | $      | 664,427 |                       |   |   | 6.11 | % |   | $ | 42,164,455 |   |   | $ | 639,333 |   |   |   | 6.14 | % |   | $ | 38,435,956 |   |   | $ | 568,245 |   |   |   | 5.93 | % |
| **Sources                  of Funds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                          | 10,455,936 |   |                        | $      | 72,954  |                       |   |   | 2.80 | % |   | $ | 10,448,840 |   |   | $ | 72,118 |   |   |   | 2.80 | % |   | $ | 10,344,463 |   |   | $ | 64,157 |   |   |   | 2.49 | % |
| Interest                  bearing                  demand                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                       | 19,173,873 |   |                        |   | 177,289 |                       |   |   | 3.71 |   |   |   | 17,886,395 |   |   |   | 163,742 |   |   |   | 3.71 |   |   |   | 14,597,277 |   |   |   | 118,085 |   |   |   | 3.24 |   |
| Time                  deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                       | 4,152,221  |   |                        |   | 46,518  |                       |   |   | 4.49 |   |   |   | 3,999,233 |   |   |   | 43,284 |   |   |   | 4.39 |   |   |   | 3,088,653 |   |   |   | 25,949 |   |   |   | 3.37 |   |
| Public                  funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       | 1,079,122  |   |                        |   | 14,003  |                       |   |   | 5.20 |   |   |   | 1,197,869 |   |   |   | 15,579 |   |   |   | 5.27 |   |   |   | 1,224,298 |   |   |   | 15,225 |   |   |   | 4.99 |   |
| Total                  deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                       | 34,861,152 |   |                        |   | 310,764 |                       |   |   | 3.58 |   |   |   | 33,532,337 |   |   |   | 294,723 |   |   |   | 3.56 |   |   |   | 29,254,691 |   |   |   | 223,416 |   |   |   | 3.06 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  borrowed                  money                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                       | 267,542    |   |                        |   | 3,519   |                       |   |   | 5.28 |   |   |   | 314,552 |   |   |   | 4,132 |   |   |   | 5.33 |   |   |   | 1,624,229 |   |   |   | 19,809 |   |   |   | 4.89 |   |
| Total                  deposits and interest-bearing                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                       | 35,128,694 |   |                        |   | 314,283 |                       |   |   | 3.59 |   |   |   | 33,846,889 |   |   |   | 298,855 |   |   |   | 3.58 |   |   |   | 30,878,920 |   |   |   | 243,225 |   |   |   | 3.16 |   |
| Noninterest-bearing                  funds (net)                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                       | 8,493,873  |   |                        |   |    |                       |   |   |   |   |   |   | 8,317,566 |   |   |   |   |   |   |   |   |   |   |   | 7,557,036 |   |   |   |   |   |   |   |   |   |
| Total                  sources to fund earning assets                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                          | 43,622,567 |   |                        |   | 314,283 |                       |   |   | 2.89 |   |   | $ | 42,164,455 |   |   |   | 298,855 |   |   |   | 2.87 |   |   | $ | 38,435,956 |   |   |   | 243,225 |   |   |   | 2.54 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income and                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| margin                  tax-equivalent                  basis                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       |       |   |                        | $      | 350,144 |                       |   |   | 3.22 | % |   |   |   |   |   | $ | 340,478 |   |   |   | 3.27 | % |   |   |   |   |   | $ | 325,020 |   |   |   | 3.39 | % |
| **Other                  Balances**                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                       |       |   |                        |   |    |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  and due from banks                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                          | 1,213,084  |   |                        |   |    |                       |   |   |   |   |   | $ | 1,182,810 |   |   |   |   |   |   |   |   |   |   | $ | 1,278,137 |   |   |   |   |   |   |   |   |   |
| Other                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       | 2,754,125  |   |                        |   |    |                       |   |   |   |   |   |   | 2,613,080 |   |   |   |   |   |   |   |   |   |   |   | 2,314,307 |   |   |   |   |   |   |   |   |   |
| Total                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       | 47,430,063 |   |                        |   |    |                       |   |   |   |   |   |   | 45,804,220 |   |   |   |   |   |   |   |   |   |   |   | 41,888,789 |   |   |   |   |   |   |   |   |   |
| Total                  deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                       | 43,869,934 |   |                        |   |    |                       |   |   |   |   |   |   | 42,232,192 |   |   |   |   |   |   |   |   |   |   |   | 37,486,585 |   |   |   |   |   |   |   |   |   |
| Demand                  deposits (noninterest-bearing)                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                       | 9,008,782  |   |                        |   |    |                       |   |   |   |   |   |   | 8,699,855 |   |   |   |   |   |   |   |   |   |   |   | 8,231,894 |   |   |   |   |   |   |   |   |   |
| Other                  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                       | 382,676    |   |                        |   |    |                       |   |   |   |   |   |   | 390,627 |   |   |   |   |   |   |   |   |   |   |   | 299,622 |   |   |   |   |   |   |   |   |   |
| Stockholders’                  equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                       | 2,909,911  |   |                        |   |    |                       |   |   |   |   |   |   | 2,866,849 |   |   |   |   |   |   |   |   |   |   |   | 2,478,353 |   |   |   |   |   |   |   |   |   |

| Notes  | - | Weighted                average yields on tax-exempt obligations have been computed on a                tax-equivalent basis assuming a federal tax rate of                35%. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | - | Non-accrual                loans have been included in the average loan                balance.                                                                                 |

----

**Noninterest      Income**

|                                                   |   |                                                             |   |   |                                                           |   |   |     |   |
|--------------------------------------------------------|--------|------------------------------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|----------|--------|
|                                                   |   | **Three                Months Ended****June                30,** |   |   | **Six                Months Ended****June                30,** |
|                                                   |   | **2007**                                                         |   |   | **2006**                                                       |   |   | **2007** |   |   | **2006** |   |
| Other                operating income:                 |   |                                                             |   |   |                                                           |   |   |     |   |   |   |   |   |   |   |   |
| Commerce                Banc                Insurance  |   | $                                                                | 23,084 |   |                                                           | $      | 20,573 |     |   | $ | 45,734 |   |   | $ | 42,517 |   |
| Commerce                Capital                Markets |   |                                                             | 8,037  |   |                                                           |   | 7,263  |     |   |   | 15,305 |   |   |   | 13,498 |   |
| Operating                lease                revenue  |   |                                                             | 4,797  |   |                                                           |   | 3,475  |     |   |   | 10,051 |   |   |   | 6,977 |   |
| Loan                brokerage                fees      |   |                                                             | 2,641  |   |                                                           |   | 2,183  |     |   |   | 5,603 |   |   |   | 4,119 |   |
|                                                   |   |                                                             | 21,100 |   |                                                           |   | 17,809 |     |   |   | 34,332 |   |   |   | 32,913 |   |
| Total                other                             |   | $                                                                | 59,659 |   |                                                           | $      | 51,303 |     |   | $ | 111,025 |   |   | $ | 100,024 |   |

**Noninterest      Expense**

|                                                                  |   |                                                             |   |   |                                                           |   |   |     |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|----------|--------|
|                                                                  |   | **Three                Months Ended****June                30,** |   |   | **Six                Months Ended****June                30,** |   |
|                                                                  |   | **2007**                                                         |   |   | **2006**                                                       |   |   | **2007** |   |   | **2006** |   |
| Other                noninterest expense:                             |   |                                                             |   |   |                                                           |   |   |     |   |   |   |   |
| Business                development                costs              |   | $                                                                | 12,314 |   |                                                           | $      | 14,464 |     |   | $ | 22,187 |   |   | $ | 24,049 |   |
| Bank-card                related service                charges       |   |                                                             | 16,723 |   |                                                           |   | 14,162 |     |   |   | 29,033 |   |   |   | 26,533 |   |
| Professional                services/Insurance                        |   |                                                             | 21,203 |   |                                                           |   | 11,418 |     |   |   | 35,333 |   |   |   | 22,733 |   |
| Provision                for non-credit-related                losses |   |                                                             | 5,809  |   |                                                           |   | 6,897  |     |   |   | 12,130 |   |   |   | 14,708 |   |
| Other                                                                 |   |                                                             | 28,953 |   |                                                           |   | 24,973 |     |   |   | 53,685 |   |   |   | 48,916 |   |
| Total                other                                            |   | $                                                                | 85,002 |   |                                                           | $      | 71,914 |     |   | $ | 152,368 |   |   | $ | 136,939 |   |

----

**Loan      and Asset Quality**

----

|                                                                       |   | **June                30,****2007** |   |   | **March                31,****2007** |   |   | **December                31,****2006** |   |   | **September                30,****2006** |   |   | **June                30,****2006** |   |
|----------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------------------|--------|--------|-------------------------------------|--------|
| Non-accrual                loans:                                          |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |
| Commercial                                                                 |   | $                                   | 22,381 |   |                                 | $      | 20,526 |                                    |   | $      | 33,686                                   |   |   | $                                   | 33,658 |   |   | $ | 34,904 |   |
| Consumer                                                                   |   |                                | 15,462 |   |                                 |   | 15,343 |                                    |   |   | 11,820                                   |   |   |                                | 9,325  |   |   |   | 8,927 |   |
| Real                estate:                                                |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Construction                                                               |   |                                | 8,509  |   |                                 |   | 8,575  |                                    |   |   | 3,531                                    |   |   |                                | 496    |   |   |   | 1,708 |   |
| Mortgage                                                                   |   |                                | 4,328  |   |                                 |   | 2,277  |                                    |   |   | 1,565                                    |   |   |                                | 1,828  |   |   |   | 2,523 |   |
| Total                non-accrual                loans                      |   |                                | 50,680 |   |                                 |   | 46,721 |                                    |   |   | 50,602                                   |   |   |                                | 45,307 |   |   |   | 48,062 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Restructured                loans:                                         |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Commercial                                                                 |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   | 2,941 |   |
| Total                restructured                loans                     |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   | 2,941 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Total                non-performing loans                                  |   |                                | 50,680 |   |                                 |   | 46,721 |                                    |   |   | 50,602                                   |   |   |                                | 45,307 |   |   |   | 51,003 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Other                real estate/foreclosed assets                         |   |                                | 5,235  |   |                                 |   | 5,000  |                                    |   |   | 2,610                                    |   |   |                                | 2,022  |   |   |   | 1,369 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Total                non-performing assets                                 |   |                                | 55,915 |   |                                 |   | 51,721 |                                    |   |   | 53,212                                   |   |   |                                | 47,329 |   |   |   | 52,372 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Loans                past due 90 days or more                              |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| and                still accruing                                          |   |                                | 965    |   |                                 |   | 658    |                                    |   |   | 620                                      |   |   |                                | 441    |   |   |   | 583 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Total                non-performing assets and                             |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| loans                past due 90 days or                more               |   | $                                   | 56,880 |   |                                 | $      | 52,379 |                                    |   | $      | 53,832                                   |   |   | $                                   | 47,770 |   |   | $ | 52,955 |   |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Total                non-performing loans as a                             |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| percentage                of total period-end                loans         |   |                                | 0.31   | %      |                                 |   | 0.29   | %                                       |   |   | 0.32                                     | %      |   |                                | 0.31   | % |   |   | 0.36 | % |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Total                non-performing assets as a                            |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| percentage                of total period-end                assets        |   |                                | 0.12   | %      |                                 |   | 0.11   | %                                       |   |   | 0.12                                     | %      |   |                                | 0.11   | % |   |   | 0.12 | % |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage                 |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| of                total non-performing                loans                |   |                                | 334    | %      |                                 |   | 351    | %                                       |   |   | 317                                      | %      |   |                                | 341    | % |   |   | 291 | % |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage                 |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| of                total period-end                loans                    |   |                                | 1.04   | %      |                                 |   | 1.03   | %                                       |   |   | 1.03                                     | %      |   |                                | 1.05   | % |   |   | 1.04 | % |
|                                                                       |   |                                |   |   |                                 |   |   |                                    |   |   |                                     |   |   |                                |   |   |   |   |   |   |
| 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 | % |

----

|                                                       |   | **Three                Months Ended** |    |   | **Six                Months Ended** |   |    | **Year                Ended**   |   |
|------------------------------------------------------------|--------|---------------------------------------|---------|--------|-------------------------------------|--------|---------|---------------------------------|--------|
|                                                       |   | **June                30,**           |    |   | **June                30,**         |   |    | **December                31,** |   |
|                                                       |   | **2007**                              |    |   | **2006**                            |   |    | **2007**                        |   |   | **2006** |   |   | **2006** |   |
| Balance                at beginning of period              |   | $                                     | 164,057 |   |                                | $      | 142,913 |                            |   | $ | 160,269 |   |   | $ | 141,464 |   |   | $ | 141,464 |   |
| Provisions                charged to operating expenses    |   |                                  | 12,550  |   |                                |   | 7,500   |                            |   |   | 22,550 |   |   |   | 14,001 |   |   |   | 33,700 |   |
|                                                       |   |                                  | 176,607 |   |                                |   | 150,413 |                            |   |   | 182,819 |   |   |   | 155,465 |   |   |   | 175,164 |   |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries                on loans previously charged-off: |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                 |   |                                  | 1,065   |   |                                |   | 2,095   |                            |   |   | 2,186 |   |   |   | 2,628 |   |   |   | 5,987 |   |
| Consumer                                                   |   |                                  | 330     |   |                                |   | 624     |                            |   |   | 619 |   |   |   | 1,135 |   |   |   | 1,604 |   |
| Commercial                real estate                      |   |                                  | 62      |   |                                |   | 317     |                            |   |   | 297 |   |   |   | 318 |   |   |   | 385 |   |
| Total                recoveries                            |   |                                  | 1,457   |   |                                |   | 3,036   |                            |   |   | 3,102 |   |   |   | 4,081 |   |   |   | 7,976 |   |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                charged-off:                          |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                 |   |                                  | (5,951  | )      |                                |   | (3,028  | )                               |   |   | (10,245 | ) |   |   | (7,214 | ) |   |   | (14,107 | ) |
| Consumer                                                   |   |                                  | (2,570  | )      |                                |   | (1,972  | )                               |   |   | (5,544 | ) |   |   | (3,684 | ) |   |   | (8,179 | ) |
| Commercial                real estate                      |   |                                  | (84     | )      |                                |   | (66     | )                               |   |   | (673 | ) |   |   | (265 | ) |   |   | (585 | ) |
| Total                charge-offs                           |   |                                  | (8,605  | )      |                                |   | (5,066  | )                               |   |   | (16,462 | ) |   |   | (11,163 | ) |   |   | (22,871 | ) |
| Net                charge-offs                             |   |                                  | (7,148  | )      |                                |   | (2,030  | )                               |   |   | (13,360 | ) |   |   | (7,082 | ) |   |   | (14,895 | ) |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at end of period                    |   | $                                     | 169,459 |   |                                | $      | 148,383 |                            |   | $ | 169,459 |   |   | $ | 148,383 |   |   | $ | 160,269 |   |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                charge-offs as a percentage of          |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| average                loans outstanding                   |   |                                  | 0.18    | %      |                                |   | 0.06    | %                               |   |   | 0.17 | % |   |   | 0.11 | % |   |   | 0.11 | % |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                reserve additions                       |   | $                                     | 5,402   |   |                                | $      | 5,470   |                            |   | $ | 9,190 |   |   | $ | 6,919 |   |   | $ | 18,805 |   |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Components:                                                |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance                for loan and lease losses         |   | $                                     | 160,694 |   |                                | $      | 140,746 |                            |   | $ | 160,694 |   |   | $ | 140,746 |   |   | $ | 152,053 |   |
| Allowance                for unfunded credit commitments   |   |                                  | 8,765   |   |                                |   | 7,637   |                            |   |   | 8,765 |   |   |   | 7,637 |   |   |   | 8,216 |   |
| Total                allowance for credit losses           |   | $                                     | 169,459 |   |                                | $      | 148,383 |                            |   | $ | 169,459 |   |   | $ | 148,383 |   |   | $ | 160,269 |   |
|                                                       |   |                                  |    |   |                                |   |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Forward-Looking      Statements**

**Item3.  Quantitative      and Qualitative Disclosures      About Market Risk**

----

**Item      4.   Controls and      Procedures**

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

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

----

**PART      II.      OTHER      INFORMATION**

**Item      1.  Legal Proceedings**

** **

*Regulatory      Orders*

----

**Item      1A.  Risk Factors**

*Bancorp has      entered into a Memorandum of Understanding (“MOU”) with the Federal Reserve Bank      of Philadelphia (“FRB”) and Commerce Bank, N.A.  has entered into a      Consent Order with the Office of the Comptroller of the Currency (the “OCC”)      .*

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

|                                    |        | **(Withhold                Authority)** |
|-----------------------------------------|-------------|-----------------------------------------|
| **Name                of Nominee**      | **For**     | **Against**                             |
|                                    |        |                                    |
| Vernon                W. Hill, II       | 156,510,143 | 16,604,373                              |
| Jack                R Bershad           | 148,913,044 | 24,201,472                              |
| Joseph                E. Buckelew       | 157,470,639 | 15,643,877                              |
| Donald                T. DiFrancesco    | 134,449,321 | 38,665,195                              |
| Nicholas                A. Giordano     | 156,179,547 | 16,934,969                              |
| Morton                N. Kerr           | 148,127,530 | 24,986,986                              |
| Steven                M. Lewis          | 157,599,096 | 15,515,420                              |
| John                K. Lloyd            | 158,094,579 | 15,019,937                              |
| George                E. Norcross, III  | 157,067,095 | 16,047,421                              |
| Daniel                J. Ragone         | 154,906,057 | 18,208,459                              |
| William                A. Schwartz, Jr. | 158,043,816 | 15,070,700                              |
| Joseph                T. Tarquini, Jr.  | 157,621,200 | 15,493,316                              |
| Joseph                S. Vassalluzzo    | 151,508,687 | 21,605,829                              |

----

**Item      6.                 Exhibits**

| Exhibit                10.1 | Consent                Order dated June 28, 2007 issued by the Comptroller of the Currency                in the                matter of Commerce Bank, N.A.  (Incorporated by reference from                the Company’s Form 8-K filed on June 29, 2007 with the Securities and                Exchange Commission.)                                                                                                                    |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit                10.2 | Stipulation                and Consent to Issuance of a Consent Order dated June 28, 2007 between                the                Comptroller of the Currency and the Board of Directors of Commerce                Bank,                N.A. on behalf of Commerce Bank, N.A.  (Incorporated by                reference from the Company’s Form 8-K filed on June 29, 2007 with the                Securities and Exchange Commission.) |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit                10.3 | Memorandum                of Understanding, dated June 28, 2007, by and between the Federal                Reserve                Bank of Philadelphia and Commerce Bancorp, Inc.  (Incorporated                by reference from the Company’s Form 8-K filed on June 29, 2007 with the                Securities and Exchange Commission.)                                                                                                |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit                31.1 | Certification                of the Company’s Chief Executive Officer                (or persons performing similar functions) pursuant to 18 U.S.C. Section                1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act                of                2002.                                                                                                                                                                 |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit                31.2 | Certification                of the Company’s Chief Financial Officer                (or persons performing similar functions) pursuant to 18 U.S.C. Section                1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act                of                2002.                                                                                                                                                                 |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit                32   | Certification                of the Company’s Chief Executive Officer (or                persons performing similar functions) and Chief Financial Officer                pursuant                to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of                the                Sarbanes-Oxley Act of 2002.                                                                                                                      |

**SIGNATURES**

|                          |   | COMMERCE                BANCORP, INC.                       |
|-------------------------------|--------|-------------------------------------------------------------|
|                          |   | (Registrant)                                                |
|                          |   |                                                        |
|                          |   |                                                        |
|                          |   |                                                        |
|                          |   |                                                        |
|                          |   |                                                        |
| AUGUST                8, 2007 |   | /s/                DOUGLAS J. PAULS                         |
| (Date)                        |   | DOUGLAS                J. PAULS                             |
|                          |   | EXECUTIVE                VICE PRESIDENT AND                 |
|                          |   | CHIEF                FINANCIAL OFFICER                      |
|                          |   | (PRINCIPAL                FINANCIAL AND ACCOUNTING OFFICER) |

----