**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 March                31, 2006                                                          |

| (                ) | 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     | 184,187,770                                                                 |
|---------------------------------|-----------------------------------------------------------------------------|
| (Title                of Class) | (No.                of Shares Outstanding as                of May 1, 2006) |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

|                    |                                                                                                         | Page   |
|-------------------------|--------------------------------------------------------------------------------------------------------------|--------|
| PART                I.  | FINANCIAL                INFORMATION                                                                         |   |
|                    |                                                                                                         |   |
| Item                1.  | Financial                Statements                                                                          |   |
|                    |                                                                                                         |   |
|                    | Consolidated                Balance Sheets                (unaudited)                                        |   |
|                    | March                31, 2006 and December 31,                2005                                           | 1      |
|                    |                                                                                                         |   |
|                    | Consolidated                Statements of Income                (unaudited)                                  |   |
|                    | Three                months ended March 31, 2006 and                                                         |   |
|                    | March                31, 2005                                                                                | 2      |
|                    |                                                                                                         |   |
|                    | Consolidated                Statements of Cash Flows                (unaudited)                              |   |
|                    | Three                months ended March 31, 2006 and March 31,                2005                           | 3      |
|                    |                                                                                                         |   |
|                    | Consolidated                Statement of Changes in                Stockholders’ Equity (unaudited)    |   |
|                    | Three                months ended March 31,                2006                                              | 4      |
|                    |                                                                                                         |   |
|                    | Notes                to Consolidated Financial Statements                (unaudited)                         | 5      |
|                    |                                                                                                         |   |
| Item                2.  | Management’s                Discussion and Analysis of                Financial                        |   |
|                    | Condition                and Results of Operation                                                            | 9      |
|                    |                                                                                                         |   |
| Item                3.  | Quantitative                and Qualitative Disclosures About Market                Risk                     | 22     |
|                    |                                                                                                         |   |
| Item                4.  | Controls                and Procedures                                                                       | 23     |
|                    |                                                                                                         |   |
| PART                II. | OTHER                INFORMATION                                                                             |   |
|                    |                                                                                                         |   |
| Item                2.  | Purchases                of Certain Equity Securities by the Issuer and                Affiliated Purchasers | 23     |
|                    |                                                                                                         |   |
| Item                6.  | Exhibits                                                                                                     | 24     |
|                    |                                                                                                         |   |

----

**PART      1.**
**FINANCIAL      INFORMATION**

**Item      1.** **Financial      Statements**

**COMMERCE      BANCORP, INC. AND      SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

|                    |                                                               |   |                         |   |                            |       |
|-------------------------|--------------------------------------------------------------------|--------|------------------------------|--------|---------------------------------|------------|
|                    |                                                               |   | **March                31,** |   | **December                31,** |       |
|                    | (dollars                in thousands)                              |   | **2006**                     |   |                            | **2005**   |   |
| **Assets**              | Cash                and due from banks                             | **$**  | **1,185,293**                |   | $                               | 1,284,064  |   |
|                    | Federal                funds sold                                  |   | **6,600**                    |   |                            | 12,700     |   |
|                    | Cash                and cash equivalents                           |   | **1,191,893**                |   |                            | 1,296,764  |   |
|                    | Loans                held for sale                                 |   | **37,349**                   |   |                            | 30,091     |   |
|                    | Trading                securities                                  |   | **123,468**                  |   |                            | 143,016    |   |
|                    | Securities                available for sale                       |   | **10,245,046**               |   |                            | 9,518,821  |   |
|                    | Securities                held to maturity                         |   | **13,705,727**               |   |                            | 13,005,364 |   |
|                    | (market                value 03/06-$13,282,726; 12/05-$12,758,552) |   |                         |   |                            |       |   |
|                    | Loans                                                              |   | **13,480,610**               |   |                            | 12,658,652 |   |
|                    | Less                allowance for loan and lease losses            |   | **135,745**                  |   |                            | 133,664    |   |
|                    |                                                               |   | **13,344,865**               |   |                            | 12,524,988 |   |
|                    | Bank                premises and equipment, net                    |   | **1,406,608**                |   |                            | 1,378,786  |   |
|                    | Goodwill                and other intangible assets                |   | **150,466**                  |   |                            | 106,926    |   |
|                    | Other                assets                                        |   | **486,960**                  |   |                            | 461,281    |   |
|                    | Total                assets                                        | **$**  | **40,692,382**               |   | $                               | 38,466,037 |   |
|                    |                                                               |   |                         |   |                            |       |   |
| **Liabilities**         | Deposits:                                                          |   |                         |   |                            |       |   |
|                    | Demand:                                                            |   |                         |   |                            |       |   |
|                    | Noninterest-bearing                                                | **$**  | **8,391,102**                |   | $                               | 8,019,878  |   |
|                    | Interest-bearing                                                   |   | **14,146,346**               |   |                            | 13,286,678 |   |
|                    | Savings                                                            |   | **10,328,280**               |   |                            | 9,486,712  |   |
|                    | Time                                                               |   | **4,246,379**                |   |                            | 3,933,445  |   |
|                    | Total                deposits                                      |   | **37,112,107**               |   |                            | 34,726,713 |   |
|                    | Other                borrowed money                                |   | **869,753**                  |   |                            | 1,106,443  |   |
|                    | Other                liabilities                                   |   | **292,225**                  |   |                            | 323,708    |   |
|                    | Total                liabilities                                   |   | **38,274,085**               |   |                            | 36,156,864 |   |
|                    |                                                               |   |                         |   |                            |       |   |
| **Stockholders’** | Common                stock, 184,046,167 shares                    |   |                         |   |                            |       |   |
| **Equity**              | issued                (179,498,717 shares in 2005)                 |   | **184,046**                  |   |                            | 179,499    |   |
|                    | Capital                in excess of par value                      |   | **1,566,673**                |   |                            | 1,450,843  |   |
|                    | Retained                earnings                                   |   | **805,967**                  |   |                            | 750,710    |   |
|                    | Accumulated                other comprehensive loss                |   | **(121,918**                 | **)**  |                            | (59,169    | ) |
|                    |                                                               |   | **2,434,768**                |   |                            | 2,321,883  |   |
|                    |                                                               |   |                         |   |                            |       |   |
|                    | Less                treasury stock, at cost, 946,626 shares        |   |                         |   |                            |       |   |
|                    | issued                (837,338 shares in 2005)                     |   | **16,471**                   |   |                            | 12,710     |   |
|                    | Total                stockholders’ equity                    |   | **2,418,297**                |   |                            | 2,309,173  |   |
|                    | Total                liabilities and stockholders’ equity    | **$**  | **40,692,382**               |   | $                               | 38,466,037 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF INCOME**

|            |                                                                 |                                                              |        |
|-----------------|----------------------------------------------------------------------|-------------------------------------------------------------------|-------------|
|            |                                                                 | **Three                Months Ended****March                31,** |        |
|            | (dollars                in thousands, except per share amounts)      |                                                              | **2006**    |   |   | **2005** |   |
| **Interest**    | Interest                and fees on loans                            | **$**                                                             | **214,974** |   | $ | 145,218 |   |
| **income**      | Interest                on investments                               |                                                              | **295,076** |   |   | 224,946 |   |
|            | Other                interest                                        |                                                              | **413**     |   |   | 316 |   |
|            | Total                interest income                                 |                                                              | **510,463** |   |   | 370,480 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Interest**    | Interest                on deposits:                                 |                                                              |        |   |   |   |   |
| **expense**     | Demand                                                               |                                                              | **97,940**  |   |   | 46,671 |   |
|            | Savings                                                              |                                                              | **54,004**  |   |   | 19,080 |   |
|            | Time                                                                 |                                                              | **36,261**  |   |   | 18,398 |   |
|            | Total                interest on deposits                            |                                                              | **188,205** |   |   | 84,149 |   |
|            | Interest                on other borrowed money                      |                                                              | **14,328**  |   |   | 4,410 |   |
|            | Interest                on long-term debt                            |                                                              |        |   |   | 3,020 |   |
|            | Total                interest expense                                |                                                              | **202,533** |   |   | 91,579 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Net                interest income                                   |                                                              | **307,930** |   |   | 278,901 |   |
|            | Provision                for credit losses                           |                                                              | **6,501**   |   |   | 6,250 |   |
|            | Net                interest income after provision for credit losses |                                                              | **301,429** |   |   | 272,651 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Noninterest** | Deposit                charges and service fees                      |                                                              | **82,281**  |   |   | 59,964 |   |
| **income**      | Other                operating income                                |                                                              | **48,721**  |   |   | 42,617 |   |
|            | Net                investment securities gains                       |                                                              |        |   |   | 1,108 |   |
|            | Total                noninterest income                              |                                                              | **131,002** |   |   | 103,689 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Noninterest** | Salaries                and benefits                                 |                                                              | **144,825** |   |   | 119,301 |   |
| **expense**     | Occupancy                                                            |                                                              | **46,240**  |   |   | 37,993 |   |
|            | Furniture                and equipment                               |                                                              | **35,960**  |   |   | 28,926 |   |
|            | Office                                                               |                                                              | **15,473**  |   |   | 12,677 |   |
|            | Marketing                                                            |                                                              | **7,811**   |   |   | 5,801 |   |
|            | Other                                                                |                                                              | **65,025**  |   |   | 53,708 |   |
|            | Total                noninterest expenses                            |                                                              | **315,334** |   |   | 258,406 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Income                before income taxes                            |                                                              | **117,097** |   |   | 117,934 |   |
|            | Provision                for federal and state income taxes          |                                                              | **39,800**  |   |   | 40,797 |   |
|            | Net                income                                            | **$**                                                             | **77,297**  |   | $ | 77,137 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Net                income per common and common equivalent share:    |                                                              |        |   |   |   |   |
|            | Basic                                                                | **$**                                                             | **0.43**    |   | $ | 0.48 |   |
|            | Diluted                                                              | **$**                                                             | **0.41**    |   | $ | 0.45 |   |
|            | Average                common and common equivalent                  |                                                              |        |   |   |   |   |
|            | shares                outstanding:                                   |                                                              |        |   |   |   |   |
|            | Basic                                                                |                                                              | **180,917** |   |   | 160,798 |   |
|            | Diluted                                                              |                                                              | **189,867** |   |   | 176,323 |   |
|            | Dividends                declared, common stock                      | **$**                                                             | **0.12**    |   | $ | 0.11 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|           |                                                                                                                   |   |                                                              |   |
|----------------|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|           |                                                                                                                   |   | **Three                Months Ended****March                31,** |   |
|           | (dollars                in thousands)                                                                                  |   | **2006**                                                          |   |   | **2005** |   |
| **Operating**  | Net                income                                                                                              | **$**  | **77,297**                                                        |   | $ | 77,137 |   |
| **activities** | Adjustments                to reconcile net income to net cash                                                         |   |                                                              |   |   |   |   |
|           | provided                by operating activities:                                                                       |   |                                                              |   |   |   |   |
|           | Provision                for credit losses                                                                             |   | **6,501**                                                         |   |   | 6,250 |   |
|           | Provision                for depreciation, amortization and accretion                                                  |   | **37,553**                                                        |   |   | 37,173 |   |
|           | Gain                on sales of securities                                                                             |   |                                                              |   |   | (1,108 | ) |
|           | Proceeds                from sales of loans held for sale                                                              |   | **114,892**                                                       |   |   | 158,738 |   |
|           | Originations                of loans held for sale                                                                     |   | **(122,150**                                                      | **)**  |   | (178,753 | ) |
|           | Net                decrease (increase) in trading securities                                                           |   | **19,548**                                                        |   |   | (37,010 | ) |
|           | Decrease                in other assets, net                                                                           |   | **11,373**                                                        |   |   | 17,549 |   |
|           | (Decrease)                increase in other liabilities                                                                |   | **(46,134**                                                       | **)**  |   | 23,778 |   |
|           | Net                cash provided by operating activities                                                               |   | **98,880**                                                        |   |   | 103,754 |   |
|           |                                                                                                                   |   |                                                              |   |   |   |   |
| **Investing**  | Proceeds                from the sales of securities available for sale                                                |   |                                                              |   |   | 188,152 |   |
| **activities** | Proceeds                from the maturity of securities available for sale                                             |   | **447,545**                                                       |   |   | 734,296 |   |
|           | Proceeds                from the maturity of securities held to maturity                                               |   | **446,707**                                                       |   |   | 493,650 |   |
|           | Purchase                of securities available for sale                                                               |   | **(1,276,562**                                                    | **)**  |   | (925,038 | ) |
|           | Purchase                of securities held to maturity                                                                 |   | **(1,150,822**                                                    | **)**  |   | (1,326,375 | ) |
|           | Net                increase in loans                                                                                   |   | **(826,378**                                                      | **)**  |   | (523,863 | ) |
|           | Capital                expenditures                                                                                    |   | **(59,081**                                                       | **)**  |   | (43,626 | ) |
|           | Net                cash used by investing activities                                                                   |   | **(2,418,591**                                                    | **)**  |   | (1,402,804 | ) |
|           |                                                                                                                   |   |                                                              |   |   |   |   |
| **Financing**  | Net                increase in demand and savings deposits                                                             |   | **2,072,460**                                                     |   |   | 1,590,993 |   |
| **activities** | Net                increase in time deposits                                                                           |   | **312,934**                                                       |   |   | 238,080 |   |
|           | Net                decrease in other borrowed money                                                                    |   | **(236,690**                                                      | **)**  |   | (524,944 | ) |
|           | Dividends                paid                                                                                          |   | **(21,479**                                                       | **)**  |   | (17,604 | ) |
|           | Proceeds                from issuance of common stock under dividend                reinvestment and other stock plans |   |  **87,582**                                                  |   |   |  39,164 |   |
|           | Other                                                                                                                  |   | **33**                                                            |   |   | (1,394 | ) |
|           | Net                cash provided by financing activities                                                               |   | **2,214,840**                                                     |   |   | 1,324,295 |   |
|           |                                                                                                                   |   |                                                              |   |   |   |   |
|           | (Decrease)                increase in cash and cash equivalents                                                        |   | **(104,871**                                                      | **)**  |   | 25,245 |   |
|           | Cash                and cash equivalents at beginning of year                                                          |   | **1,296,764**                                                     |   |   | 1,050,806 |   |
|           | Cash                and cash equivalents at end of period                                                              | **$**  | **1,191,893**                                                     |   | $ | 1,076,051 |   |
|           |                                                                                                                   |   |                                                              |   |   |   |   |
|           | Supplemental                disclosures of cash flow information:                                                      |   |                                                              |   |   |   |   |
|           | Cash                paid during the period for:                                                                        |   |                                                              |   |   |   |   |
|           | Interest                                                                                                               | **$**  | **201,341**                                                       |   | $ | 91,295 |   |
|           | Income                taxes                                                                                            |   | **573**                                                           |   |   | 374 |   |

----

**COMMERCE      BANCORP, INC. AND      SUBSIDIARIES**

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

| Three                months ended March 31, 2006                 |         |   |                          |   |         |   |         |   |              |   |           |   |
|------------------------------------------------------------------|--------------|--------|-------------------------------|--------|--------------|--------|--------------|--------|-------------------|--------|----------------|--------|
| *(in                thousands)*                                  |         |   |                          |   |         |   |         |   |              |   |           |   |
|                                                             |         |   | **Capital                in** |   |         |   |         |   | **Accumulated**   |   |           |   |
|                                                             |         |   | **Excess                of**  |   |         |   |         |   | **Other**         |   |           |   |
|                                                             | **Common**   |   | **Par**                       |   | **Retained** |   | **Treasury** |   | **Comprehensive** |   |           |   |
|                                                             | **Stock**    |   | **Value**                     |   | **Earnings** |   | **Stock**    |   | **Loss**          |   | **Total**      |   |
|                                                             |         |   |                          |   |         |   |         |   |              |   |           |   |
| **Balances                at December 31, 2005**                 | **$179,499** |   | **$1,450,843**                |   | **$750,710** |   | **$(12,710** | **)**  | **$(59,169**      | **)**  | **$2,309,173** |   |
| Net                income                                        |         |   |                          |   | 77,297       |   |         |   |              |   | 77,297         |   |
| Other                comprehensive loss, net of tax              |         |   |                          |   |         |   |         |   |              |   |           |   |
| Unrealized                loss on securities (pre-tax $100,571)  |         |   |                          |   |         |   |         |   | (62,749           | )      | (62,749        | )      |
| Total                comprehensive income                        |         |   |                          |   |         |   |         |   |              |   | 14,548         |   |
| Cash                dividends                                    |         |   |                          |   | (22,039      | )      |         |   |              |   | (22,039        | )      |
| Shares                issued under dividend reinvestment         |         |   |                          |   |         |   |         |   |              |   |           |   |
| and                compensation and benefit plans (3,687 shares) | 3,687        |   | 87,253                        |   |         |   |         |   |              |   | 90,940         |   |
| Acquisition                of eMoney Advisor, Inc. (860 shares)  | 860          |   | 28,140                        |   |         |   |         |   |              |   | 29,000         |   |
| Other                                                            |         |   | 437                           |   | (1           | )      | (3,761       | )      |              |   | (3,325         | )      |
| **Balances                at March 31, 2006**                    | **$184,046** |   | **$1,566,673**                |   | **$805,967** |   | **$(16,471** | **)**  | **$(121,918**     | **)**  | **$2,418,297** |   |

----

**COMMERCE      BANCORP, INC. AND      SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**A.**
**Consolidated      Financial Statements**

| **B.  ** | **Stock-Based                Compensation** |
|--------------------|---------------------------------------------|

----

|                                          |   |  Shares                UnderOption |       |  Weighted                Average Exercise                Price |   | Weighted                Average Remaining                Contractual                Life |   |
|-----------------------------------------------|--------|-----------------------------------------|------------|---------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|
| Outstanding                at January 1, 2006 |   |                                    | 26,894,076 |                                                                | $      | 19.88                                                                                    |   |   |   |   |
| Options                granted                |   |                                    | 3,911,527  |                                                                |   | 36.35                                                                                    |   |   |   |   |
| Options                exercised              |   |                                    | 2,058,673  |                                                                |   | 18.13                                                                                    |   |   |   |   |
| Options                canceled               |   |                                    | 19,526     |                                                                |   | 31.51                                                                                    |   |   |   |   |
| Outstanding                at March 31, 2006  |   |                                    | 28,727,404 |                                                                | $      | 22.19                                                                                    |   |   | 6.3 |   |
| Exercisable                at March 31, 2006  |   |                                    | 24,877,492 |                                                                | $      | 20.01                                                                                    |   |   | 5.8 |   |

----

|                                                          |   | **Three                Months**   |   |
|---------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                          |   | **Ended**                         |   |
|                                                          |   | **March                31, 2005** |   |
| Reported                net income                            |   | $                                 | 77,137 |   |
| Less:                Stock option compensation expense        |   |                              |   |   |
| determined                under fair value method, net of tax |   |                              | (4,031 | ) |
| Pro                forma net income, basic                    |   | $                                 | 73,106 |   |
| Add:                Interest expense on Convertible Trust     |   |                              |   |   |
| Capital                Securities, net of tax                 |   |                              | 1,963  |   |
| Pro                forma net income, diluted                  |   | $                                 | 75,069 |   |
|                                                          |   |                              |   |   |
| Reported                net income per share:                 |   |                              |   |   |
| Basic                                                         |   | $                                 | 0.48   |   |
| Diluted                                                       |   |                              | 0.45   |   |
|                                                          |   |                              |   |   |
| Pro                forma net income per share:                |   |                              |   |   |
| Basic                                                         |   | $                                 | 0.45   |   |
| Diluted                                                       |   |                              | 0.43   |   |
|                                                          |   |                              |   |   |

**C.**
**Commitments**

**D.**
**Comprehensive      Income**

----

**E.**
**Segment      Information**

|                                               |                                                                   |      |                                                                   |        |
|----------------------------------------------------|------------------------------------------------------------------------|-----------|------------------------------------------------------------------------|-------------|
|                                               | **Three                Months Ended****March                31, 2006** |      | **Three                Months Ended****March                31, 2005** |        |
|                                               | **Community**                                                          |      |                                                                   | **Parent/** |   |   |   |   | **Community** |   |   | **Parent/** |   |   |   |   |
|                                               |                                                                   | **Banks** |                                                                   |        | **Other** |   |   | **Total** |   |   | **Banks** |   |   | **Other** |   |   | **Total** |   |
| Net                interest income                 | $                                                                      | 307,057   |                                                                   | $           | 873 |   | $ | 307,930 |   | $ | 280,955 |   | $ | (2,054 | ) | $ | 278,901 |   |
| Provision                for loan losses           |                                                                   | 6,501     |                                                                   |        |   |   |   | 6,501 |   |   | 6,250 |   |   | - |   |   | 6,250 |   |
| Net                interest income after provision |                                                                   | 300,556   |                                                                   |        | 873 |   |   | 301,429 |   |   | 274,705 |   |   | (2,054 | ) |   | 272,651 |   |
| Noninterest                income                  |                                                                   | 100,284   |                                                                   |        | 30,718 |   |   | 131,002 |   |   | 75,296 |   |   | 28,393 |   |   | 103,689 |   |
| Noninterest                expense                 |                                                                   | 289,884   |                                                                   |        | 25,450 |   |   | 315,334 |   |   | 236,769 |   |   | 21,637 |   |   | 258,406 |   |
| Income                before income taxes          |                                                                   | 110,956   |                                                                   |        | 6,141 |   |   | 117,097 |   |   | 113,232 |   |   | 4,702 |   |   | 117,934 |   |
| Income                tax expense                  |                                                                   | 37,499    |                                                                   |        | 2,301 |   |   | 39,800 |   |   | 39,092 |   |   | 1,705 |   |   | 40,797 |   |
| Net                income                          | $                                                                      | 73,457    |                                                                   | $           | 3,840 |   | $ | 77,297 |   | $ | 74,140 |   | $ | 2,997 |   | $ | 77,137 |   |
|                                               |                                                                   |      |                                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                assets (in millions)        | $                                                                      | 36,597    |                                                                   | $           | 2,691 |   | $ | 39,288 |   | $ | 28,714 |   | $ | 2,383 |   | $ | 31,097 |   |

**F.       **
**Net      Income Per Share**

|                                                                                                   |                                                              |     |
|--------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|----------|
|                                                                                                   | **Three                Months Ended****March                31,** |     |
|                                                                                                   |                                                              | **2006** |   |   | **2005** |   |
|                                                                                                   |                                                              |     |   |   |   |   |
| **Basic:**                                                                                             |                                                              |     |   |   |   |   |
| Net                income available to common shareholders - basic                                     | $                                                                 | 77,297   |   | $ | 77,137 |   |
| Average                common shares outstanding - basic                                               |                                                              | 180,917  |   |   | 160,798 |   |
| Net                income per common share - basic                                                     | $                                                                 | 0.43     |   | $ | 0.48 |   |
|                                                                                                   |                                                              |     |   |   |   |   |
| **Diluted:**                                                                                           |                                                              |     |   |   |   |   |
| Net                income                                                                              | $                                                                 | 77,297   |   | $ | 77,137 |   |
| Add                interest expense on Convertible Trust Capital Securities, net of                tax |                                                              |     |   |   | 1,963 |   |
| Net                income available to common shareholders - diluted                                   | $                                                                 | 77,297   |   | $ | 79,100 |   |
|                                                                                                   |                                                              |     |   |   |   |   |
|                                                                                                   |                                                              |     |   |   |   |   |
| Average                common shares outstanding                                                       |                                                              | 180,917  |   |   | 160,798 |   |
| Additional                shares considered in diluted computation assuming:                           |                                                              |     |   |   |   |   |
| Exercise                of stock options                                                               |                                                              | 8,950    |   |   | 7,943 |   |
| Conversion                of Convertible Trust Capital Securities                                      |                                                              |     |   |   | 7,582 |   |
| Average                common shares outstanding - diluted                                             |                                                              | 189,867  |   |   | 176,323 |   |
|                                                                                                   |                                                              |     |   |   |   |   |
| Net                income per common share - diluted                                                   | $                                                                 | 0.41     |   | $ | 0.45 |   |
|                                                                                                   |                                                              |     |   |   |   |   |

----

**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 |   |
|                                      |       |   |                                     |      |   |   |   |   |   |
| **March                31, 2006:**        |       |   |                                     |      |   |   |   |   |   |
| Company                                   |       |   |                                     |      |   |   |   |   |   |
| Risk                based capital ratios: |       |   |                                     |      |   |   |   |   |   |
| Tier                1                     | $2,389,749 | 11.80  | %                                        | $810,055  | 4.00 | % | $1,215,083 | 6.00 | % |
| Total                capital              | 2,538,043  | 12.53  |                                     | 1,620,111 | 8.00 |   | 2,025,139 | 10.00 |   |
| Leverage                ratio             | 2,389,749  | 6.09   |                                     | 1,570,680 | 4.00 |   | 1,963,350 | 5.00 |   |
| Commerce                N.A.              |       |   |                                     |      |   |   |   |   |   |
| Risk                based capital ratios: |       |   |                                     |      |   |   |   |   |   |
| Tier                1                     | $2,135,415 | 11.50  | %                                        | $742,788  | 4.00 | % | $1,114,182 | 6.00 | % |
| Total                capital              | 2,262,134  | 12.18  |                                     | 1,485,576 | 8.00 |   | 1,856,970 | 10.00 |   |
| Leverage                ratio             | 2,135,415  | 6.01   |                                     | 1,422,289 | 4.00 |   | 1,777,861 | 5.00 |   |
|                                      |       |   |                                     |      |   |   |   |   |   |

----

|                                      |       |   |    | Per                Regulatory Guidelines |                                          |
|-------------------------------------------|------------|--------|---------|------------------------------------------|-----------------------------------------------|
|                                      | Actual     |   | Minimum |                                     | “Well                Capitalized” |   |
|                                      | Amount     | Ratio  |    | Amount                                   | Ratio                                         |   | Amount | Ratio |   |
|                                      |       |   |    |                                     |                                          |   |   |   |   |
| **March                31, 2005:**        |       |   |    |                                     |                                          |   |   |   |   |
| Company                                   |       |   |    |                                     |                                          |   |   |   |   |
| Risk                based capital ratios: |       |   |    |                                     |                                          |   |   |   |   |
| Tier                1                     | $1,932,767 | 12.46  | %       | $620,292                                 | 4.00                                          | % | $930,437 | 6.00 | % |
| Total                capital              | 2,077,393  | 13.40  |    | 1,240,583                                | 8.00                                          |   | 1,550,729 | 10.00 |   |
| Leverage                ratio             | 1,932,767  | 6.22   |    | 1,243,373                                | 4.00                                          |   | 1,554,216 | 5.00 |   |
| Commerce                N.A.              |       |   |    |                                     |                                          |   |   |   |   |
| Risk                based capital ratios: |       |   |    |                                     |                                          |   |   |   |   |
| Tier                1                     | $1,695,458 | 12.04  | %       | $563,348                                 | 4.00                                          | % | $845,022 | 6.00 | % |
| Total                capital              | 1,821,217  | 12.93  |    | 1,126,695                                | 8.00                                          |   | 1,408,369 | 10.00 |   |
| Leverage                ratio             | 1,695,458  | 6.08   |    | 1,115,983                                | 4.00                                          |   | 1,394,978 | 5.00 |   |

**Deposits**

|       |                                 |                             |                                 |                             |                                  |
|------------|--------------------------------------|----------------------------------|--------------------------------------|----------------------------------|---------------------------------------|
|       | **March                31,****2006** | **%                of****Total** | **March                31,****2005** | **%                of****Total** | **Annual****Growth                %** |
|       |                                 |                             |                                 |                             |                                  |
| Consumer   | $                15,643,435          | 44%                              | $                12,686,891          | 45%                              | 23%                                   |
|       |                                 |                             |                                 |                             |                                  |
| Commercial | 13,641,723                           | 38                               | 10,142,285                           | 36                               | 35                                    |
|       |                                 |                             |                                 |                             |                                  |
| Government | 6,627,282                            | 18                               | 5,228,980                            | 19                               | 27                                    |
|       |                                 |                             |                                 |                             |                                  |
| Total      | $                35,912,440          | 100%                             | $                28,058,156          | 100%                             | 28%                                   |
|       |                                 |                             |                                 |                             |                                  |

**Interest      Rate Sensitivity and Liquidity**

----

|                              |   |                                  |                         |   |   |
|-----------------------------------|--------|---------------------------------------|------------------------------|--------|--------|
|                              |   | **Basis                Point Change** |
|                              |   | **Plus                200**           | **Minus                100** |
| March                31, 2006:    |   |                                  |                         |   |   |
| Twelve                Months      |   | (8.8                                  | )%                           | 3.4    | %      |
| Twenty                Four Months |   | (2.5                                  | )%                           | 1.8    | %      |
|                              |   |                                  |                         |   |   |
| March                31, 2005:    |   |                                  |                         |   |   |
| Twelve                Months      |   | 4.5                                   | %                            | (2.9   | )%     |
| Twenty                Four Months |   | 7.6                                   | %                            | (8.7   | )%     |
|                              |   |                                  |                         |   |   |

----

|                                  |                            |                         |
|---------------------------------------|---------------------------------|------------------------------|
|                                  | **Market                Value** |                         |
|                                  | **of                Equity**    | **Per                Share** |
|                                  |                            |                         |
| Plus                200 basis points  | $8,157                          | $44.32                       |
|                                  |                            |                         |
| Current                Rate           | $8,527                          | $46.33                       |
|                                  |                            |                         |
| Minus                100 basis points | $7,853                          | $42.67                       |

**Short-Term      Borrowings**

**Interest      Earning Assets**

----

**Loans**

|                                              |   | **March                31,**  |   |               | **December                31,** |   |
|---------------------------------------------------|--------|-------------------------------|--------|--------------------|---------------------------------|--------|
|                                              |   | **2006**                      |   |               | **2005**                        |   |
|                                              |   | (in                thousands) |   |
| Commercial:                                       |   |                          |   |               |                            |   |
| Term                                              | $      | 1,951,600                     |   | $                  | 1,781,148                       |   |
| Line                of credit                     |   | 1,632,310                     |   |               | 1,517,347                       |   |
|                                              |   | 3,583,910                     |   |               | 3,298,495                       |   |
|                                              |   |                          |   |               |                            |   |
| Owner-occupied                                    |   | 2,526,458                     |   |               | 2,402,300                       |   |
|                                              |   | 6,110,368                     |   |               | 5,700,795                       |   |
|                                              |   |                          |   |               |                            |   |
| Consumer:                                         |   |                          |   |               |                            |   |
| Mortgages                (1-4 family residential) |   | 2,119,424                     |   |               | 2,000,309                       |   |
| Installment                                       |   | 230,927                       |   |               | 211,332                         |   |
| Home                equity                        |   | 2,484,333                     |   |               | 2,353,581                       |   |
| Credit                lines                       |   | 90,282                        |   |               | 100,431                         |   |
|                                              |   | 4,924,966                     |   |               | 4,665,653                       |   |
| Commercial                real estate:            |   |                          |   |               |                            |   |
| Investor                developer                 |   | 2,156,040                     |   |               | 2,001,674                       |   |
| Construction                                      |   | 289,236                       |   |          | 290,530                         |   |
|                                              |   | 2,445,276                     |   |     | 2,292,204                       |   |
| Total                loans                        | $      | 13,480,610                    |   | $                  | 12,658,652                      |   |

**Investments**

----

|                                          |   |                          |       |                       |   |       |   |
|-----------------------------------------------|--------|-------------------------------|------------|----------------------------|--------|------------|--------|
|                                          |   | **Available**                 |       | **Held                to** |   |       |   |
| **Product                Description**        |   | **For                Sale**   |       | **Maturity**               |   | **Total**  |   |
|                                          |   | (in                thousands) |       |
| Mortgage-backed                Securities:    |   |                          |       |                       |   |       |   |   |   |   |
| Federal                Agencies Pass Through  |   |                          |       |                       |   |       |   |   |   |   |
| Certificates                (AAA Rated)       |   | $                             | 1,485,247  |                       | $      | 2,249,177  |   | $ | 3,734,424 |   |
|                                          |   |                          |       |                       |   |       |   |   |   |   |
| Collateralized                Mortgage        |   |                          |       |                       |   |       |   |   |   |   |
| Obligations                (AAA Rated)        |   |                          | 8,003,218  |                       |   | 9,542,836  |   |   | 17,546,054 |   |
|                                          |   |                          |       |                       |   |       |   |   |   |   |
| U.S.                Government agencies/Other |   |                          | 756,581    |                       |   | 1,913,714  |   |   | 2,670,295 |   |
|                                          |   |                          |       |                       |   |       |   |   |   |   |
| Total                                         |   | $                             | 10,245,046 |                       | $      | 13,705,727 |   | $ | 23,950,773 |   |
|                                          |   |                          |       |                       |   |       |   |   |   |   |
| Duration                (in years)            |   |                          | 3.48       |                       |   | 4.03       |   |   | 3.79 |   |
| Average                Life (in years)        |   |                          | 6.37       |                       |   | 6.34       |   |   | 6.35 |   |
| Quarterly                Average Yield        |   |                          | 5.47       | %                          |   | 5.11       | %      |   | 5.26 | % |

|                                                                  |   |                                 |       |
|-----------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                  |   | **At                March 31, 2006** |       |
|                                                                  |   |  **Amortized****Cost**          |       | **Gross****Unrealized****Gains** |   | **Gross****Unrealized****Losses** |   |  **Market****Value** |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                    | 10,356,899 |   | $ | 6,452 |   | $ | (212,326 | ) | $ | 10,151,025 |   |
| Obligations                of state and political subdivisions        |   |                                 | 58,837     |   |   | 15 |   |   | (1,037 | ) |   | 57,815 |   |
| Equity                securities                                      |   |                                 | 9,679      |   |   | 11,959 |   |   |   |   |   | 21,638 |   |
| Other                                                                 |   |                                 | 14,552     |   |   | 30 |   |   | (14 | ) |   | 14,568 |   |
| Securities                available for sale                          |   | $                                    | 10,439,967 |   | $ | 18,456 |   | $ | (213,377 | ) | $ | 10,245,046 |   |
|                                                                  |   |                                 |       |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                    | 13,078,763 |   | $ | 3,610 |   | $ | (425,231 | ) | $ | 12,657,142 |   |
| Obligations                of state and political subdivisions        |   |                                 | 517,193    |   |   | 630 |   |   | (2,009 | ) |   | 515,814 |   |
| Other                                                                 |   |                                 | 109,771    |   |   |   |   |   |   |   |   | 109,771 |   |
| Securities                held to maturity                            |   | $                                    | 13,705,727 |   | $ | 4,240 |   | $ | (427,240 | ) | $ | 13,282,727 |   |

----

|                                                                  |   |                                    |       |
|-----------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                  |   | **At                December 31, 2005** |       |
|                                                                  |   |  **Amortized****Cost**             |       | **Gross****Unrealized****Gains** |   | **Gross****Unrealized****Losses** |   |  **Market****Value** |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                       | 9,529,645  |   | $ | 5,779 |   | $ | (112,946 | ) | $ | 9,422,478 |   |
| Obligations                of state and political subdivisions        |   |                                    | 59,517     |   |   | 41 |   |   | (431 | ) |   | 59,127 |   |
| Equity                securities                                      |   |                                    | 9,679      |   |   | 13,093 |   |   |   |   |   | 22,772 |   |
| Other                                                                 |   |                                    | 14,330     |   |   | 116 |   |   | (2 | ) |   | 14,444 |   |
| Securities                available for sale                          |   | $                                       | 9,613,171  |   | $ | 19,029 |   | $ | (113,379 | ) | $ | 9,518,821 |   |
|                                                                  |   |                                    |       |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                       | 12,415,587 |   | $ | 5,191 |   | $ | (252,231 | ) | $ | 12,168,547 |   |
| Obligations                of state and political subdivisions        |   |                                    | 490,257    |   |   | 1,216 |   |   | (988 | ) |   | 490,485 |   |
| Other                                                                 |   |                                    | 99,520     |   |   |   |   |   |   |   |   | 99,520 |   |
| Securities                held to maturity                            |   | $                                       | 13,005,364 |   | $ | 6,407 |   | $ | (253,219 | ) | $ | 12,758,552 |   |

**Net      Income**

----

**Net      Interest Income**

|                             | **Net                Interest Income** |
|----------------------------------|----------------------------------------|
| **Quarter                Ended** | **Volume**                             |   | **Rate** |   | **Total** |   | **%** |
| **March                31**      | **Increase**                           |   | **Change** |   | **Increase** |   | **Increase** |
|                             |                                   |   |   |   |   |   |   |
| **2006                vs. 2005** | $                68,517                |   | $(37,745) |   | $30,772 |   | 11% |
|                             |                                   |   |   |   |   |   |   |

----

**Average      Balances and Net Interest Income**

|                                                 | March                2006  |   | December                2005 |   | March                2005 |   |
|------------------------------------------------------|----------------------------|--------|------------------------------|--------|---------------------------|--------|
|                                                 | Average                    |   |                         |   | Average                   |   | Average |   |   |   | Average |   | Average |   |   |   | Average |   |
| *(dollars                in thousands)*              | Balance                    |   | Interest                     |   | Rate                      |   | Balance |   | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   |
| **Earning                Assets**                    |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                securities                 |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                              | $22,325,450                |   | $289,739                     |   | 5.26                      | %      | $21,761,130 |   | $273,042 |   | 4.98 | % | $18,192,721 |   | $221,886 |   | 4.95 | % |
| Tax-exempt                                           | 549,794                    |   | 6,956                        |   | 5.13                      |   | 518,699 |   | 6,279 |   | 4.80 |   | 405,771 |   | 3,313 |   | 3.31 |   |
| Trading                                              | 108,670                    |   | 1,255                        |   | 4.69                      |   | 124,625 |   | 1,838 |   | 5.85 |   | 111,732 |   | 1,395 |   | 5.06 |   |
| Total                investment securities           | 22,983,914                 |   | 297,950                      |   | 5.26                      |   | 22,404,454 |   | 281,159 |   | 4.98 |   | 18,710,224 |   | 226,594 |   | 4.91 |   |
| Federal                funds sold                    | 36,594                     |   | 413                          |   | 4.58                      |   | 26,165 |   | 293 |   | 4.44 |   | 50,311 |   | 316 |   | 2.55 |   |
| Loans                                                |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                mortgages                  | 4,491,557                  |   | 76,193                       |   | 6.88                      |   | 4,124,373 |   | 68,958 |   | 6.63 |   | 3,527,626 |   | 55,095 |   | 6.33 |   |
| Commercial                                           | 3,221,996                  |   | 59,125                       |   | 7.44                      |   | 2,893,352 |   | 51,892 |   | 7.12 |   | 2,327,438 |   | 35,581 |   | 6.20 |   |
| Consumer                                             | 4,817,562                  |   | 74,127                       |   | 6.24                      |   | 4,402,231 |   | 68,197 |   | 6.15 |   | 3,423,574 |   | 49,974 |   | 5.92 |   |
| Tax-exempt                                           | 492,283                    |   | 8,506                        |   | 7.01                      |   | 487,280 |   | 8,570 |   | 6.98 |   | 391,510 |   | 7,028 |   | 7.28 |   |
| Total                loans                           | 13,023,398                 |   | 217,951                      |   | 6.79                      |   | 11,907,236 |   | 197,617 |   | 6.58 |   | 9,670,148 |   | 147,678 |   | 6.19 |   |
| Total                earning assets                  | $36,043,906                |   | $516,314                     |   | 5.81                      | %      | $34,337,855 |   | $479,069 |   | 5.53 | % | $28,430,683 |   | $374,588 |   | 5.35 | % |
| **Sources                of Funds**                  |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities          |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                              | $                9,712,691 |   | $                54,004      |   | 2.25                      | %      | $                8,993,005 |   | $                45,866 |   | 2.02 | % | $                6,558,587 |   | $                19,080 |   | 1.18 | % |
| Interest                bearing demand               | 13,584,371                 |   | 97,940                       |   | 2.92                      |   | 13,222,933 |   | 84,148 |   | 2.52 |   | 11,924,947 |   | 46,671 |   | 1.59 |   |
| Time                deposits                         | 3,131,039                  |   | 25,850                       |   | 3.35                      |   | 2,970,865 |   | 23,540 |   | 3.14 |   | 2,566,074 |   | 13,740 |   | 2.17 |   |
| Public                funds                          | 952,132                    |   | 10,411                       |   | 4.43                      |   | 861,920 |   | 8,447 |   | 3.89 |   | 781,282 |   | 4,658 |   | 2.42 |   |
| Total                deposits                        | 27,380,233                 |   | 188,205                      |   | 2.79                      |   | 26,048,723 |   | 162,001 |   | 2.47 |   | 21,830,890 |   | 84,149 |   | 1.56 |   |
|                                                 |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                borrowed money                  | 1,316,437                  |   | 14,328                       |   | 4.41                      |   | 1,213,323 |   | 12,386 |   | 4.05 |   | 703,223 |   | 4,410 |   | 2.54 |   |
| Long-term                debt                        |                       |   |                         |   |                      |   |   |   |   |   |   |   | 200,000 |   | 3,020 |   | 6.12 |   |
| Total                deposits and interest-bearing   |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                                          | 28,696,670                 |   | 202,533                      |   | 2.86                      |   | 27,262,046 |   | 174,387 |   | 2.54 |   | 22,734,113 |   | 91,579 |   | 1.63 |   |
| Noninterest-bearing                funds (net)       | 7,347,236                  |   |                         |   |                      |   | 7,075,809 |   |   |   |   |   | 5,696,570 |   |   |   |   |   |
| Total                sources to fund earning assets  | $36,043,906                |   | 202,533                      |   | 2.28                      |   | $34,337,855 |   | 174,387 |   | 2.01 |   | $28,430,683 |   | 91,579 |   | 1.31 |   |
|                                                 |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income and               |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| margin                tax-equivalent basis           |                       |   | $313,781                     |   | 3.53                      | %      |   |   | $304,682 |   | 3.52 | % |   |   | $283,009 |   | 4.04 | % |
| **Other                Balances**                    |                       |   |                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks               | $                1,286,259 |   |                         |   |                      |   | $1,304,177 |   |   |   |   |   | $                1,180,375 |   |   |   |   |   |
| Other                assets                          | 2,094,400                  |   |                         |   |                      |   | 1,945,109 |   |   |   |   |   | 1,625,412 |   |   |   |   |   |
| Total                assets                          | 39,288,182                 |   |                         |   |                      |   | 37,445,373 |   |   |   |   |   | 31,096,724 |   |   |   |   |   |
| Total                deposits                        | 35,295,835                 |   |                         |   |                      |   | 33,783,365 |   |   |   |   |   | 28,220,513 |   |   |   |   |   |
| Demand                deposits (noninterest-bearing) |  7,915,602            |   |                         |   |                      |   |  7,734,642 |   |   |   |   |   |  6,389,623 |   |   |   |   |   |
| Other                liabilities                     | 298,278                    |   |                         |   |                      |   | 282,218 |   |   |   |   |   | 256,677 |   |   |   |   |   |
| Stockholders’                equity            | 2,377,632                  |   |                         |   |                      |   | 2,166,467 |   |   |   |   |   | 1,716,311 |   |   |   |   |   |

| 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****March                31,** |   |
|                                   |   | **2006**                                                          |   | **2005** |   |
| Other                operating income: |   |                                                              |   |   |   |   |   |
| Insurance                              |   | $                                                                 | 21,944 |   | $ | 19,789 |   |
| Capital                Markets         |   |                                                              | 6,235  |   |   | 6,441 |   |
| Loan                Brokerage Fees     |   |                                                              | 1,937  |   |   | 2,759 |   |
| Other                                  |   |                                                              | 18,605 |   |   | 13,628 |   |
| Total                other             |   | $                                                                 | 48,721 |   | $ | 42,617 |   |

**Noninterest      Expense**

|                                                   |   |                                                              |   |
|--------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                   |   | **Three                Months Ended****March                31,** |   |
|                                                   |   | **2006**                                                          |   | **2005** |   |
| Other                noninterest expense:              |   |                                                              |   |   |   |
| Business                development costs              |   | $                                                                 | 8,810  |   | $ | 7,115 |   |
| Bank-card                related service charges       |   |                                                              | 12,371 |   |   | 10,914 |   |
| Professional                services/Insurance         |   |                                                              | 10,670 |   |   | 9,786 |   |
| Provision                for non-credit-related losses |   |                                                              | 7,812  |   |   | 7,672 |   |
| Other                                                  |   |                                                              | 25,362 |   |   | 18,221 |   |
| Total                other                             |   | $                                                                 | 65,025 |   | $ | 53,708 |   |

----

**Loan      and Asset Quality**

----

|                                                        |   | **March                31,****2006** |   | **December                31,****2005** |   | **September                30,****2005** |   | **June                30,****2005** |   | **March                31,****2005** |   |
|-------------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|--------|-------------------------------------|--------|--------------------------------------|--------|
| Non-accrual                loans:                           |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |
| Commercial                                                  |   | $                                    | 16,975 |                                    | $      | 16,712                                   |   | $                                   | 16,926 |                                 | $      | 20,467 |   | $ | 18,376 |   |
| Consumer                                                    |   |                                 | 9,285  |                                    |   | 8,834                                    |   |                                | 8,559  |                                 |   | 8,641 |   |   | 8,723 |   |
| Real                estate:                                 |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Construction                                                |   |                                 | 1,726  |                                    |   | 1,763                                    |   |                                | 1,882  |                                 |   | 178 |   |   | 178 |   |
| Mortgage                                                    |   |                                 | 2,096  |                                    |   | 4,329                                    |   |                                | 3,353  |                                 |   | 3,086 |   |   | 1,290 |   |
| Total                non-accrual loans                      |   |                                 | 30,082 |                                    |   | 31,638                                   |   |                                | 30,720 |                                 |   | 32,372 |   |   | 28,567 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Restructured                loans:                          |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Commercial                                                  |   |                                 | 3,037  |                                    |   | 3,133                                    |   |                                | 3,230  |                                 |   | 3,326 |   |   | 3,422 |   |
| Total                restructured loans                     |   |                                 | 3,037  |                                    |   | 3,133                                    |   |                                | 3,230  |                                 |   | 3,326 |   |   | 3,422 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing loans                   |   |                                 | 33,119 |                                    |   | 34,771                                   |   |                                | 33,950 |                                 |   | 35,698 |   |   | 31,989 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Other                real estate                            |   |                                 | 435    |                                    |   | 279                                      |   |                                | 310    |                                 |   | 349 |   |   | 777 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets                  |   |                                 | 33,554 |                                    |   | 35,050                                   |   |                                | 34,260 |                                 |   | 36,047 |   |   | 32,766 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Loans                past due 90 days or more               |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| and                still accruing                           |   |                                 | 332    |                                    |   | 248                                      |   |                                | 177    |                                 |   | 165 |   |   | 233 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and              |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| loans                past due 90 days or more               |   | $                                    | 33,886 |                                    | $      | 35,298                                   |   | $                                   | 34,437 |                                 | $      | 36,212 |   | $ | 32,999 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing loans as a              |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end loans         |   |                                 | 0.25   | %                                       |   | 0.27                                     | %      |                                | 0.30   | %                                    |   | 0.33 | % |   | 0.32 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets as a             |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end assets        |   |                                 | 0.08   | %                                       |   | 0.09                                     | %      |                                | 0.09   | %                                    |   | 0.11 | % |   | 0.10 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and loans        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| past                due 90 days or more as a                |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end assets        |   |                                 | 0.08   | %                                       |   | 0.09                                     | %      |                                | 0.09   | %                                    |   | 0.11 | % |   | 0.10 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage  |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| of                total non-performing loans                |   |                                 | 432    | %                                       |   | 407                                      | %      |                                | 409    | %                                    |   | 396 | % |   | 435 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage  |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| of                total period-end loans                    |   |                                 | 1.06   | %                                       |   | 1.12                                     | %      |                                | 1.23   | %                                    |   | 1.32 | % |   | 1.40 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and loans        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| past                due 90 days or more as a                |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of stockholders’ equity and |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| allowance                for loan losses                    |   |                                 | 1      | %                                       |   | 1                                        | %      |                                | 2      | %                                    |   | 2 | % |   | 2 | % |

----

|                                                                                                                                                                                                                                 |   | **Three                Months Ended** |    | **Year                Ended**   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|---------------------------------|--------|
|                                                                                                                                                                                                                                 |   | **March                31,**          |    | **December                31,** |   |
|                                                                                                                                                                                                                                 |   | **2006**                              |    | **2005**                        |   | **2005** |   |
| Balance                at beginning of period                                                                                                                                                                                        |   | $                                     | 141,464 |                            | $      | 135,620 |   | $ | 135,620 |   |
| Provisions                charged to operating expenses                                                                                                                                                                              |   |                                  | 6,501   |                            |   | 6,250 |   |   | 19,150 |   |
|                                                                                                                                                                                                                                 |   |                                  | 147,965 |                            |   | 141,870 |   |   | 154,770 |   |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Recoveries                on loans previously charged-off:                                                                                                                                                                           |   |                                  |    |                            |   |   |   |   |   |   |
| Commercial                                                                                                                                                                                                                           |   |                                  | 533     |                            |   | 651 |   |   | 2,546 |   |
| Consumer                                                                                                                                                                                                                             |   |                                  | 511     |                            |   | 833 |   |   | 2,566 |   |
| Commercial                real estate                                                                                                                                                                                                |   |                                  | 1       |                            |   | 50 |   |   | 80 |   |
| Total                recoveries                                                                                                                                                                                                      |   |                                  | 1,045   |                            |   | 1,534 |   |   | 5,192 |   |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Loans                charged-off:                                                                                                                                                                                                    |   |                                  |    |                            |   |   |   |   |   |   |
| Commercial                                                                                                                                                                                                                           |   |                                  | (4,186  | )                               |   | (2,602 | ) |   | (13,944 | ) |
| Consumer                                                                                                                                                                                                                             |   |                                  | (1,712  | )                               |   | (1,487 | ) |   | (5,912 | ) |
| Commercial                real estate                                                                                                                                                                                                |   |                                  | (199    | )                               |   | (26 | ) |   | (1,136 | ) |
| Total                charge-offs                                                                                                                                                                                                     |   |                                  | (6,097  | )                               |   | (4,115 | ) |   | (20,992 | ) |
| Net                charge-offs                                                                                                                                                                                                       |   |                                  | (5,052  | )                               |   | (2,581 | ) |   | (15,800 | ) |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Allowance                for credit loss acquired bank                                                                                                                                                                               |   |                                  |    |                            |   |   |   |   | 2,494 |   |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Balance                at end of period                                                                                                                                                                                              |   | $                                     | 142,913 |                            | $      | 139,289 |   | $ | 141,464 |   |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Net                charge-offs as a percentage of average loans outstanding                                                                                                                                                          |   |                                  | 0.16    | %                               |   | 0.11 | % |   | 0.15 | % |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Net                Reserve Additions                                                                                                                                                                                                 |   | $                                     | 1,449   |                            | $      | 3,669 |   | $ | 5,844 |   |
| Components:                                                                                                                                                                                                                          |   |                                  |    |                            |   |   |   |   |   |   |
| Allowance                for loan and lease losses                                                                                                                                                                                   |   | $                                     | 135,745 |                            | $      | 139,289 |   | $ | 133,664 |   |
| Allowance                for unfunded credit commitments (1)                                                                                                                                                                         |   |                                  | 7,168   |                            |   |   |   |   | 7,800 |   |
| Total                allowance for credit losses                                                                                                                                                                                     |   | $                                     | 142,913 |                            | $      | 139,289 |   | $ | 141,464 |   |
|                                                                                                                                                                                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| (1)                During the fourth quarter of 2005, the allowance for unfunded credit                commitments was reclassified from the allowance for loan and lease                losses                to other liabilities. |

----

**Forward-Looking      Statements**

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

----

**Item      4.****Controls      and Procedures**

**PART      II.** **OTHER      INFORMATION**

**Item      2.**
**Purchases      of Certain Equity Securities by the Issuer and Affiliated      Purchasers**

|                                               |  (a)                                                       |  (b)                                               |  (c)                                                                                                                  |  (d)                                                                                                                |
|----------------------------------------------------|-----------------------------------------------------------------|---------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|   Period                            |  Total                Number of Shares Purchased (1)  |  Average                Price Paid per Share  |  Total                Number of Shares Purchased as Part of Publicly Announced Plans or                Programs  |  Maximum                Number of Shares that May Yet Be Purchased Under the Plans or                Programs  |
|  January                1 to January 31, 2006 |  109,363                                                   |  $34.41                                            |                                                                                                                       |                                                                                                                     |
| February                1 to February 28, 2006     |                                                            |                                                    |                                                                                                                       |                                                                                                                     |
| March                1 to March 31, 2006           |                                                            |                                                    |                                                                                                                       |                                                                                                                     |
| Total                                              | 109,363                                                         | $34.41                                                  |                                                                                                                       |                                                                                                                     |

----

**Item      6.** **Exhibits**

| Exhibit                10.40 * | Description                of Directors and Named Executive Officer’s                compensation.                                                                                                                                                       |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                                                                                                                                           |
| Exhibit                31.1    | Certification                of the Company’s Chief Executive Officer                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                             |
|                           |                                                                                                                                                                                                                                                           |
| Exhibit                31.2    | Certification                of the Company’s Chief Financial Officer                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                             |
|                           |                                                                                                                                                                                                                                                           |
| Exhibit                32      | Certification                of the Company’s Chief Executive Officer and                Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |

----

**SIGNATURES**

|                       |   | COMMERCE                BANCORP, INC.                       |
|----------------------------|--------|-------------------------------------------------------------|
|                       |   | (Registrant)                                                |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
|                       |   |                                                        |
| MAY                9, 2006 |   | /s/                DOUGLAS J. PAULS                         |
| (Date)                     |   | DOUGLAS                J. PAULS                             |
|                       |   | EXECUTIVE                VICE PRESIDENT AND                 |
|                       |   | CHIEF                FINANCIAL OFFICER                      |
|                       |   | (PRINCIPAL                FINANCIAL AND ACCOUNTING OFFICER) |

----