**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, 2007                                                          |

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

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

| Commerce                Atrium, 1701 Route 70 East, Cherry Hill, New Jersey                08034-5400 |
|-------------------------------------------------------------------------------------------------------|
| (Address                of Principal Executive Offices) (Zip Code)                                    |
|                                                                                                  |
| (856)                751-9000                                                                         |
| (Registrant’s                telephone number, including area                code)              |

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

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

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

| Common                Stock     | 191,373,248                                                                 |
|---------------------------------|-----------------------------------------------------------------------------|
| (Title                of Class) | (No.                of Shares Outstanding as                of May 1, 2007) |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

|                    |                                                                                                      | Page   |
|-------------------------|-----------------------------------------------------------------------------------------------------------|--------|
| PART                I.  | FINANCIAL                INFORMATION                                                                      |   |
|                    |                                                                                                      |   |
| Item                1.  | Financial                Statements                                                                       |   |
|                    |                                                                                                      |   |
|                    | Consolidated                Balance Sheets (unaudited)                                                    |   |
|                    | March                31, 2007 and December 31, 2006                                                       | 1      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statements of Income                (unaudited)                               |   |
|                    | Three                months ended March 31, 2007 and                                                      |   |
|                    | March                31, 2006                                                                             | 2      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statements of Cash Flows                (unaudited)                           |   |
|                    | Three                months ended March 31, 2007 and March 31,                2006                        | 3      |
|                    |                                                                                                      |   |
|                    | Consolidated                Statement of Changes in Stockholders’ Equity                (unaudited) |   |
|                    | Three                months ended March 31, 2007                                                          | 4      |
|                    |                                                                                                      |   |
|                    | Notes                to Consolidated Financial Statements                (unaudited)                      | 5      |
|                    |                                                                                                      |   |
| Item                2.  | Management’s                Discussion and Analysis of                Financial                     |   |
|                    | Condition                and Results of Operation                                                         | 8      |
|                    |                                                                                                      |   |
| Item                3.  | Quantitative                and Qualitative Disclosures About Market                Risk                  | 22     |
|                    |                                                                                                      |   |
| Item                4.  | Controls                and Procedures                                                                    | 22     |
|                    |                                                                                                      |   |
| PART                II. | OTHER                INFORMATION                                                                          |   |
|                    |                                                                                                      |   |
| Item                1.  | Legal                Proceedings                                                                          | 23     |
|                    |                                                                                                      |   |
| Item                2.  | Unregistered                Sales of Equity Securities and Use of                Proceeds                 | 23     |
|                    |                                                                                                      |   |
| Item                6.  | Exhibits                                                                                                  | 24     |
|                    |                                                                                                      |   |

----

**PART1.**
**FINANCIAL      INFORMATION**

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

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

|                    |                                                               |   |                         |   |                            |       |
|-------------------------|--------------------------------------------------------------------|--------|------------------------------|--------|---------------------------------|------------|
|                    |                                                               |   | **March                31,** |   | **December                31,** |       |
|                    | (dollars                in thousands)                              |   | **2007**                     |   |                            | **2006**   |   |
| **Assets**              | Cash                and due from banks                             | **$**  | **1,237,008**                |   | $                               | 1,207,390  |   |
|                    | Federal                funds sold                                  |   | **506,400**                  |   |                            | 9,300      |   |
|                    | Cash                and cash equivalents                           |   | **1,743,408**                |   |                            | 1,216,690  |   |
|                    | Loans                held for sale                                 |   | **48,447**                   |   |                            | 52,741     |   |
|                    | Trading                securities                                  |   | **156,241**                  |   |                            | 106,007    |   |
|                    | Securities                available for sale                       |   | **12,333,705**               |   |                            | 11,098,113 |   |
|                    | Securities                held to maturity                         |   | **14,811,708**               |   |                            | 14,884,982 |   |
|                    | (market                value 03/07-$14,587,667; 12/06-$14,617,765) |   |                         |   |                            |       |   |
|                    | Loans                                                              |   | **15,934,006**               |   |                            | 15,607,049 |   |
|                    | Less                allowance for loan and lease losses            |   | **155,912**                  |   |                            | 152,053    |   |
|                    |                                                               |   | **15,778,094**               |   |                            | 15,454,996 |   |
|                    | Bank                premises and equipment, net                    |   | **1,801,998**                |   |                            | 1,753,670  |   |
|                    | Goodwill                and other intangible assets                |   | **145,923**                  |   |                            | 141,631    |   |
|                    | Other                assets                                        |   | **552,108**                  |   |                            | 562,986    |   |
|                    | Total                assets                                        | **$**  | **47,371,632**               |   | $                               | 45,271,816 |   |
|                    |                                                               |   |                         |   |                            |       |   |
| **Liabilities**         | Deposits:                                                          |   |                         |   |                            |       |   |
|                    | Demand:                                                            |   |                         |   |                            |       |   |
|                    | Noninterest-bearing                                                | **$**  | **9,321,584**                |   | $                               | 8,936,824  |   |
|                    | Interest-bearing                                                   |   | **18,682,011**               |   |                            | 16,853,457 |   |
|                    | Savings                                                            |   | **10,580,371**               |   |                            | 10,459,306 |   |
|                    | Time                                                               |   | **5,391,900**                |   |                            | 5,038,624  |   |
|                    | Total                deposits                                      |   | **43,975,866**               |   |                            | 41,288,211 |   |
|                    | Other                borrowed money                                |   | **122,725**                  |   |                            | 777,404    |   |
|                    | Other                liabilities                                   |   | **391,848**                  |   |                            | 405,103    |   |
|                    | Total                liabilities                                   |   | **44,490,439**               |   |                            | 42,470,718 |   |
|                    |                                                               |   |                         |   |                            |       |   |
| **Stockholders’** | Common                stock, 192,751,235 shares                    |   |                         |   |                            |       |   |
| **Equity**              | issued                (189,738,423 shares in 2006)                 |   | **192,751**                  |   |                            | 189,738    |   |
|                    | Capital                in excess of par value                      |   | **1,779,523**                |   |                            | 1,744,691  |   |
|                    | Retained                earnings                                   |   | **1,007,299**                |   |                            | 958,770    |   |
|                    | Accumulated                other comprehensive loss                |   | **(49,364**                  | **)**  |                            | (65,240    | ) |
|                    |                                                               |   | **2,930,209**                |   |                            | 2,827,959  |   |
|                    |                                                               |   |                         |   |                            |       |   |
|                    | Less                treasury stock, at cost, 1,874,923 shares      |   |                         |   |                            |       |   |
|                    | (1,231,081                shares in 2006)                          |   | **49,016**                   |   |                            | 26,861     |   |
|                    | Total                stockholders’ equity                    |   | **2,881,193**                |   |                            | 2,801,098  |   |
|                    | Total                liabilities and stockholders’ equity    | **$**  | **47,371,632**               |   | $                               | 45,271,816 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF INCOME**

|            |                                                                 |                                                              |        |
|-----------------|----------------------------------------------------------------------|-------------------------------------------------------------------|-------------|
|            |                                                                 | **Three                Months Ended****March                31,** |        |
|            | (dollars                in thousands, except per share amounts)      |                                                              | **2007**    |   |   | **2006** |   |
| **Interest**    | Interest                and fees on loans                            | **$**                                                             | **270,770** |   | $ | 214,974 |   |
| **income**      | Interest                on investments                               |                                                              | **355,308** |   |   | 295,076 |   |
|            | Other                interest                                        |                                                              | **5,733**   |   |   | 413 |   |
|            | Total                interest income                                 |                                                              | **631,811** |   |   | 510,463 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Interest**    | Interest                on deposits:                                 |                                                              |        |   |   |   |   |
| **expense**     | Demand                                                               |                                                              | **163,742** |   |   | 97,940 |   |
|            | Savings                                                              |                                                              | **72,118**  |   |   | 54,004 |   |
|            | Time                                                                 |                                                              | **58,863**  |   |   | 36,261 |   |
|            | Total                interest on deposits                            |                                                              | **294,723** |   |   | 188,205 |   |
|            | Interest                on other borrowed money                      |                                                              | **4,132**   |   |   | 14,328 |   |
|            | Total                interest expense                                |                                                              | **298,855** |   |   | 202,533 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Net                interest income                                   |                                                              | **332,956** |   |   | 307,930 |   |
|            | Provision                for credit losses                           |                                                              | **10,000**  |   |   | 6,501 |   |
|            | Net                interest income after provision for credit losses |                                                              | **322,956** |   |   | 301,429 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Noninterest** | Deposit                charges and service fees                      |                                                              | **105,206** |   |   | 82,281 |   |
| **income**      | Other                operating income                                |                                                              | **51,366**  |   |   | 48,721 |   |
|            | Net                investment securities gains                       |                                                              | **2,879**   |   |   |   |   |
|            | Total                noninterest income                              |                                                              | **159,451** |   |   | 131,002 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
| **Noninterest** | Salaries                and benefits                                 |                                                              | **167,759** |   |   | 144,825 |   |
| **expense**     | Occupancy                                                            |                                                              | **58,072**  |   |   | 46,240 |   |
|            | Furniture                and equipment                               |                                                              | **42,852**  |   |   | 35,960 |   |
|            | Office                                                               |                                                              | **16,303**  |   |   | 15,473 |   |
|            | Marketing                                                            |                                                              | **10,433**  |   |   | 7,811 |   |
|            | Other                                                                |                                                              | **67,366**  |   |   | 65,025 |   |
|            | Total                noninterest expenses                            |                                                              | **362,785** |   |   | 315,334 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Income                before income taxes                            |                                                              | **119,622** |   |   | 117,097 |   |
|            | Provision                for federal and state income taxes          |                                                              | **41,686**  |   |   | 39,800 |   |
|            | Net                income                                            | **$**                                                             | **77,936**  |   | $ | 77,297 |   |
|            |                                                                 |                                                              |        |   |   |   |   |
|            | Net                income per common and common equivalent share:    |                                                              |        |   |   |   |   |
|            | Basic                                                                | **$**                                                             | **0.41**    |   | $ | 0.43 |   |
|            | Diluted                                                              | **$**                                                             | **0.40**    |   | $ | 0.41 |   |
|            | Average                common and common equivalent                  |                                                              |        |   |   |   |   |
|            | shares                outstanding:                                   |                                                              |        |   |   |   |   |
|            | Basic                                                                |                                                              | **189,278** |   |   | 180,917 |   |
|            | Diluted                                                              |                                                              | **196,505** |   |   | 189,867 |   |
|            | Dividends                declared, common stock                      | **$**                                                             | **0.13**    |   | $ | 0.12 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|           |                                                                                                                                |   |                                                              |   |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|           |                                                                                                                                |   | **Three                Months Ended****March                31,** |   |
|           | (dollars                in thousands)                                                                                               |   | **2007**                                                          |   |   | **2006** |   |
| **Operating**  | Net                income                                                                                                           | **$**  | **77,936**                                                        |   | $ | 77,297 |   |
| **activities** | Adjustments                to reconcile net income to net cash                                                                      |   |                                                              |   |   |   |   |
|           | provided                by operating activities:                                                                                    |   |                                                              |   |   |   |   |
|           | Provision                for credit losses                                                                                          |   | **10,000**                                                        |   |   | 6,501 |   |
|           | Provision                for depreciation, amortization and accretion                                                               |   | **40,805**                                                        |   |   | 37,553 |   |
|           | Stock-based                compensation expense                                                                                     |   | **2,352**                                                         |   |   | 403 |   |
|           | Net                gain on sales of securities                                                                                      |   | **(2,879**                                                        | **)**  |   |   |   |
|           | Proceeds                from sales of loans held for sale                                                                           |   | **222,900**                                                       |   |   | 114,892 |   |
|           | Originations                of loans held for sale                                                                                  |   | **(218,606**                                                      | **)**  |   | (122,150 | ) |
|           | Net                (increase) decrease in trading securities                                                                        |   | **(50,234**                                                       | **)**  |   | 19,548 |   |
|           | Decrease                in other assets, net                                                                                        |   | **3,705**                                                         |   |   | 11,373 |   |
|           | Decrease                in other liabilities                                                                                        |   | **(18,175**                                                       | **)**  |   | (46,537 | ) |
|           | Net                cash provided by operating activities                                                                            |   | **67,804**                                                        |   |   | 98,880 |   |
|           |                                                                                                                                |   |                                                              |   |   |   |   |
| **Investing**  | Proceeds                from the sales of securities available for sale                                                             |   | **457,890**                                                       |   |   |   |   |
| **activities** | Proceeds                from the maturity of securities available for sale                                                          |   | **827,743**                                                       |   |   | 447,545 |   |
|           | Proceeds                from the maturity of securities held to maturity                                                            |   | **697,774**                                                       |   |   | 446,707 |   |
|           | Purchase                of securities available for sale                                                                            |   | **(2,493,218**                                                    | **)**  |   | (1,276,562 | ) |
|           | Purchase                of securities held to maturity                                                                              |   | **(626,614**                                                      | **)**  |   | (1,150,822 | ) |
|           | Net                increase in loans                                                                                                |   | **(333,071**                                                      | **)**  |   | (826,378 | ) |
|           | Capital                expenditures                                                                                                 |   | **(86,094**                                                       | **)**  |   | (59,081 | ) |
|           | Net                cash used by investing activities                                                                                |   | **(1,555,590**                                                    | **)**  |   | (2,418,591 | ) |
|           |                                                                                                                                |   |                                                              |   |   |   |   |
| **Financing**  | Net                increase in demand and savings deposits                                                                          |   | **2,334,379**                                                     |   |   | 2,072,460 |   |
| **activities** | Net                increase in time deposits                                                                                        |   | **353,276**                                                       |   |   | 312,934 |   |
|           | Net                decrease in other borrowed money                                                                                 |   | **(654,679**                                                      | **)**  |   | (236,690 | ) |
|           | Dividends                paid                                                                                                       |   | **(24,511**                                                       | **)**  |   | (21,479 | ) |
|           | Proceeds                from issuance of common stock under                   dividend reinvestment and other stock plans |   |  **6,039**                                                   |   |   |  87,582 |   |
|           | Other                                                                                                                               |   |                                                              |   |   | 33 |   |
|           | Net                cash provided by financing activities                                                                            |   | **2,014,504**                                                     |   |   | 2,214,840 |   |
|           |                                                                                                                                |   |                                                              |   |   |   |   |
|           | Increase                (decrease) in cash and cash equivalents                                                                     |   | **526,718**                                                       |   |   | (104,871 | ) |
|           | Cash                and cash equivalents at beginning of year                                                                       |   | **1,216,690**                                                     |   |   | 1,296,764 |   |
|           | Cash                and cash equivalents at end of period                                                                           | **$**  | **1,743,408**                                                     |   | $ | 1,191,893 |   |
|           |                                                                                                                                |   |                                                              |   |   |   |   |
|           | Supplemental                disclosures of cash flow information:                                                                   |   |                                                              |   |   |   |   |
|           | Cash                paid during the period for:                                                                                     |   |                                                              |   |   |   |   |
|           | Interest                                                                                                                            | **$**  | **286,784**                                                       |   | $ | 201,341 |   |
|           | Income                taxes                                                                                                         |   | **839**                                                           |   |   | 573 |   |
|           | Other                noncash activities:                                                                                            |   |                                                              |   |   |   |   |
|           | Fair                value of noncash assets and liabilities acquired:                                                               |   |                                                              |   |   |   |   |
|           | Assets                acquired                                                                                                      |   | **75**                                                            |   |   | 680 |   |
|           | Liabilities                assumed                                                                                                  |   | **24**                                                            |   |   | 10,076 |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

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

| Three                months ended March 31, 2007                      |         |   |                          |   |           |   |         |   |              |   |           |   |
|-----------------------------------------------------------------------|--------------|--------|-------------------------------|--------|----------------|--------|--------------|--------|-------------------|--------|----------------|--------|
| *(in                thousands)*                                       |         |   |                          |   |           |   |         |   |              |   |           |   |
|                                                                  |         |   | **Capital                in** |   |           |   |         |   | **Accumulated**   |   |           |   |
|                                                                  |         |   | **Excess                of**  |   |           |   |         |   | **Other**         |   |           |   |
|                                                                  | **Common**   |   | **Par**                       |   | **Retained**   |   | **Treasury** |   | **Comprehensive** |   |           |   |
|                                                                  | **Stock**    |   | **Value**                     |   | **Earnings**   |   | **Stock**    |   | **Loss**          |   | **Total**      |   |
|                                                                  |         |   |                          |   |           |   |         |   |              |   |           |   |
| **Balances                at December 31, 2006**                      | **$189,738** |   | **$1,744,691**                |   | **$958,770**   |   | **$(26,861** | **)**  | **$(65,240**      | **)**  | **$2,801,098** |   |
| Net                income                                             |         |   |                          |   | 77,936         |   |         |   |              |   | 77,936         |   |
| Other                comprehensive loss, net of tax                   |         |   |                          |   |           |   |         |   |              |   |           |   |
| Unrealized                gain on securities (pre-tax $27,817)        |         |   |                          |   |           |   |         |   | 17,438            |   | 17,438         |   |
| Reclassification                adjustment (pre-tax $2,403)           |         |   |                          |   |           |   |         |   | (1,562            | )      | (1,562         | )      |
| Other                comprehensive loss                               |         |   |                          |   |           |   |         |   |              |   | 15,876         |   |
| Total                comprehensive income                             |         |   |                          |   |           |   |         |   |              |   | 93,812         |   |
| Cash                dividends declared                                |         |   |                          |   | (24,821        | )      |         |   |              |   | (24,821        | )      |
| Shares                issued under dividend reinvestment              |         |   |                          |   |           |   |         |   |              |   |           |   |
| and                compensation and benefit plans (2,787 shares)      | 2,787        |   | 25,406                        |   |           |   |         |   |              |   | 28,193         |   |
| Acquisition                of insurance brokerage agency (226 shares) | 226          |   | 7,074                         |   |           |   |         |   |              |   | 7,300          |   |
| Other                                                                 |         |   | 2,352                         |   | (4,586         | )      | (22,155      | )      |              |   | (24,389        | )      |
| **Balances                at March 31, 2007**                         | **$192,751** |   | **$1,779,523**                |   | **$1,007,299** |   | **$(49,016** | **)**  | **$(49,364**      | **)**  | **$2,881,193** |   |

----

**COMMERCE      BANCORP, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

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

----

**C.**
**Commitments**

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

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

|                                               |                                                                   |      |                                                                   |        |
|----------------------------------------------------|------------------------------------------------------------------------|-----------|------------------------------------------------------------------------|-------------|
|                                               | **Three                Months Ended****March                31, 2007** |      | **Three                Months Ended****March                31, 2006** |        |
|                                               | **Community**                                                          |      |                                                                   | **Parent/** |   |   |   |   | **Community** |   |   | **Parent/** |   |   |   |   |
|                                               |                                                                   | **Banks** |                                                                   |        | **Other** |   |   | **Total** |   |   | **Banks** |   |   | **Other** |   |   | **Total** |   |
| Net                interest income                 | $                                                                      | 331,917   |                                                                   | $           | 1,039 |   | $ | 332,956 |   | $ | 307,057 |   | $ | 873 |   | $ | 307,930 |   |
| Provision                for loan losses           |                                                                   | 10,000    |                                                                   |        |   |   |   | 10,000 |   |   | 6,501 |   |   |   |   |   | 6,501 |   |
| Net                interest income after provision |                                                                   | 321,917   |                                                                   |        | 1,039 |   |   | 322,956 |   |   | 300,556 |   |   | 873 |   |   | 301,429 |   |
| Noninterest                income                  |                                                                   | 130,315   |                                                                   |        | 29,136 |   |   | 159,451 |   |   | 100,284 |   |   | 30,718 |   |   | 131,002 |   |
| Noninterest                expense                 |                                                                   | 334,875   |                                                                   |        | 27,910 |   |   | 362,785 |   |   | 289,884 |   |   | 25,450 |   |   | 315,334 |   |
| Income                before income taxes          |                                                                   | 117,357   |                                                                   |        | 2,265 |   |   | 119,622 |   |   | 110,956 |   |   | 6,141 |   |   | 117,097 |   |
| Income                tax expense                  |                                                                   | 40,661    |                                                                   |        | 1,025 |   |   | 41,686 |   |   | 37,499 |   |   | 2,301 |   |   | 39,800 |   |
| Net                income                          | $                                                                      | 76,696    |                                                                   | $           | 1,240 |   | $ | 77,936 |   | $ | 73,457 |   | $ | 3,840 |   | $ | 77,297 |   |
|                                               |                                                                   |      |                                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average                assets (in millions)        | $                                                                      | 42,618    |                                                                   | $           | 3,186 |   | $ | 45,804 |   | $ | 36,597 |   | $ | 2,691 |   | $ | 39,288 |   |

----

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

|                                                                         |                                                              |     |
|------------------------------------------------------------------------------|-------------------------------------------------------------------|----------|
|                                                                         | **Three                Months Ended****March                31,** |     |
|                                                                         |                                                              | **2007** |   |   | **2006** |   |
|                                                                         |                                                              |     |   |   |   |   |
| **Basic:**                                                                   |                                                              |     |   |   |   |   |
| Net                income available to common shareholders - basic           | $                                                                 | 77,936   |   | $ | 77,297 |   |
| Average                common shares outstanding - basic                     |                                                              | 189,278  |   |   | 180,917 |   |
| Net                income per common share - basic                           | $                                                                 | 0.41     |   | $ | 0.43 |   |
|                                                                         |                                                              |     |   |   |   |   |
| **Diluted:**                                                                 |                                                              |     |   |   |   |   |
| Net                income available to common shareholders - diluted         | $                                                                 | 77,936   |   | $ | 77,297 |   |
|                                                                         |                                                              |     |   |   |   |   |
|                                                                         |                                                              |     |   |   |   |   |
| Average                common shares outstanding                             |                                                              | 189,278  |   |   | 180,917 |   |
| Additional                shares considered in diluted computation assuming: |                                                              |     |   |   |   |   |
| Exercise                of stock options                                     |                                                              | 7,227    |   |   | 8,950 |   |
| Average                common shares outstanding - diluted                   |                                                              | 196,505  |   |   | 189,867 |   |
|                                                                         |                                                              |     |   |   |   |   |
| Net                income per common share - diluted                         | $                                                                 | 0.40     |   | $ | 0.41 |   |
|                                                                         |                                                              |     |   |   |   |   |

| **G.  ** | **New                Accounting Pronouncements** |
|--------------------|--------------------------------------------------|

----

**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, 2007:**        |   |   |      |                                     |   |   |   |   |   |   |   |   |   |
| Company                                   |   |   |      |                                     |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |   |      |                                     |   |   |   |   |   |   |   |   |   |
| Tier                1                     |   | $      | 2,784,634 |                                     |   | 11.63 | %     | $ | 957,928 |   |   | 4.00 | %     | $ | 1,436,892 |   |   | 6.00 | % |
| Total                capital              |   |   | 2,953,572 |                                     |   | 12.33 |   |   | 1,915,857 |   |   | 8.00 |   |   | 2,394,821 |   |   | 10.00 |   |
| Leverage                ratio             |   |   | 2,784,634 |                                     |   | 6.09 |   |   | 1,829,702 |   |   | 4.00 |   |   | 2,287,128 |   |   | 5.00 |   |
| Commerce                N.A.              |   |   |      |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk                based capital ratios: |   |   |      |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                     |   | $      | 2,457,367 |                                     |   | 11.17 | % | $ | 879,619 |   |   | 4.00 | % | $ | 1,319,428 |   |   | 6.00 | % |
| Total                capital              |   |   | 2,603,385 |                                     |   | 11.84 |   |   | 1,759,237 |   |   | 8.00 |   |   | 2,199,047 |   |   | 10.00 |   |
| Leverage                ratio             |   |   | 2,457,367 |                                     |   | 5.91 |   |   | 1,663,461 |   |   | 4.00 |   |   | 2,079,327 |   |   | 5.00 |   |
|                                      |   |   |      |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                      |   |   |      |    |   | 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 |   |

**Deposits**

|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |
|------------|--------|--------------------------------------|------------|----------------------------------|--------|--------------------------------------|--------|----------------------------------|------------|---------------------------------------|--------|
|       |   | **March                31,****2007** |       | **%                of****Total** |   | **March                31,****2006** |   | **%                of****Total** |       | **Annual****Growth                %** |   |
|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |
| Consumer   |   | $                                    | 17,906,912 |                             |   | 42                                   | %      | $                                | 15,643,435 |                                  |   | 44 | % |   | 14 | % |
|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |   |   |   |   |   |
| Commercial |   |                                 | 16,895,083 |                             |   | 40                                   |   |                             | 13,641,723 |                                  |   | 38 |   |   | 24 |   |
|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |   |   |   |   |   |
| Government |   |                                 | 7,896,701  |                             |   | 18                                   |   |                             | 6,627,282  |                                  |   | 18 |   |   | 19 |   |
|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |   |   |   |   |   |
| Total      |   | $                                    | 42,698,696 |                             |   | 100                                  | %      | $                                | 35,912,440 |                                  |   | 100 | % |   | 19 | % |
|       |   |                                 |       |                             |   |                                 |   |                             |       |                                  |   |   |   |   |   |   |

**Interest      Rate Sensitivity and Liquidity**

----

|                           |   |                                  |   |                         |   |
|--------------------------------|--------|---------------------------------------|--------|------------------------------|--------|
|                           |   | **Basis                Point Change** |   |
|                           |   | **Plus                200**           |   | **Minus                100** |   |
| March                31, 2007: |   |                                  |   |                         |   |
| Twelve                Months   |   |                                  | (8.5   | )%                           |   | 2.9 | % |
|                           |   |                                  |   |                         |   |   |   |
| March                31, 2006: |   |                                  |   |                         |   |   |   |
| Twelve                Months   |   |                                  | (3.7   | )%                           |   | 1.4 | % |
|                           |   |                                  |   |                         |   |   |   |

----

|                                  |   |                            |   |                         |   |
|---------------------------------------|--------|---------------------------------|--------|------------------------------|--------|
|                                  |   | **Market                Value** |   |                         |   |
|                                  |   | **of                Equity**    |   | **Per                Share** |   |
|                                  |   |                            |   |                         |   |
| Plus                200 basis points  |   | $                               | 9,551  |                         | $      | 49.55 |   |
|                                  |   |                            |   |                         |   |   |   |
| Current                Rate           |   | $                               | 10,154 |                         | $      | 52.68 |   |
|                                  |   |                            |   |                         |   |   |   |
| Minus                100 basis points |   | $                               | 9,154  |                         | $      | 47.49 |   |

**Short-Term      Borrowings**

**Interest      Earning Assets**

----

**Loans**

|                                              |   | **March                31,**  |       |  **December                31,** |   |
|---------------------------------------------------|--------|-------------------------------|------------|---------------------------------------|--------|
|                                              |   | **2007**                      |       |  **2006**                        |   |
|                                              |   | (in                thousands) |       |
| Commercial:                                       |   |                          |       |                             |   |
| Term                                              |   | $                             | 2,432,065  |                                  | $      | 2,392,889 |   |
| Line                of credit                     |   |                          | 1,790,734  |                                  |   | 1,843,545 |   |
|                                              |   |                          | 4,222,799  |                                  |   | 4,236,434 |   |
|                                              |   |                          |       |                                  |   |   |   |
| Owner-occupied                                    |   |                          | 3,007,211  |                                  |   | 2,845,791 |   |
|                                              |   |                          | 7,230,010  |                                  |   | 7,082,225 |   |
|                                              |   |                          |       |                                  |   |   |   |
| Consumer:                                         |   |                          |       |                                  |   |   |   |
| Mortgages                (1-4 family residential) |   |                          | 2,256,222  |                                  |   | 2,235,247 |   |
| Installment                                       |   |                          | 282,667    |                                  |   | 287,151 |   |
| Home                equity                        |   |                          | 3,119,327  |                                  |   | 2,958,893 |   |
| Credit                lines                       |   |                          | 138,794    |                                  |   | 137,429 |   |
|                                              |   |                          | 5,797,010  |                                  |   | 5,618,720 |   |
| Commercial                real estate:            |   |                          |       |                                  |   |   |   |
| Investor                developer                 |   |                          | 2,562,842  |                                  |   | 2,625,628 |   |
| Construction                                      |   |                          | 344,144    |                                  |   | 280,476 |   |
|                                              |   |                          | 2,906,986  |                                  |   | 2,906,104 |   |
| Total                loans                        |   | $                             | 15,934,006 |                                  | $      | 15,607,049 |   |

**Investments**

----

|                                                  |   |                          |       |                       |   |       |   |
|-------------------------------------------------------|--------|-------------------------------|------------|----------------------------|--------|------------|--------|
|                                                  |   | **Available**                 |       | **Held                to** |   |       |   |
| **Product                Description**                |   | **For                Sale**   |       | **Maturity**               |   | **Total**  |   |
|                                                  |   | (in                thousands) |       |
| Mortgage-backed                Securities:            |   |                          |       |                       |   |       |   |
| Federal                Agencies Pass Through          |   |                          |       |                       |   |       |   |
|                   Certificates (AAA Rated)  |   | $                             | 1,378,225  |                       | $      | 1,981,996  |   | $ | 3,360,221 |   |
|                                                  |   |                          |       |                       |   |       |   |   |   |   |
| Collateralized                Mortgage                |   |                          |       |                       |   |       |   |   |   |   |
|                   Obligations (AAA Rated)   |   |                          | 9,951,830  |                       |   | 10,572,692 |   |   | 20,524,522 |   |
|                                                  |   |                          |       |                       |   |       |   |   |   |   |
| U.S.                Government agencies/Other         |   |                          | 1,003,650  |                       |   | 2,257,020  |   |   | 3,260,670 |   |
|                                                  |   |                          |       |                       |   |       |   |   |   |   |
|         Total |   | $                             | 12,333,705 |                       | $      | 14,811,708 |   | $ | 27,145,413 |   |
|                                                  |   |                          |       |                       |   |       |   |   |   |   |
| Duration                (in years)                    |   |                          | 2.86       |                       |   | 3.47       |   |   | 3.19 |   |
| Average                Life (in years)                |   |                          | 4.99       |                       |   | 5.18       |   |   | 5.09 |   |
| Quarterly                Average Yield                |   |                          | 5.77       | %                          |   | 5.48       | %      |   | 5.61 | % |

|                                                                  |   |                                 |       |
|-----------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                  |   | **At                March 31, 2007** |       |
|                                                                  |   |  **Amortized****Cost**          |       | **Gross****Unrealized****Gains** |   | **Gross****Unrealized****Losses** |   |  **Market****Value** |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                    | 12,309,189 |   | $ | 16,814 |   | $ | (106,474 | ) | $ | 12,219,529 |   |
| Obligations                of state and political subdivisions        |   |                                 | 54,372     |   |   | 62 |   |   | (191 | ) |   | 54,243 |   |
| Equity                securities                                      |   |                                 | 9,679      |   |   | 10,846 |   |   |   |   |   | 20,525 |   |
| Other                                                                 |   |                                 | 39,486     |   |   |   |   |   | (78 | ) |   | 39,408 |   |
| Securities                available for sale                          |   | $                                    | 12,412,726 |   | $ | 27,722 |   | $ | (106,743 | ) | $ | 12,333,705 |   |
|                                                                  |   |                                 |       |   |   |   |   |   |   |   |   |   |   |
| U.S.                Government agency and mortgage-backed obligations |   | $                                    | 14,117,958 |   | $ | 12,957 |   | $ | (238,193 | ) | $ | 13,892,722 |   |
| Obligations                of state and political subdivisions        |   |                                 | 555,253    |   |   | 1,511 |   |   | (316 | ) |   | 556,448 |   |
| Other                                                                 |   |                                 | 138,497    |   |   |   |   |   |   |   |   | 138,497 |   |
| Securities                held to maturity                            |   | $                                    | 14,811,708 |   | $ | 14,468 |   | $ | (238,509 | ) | $ | 14,587,667 |   |

----

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

**Net      Income**

----

**Net      Interest Income**

|                             |   | **Net                Interest Income** |   |
|----------------------------------|--------|----------------------------------------|--------|
| **Quarter                Ended** |   | **Volume**                             |   | **Rate** |   | **Total** |   | **%** |   |
| **March                31**      |   | **Increase**                           |   | **Change** |   | **Increase** |   | **Increase** |   |
|                             |   |                                   |   |   |   |   |   |   |   |
| **2007                vs. 2006** |   | $                                      | 50,707 |   | $ | (24,010 | ) | $ | 26,697 |   |   | 9 | % |
|                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |

----

**Average      Balances and Net Interest Income**

|                                                     |   |                      |       |
|----------------------------------------------------------|--------|---------------------------|------------|
|                                                     |   | March                2007 |       | December                2006 |   | March                2006 |   |
|                                                     |   | Average                   |       |   |   | Average |   | Average |   |   |   | Average |   | Average |   |   |   | Average |   |
| *(dollars                in thousands)*                  |   | Balance                   |       | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   |
| **Earning                Assets**                        |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                securities                     |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                  |   | $                         | 25,237,398 |   | $ | 348,630 |   |   | 5.60 | % | $ | 24,610,625 |   | $ | 335,665 |   |   | 5.41 | % | $ | 22,325,450 |   | $ | 289,739 |   |   | 5.26 | % |
| Tax-exempt                                               |   |                      | 611,725    |   |   | 8,984 |   |   | 5.96 |   |   | 586,903 |   |   | 8,596 |   |   | 5.81 |   |   | 549,794 |   |   | 6,956 |   |   | 5.13 |   |
| Trading                                                  |   |                      | 96,838     |   |   | 1,290 |   |   | 5.40 |   |   | 103,468 |   |   | 1,157 |   |   | 4.44 |   |   | 108,670 |   |   | 1,255 |   |   | 4.69 |   |
| Total                investment securities               |   |                      | 25,945,961 |   |   | 358,904 |   |   | 5.61 |   |   | 25,300,996 |   |   | 345,418 |   |   | 5.42 |   |   | 22,983,914 |   |   | 297,950 |   |   | 5.26 |   |
| Federal                funds sold                        |   |                      | 436,031    |   |   | 5,733 |   |   | 5.33 |   |   | 323,652 |   |   | 4,345 |   |   | 5.33 |   |   | 36,594 |   |   | 413 |   |   | 4.58 |   |
| Loans                                                    |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                mortgages                      |   |                      | 5,447,516  |   |   | 95,522 |   |   | 7.11 |   |   | 5,192,406 |   |   | 92,553 |   |   | 7.07 |   |   | 4,491,557 |   |   | 76,193 |   |   | 6.88 |   |
| Commercial                                               |   |                      | 4,024,615  |   |   | 77,457 |   |   | 7.81 |   |   | 3,764,466 |   |   | 74,777 |   |   | 7.88 |   |   | 3,221,996 |   |   | 59,125 |   |   | 7.44 |   |
| Consumer                                                 |   |                      | 5,711,130  |   |   | 90,500 |   |   | 6.43 |   |   | 5,533,248 |   |   | 88,846 |   |   | 6.37 |   |   | 4,817,562 |   |   | 74,127 |   |   | 6.24 |   |
| Tax-exempt                                               |   |                      | 599,202    |   |   | 11,217 |   |   | 7.59 |   |   | 538,746 |   |   | 10,104 |   |   | 7.44 |   |   | 492,283 |   |   | 8,506 |   |   | 7.01 |   |
| Total                loans                               |   |                      | 15,782,463 |   |   | 274,696 |   |   | 7.06 |   |   | 15,028,866 |   |   | 266,280 |   |   | 7.03 |   |   | 13,023,398 |   |   | 217,951 |   |   | 6.79 |   |
| Total                earning assets                      |   | $                         | 42,164,455 |   | $ | 639,333 |   |   | 6.14 | % | $ | 40,653,514 |   | $ | 616,043 |   |   | 6.01 | % | $ | 36,043,906 |   | $ | 516,314 |   |   | 5.81 | % |
| **Sources                of Funds**                      |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities              |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                                  |   | $                         | 10,448,840 |   | $ | 72,118 |   |   | 2.80 | % | $ | 10,643,889 |   | $ | 72,947 |   |   | 2.72 | % | $ | 9,712,691 |   | $ | 54,004 |   |   | 2.25 | % |
| Interest                bearing demand                   |   |                      | 17,886,395 |   |   | 163,742 |   |   | 3.71 |   |   | 16,280,718 |   |   | 146,773 |   |   | 3.58 |   |   | 13,584,371 |   |   | 97,940 |   |   | 2.92 |   |
| Time                deposits                             |   |                      | 3,999,233  |   |   | 43,284 |   |   | 4.39 |   |   | 3,723,163 |   |   | 39,578 |   |   | 4.22 |   |   | 3,131,039 |   |   | 25,850 |   |   | 3.35 |   |
| Public                funds                              |   |                      | 1,197,869  |   |   | 15,579 |   |   | 5.27 |   |   | 1,525,472 |   |   | 20,556 |   |   | 5.35 |   |   | 952,132 |   |   | 10,411 |   |   | 4.43 |   |
| Total                deposits                            |   |                      | 33,532,337 |   |   | 294,723 |   |   | 3.56 |   |   | 32,173,242 |   |   | 279,854 |   |   | 3.45 |   |   | 27,380,233 |   |   | 188,205 |   |   | 2.79 |   |
|                                                     |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                borrowed money                      |   |                      | 314,552    |   |   | 4,132 |   |   | 5.33 |   |   | 267,992 |   |   | 3,568 |   |   | 5.28 |   |   | 1,316,437 |   |   | 14,328 |   |   | 4.41 |   |
| Total                      deposits and interest-bearing |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                                              |   |                      | 33,846,889 |   |   | 298,855 |   |   | 3.58 |   |   | 32,441,234 |   |   | 283,422 |   |   | 3.47 |   |   | 28,696,670 |   |   | 202,533 |   |   | 2.86 |   |
| Noninterest-bearing                funds (net)           |   |                      | 8,317,566  |   |   |   |   |   |   |   |   | 8,212,280 |   |   |   |   |   |   |   |   | 7,347,236 |   |   |   |   |   |   |   |
| Total                sources to fund earning assets      |   | $                         | 42,164,455 |   |   | 298,855 |   |   | 2.87 |   | $ | 40,653,514 |   |   | 283,422 |   |   | 2.76 |   | $ | 36,043,906 |   |   | 202,533 |   |   | 2.28 |   |
|                                                     |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income and                   |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| margin                tax-equivalent basis               |   |                      |       |   | $ | 340,478 |   |   | 3.27 | % |   |   |   | $ | 332,621 |   |   | 3.25 | % |   |   |   | $ | 313,781 |   |   | 3.53 | % |
| **Other                Balances**                        |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks                   |   | $                         | 1,182,810  |   |   |   |   |   |   |   | $ | 1,174,831 |   |   |   |   |   |   |   | $ | 1,286,259 |   |   |   |   |   |   |   |
| Other                assets                              |   |                      | 2,613,080  |   |   |   |   |   |   |   |   | 2,451,297 |   |   |   |   |   |   |   |   | 2,094,400 |   |   |   |   |   |   |   |
| Total                assets                              |   |                      | 45,804,220 |   |   |   |   |   |   |   |   | 44,127,353 |   |   |   |   |   |   |   |   | 39,288,182 |   |   |   |   |   |   |   |
| Total                deposits                            |   |                      | 42,232,192 |   |   |   |   |   |   |   |   | 40,704,685 |   |   |   |   |   |   |   |   | 35,295,835 |   |   |   |   |   |   |   |
| Demand                deposits (noninterest-bearing)     |   |                      | 8,699,855  |   |   |   |   |   |   |   |   | 8,531,443 |   |   |   |   |   |   |   |   | 7,915,602 |   |   |   |   |   |   |   |
| Other                liabilities                         |   |                      | 390,627    |   |   |   |   |   |   |   |   | 379,025 |   |   |   |   |   |   |   |   | 298,278 |   |   |   |   |   |   |   |
| Stockholders’                equity                |   |                      | 2,866,849  |   |   |   |   |   |   |   |   | 2,775,651 |   |   |   |   |   |   |   |   | 2,377,632 |   |   |   |   |   |   |   |

| 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,** |   |
|                                    |   | **2007**                                                          |   | **2006** |   |
| Other                operating income:  |   |                                                              |   |   |   |
| Commerce                Banc Insurance  |   | $                                                                 | 22,650 |   | $ | 21,944 |   |
| Commerce                Capital Markets |   |                                                              | 7,267  |   |   | 6,235 |   |
| Operating                lease revenue  |   |                                                              | 5,254  |   |   | 3,502 |   |
| Loan                brokerage fees      |   |                                                              | 2,963  |   |   | 1,937 |   |
| Other                                   |   |                                                              | 13,232 |   |   | 15,103 |   |
| Total                other              |   | $                                                                 | 51,366 |   | $ | 48,721 |   |

**Noninterest      Expense**

|                                                   |   |                                                              |   |
|--------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                   |   | **Three                Months Ended****March                31,** |   |
|                                                   |   | **2007**                                                          |   | **2006** |   |
| Other                noninterest expense:              |   |                                                              |   |   |   |
| Business                development costs              |   | $                                                                 | 9,873  |   | $ | 9,583 |   |
| Bank-card                related service charges       |   |                                                              | 12,310 |   |   | 12,371 |   |
| Professional                services/Insurance         |   |                                                              | 14,130 |   |   | 11,316 |   |
| Provision                for non-credit-related losses |   |                                                              | 6,321  |   |   | 7,812 |   |
| Other                                                  |   |                                                              | 24,732 |   |   | 23,943 |   |
| Total                other                             |   | $                                                                 | 67,366 |   | $ | 65,025 |   |

----

**Loan      and Asset Quality**

----

|                                                        |   | **March                31,****2007** |   | **December                31,****2006** |   | **September                30,****2006** |   | **June                30,****2006** |   | **March                31,****2006** |   |
|-------------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|--------|-------------------------------------|--------|--------------------------------------|--------|
| Non-accrual                loans:                           |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |
| Commercial                                                  |   | $                                    | 20,526 |                                    | $      | 33,686                                   |   | $                                   | 33,658 |                                 | $      | 34,904 |   | $ | 16,975 |   |
| Consumer                                                    |   |                                 | 15,343 |                                    |   | 11,820                                   |   |                                | 9,325  |                                 |   | 8,927 |   |   | 9,285 |   |
| Real                estate:                                 |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Construction                                                |   |                                 | 8,575  |                                    |   | 3,531                                    |   |                                | 496    |                                 |   | 1,708 |   |   | 1,726 |   |
| Mortgage                                                    |   |                                 | 2,277  |                                    |   | 1,565                                    |   |                                | 1,828  |                                 |   | 2,523 |   |   | 2,096 |   |
| Total                non-accrual loans                      |   |                                 | 46,721 |                                    |   | 50,602                                   |   |                                | 45,307 |                                 |   | 48,062 |   |   | 30,082 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Restructured                loans:                          |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Commercial                                                  |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   | 2,941 |   |   | 3,037 |   |
| Total                restructured loans                     |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   | 2,941 |   |   | 3,037 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing loans                   |   |                                 | 46,721 |                                    |   | 50,602                                   |   |                                | 45,307 |                                 |   | 51,003 |   |   | 33,119 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Other                real estate/foreclosed assets          |   |                                 | 5,000  |                                    |   | 2,610                                    |   |                                | 2,022  |                                 |   | 1,369 |   |   | 435 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets                  |   |                                 | 51,721 |                                    |   | 53,212                                   |   |                                | 47,329 |                                 |   | 52,372 |   |   | 33,554 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Loans                past due 90 days or more               |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| and                still accruing                           |   |                                 | 658    |                                    |   | 620                                      |   |                                | 441    |                                 |   | 583 |   |   | 332 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and              |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| loans                past due 90 days or more               |   | $                                    | 52,379 |                                    | $      | 53,832                                   |   | $                                   | 47,770 |                                 | $      | 52,955 |   | $ | 33,886 |   |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing loans as a              |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end loans         |   |                                 | 0.29   | %                                       |   | 0.32                                     | %      |                                | 0.31   | %                                    |   | 0.36 | % |   | 0.25 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets as a             |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end assets        |   |                                 | 0.11   | %                                       |   | 0.12                                     | %      |                                | 0.11   | %                                    |   | 0.12 | % |   | 0.08 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and loans        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| past                due 90 days or more as a                |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of total period-end assets        |   |                                 | 0.11   | %                                       |   | 0.12                                     | %      |                                | 0.11   | %                                    |   | 0.12 | % |   | 0.08 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage  |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| of                total non-performing loans                |   |                                 | 351    | %                                       |   | 317                                      | %      |                                | 341    | %                                    |   | 291 | % |   | 432 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Allowance                for credit losses as a percentage  |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| of                total period-end loans                    |   |                                 | 1.03   | %                                       |   | 1.03                                     | %      |                                | 1.05   | %                                    |   | 1.04 | % |   | 1.06 | % |
|                                                        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| Total                non-performing assets and loans        |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| past                due 90 days or more as a                |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| percentage                of stockholders’ equity and |   |                                 |   |                                    |   |                                     |   |                                |   |                                 |   |   |   |   |   |   |
| allowance                for loan losses                    |   |                                 | 2      | %                                       |   | 2                                        | %      |                                | 2      | %                                    |   | 2 | % |   | 1 | % |

----

|                                                                        |   | **Three                Months Ended** |    | **Year                Ended**   |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------|---------|---------------------------------|--------|
|                                                                        |   | **March                31,**          |    | **December                31,** |   |
|                                                                        |   | **2007**                              |    | **2006**                        |   | **2006** |   |
| Balance                at beginning of period                               |   | $                                     | 160,269 |                            | $      | 141,464 |   | $ | 141,464 |   |
| Provisions                charged to operating expenses                     |   |                                  | 10,000  |                            |   | 6,501 |   |   | 33,700 |   |
|                                                                        |   |                                  | 170,269 |                            |   | 147,965 |   |   | 175,164 |   |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |
| Recoveries                on loans previously charged-off:                  |   |                                  |    |                            |   |   |   |   |   |   |
| Commercial                                                                  |   |                                  | 1,121   |                            |   | 533 |   |   | 5,987 |   |
| Consumer                                                                    |   |                                  | 289     |                            |   | 511 |   |   | 1,604 |   |
| Commercial                real estate                                       |   |                                  | 235     |                            |   | 1 |   |   | 385 |   |
| Total                recoveries                                             |   |                                  | 1,645   |                            |   | 1,045 |   |   | 7,976 |   |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |
| Loans                charged-off:                                           |   |                                  |    |                            |   |   |   |   |   |   |
| Commercial                                                                  |   |                                  | (4,294  | )                               |   | (4,186 | ) |   | (14,107 | ) |
| Consumer                                                                    |   |                                  | (2,974  | )                               |   | (1,712 | ) |   | (8,179 | ) |
| Commercial                real estate                                       |   |                                  | (589    | )                               |   | (199 | ) |   | (585 | ) |
| Total                charge-offs                                            |   |                                  | (7,857  | )                               |   | (6,097 | ) |   | (22,871 | ) |
| Net                charge-offs                                              |   |                                  | (6,212  | )                               |   | (5,052 | ) |   | (14,895 | ) |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |
| Balance                at end of period                                     |   | $                                     | 164,057 |                            | $      | 142,913 |   | $ | 160,269 |   |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |
| Net                charge-offs as a percentage of average loans outstanding |   |                                  | 0.16    | %                               |   | 0.16 | % |   | 0.11 | % |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |
| Net                Reserve Additions                                        |   | $                                     | 3,788   |                            | $      | 1,449 |   | $ | 18,805 |   |
| Components:                                                                 |   |                                  |    |                            |   |   |   |   |   |   |
| Allowance                for loan and lease losses                          |   | $                                     | 155,912 |                            | $      | 135,745 |   | $ | 152,053 |   |
| Allowance                for unfunded credit commitments                    |   |                                  | 8,145   |                            |   | 7,168 |   |   | 8,216 |   |
| Total                allowance for credit losses                            |   | $                                     | 164,057 |                            | $      | 142,913 |   | $ | 160,269 |   |
|                                                                        |   |                                  |    |                            |   |   |   |   |   |   |

----

**Forward-Looking      Statements**

----

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

**Item4.**
**Controls      and Procedures**

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

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

----

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

**Item      1. **
**Legal      Proceedings**

**Item      2.**
**Unregistered      Sales of Equity Securities and Use of Proceeds**

|                                                      |        |  (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, 2007   |   |                                                                     | 643,842 |                                                                       | $      | 34.41                                                                                                                |   |                                                                                                               |   |   |   |   |   |
|  February                1 to February 28, 2007 |   |                                                                     |    |                                                                       |   |                                                                                                                 |   |                                                                                                               |   |   |   |   |   |
|  March                1 to March 31, 2007       |   |                                                                     |    |                                                                       |   |                                                                                                                 |   |                                                                                                               |   |   |   |   |   |
|  Total                                          |   |                                                                          | 643,842 |                                                                       | $      | 34.41                                                                                                                |        |                                                                                                                    |   |  |  |   |  |

----

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

| Exhibit                10.1 * | Description                of 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, 2007 |   | /s/                DOUGLAS J. PAULS                         |
| (Date)                     |   | DOUGLAS                J. PAULS                             |
|                       |   | EXECUTIVE                VICE PRESIDENT AND                 |
|                       |   | CHIEF                FINANCIAL OFFICER                      |
|                       |   | (PRINCIPAL                FINANCIAL AND ACCOUNTING OFFICER) |

----