content: 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 quarter ended September 30, 1999
  
                                         OR
  
  (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                EXCHANGE ACT OF 1934
  
        For the transition period from ______________ to ______________
  
                              Commission File #0-12874
  
                               COMMERCE BANCORP, INC.
  
               (Exact name of registrant as specified in its charter)
  
               New Jersey                                      22-2433468
  --------------------------------------------------------------------------------
   (State or other jurisdiction of                  (IRS Employer Identification
    incorporation or organization)                              Number)
  
       Commerce Atrium, 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
  
                                   (856) 751-9000
  --------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the  preceding 12 months (or for such  shorter  period that the  registrant  was
  required  to file  such  report(s),  and (2) has  been  subject  to such  filing
  requirements for the past 90 days.
  
                    Yes  X                                No __
  
                       APPLICABLE ONLY TO CORPORATE ISSUERS:
              Indicate the number of shares outstanding of each of the
          issuer's classes of common stock, as of the last practical date.
  
      Common Stock                                             28,049,528
  --------------------------------------------------------------------------------
    (Title of Class)                                (No. of Shares Outstanding
                                                            as of 11/08/99)
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                        INDEX
  
                                                                              Page
  PART I. FINANCIAL INFORMATION
  
  Item 1. Financial Statements
  
          Consolidated Balance Sheets (unaudited)
          September 30, 1999 and December 31, 1998..............................1
  
          Consolidated  Statements of Income  (unaudited)
          Three months ended September 30, 1999 and
          September 30, 1998 and nine months ended
          September 30, 1999 and September 30, 1998.............................2
  
          Consolidated Statements of Cash Flows (unaudited)
          Nine months ended September 30, 1999 and
          September 30, 1998....................................................3
  
          Notes to Consolidated Financial Statements (unaudited)................4
  
  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operation....................................7
  
  Item 3. Quantitative and Qualitative Disclosures About Market Risk...........14
  
  PART II.OTHER INFORMATION
  
  Item 6. Exhibits and Reports on Form 8-K.....................................15
  
  
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (unaudited)
  <TABLE>
  <CAPTION>
  -------------------------------------------------------------------------------------------------------------
                                                                           September 30,          December 31,
                                                                           ------------------------------------
        (dollars in thousands)                                                 1999                    1998
  -------------------------------------------------------------------------------------------------------------
  <S>                                                                       <C>                   <C>
  Assets
       Cash and due from banks                                              $   266,467           $   267,220
       Federal funds sold                                                                              10,395
                                                                            -----------           -----------
            Cash and cash equivalents                                           266,467               277,615
       Loans held for sale                                                        8,762                22,418
       Trading securities                                                        91,321                85,359
       Securities available for sale                                          1,741,290             1,305,004
       Securities held to maturity                                            1,106,248             1,220,874
            (market value 9/99-$1,071,559; 12/98-$1,223,667)
       Loans                                                                  2,741,788             2,280,326
            Less allowance for loan losses                                       35,918                31,265
                                                                            -----------           -----------
                                                                              2,705,870             2,249,061
       Bank premises and equipment, net                                         178,755               147,448
       Other assets                                                             180,967               116,411
                                                                            -----------           -----------
                                                                            $ 6,279,680           $ 5,424,190
                                                                            ===========           ===========
  
  Liabilities
       Deposits:
            Demand:
            Interest-bearing                                                $ 1,927,121           $ 1,682,958
            Noninterest-bearing                                               1,283,468             1,162,126
       Savings                                                                1,032,247               973,324
       Time                                                                   1,261,898             1,110,400
                                                                            -----------           -----------
            Total deposits                                                    5,504,734             4,928,808
  
       Other borrowed money                                                     297,469                27,845
       Other liabilities                                                         54,203                60,027
       Obligation to Employee Stock Ownership Plan (ESOP)                           769                 1,282
       Trust Capital Securities - Commerce Capital Trust I                       57,500                57,500
       Long-term debt                                                            23,000                23,000
                                                                            -----------           -----------
                                                                              5,937,675             5,098,462
  
  Stockholders'
  Equity
       Common stock, 28,053,249 shares
            issued (27,373,983 shares in 1998)                                   43,833                40,988
       Capital in excess of par or stated value                                 306,944               236,928
       Retained earnings                                                         22,968                43,712
       Accumulated other comprehensive income                                   (29,347)                7,006
                                                                            -----------           -----------
                                                                                344,398               328,634
       Less commitment to ESOP                                                      769                 1,282
  
       Less treasury stock, at cost                                               1,624                 1,624
                                                                            -----------           -----------
            Total stockholders' equity                                          342,005               325,728
                                                                            -----------           -----------
  
                                                                            $ 6,279,680           $ 5,424,190
                                                                            ===========           ===========
  </TABLE>
  
  See accompanying notes
  
                                         1
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF INCOME
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
      ----------------------------------------------------------------------------------------------------------------------
                                                                Three Months Ended                   Nine Months Ended
                                                                   September 30,                        September 30,
                                                            ----------------------------       -----------------------------
      (dollars in thousands, except per share amounts)         1999              1998              1999              1998
      ----------------------------------------------------------------------------------------------------------------------
  <S>                                                       <C>               <C>               <C>               <C>
  Interest income
      Interest and fees on loans                            $ 55,664          $ 44,074          $156,228          $122,229
      Interest on investments                                 42,949            38,114           122,723           115,663
      Other interest                                             484               968               868             1,824
                                                            --------          --------          --------          --------
            Total interest income                             99,097            83,156           279,819           239,716
                                                            --------          --------          --------          --------
  
  Interest expense
      Interest on deposits:
         Demand                                               11,914             8,981            31,607            25,872
         Savings                                               5,349             5,324            15,264            15,384
         Time                                                 14,999            16,392            44,684            46,763
                                                            --------          --------          --------          --------
            Total interest on deposits                        32,262            30,697            91,555            88,019
      Interest on other borrowed money                         2,074               604             4,929             3,549
      Interest on long-term debt                               1,782             1,782             5,345             5,346
                                                            --------          --------          --------          --------
            Total interest expense                            36,118            33,083           101,829            96,914
                                                            --------          --------          --------          --------
  
      Net interest income                                     62,979            50,073           177,990           142,802
      Provision for loan losses                                1,653             2,053             6,111             5,441
                                                            --------          --------          --------          --------
      Net interest income after provision for
        loan losses                                           61,326            48,020           171,879           137,361
  
  Noninterest income
      Deposit charges and service fees                        11,272             8,897            31,824            26,228
      Other operating income                                  16,690            15,468            50,067            41,312
      Net investment securities gains                            270               991             1,535             1,920
                                                            --------          --------          --------          --------
            Total noninterest income                          28,232            25,356            83,426            69,460
                                                            --------          --------          --------          --------
  
  Noninterest expense
      Salaries                                                26,158            20,897            73,458            57,472
      Benefits                                                 4,807             4,630            14,704            12,628
      Occupancy                                                5,765             4,769            16,065            13,331
      Furniture and equipment                                  8,336             6,174            22,890            17,921
      Office                                                   5,403             4,030            15,554            11,897
      Audit and regulatory fees and assessments                  738               610             1,942             1,709
      Marketing                                                2,735             2,039             6,901             5,775
      Other real estate (net)                                    454               320             1,423             1,145
      Other                                                   10,343             8,655            30,278            23,043
                                                            --------          --------          --------          --------
            Total noninterest expenses                        64,739            52,124           183,215           144,921
                                                            --------          --------          --------          --------
  
      Income before income taxes                              24,819            21,252            72,090            61,900
      Provision for federal and state income taxes             7,979             7,150            23,753            21,466
                                                            --------          --------          --------          --------
      Net income                                            $ 16,840          $ 14,102          $ 48,337          $ 40,434
                                                            ========          ========          ========          ========
  
  
      Net income per common and common
        equivalent share:
            Basic                                           $   0.61          $   0.52          $   1.75          $   1.51
                                                            --------          --------          --------          --------
            Diluted                                         $   0.58          $   0.50          $   1.68          $   1.44
                                                            --------          --------          --------          --------
      Average common and common equivalent
        shares outstanding:
            Basic                                             27,816            27,016            27,605            26,710
                                                            --------          --------          --------          --------
            Diluted                                           28,849            28,218            28,832            28,076
                                                            --------          --------          --------          --------
      Cash dividends declared, common stock                 $   0.22          $   0.38          $   0.65          $   0.73
                                                            ========          ========          ========          ========
  </TABLE>
  
  See accompanying notes
  
                                         2
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  <TABLE>
  <CAPTION>
  
          ----------------------------------------------------------------------------------------------------------
                                                                                           Nine Months Ended
                                                                                             September 30,
                                                                                    --------------------------------
          (dollars in thousands)                                                       1999                1998
          ----------------------------------------------------------------------------------------------------------
  <S>                                                                                <C>                 <C>
  Operating
  activities
          Net income                                                                 $  48,337           $  40,434
          Adjustments to reconcile net income to net cash
            provided by operating activities:
              Provision for loan losses                                                  6,111               5,441
              Provision for depreciation, amortization and accretion                    21,913              18,837
              Gains on sales of securities available for sale                           (1,535)             (1,902)
              Proceeds from sales of mortgages held for sale                            92,319              56,614
              Originations of mortgages held for sale                                  (78,663)            (48,734)
              Net loan (chargeoffs)                                                     (1,458)             (1,273)
              Net increase in trading securities                                        (5,962)            (45,881)
              Increase in other assets                                                 (44,783)            (37,389)
              (Decrease) increase in other liabilities                                  (5,824)             25,711
          ---------------------------------------------------------------------------------------------------------
                 Net cash provided by operating activities                              30,455              11,858
  
  Investing
  activities
          Proceeds from the sales of securities available for sale                     250,179             321,960
          Proceeds from the maturity of securities available for sale                  240,316             319,031
          Proceeds from the maturity of securities held to maturity                    204,345             226,458
          Purchase of securities available for sale                                   (843,644)           (546,697)
          Purchase of securities held to maturity                                     (103,329)           (477,573)
          Net increase in loans                                                       (599,149)           (423,281)
          Proceeds from sales of loans                                                   7,919               7,523
          Purchases of premises and equipment                                          (47,567)            (32,410)
          ---------------------------------------------------------------------------------------------------------
                 Net cash used by investing activities                                (890,930)           (604,989)
  
  Financing
  activities
          Net increase in demand and savings deposits                                  424,428             525,113
          Net increase in time deposits                                                151,498             296,317
          Net increase(decrease) in other borrowed money                               269,624            (191,550)
          Dividends paid                                                               (17,325)            (18,245)
          Proceeds from issuance of common stock under
             dividend reinvestment and other stock plans                                20,886               7,272
          Issuance of common stock                                                                           9,585
          Other                                                                            216                  59
          ---------------------------------------------------------------------------------------------------------
                 Net cash provided by financing activities                             849,327             628,551
  
          (Decrease) increase in cash and cash equivalents                             (11,148)             35,420
          Cash and cash equivalents at beginning of year                               277,615             204,776
          ---------------------------------------------------------------------------------------------------------
          Cash and cash equivalents at end of period                                 $ 266,467           $ 240,196
          =========================================================================================================
  
  
          Supplemental  disclosures of cash flow information:
             Cash paid during the period for:
               Interest                                                              $ 101,176           $  93,956
               Income taxes                                                             23,568              23,050
             Other noncash activities:
               Transfer of securities to securities available for sale                  91,010
               Securitization of loans                                                 129,768
          ---------------------------------------------------------------------------------------------------------
  </TABLE>
  See accompanying notes
  
                                         3
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (unaudited)
  
  A.   Consolidated Financial Statements
  
  The consolidated financial statements included herein have been prepared without
  audit  pursuant to the rules and  regulations  of the  Securities  and  Exchange
  Commission.  Certain information and footnote  disclosures  normally included in
  financial  statements  prepared in accordance with generally accepted accounting
  principles   have  been  condensed  or  omitted   pursuant  to  such  rules  and
  regulations.   The  accompanying  condensed  consolidated  financial  statements
  reflect all adjustments which are, in the opinion of management,  necessary to a
  fair  statement  of  the  results  for  the  interim  periods  presented.   Such
  adjustments  are  of a  normal  recurring  nature.  The  accompanying  financial
  statements  include  the  consolidated  accounts of the former  Community  First
  Banking  Company  (CFBC),  Tinton  Falls,  New Jersey,  and the former  Prestige
  Financial  Corp.  (PFC),  Flemington,  New Jersey,  for all  periods  presented.
  Effective January 15, 1999, Commerce Bancorp,  Inc. (the Company) acquired CFBC,
  and CFBC's  wholly-owned  bank  subsidiary,  Tinton Falls State Bank, was merged
  with and into Commerce  Bank/Shore,  N.A. Also  effective  January 15, 1999, the
  Company acquired PFC, and PFC's  wholly-owned  bank  subsidiary,  Prestige State
  Bank, was  re-chartered  as a national bank and renamed  Commerce  Bank/Central,
  N.A. The  transactions  were  accounted  for as poolings of  interests.  Certain
  amounts in prior periods have been reclassified for comparative purposes.
  
  These condensed  consolidated financial statements should be read in conjunction
  with the audited  financial  statements  and the notes  thereto  included in the
  registrant's  Annual Report on Form 10-K for the period ended December 31, 1998.
  The results for the three  months ended  September  30, 1999 and the nine months
  ended September 30, 1999 are not necessarily  indicative of the results that may
  be expected for the year ended December 31, 1999.
  
  The consolidated  financial statements include the accounts of Commerce Bancorp,
  Inc. and all of its subsidiaries,  including  Commerce Bank, N.A. (Commerce NJ),
  Commerce   Bank/Pennsylvania,   N.A.,   Commerce   Bank/Shore,   N.A.,  Commerce
  Bank/North,  Commerce  Bank/Central,  N.A.,  Commerce  Capital Trust I, Commerce
  National Insurance  Services,  Inc. (Commerce  Insurance),  and Commerce Capital
  Markets,  Inc.  (CCMI).  All  material   intercompany   transactions  have  been
  eliminated.
  
  B.   Commitments
  
  In the normal course of business,  there are various outstanding  commitments to
  extend credit, such as letters of credit and unadvanced loan commitments,  which
  are  not  reflected  in  the  accompanying  consolidated  financial  statements.
  Management  does  not  anticipate  any  material  losses  as a  result  of these
  transactions.
  
  C.   Comprehensive Income
  
  Total  comprehensive  income,  which for the  Company  included  net  income and
  unrealized  gains and losses on the  Company's  available  for sale  securities,
  amounted to $7.8 million and $19.7 million,  respectively,  for the three months
  ended  September 30, 1999 and 1998. For the nine months ended September 30, 1999
  and 1998,  total  comprehensive  income  was $12.0  million  and $43.4  million,
  respectively.
  
                                         4
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  D.   Segment Information
  
  Selected segment information is as follows:
  <TABLE>
  <CAPTION>
  ---------------------------------------------------------------------------------------------------------------------------------
                                                      Three Months Ended                          Three Months Ended
                                                      September 30, 1999                          September 30, 1998
                                           Community        Parent/                      Community      Parent/
                                             Banks           Other          Total          Banks         Other             Total
  ---------------------------------------------------------------------------------------------------------------------------------
  <S>                                     <C>            <C>             <C>            <C>            <C>             <C>
  Net interest income                     $   64,741     $   (1,762)     $   62,979     $   51,639     $   (1,566)     $   50,073
  Provision for loan losses                    1,653                          1,653          2,053                          2,053
                                          -----------------------------------------------------------------------------------------
  
  Net interest income after provision         63,088         (1,762)         61,326         49,586         (1,566)         48,020
  Noninterest income                          16,966         11,266          28,232         14,944         10,412          25,356
  Noninterest expense                         54,397         10,342          64,739         43,469          8,655          52,124
                                          -----------------------------------------------------------------------------------------
  Income before income taxes                  25,657           (838)         24,819         21,061            191          21,252
  Income tax expense                           8,094           (115)          7,979          7,204            (54)          7,150
                                          -----------------------------------------------------------------------------------------
  Net income                              $   17,563     $     (723)     $   16,840     $   13,857     $      245      $   14,102
                                          =========================================================================================
  
  Average assets (in millions)            $5,431,034     $  592,980      $6,024,014     $4,479,574     $  482,005      $4,961,579
                                          =========================================================================================
  </TABLE>
  
  <TABLE>
  <CAPTION>
  ---------------------------------------------------------------------------------------------------------------------------------
                                                       Nine Months Ended                            Nine Months Ended
                                                       September 30, 1999                           September 30, 1998
                                          Community         Parent/                     Community        Parent/
                                             Banks           Other          Total          Banks          Other           Total
  ---------------------------------------------------------------------------------------------------------------------------------
  <S>                                     <C>            <C>             <C>            <C>            <C>             <C>
  Net interest income                     $  183,075     $   (5,085)     $  177,990     $  147,559     $   (4,757)     $  142,802
  Provision for loan losses                    6,111                          6,111          5,441                          5,441
                                          -----------------------------------------------------------------------------------------
  
  Net interest income after provision        176,964         (5,085)        171,879        142,118         (4,757)        137,361
  Noninterest income                          47,213         36,213          83,426         42,442         27,018          69,460
  Noninterest expense                        151,719         31,496         183,215        122,197         22,724         144,921
                                          -----------------------------------------------------------------------------------------
  Income before income taxes                  72,458           (368)         72,090         62,363           (463)         61,900
  Income tax expense                          23,427            326          23,753         21,792           (326)         21,466
                                          -----------------------------------------------------------------------------------------
  Net income                              $   49,031     $     (694)     $   48,337     $   40,571     $     (137)     $   40,434
                                          =========================================================================================
  
  Average assets (in millions)            $5,158,501     $  584,261      $5,742,762     $4,274,188     $  456,582      $4,730,770
                                          =========================================================================================
  </TABLE>
  
  
  E.   Recent Accounting Statement
  
  In June 1998, the Financial  Accounting Standards Board issued Statement No. 133
  "Accounting for Derivative  Instruments and Hedging  Activities"  (FAS 133). FAS
  133 will require the Company to recognize all  derivatives  on the balance sheet
  at fair  value.  Derivatives  that are not hedges must be adjusted to fair value
  through  income.  If the  derivative is a hedge,  depending on the nature of the
  hedge, changes in the fair value of the derivative will either be offset against
  the change in fair value of the hedged  asset or liability  through  earnings or
  recognized in other comprehensive  income until the hedged item is recognized in
  earnings. The ineffective portion of a derivative's change in fair value will be
  immediately  recognized in earnings.  FAS 133 becomes  effective for the Company
  beginning  January 1, 2001.  Although early adoption is allowed in any quarterly
  period  after June 1998,  the Company has no plans to adopt FAS 133 prior to the
  effective date. Based on the Company's minimal use of derivatives at the current
  time,  management  does not expect the adoption of FAS 133 to have a significant
  effect on  results of  operations  or the  financial  position  of the  Company.
  However,  the impact from adopting FAS 133 will depend on the nature and purpose
  of the derivative instruments in use by the Company at that time.
  
                                         5
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  F.   Trust Capital Securities
  
  On June 9,  1997,  the  Company  issued  $57.5  million of 8.75%  Trust  Capital
  Securities  through Commerce  Capital Trust I, a newly formed Delaware  business
  trust  subsidiary of the Company.  The net proceeds of the offering will be used
  for general corporate  purposes,  which may include  contributions to subsidiary
  banks  to  fund  their   operations,   the  financing  of  one  or  more  future
  acquisitions,  repayment  of  indebtedness  of the Company or of its  subsidiary
  banks,  investments  in or  extensions  of  credit to its  subsidiaries,  or the
  repurchase  of shares  of the  Company's  outstanding  common  stock.  All $57.5
  million of the Trust Capital Securities qualify as Tier 1 capital for regulatory
  capital purposes.
  
  G.   Earnings Per Share
  
  The  calculation  of earnings per share  follows (in  thousands,  except for per
  share amounts):
  
  <TABLE>
  <CAPTION>
                                               Three Months Ended      Nine Months Ended
                                                  September 30,          September 30,
                                             -----------------------------------------------
                                                1999        1998       1999        1998
  ------------------------------------------------------------------------------------------
  <S>                                         <C>         <C>         <C>         <C>
  Basic:
  Net income applicable to common stock       $16,840     $14,102     $48,337     $40,434
                                              =======     =======     =======     =======
  
  Average common shares outstanding            27,816      27,016      27,605      26,710
                                              =======     =======     =======     =======
  
  Net income per common share - basic         $  0.61     $  0.52     $  1.75     $  1.51
                                              =======     =======     =======     =======
  
  
  Diluted:
  Net income applicable to common stock
     on a diluted basis                       $16,840     $14,102     $48,337     $40,434
                                              =======     =======     =======     =======
  
  
  Average common shares outstanding            27,816      27,016      27,605      26,710
  Additional shares considered in diluted
     Computation assuming:
  Exercise of stock options                     1,033       1,202       1,227       1,226
  Conversion of preferred stock                                                       140
                                              -------     -------     -------     -------
  Average common shares outstanding
     on a diluted basis                        28,849      28,218      28,832      28,076
                                              =======     =======     =======     =======
  
  Net income per common share - diluted       $  0.58     $  0.50     $  1.68     $  1.44
                                              =======     =======     =======     =======
  </TABLE>
  
  
  H.   Pending Acquisitions
  
  On  July  27,  1999,  Commerce  Insurance,  the  Company's  insurance  brokerage
  subsidiary,  reached an agreement in  principle  to acquire  Mullaney  Insurance
  Associates,  Oakhurst,  New Jersey.  On October 27, 1999, the Company reached an
  agreement in principle  to acquire  Traber and  Vreeland,  Inc.,  Randolph,  New
  Jersey. The acquisitons of these insurance  brokerage agencies will be completed
  by the issuance of common stock of the Company  totaling  approximately  325,000
  shares.  The Company expects the  acquisitions to close in the fourth quarter of
  1999. The transactions will be accounted for as poolings of interests.  However,
  the Company does not expect to restate the  financial  statements of the periods
  prior to the acquisitions, as the changes, in the aggregate, will be immaterial.
  
                                         6
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation
  
  Capital Resources
  
  At September 30, 1999,  stockholders'  equity totaled $342.0 million or 5.45% of
  total  assets,  compared to $325.7  million or 6.01% of total assets at December
  31, 1998.
  
  The table below presents the Company's and Commerce NJ's risk-based and leverage
  ratios at September 30, 1999 and 1998:
  
  <TABLE>
  <CAPTION>
                                                                               Per Regulatory Guidelines
                                                                    -------------------------------------------------
                                                    Actual                Minimum             "Well Capitalized"
                                              Amount      Ratio      Amount      Ratio       Amount          Ratio
  -------------------------------------------------------------------------------------------------------------------
  <S>                                       <C>          <C>         <C>        <C>        <C>             <C>
  September 30, 1999
  Company
    Risk based capital ratios:
        Tier 1                               $424,423     11.48%     $147,915     4.00%     $221,873         6.00%
        Total capital                         474,141     12.82       295,830     8.00       369,788        10.00
    Leverage ratio                            424,423      7.02       242,000     4.00       302,500         5.00
  
  Commerce NJ
    Risk based capital ratios:
        Tier 1                               $212,741     10.31%     $ 82,527     4.00%     $123,791         6.00%
        Total capital                         232,317     11.26       165,055     8.00       206,319        10.00
    Leverage ratio                            212,741      6.35       134,007     4.00       167,509         5.00
  
  September 30, 1998
  Company
    Risk based capital ratios:
        Tier 1                               $370,401     13.62%     $108,753     4.00%     $163,130         6.00%
        Total capital                         417,119     15.34       217,506     8.00       271,883        10.00
    Leverage ratio                            370,401      7.50       148,190     3.00       246,983         5.00
  
  Commerce NJ
    Risk based capital ratios:
        Tier 1                               $190,741     12.74%     $ 59,903     4.00%     $ 89,854         6.00%
        Total capital                         206,842     13.81       119,805     8.00       149,756        10.00
    Leverage ratio                            190,741      6.68        85,702     3.00       142,836         5.00
  </TABLE>
  
  At September 30, 1999, the Company's consolidated capital levels and each of the
  Company's  bank   subsidiaries   met  the  regulatory   definition  of  a  "well
  capitalized" financial institution, i.e., a leverage capital ratio exceeding 5%,
  a Tier 1 risk-based  capital ratio exceeding 6%, and a total risk-based  capital
  ratio  exceeding  10%.  Management  believes that as of September 30, 1999,  the
  Company and its  subsidiaries  meet all capital  adequacy  requirements to which
  they are subject.
  
  Deposits
  
  Total deposits at September 30, 1999 were $5.50 billion,  up $898.7 million,  or
  20% over total deposits of $4.61 billion at September 30, 1998, and up by $575.9
  million,  or 12% from year-end 1998. Deposit growth during the first nine months
  of 1999  included core deposit  growth in all  categories as well as growth from
  the public sector. The Company  experienced  "same-store core deposit growth" of
  17.5% at  September  30,  1999 as  compared  to  deposits  a year ago for  those
  branches open for more than two years.
  
                                         7
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Interest Rate Sensitivity and Liquidity
  
  The Company's risk of loss arising from adverse changes in the fair market value
  of financial instruments, or market risk, is composed primarily of interest rate
  risk.  The  primary  objective  of  the  Company's  asset/liability   management
  activities  is to maximize net interest  income,  while  maintaining  acceptable
  levels of interest rate risk. The Company's  Asset/Liability Committee (ALCO) is
  responsible for  establishing  policies to limit exposure to interest rate risk,
  and to ensure  procedures  are  established  to  monitor  compliance  with these
  policies. The guidelines established by ALCO are reviewed by the Company's Board
  of Directors.
  
  Management considers the simulation of net interest income in different interest
  rate environments to be the best indicator of the Company's  interest rate risk.
  Income  simulation  analysis  captures not only the  potential of all assets and
  liabilities to mature or reprice, but also the probability that they will do so.
  Income  simulation also attends to the relative  interest rate  sensitivities of
  these  items,  and  projects  their  behavior  over an extended  period of time.
  Finally,  income simulation permits management to assess the probable effects on
  the balance  sheet not only of changes in interest  rates,  but also of proposed
  strategies for responding to them.
  
  The Company's  income  simulation  model analyzes  interest rate  sensitivity by
  projecting net income over the next 24 months in a flat rate scenario versus net
  income in alternative  interest rate scenarios.  Management  continually reviews
  and  refines  its  interest  rate risk  management  process in  response  to the
  changing   economic   climate.   Currently,   the  Company's  model  projects  a
  proportionate  200 basis point change during the next year, with rates remaining
  constant in the second year.  The  Company's  ALCO policy has  established  that
  interest income  sensitivity will be considered  acceptable if net income in the
  above  interest  rate  scenario  is  within  15% of net  income in the flat rate
  scenario  in the first  year and  within  30% over the two year time  frame.  At
  September 30, 1999, the Company's  income  simulation model indicates net income
  would  increase  by 5.71% and  0.66% in the first  year and over a two year time
  frame,  respectively,  if rates  decreased as described  above, as compared to a
  decrease of 2.40% and 10.05%, respectively,  at September 30, 1998. At September
  30, 1999,  the model  projects that net income would decrease by 8.92% and 6.67%
  in the  first  year and  over a two  year  time  frame,  respectively,  if rates
  increased  as  described  above,  as  compared to a decrease of 6.13% and 5.98%,
  respectively,  at September 30, 1998.  All of these net income  projections  are
  within  an  acceptable  level of  interest  rate  risk  pursuant  to the  policy
  established by ALCO.
  
  In the event the Company's  interest rate risk models  indicate an  unacceptable
  level of risk, the Company could undertake a number of actions that would reduce
  this risk,  including the sale of a portion of its available for sale portfolio,
  the use of risk  management  strategies such as interest rate swaps and caps, or
  the extension of the maturities of its short-term borrowings.
  
  Management  also  monitors  interest  rate risk by  utilizing a market  value of
  equity model. The model assesses the impact of a change in interest rates on the
  market value of all the  Company's  assets and  liabilities,  as well as any off
  balance  sheet items.  The model  calculates  the market value of the  Company's
  assets and liabilities in excess of book value in the current rate scenario, and
  then  compares the excess of market value over book value given an immediate 200
  basis point change in rates.  The Company's ALCO policy indicates that the level
  of interest  rate risk is  unacceptable  if the immediate 200 basis point change
  would  result in the loss of 60% or more of the excess of market value over book
  value in the current rate  scenario.  At September 30, 1999, the market value of
  equity model indicates an acceptable level of interest rate risk.
  
  Liquidity  involves the Company's ability to raise funds to support asset growth
  or decrease assets to meet deposit  withdrawals  and other  borrowing  needs, to
  maintain reserve requirements and to otherwise operate the Company on an ongoing
  basis.  The  Company's  liquidity  needs  are  primarily  met by  growth in core
  deposits,  its  cash  and  federal  funds  sold  position,  cash  flow  from its
  amortizing  investment  and loan  portfolios,  as well as the use of  short-term
  borrowings, as required.
  
                                         8
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Short-Term Borrowings
  
  Short-term borrowings,  or other borrowed money, consist primarily of securities
  sold under agreements to repurchase and overnight lines of credit,  and are used
  to meet short term funding needs. At September 30, 1999,  short-term  borrowings
  aggregated $297.5 million and had an average rate of 5.56%, as compared to $27.8
  million at an average rate of 4.98% at December 31, 1998.
  
  Interest Earning Assets
  
  For the nine month period ended  September  30, 1999,  interest  earning  assets
  increased $765.0 million from $4.92 billion to $5.69 billion.  This increase was
  primarily in investment securities and the loan portfolio as described below.
  
  Loans
  
  During the first nine months of 1999,  loans increased $456.8 million from $2.25
  billion to $2.71 billion.  At September 30, 1999, loans represented 49% of total
  deposits and 43% of total assets. All segments of the loan portfolio experienced
  growth in the first nine months of 1999,  including  loans secured by commercial
  real estate properties, commercial loans, and consumer loans.
  
  During the third  quarter of 1999,  the Company  securitized  $129.8  million of
  residential  mortgage loans, and included the securities in its held to maturity
  investment portfolio.
  
  Investments
  
  In total, for the first nine months of 1999, securities increased $327.6 million
  from $2.61 billion to $2.94 billion.  Deposit  growth and other funding  sources
  were used to increase the Company's investment portfolio. The available for sale
  portfolio  increased  $436.3 million to $1.74 billion at September 30, 1999 from
  $1.31  billion  at  December  31,  1998,  and the  securities  held to  maturity
  portfolio  decreased  $114.6 million to $1.11 billion at September 30, 1999 from
  $1.22 billion at year-end 1998. In connection with the  acquisitions of CFBC and
  PFC, management reclassified $91.0 million of investment securities from held to
  maturity  to  available  for sale during the first  quarter of 1999.  Unrealized
  losses on those securities  transferred were  approximately  $330 thousand.  The
  portfolio of trading  securities  increased  $6.0 million from  year-end 1998 to
  $91.3 million at September 30, 1999. At September 30, 1999,  the average life of
  the  investment  portfolio  was  approximately  5.5 years,  and the duration was
  approximately 4.1 years. At September 30, 1999, total securities represented 47%
  of total assets.
  
  Net Income
  
  Net income for the third quarter of 1999 was $16.8 million,  an increase of $2.7
  million or 19% over the $14.1  million  recorded for the third  quarter of 1998.
  Net income for the first nine months of 1999 was $48.3  million,  an increase of
  $7.9 million or 20% over the $40.4 million  recorded in the first nine months of
  1998. On a per share basis, diluted net income for the third quarter of 1999 and
  the first nine months of 1999 were $0.58 and $1.68 per common share  compared to
  $0.50 and $1.44 per common share for the respective 1998 periods.
  
  Return on average  assets (ROA) and return on average equity (ROE) for the third
  quarter  of 1999 were  1.12% and  20.32%,  respectively,  compared  to 1.14% and
  17.66%,  respectively,  for the same 1998 period. ROA and ROE for the first nine
  months of 1999 were 1.12% and 19.35%, respectively, compared to 1.13% and 17.61%
  a year ago.
  
  Net Interest Income
  
  Net interest  income  totaled  $63.0  million for the third  quarter of 1999, an
  increase  of $12.9  million  or 26% from $50.1  million in the third  quarter of
  1998.  Net  interest  income for the first nine  months of 1999  totaled  $178.0
  million,  up $35.2  million  or 25% from the  first  nine  months  of 1998.  The
  improvement in net interest  income for both periods was due primarily to volume
  increases in the loan and investment portfolios.
  
                                         9
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Noninterest Income
  
  Noninterest  income  totaled  $28.2  million for the third  quarter of 1999,  an
  increase of $2.9 million or 11% from $25.4 million in the third quarter of 1998.
  The increase was due to increased  deposit charges and service fees,  which rose
  $2.4 million over the third quarter of 1998 primarily due to higher  transaction
  volumes.  In addition,  other operating  income rose $1.2 million over the prior
  year, primarily from increased revenues from Commerce National. The Company also
  recorded $270 thousand in net investment  securities  gains in the third quarter
  of 1999, as compared to $991 thousand a year ago.
  
  For the first nine months of 1999,  noninterest income totaled $83.4 million, an
  increase of $13.9  million or 20% from $69.5 million in the first nine months of
  1998.  Other  operating  income rose $8.8  million over the first nine months of
  1998,  including  increased revenues of $6.2 million from Commerce Insurance and
  $1.0 million from CCMI.  Deposit charges and service fees rose $5.6 million over
  the prior year  primarily  due to higher  transaction  volumes,  and the Company
  recorded  $1.5  million  in net  investment  securities  gains in the first nine
  months of 1999 as compared to $1.9 million a year ago.
  
  Noninterest Expense
  
  For the third quarter of 1999,  noninterest  expense  totaled $64.7 million,  an
  increase of $12.6 million or 24% over the same period in 1998.  Contributing  to
  this  increase was new branch  activity  over the past twelve  months,  with the
  number of branches  increasing from 93 at September 30, 1998 to 111 at September
  30, 1999,  and the growth of Commerce  Insurance and CCMI.  With the addition of
  these new offices,  staff,  facilities,  and related expenses rose  accordingly.
  Other  noninterest  expenses  rose $1.7 million over the third  quarter of 1998.
  This increase resulted primarily from higher bank card-related  service charges,
  increased  business   development   expenses,   and  increased   provisions  for
  non-credit-related losses.
  
  For the first nine months of 1999,  noninterest  expense totaled $183.2 million,
  an increase of $38.3 million or 26% over $144.9 million in the first nine months
  of 1998. Contributing to this increase was new branch activity and the growth of
  Commerce National and CCMI as noted above. Other noninterest  expenses rose $7.2
  million over the first nine months of 1998.  This  increase  resulted  primarily
  from higher bank card-related  service charges,  increased business  development
  expenses, and increased provisions for non-credit-related losses.
  
  
  The Company's operating efficiency ratio (noninterest expenses,  less other real
  estate expense, divided by net interest income plus noninterest income excluding
  non-recurring gains) was 69.95% for the first nine months of 1999 as compared to
  68.35% for the same 1998 period.  The Company's  efficiency  ratio remains above
  its peer group primarily due to its aggressive growth expansion activities.
  
  Loan and Asset Quality
  
  Total  non-performing  assets  (non-performing  loans  and  other  real  estate,
  excluding  loans  past  due 90 days or more  and  still  accruing  interest)  at
  September  30, 1999 were $13.1  million,  or 0.21% of total  assets  compared to
  $14.7 million or 0.27% of total assets at December 31, 1998 and $13.9 million or
  0.27% of total assets at September 30, 1998.
  
  Total non-performing loans (non-accrual loans and restructured loans,  excluding
  loans past due 90 days or more and still  accruing  interest) at  September  30,
  1999 were $9.3 million or 0.34% of total loans compared to $8.6 million or 0.38%
  of total loans at December  31, 1998 and $8.5 million or 0.41% of total loans at
  September 30, 1998.  At September  30, 1999,  loans past due 90 days or more and
  still accruing  interest  amounted to $581 thousand compared to $945 thousand at
  December  31, 1998 and $2.6  million at September  30,  1998.  Additional  loans
  considered  as potential  problem  loans by the  Company's  internal loan review
  department  ($22.1 million at September 30, 1999) have been evaluated as to risk
  exposure in determining the adequacy of the allowance for loan losses.
  
                                         10
  
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Other real estate (ORE) at September  30, 1999 totaled $3.8 million  compared to
  $6.1 million at December 31, 1998 and $5.4 million at September 30, 1998.  These
  properties  have  been  written  down to the  lower of cost or fair  value  less
  disposition costs.
  
  The following pages include tabular  presentations  showing detailed information
  about the  Company's  non-performing  loans and  assets and an  analysis  of the
  Company's  allowance  for loan losses and other  related data for  September 30,
  1999, December 31, 1998, and September 30, 1998.
  
  Year 2000
  
  The Company began the process of preparing its computer systems and applications
  for the Year 2000 in 1996. The process  involves  identifying and resolving date
  recognition  problems in computer systems and software,  and to a lesser extent,
  other operating equipment, that could be caused by the date change from December
  31, 1999 to January 1, 2000.
  
  The Company has completed its assessment of all business processes that could be
  affected by the Year 2000 issue.  Each business  process  assessment  included a
  review of the information  systems used in that process,  including hardware and
  software,  involvement of third parties, and any other operating equipment.  The
  Company licenses substantially all software used in conducting its business from
  third party  vendors.  All vendors have been  contacted  regarding the Year 2000
  issue, and the Company  continues to track the progress each vendor is making in
  reaching  Year 2000  compliance.  The Company is also working  with  significant
  customers and counterparties to monitor their Year 2000 efforts. The Company has
  all  necessary  changes  in place and tested for all  mission  critical  systems
  (those systems defined as absolutely  essential to the daily business  operation
  of the Company).  Additionally,  the Company has completed certification testing
  with all mission  critical service  providers.  Changes for 98% of the remaining
  systems  are in place and  tested.  Contingency  plans have been  completed  and
  validated.
  
  The Company believes it is taking the appropriate steps to address all Year 2000
  issues.  Despite  the  Company's  efforts to address  the Year 2000  problem and
  develop  contingency  plans  in the  event  of  Year  2000  failures,  including
  non-compliance  by third parties  (including  loan  customers),  there can be no
  assurance  that the Year 2000 issue  will not  materially  adversely  impact the
  Company's  financial  position,  results of operations,  or  relationships  with
  customers, vendors, or others.
  
  The  Company  estimates  the  total  cost of the Year 2000  compliance  process,
  including internal and external personnel and any required hardware and software
  modifications, will not exceed $1.0 million.
  
  Forward-Looking Statements
  
  The  Company  may  from  time  to time  make  written  or oral  "forward-looking
  statements",  including  statements  contained in the Company's filings with the
  Securities and Exchange Commission (including this Form 10-Q), in its reports to
  stockholders and in other communications by the Company,  which are made in good
  faith by the Company  pursuant to the "safe  harbor"  provisions  of the Private
  Securities Litigation Reform Act of 1995.
  
  These  forward-looking   statements  include  statements  with  respect  to  the
  Company's  beliefs,  plans,  objectives,  goals,  expectations,   anticipations,
  estimates  and   intentions,   that  are  subject  to   significant   risks  and
  uncertainties  and are subject to change based on various factors (some of which
  are beyond the Company's control). The words "may", "could", "should",  "would",
  believe",  "anticipate",  "estimate",  "expect",  "intend",  "plan" and  similar
  expressions are intended to identify forward-looking  statements.  The following
  factors, among others, could cause the Company's financial performance to differ
  materially from that expressed in such forward-looking  statements: the strength
  of the United States economy in general and the strength of the local  economies
  in which the Company conducts operations; the effects of, and changes in, trade,
  monetary and fiscal policies,  including  interest rate policies of the Board of
  Governors of the Federal Reserve System (the "FRB"); inflation;  interest rates,
  market and monetary  fluctuations;  the timely  development of  competitive  new
  products and  services by the Company and the  acceptance  of such  products and
  services by customers;  the willingness of customers to substitute  competitors'
  products and services  for the  Company's  products and services and vice versa;
  the impact of changes in financial  services'  laws and  regulations  (including
  laws  concerning  taxes,  banking,  securities  and  insurance);   technological
  changes; future acquisitions;  the expense savings and revenue enhancements from
  
                                         11
  
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  acquisitions  being less than  expected;  the growth  and  profitability  of the
  Company's  noninterest  or fee income  being less than  expected;  unanticipated
  regulatory  or judicial  proceedings;  changes in consumer  spending  and saving
  habits;  and the success of the Company at  managing  the risks  involved in the
  foregoing.
  
  The  Company  cautions  that the  foregoing  list of  important  factors  is not
  exclusive.  The  Company  does  not  undertake  to  update  any  forward-looking
  statement,  whether written or oral, that may be made from time to time by or on
  behalf of the Company.
  
                                         12
  
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  The following summary presents  information  regarding  non-performing loans and
  assets as of September 30, 1999 and the preceding four quarters: (dollar amounts
  in thousands)
  
  <TABLE>
  <CAPTION>
                                                    September 30,     June 30,         March 31,       December 31,     September 30,
                                                        1999            1999             1999              1998             1998
                                                   ----------------------------------------------------------------------------------
  <S>                                                 <C>              <C>              <C>              <C>              <C>
  Non-accrual loans:
       Commercial                                     $ 2,827          $ 3,104          $ 2,821          $ 2,466          $ 2,417
       Consumer                                           748              787              846              831              782
       Real estate:
           Construction                                    55              115              115              189              587
           Mortgage                                     5,539            5,144            4,937            4,849            4,631
                                                   ----------------------------------------------------------------------------------
                Total non-accrual loans                 9,169            9,150            8,719            8,335            8,417
                                                   ----------------------------------------------------------------------------------
  
  Restructured loans:
       Commercial                                          15               16               16               17               17
       Consumer
       Real estate:
           Construction
           Mortgage                                       108              110              117              217              104
                                                   ----------------------------------------------------------------------------------
                Total restructured loans                  123              126              133              234              121
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing loans                            9,292            9,276            8,852            8,569            8,538
                                                   ----------------------------------------------------------------------------------
  
  Other real estate                                     3,799            4,118            5,645            6,081            5,409
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing assets                          13,091           13,394           14,497           14,650           13,947
                                                   ----------------------------------------------------------------------------------
  
  Loans past due 90 days or more
       and still accruing                                 581              693              696              945            2,622
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing assets and
       loans past due 90 days or more                 $13,672          $14,087          $15,193          $15,595          $16,569
                                                   ==================================================================================
  
  Total non-performing loans as a
       percentage of total period-end loans              0.34%            0.34%            0.36%            0.38%            0.41%
  
  Total non-performing assets as a
       percentage of total period-end assets             0.21%            0.23%            0.26%            0.27%            0.27%
  
  Total non-performing assets and loans
       past due 90 days or more as a
       percentage of total period-end assets             0.22%            0.24%            0.27%            0.29%            0.33%
  
  Allowance for loan losses as a percentage
       of total non-performing loans                      387%             376%             374%             365%             332%
  
  Allowance for loan losses as a percentage
       of total period-end loans                         1.31%            1.30%            1.34%            1.37%            1.36%
  
  Total non-performing assets and loans
       past due 90 days or more as a
       percentage of stockholders' equity and
       allowance for loan losses                            4%               4%               4%               4%               5%
  </TABLE>
  
                                         13
  
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  The following  table  presents,  for the periods  indicated,  an analysis of the
  allowance for loan losses and other related data: (dollar amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                        Nine Months Ended                  Year
                                                   ---------------------------             Ended
                                                   09/30/99           09/30/98           12/31/98
                                                   --------           --------           --------
  <S>                                              <C>                <C>                <C>
  Balance at beginning of period                   $ 31,265           $ 24,150           $ 24,150
  Provisions charged to operating expenses            6,111              5,441              8,762
                                                   --------           --------           --------
                                                     37,376             29,591             32,912
  
  Recoveries on loans charged-off:
  Commercial                                            446                284                418
  Consumer                                              193                240                305
  Real estate                                            72                 24                764
                                                   --------           --------           --------
  Total recoveries                                      711                548              1,487
  
  Loans charged-off:
  Commercial                                         (1,087)              (534)            (1,281)
  Consumer                                             (805)              (966)            (1,352)
  Real estate                                          (277)              (321)              (501)
                                                   --------           --------           --------
  Total charge-offs                                  (2,169)            (1,821)            (3,134)
                                                   --------           --------           --------
  Net charge-offs                                    (1,458)            (1,273)            (1,647)
                                                   --------           --------           --------
  
  Balance at end of period                         $ 35,918           $ 28,318           $ 31,265
                                                   ========           ========           ========
  
  Net charge-offs as a percentage of
  average loans outstanding                            0.08%              0.09%              0.08%
  </TABLE>
  
  Item 3:  Quantitative and Qualitative Disclosures About Market Risk
  
  See Item 2 -  Management's  Discussion  and Analysis of Financial  Condition and
  Results of Operation, Interest Rate Sensitivity and Liquidity.
  
  
                                         14
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  PART II.  OTHER INFORMATION
  
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            No  reports  on Form 8-K were filed  during  the third  quarter  ended
            September 30, 1999.
  
  
  
                                         15
  <PAGE>
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
                                     SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
  
  
                                             COMMERCE BANCORP, INC.
                                     -------------------------------------------
                                                   (Registrant)
  
  
  
  
  
        November 15, 1999                        /s/ THOMAS J. SUKAY
  -----------------------------      -------------------------------------------
             (Date)                                THOMAS J. SUKAY
                                                SENIOR VICE PRESIDENT
                                    (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
  
  
                                         16
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 69387}]
metadata_filer: {"company-data": {"conformed-name": "COMMERCE BANCORP INC /NJ/", "cik": "0000715096", "assigned-sic": "6021", "irs-number": "222433468", "state-of-incorporation": "NJ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-12069", "film-number": "99752268"}, "business-address": {"street1": "COMMERCE ATRIUM", "street2": "1701 RTE 70 E", "city": "CHERRY HILL", "state": "NJ", "zip": "08034-5400", "phone": "6097519000"}, "mail-address": {"street1": "1701 ROUTE 70 EAST", "city": "CHERRY HILL", "state": "NJ", "zip": "08034-5400"}}
text: 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 quarter ended September 30, 1999
  
                                         OR
  
  (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                EXCHANGE ACT OF 1934
  
        For the transition period from ______________ to ______________
  
                              Commission File #0-12874
  
                               COMMERCE BANCORP, INC.
  
               (Exact name of registrant as specified in its charter)
  
               New Jersey                                      22-2433468
  --------------------------------------------------------------------------------
   (State or other jurisdiction of                  (IRS Employer Identification
    incorporation or organization)                              Number)
  
       Commerce Atrium, 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
                                   (856) 751-9000
  --------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the  preceding 12 months (or for such  shorter  period that the  registrant  was
  required  to file  such  report(s),  and (2) has  been  subject  to such  filing
  requirements for the past 90 days.
  
                    Yes  X                                No __
  
                       APPLICABLE ONLY TO CORPORATE ISSUERS:
              Indicate the number of shares outstanding of each of the
          issuer's classes of common stock, as of the last practical date.
  
      Common Stock                                             28,049,528
  --------------------------------------------------------------------------------
    (Title of Class)                                (No. of Shares Outstanding
                                                            as of 11/08/99)
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
                                        INDEX
  
                                                                              Page
  PART I. FINANCIAL INFORMATION
  
  Item 1. Financial Statements
  
          Consolidated Balance Sheets (unaudited)
          September 30, 1999 and December 31, 1998..............................1
  
          Consolidated  Statements of Income  (unaudited)
          Three months ended September 30, 1999 and
          September 30, 1998 and nine months ended
          September 30, 1999 and September 30, 1998.............................2
  
          Consolidated Statements of Cash Flows (unaudited)
          Nine months ended September 30, 1999 and
          September 30, 1998....................................................3
  
          Notes to Consolidated Financial Statements (unaudited)................4
  
  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operation....................................7
  
  Item 3. Quantitative and Qualitative Disclosures About Market Risk...........14
  
  PART II.OTHER INFORMATION
  
  Item 6. Exhibits and Reports on Form 8-K.....................................15
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (unaudited)
  -------------------------------------------------------------------------------------------------------------
                                                                           September 30,          December 31,
                                                                           ------------------------------------
        (dollars in thousands)                                                 1999                    1998
  -------------------------------------------------------------------------------------------------------------
  Assets
       Cash and due from banks                                              $   266,467           $   267,220
       Federal funds sold                                                                              10,395
                                                                            -----------           -----------
            Cash and cash equivalents                                           266,467               277,615
       Loans held for sale                                                        8,762                22,418
       Trading securities                                                        91,321                85,359
       Securities available for sale                                          1,741,290             1,305,004
       Securities held to maturity                                            1,106,248             1,220,874
            (market value 9/99-$1,071,559; 12/98-$1,223,667)
       Loans                                                                  2,741,788             2,280,326
            Less allowance for loan losses                                       35,918                31,265
                                                                            -----------           -----------
                                                                              2,705,870             2,249,061
       Bank premises and equipment, net                                         178,755               147,448
       Other assets                                                             180,967               116,411
                                                                            -----------           -----------
                                                                            $ 6,279,680           $ 5,424,190
                                                                            ===========           ===========
  
  Liabilities
       Deposits:
            Demand:
            Interest-bearing                                                $ 1,927,121           $ 1,682,958
            Noninterest-bearing                                               1,283,468             1,162,126
       Savings                                                                1,032,247               973,324
       Time                                                                   1,261,898             1,110,400
                                                                            -----------           -----------
            Total deposits                                                    5,504,734             4,928,808
  
       Other borrowed money                                                     297,469                27,845
       Other liabilities                                                         54,203                60,027
       Obligation to Employee Stock Ownership Plan (ESOP)                           769                 1,282
       Trust Capital Securities - Commerce Capital Trust I                       57,500                57,500
       Long-term debt                                                            23,000                23,000
                                                                            -----------           -----------
                                                                              5,937,675             5,098,462
  
  Stockholders'
  Equity
       Common stock, 28,053,249 shares
            issued (27,373,983 shares in 1998)                                   43,833                40,988
       Capital in excess of par or stated value                                 306,944               236,928
       Retained earnings                                                         22,968                43,712
       Accumulated other comprehensive income                                   (29,347)                7,006
                                                                            -----------           -----------
                                                                                344,398               328,634
       Less commitment to ESOP                                                      769                 1,282
  
       Less treasury stock, at cost                                               1,624                 1,624
                                                                            -----------           -----------
            Total stockholders' equity                                          342,005               325,728
                                                                            -----------           -----------
  
                                                                            $ 6,279,680           $ 5,424,190
                                                                            ===========           ===========
  See accompanying notes
  
                                         1
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF INCOME
                                     (unaudited)
  ----------------------------------------------------------------------------------------------------------------------
                                                                Three Months Ended                   Nine Months Ended
                                                                   September 30,                        September 30,
                                                            ----------------------------       -----------------------------
      (dollars in thousands, except per share amounts)         1999              1998              1999              1998
      ----------------------------------------------------------------------------------------------------------------------
  Interest income
      Interest and fees on loans                            $ 55,664          $ 44,074          $156,228          $122,229
      Interest on investments                                 42,949            38,114           122,723           115,663
      Other interest                                             484               968               868             1,824
                                                            --------          --------          --------          --------
            Total interest income                             99,097            83,156           279,819           239,716
                                                            --------          --------          --------          --------
  
  Interest expense
      Interest on deposits:
         Demand                                               11,914             8,981            31,607            25,872
         Savings                                               5,349             5,324            15,264            15,384
         Time                                                 14,999            16,392            44,684            46,763
                                                            --------          --------          --------          --------
            Total interest on deposits                        32,262            30,697            91,555            88,019
      Interest on other borrowed money                         2,074               604             4,929             3,549
      Interest on long-term debt                               1,782             1,782             5,345             5,346
                                                            --------          --------          --------          --------
            Total interest expense                            36,118            33,083           101,829            96,914
                                                            --------          --------          --------          --------
  
      Net interest income                                     62,979            50,073           177,990           142,802
      Provision for loan losses                                1,653             2,053             6,111             5,441
                                                            --------          --------          --------          --------
      Net interest income after provision for
        loan losses                                           61,326            48,020           171,879           137,361
  
  Noninterest income
      Deposit charges and service fees                        11,272             8,897            31,824            26,228
      Other operating income                                  16,690            15,468            50,067            41,312
      Net investment securities gains                            270               991             1,535             1,920
                                                            --------          --------          --------          --------
            Total noninterest income                          28,232            25,356            83,426            69,460
                                                            --------          --------          --------          --------
  
  Noninterest expense
      Salaries                                                26,158            20,897            73,458            57,472
      Benefits                                                 4,807             4,630            14,704            12,628
      Occupancy                                                5,765             4,769            16,065            13,331
      Furniture and equipment                                  8,336             6,174            22,890            17,921
      Office                                                   5,403             4,030            15,554            11,897
      Audit and regulatory fees and assessments                  738               610             1,942             1,709
      Marketing                                                2,735             2,039             6,901             5,775
      Other real estate (net)                                    454               320             1,423             1,145
      Other                                                   10,343             8,655            30,278            23,043
                                                            --------          --------          --------          --------
            Total noninterest expenses                        64,739            52,124           183,215           144,921
                                                            --------          --------          --------          --------
  
      Income before income taxes                              24,819            21,252            72,090            61,900
      Provision for federal and state income taxes             7,979             7,150            23,753            21,466
                                                            --------          --------          --------          --------
      Net income                                            $ 16,840          $ 14,102          $ 48,337          $ 40,434
                                                            ========          ========          ========          ========
  
      Net income per common and common
        equivalent share:
            Basic                                           $   0.61          $   0.52          $   1.75          $   1.51
                                                            --------          --------          --------          --------
            Diluted                                         $   0.58          $   0.50          $   1.68          $   1.44
                                                            --------          --------          --------          --------
      Average common and common equivalent
        shares outstanding:
            Basic                                             27,816            27,016            27,605            26,710
                                                            --------          --------          --------          --------
            Diluted                                           28,849            28,218            28,832            28,076
                                                            --------          --------          --------          --------
      Cash dividends declared, common stock                 $   0.22          $   0.38          $   0.65          $   0.73
                                                            ========          ========          ========          ========
  See accompanying notes
  
                                         2
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  ----------------------------------------------------------------------------------------------------------
                                                                                           Nine Months Ended
                                                                                             September 30,
                                                                                    --------------------------------
          (dollars in thousands)                                                       1999                1998
          ----------------------------------------------------------------------------------------------------------
  Operating
  activities
          Net income                                                                 $  48,337           $  40,434
          Adjustments to reconcile net income to net cash
            provided by operating activities:
              Provision for loan losses                                                  6,111               5,441
              Provision for depreciation, amortization and accretion                    21,913              18,837
              Gains on sales of securities available for sale                           (1,535)             (1,902)
              Proceeds from sales of mortgages held for sale                            92,319              56,614
              Originations of mortgages held for sale                                  (78,663)            (48,734)
              Net loan (chargeoffs)                                                     (1,458)             (1,273)
              Net increase in trading securities                                        (5,962)            (45,881)
              Increase in other assets                                                 (44,783)            (37,389)
              (Decrease) increase in other liabilities                                  (5,824)             25,711
          ---------------------------------------------------------------------------------------------------------
                 Net cash provided by operating activities                              30,455              11,858
  
  Investing
  activities
          Proceeds from the sales of securities available for sale                     250,179             321,960
          Proceeds from the maturity of securities available for sale                  240,316             319,031
          Proceeds from the maturity of securities held to maturity                    204,345             226,458
          Purchase of securities available for sale                                   (843,644)           (546,697)
          Purchase of securities held to maturity                                     (103,329)           (477,573)
          Net increase in loans                                                       (599,149)           (423,281)
          Proceeds from sales of loans                                                   7,919               7,523
          Purchases of premises and equipment                                          (47,567)            (32,410)
          ---------------------------------------------------------------------------------------------------------
                 Net cash used by investing activities                                (890,930)           (604,989)
  
  Financing
  activities
          Net increase in demand and savings deposits                                  424,428             525,113
          Net increase in time deposits                                                151,498             296,317
          Net increase(decrease) in other borrowed money                               269,624            (191,550)
          Dividends paid                                                               (17,325)            (18,245)
          Proceeds from issuance of common stock under
             dividend reinvestment and other stock plans                                20,886               7,272
          Issuance of common stock                                                                           9,585
          Other                                                                            216                  59
          ---------------------------------------------------------------------------------------------------------
                 Net cash provided by financing activities                             849,327             628,551
  
          (Decrease) increase in cash and cash equivalents                             (11,148)             35,420
          Cash and cash equivalents at beginning of year                               277,615             204,776
          ---------------------------------------------------------------------------------------------------------
          Cash and cash equivalents at end of period                                 $ 266,467           $ 240,196
          =========================================================================================================
  
          Supplemental  disclosures of cash flow information:
             Cash paid during the period for:
               Interest                                                              $ 101,176           $  93,956
               Income taxes                                                             23,568              23,050
             Other noncash activities:
               Transfer of securities to securities available for sale                  91,010
               Securitization of loans                                                 129,768
          ---------------------------------------------------------------------------------------------------------
  See accompanying notes
  
                                         3
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (unaudited)
  
  A.   Consolidated Financial Statements
  
  The consolidated financial statements included herein have been prepared without
  audit  pursuant to the rules and  regulations  of the  Securities  and  Exchange
  Commission.  Certain information and footnote  disclosures  normally included in
  financial  statements  prepared in accordance with generally accepted accounting
  principles   have  been  condensed  or  omitted   pursuant  to  such  rules  and
  regulations.   The  accompanying  condensed  consolidated  financial  statements
  reflect all adjustments which are, in the opinion of management,  necessary to a
  fair  statement  of  the  results  for  the  interim  periods  presented.   Such
  adjustments  are  of a  normal  recurring  nature.  The  accompanying  financial
  statements  include  the  consolidated  accounts of the former  Community  First
  Banking  Company  (CFBC),  Tinton  Falls,  New Jersey,  and the former  Prestige
  Financial  Corp.  (PFC),  Flemington,  New Jersey,  for all  periods  presented.
  Effective January 15, 1999, Commerce Bancorp,  Inc. (the Company) acquired CFBC,
  and CFBC's  wholly-owned  bank  subsidiary,  Tinton Falls State Bank, was merged
  with and into Commerce  Bank/Shore,  N.A. Also  effective  January 15, 1999, the
  Company acquired PFC, and PFC's  wholly-owned  bank  subsidiary,  Prestige State
  Bank, was  re-chartered  as a national bank and renamed  Commerce  Bank/Central,
  N.A. The  transactions  were  accounted  for as poolings of  interests.  Certain
  amounts in prior periods have been reclassified for comparative purposes.
  
  These condensed  consolidated financial statements should be read in conjunction
  with the audited  financial  statements  and the notes  thereto  included in the
  registrant's  Annual Report on Form 10-K for the period ended December 31, 1998.
  The results for the three  months ended  September  30, 1999 and the nine months
  ended September 30, 1999 are not necessarily  indicative of the results that may
  be expected for the year ended December 31, 1999.
  
  The consolidated  financial statements include the accounts of Commerce Bancorp,
  Inc. and all of its subsidiaries,  including  Commerce Bank, N.A. (Commerce NJ),
  Commerce   Bank/Pennsylvania,   N.A.,   Commerce   Bank/Shore,   N.A.,  Commerce
  Bank/North,  Commerce  Bank/Central,  N.A.,  Commerce  Capital Trust I, Commerce
  National Insurance  Services,  Inc. (Commerce  Insurance),  and Commerce Capital
  Markets,  Inc.  (CCMI).  All  material   intercompany   transactions  have  been
  eliminated.
  
  B.   Commitments
  
  In the normal course of business,  there are various outstanding  commitments to
  extend credit, such as letters of credit and unadvanced loan commitments,  which
  are  not  reflected  in  the  accompanying  consolidated  financial  statements.
  Management  does  not  anticipate  any  material  losses  as a  result  of these
  transactions.
  
  C.   Comprehensive Income
  
  Total  comprehensive  income,  which for the  Company  included  net  income and
  unrealized  gains and losses on the  Company's  available  for sale  securities,
  amounted to $7.8 million and $19.7 million,  respectively,  for the three months
  ended  September 30, 1999 and 1998. For the nine months ended September 30, 1999
  and 1998,  total  comprehensive  income  was $12.0  million  and $43.4  million,
  respectively.
  
                                         4
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  D.   Segment Information
  
  Selected segment information is as follows:
  ---------------------------------------------------------------------------------------------------------------------------------
                                                      Three Months Ended                          Three Months Ended
                                                      September 30, 1999                          September 30, 1998
                                           Community        Parent/                      Community      Parent/
                                             Banks           Other          Total          Banks         Other             Total
  ---------------------------------------------------------------------------------------------------------------------------------
  Net interest income                     $   64,741     $   (1,762)     $   62,979     $   51,639     $   (1,566)     $   50,073
  Provision for loan losses                    1,653                          1,653          2,053                          2,053
                                          -----------------------------------------------------------------------------------------
  
  Net interest income after provision         63,088         (1,762)         61,326         49,586         (1,566)         48,020
  Noninterest income                          16,966         11,266          28,232         14,944         10,412          25,356
  Noninterest expense                         54,397         10,342          64,739         43,469          8,655          52,124
                                          -----------------------------------------------------------------------------------------
  Income before income taxes                  25,657           (838)         24,819         21,061            191          21,252
  Income tax expense                           8,094           (115)          7,979          7,204            (54)          7,150
                                          -----------------------------------------------------------------------------------------
  Net income                              $   17,563     $     (723)     $   16,840     $   13,857     $      245      $   14,102
                                          =========================================================================================
  
  Average assets (in millions)            $5,431,034     $  592,980      $6,024,014     $4,479,574     $  482,005      $4,961,579
                                          =========================================================================================
  ---------------------------------------------------------------------------------------------------------------------------------
                                                       Nine Months Ended                            Nine Months Ended
                                                       September 30, 1999                           September 30, 1998
                                          Community         Parent/                     Community        Parent/
                                             Banks           Other          Total          Banks          Other           Total
  ---------------------------------------------------------------------------------------------------------------------------------
  Net interest income                     $  183,075     $   (5,085)     $  177,990     $  147,559     $   (4,757)     $  142,802
  Provision for loan losses                    6,111                          6,111          5,441                          5,441
                                          -----------------------------------------------------------------------------------------
  
  Net interest income after provision        176,964         (5,085)        171,879        142,118         (4,757)        137,361
  Noninterest income                          47,213         36,213          83,426         42,442         27,018          69,460
  Noninterest expense                        151,719         31,496         183,215        122,197         22,724         144,921
                                          -----------------------------------------------------------------------------------------
  Income before income taxes                  72,458           (368)         72,090         62,363           (463)         61,900
  Income tax expense                          23,427            326          23,753         21,792           (326)         21,466
                                          -----------------------------------------------------------------------------------------
  Net income                              $   49,031     $     (694)     $   48,337     $   40,571     $     (137)     $   40,434
                                          =========================================================================================
  
  Average assets (in millions)            $5,158,501     $  584,261      $5,742,762     $4,274,188     $  456,582      $4,730,770
                                          =========================================================================================
  E.   Recent Accounting Statement
  
  In June 1998, the Financial  Accounting Standards Board issued Statement No. 133
  "Accounting for Derivative  Instruments and Hedging  Activities"  (FAS 133). FAS
  133 will require the Company to recognize all  derivatives  on the balance sheet
  at fair  value.  Derivatives  that are not hedges must be adjusted to fair value
  through  income.  If the  derivative is a hedge,  depending on the nature of the
  hedge, changes in the fair value of the derivative will either be offset against
  the change in fair value of the hedged  asset or liability  through  earnings or
  recognized in other comprehensive  income until the hedged item is recognized in
  earnings. The ineffective portion of a derivative's change in fair value will be
  immediately  recognized in earnings.  FAS 133 becomes  effective for the Company
  beginning  January 1, 2001.  Although early adoption is allowed in any quarterly
  period  after June 1998,  the Company has no plans to adopt FAS 133 prior to the
  effective date. Based on the Company's minimal use of derivatives at the current
  time,  management  does not expect the adoption of FAS 133 to have a significant
  effect on  results of  operations  or the  financial  position  of the  Company.
  However,  the impact from adopting FAS 133 will depend on the nature and purpose
  of the derivative instruments in use by the Company at that time.
  
                                         5
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  F.   Trust Capital Securities
  
  On June 9,  1997,  the  Company  issued  $57.5  million of 8.75%  Trust  Capital
  Securities  through Commerce  Capital Trust I, a newly formed Delaware  business
  trust  subsidiary of the Company.  The net proceeds of the offering will be used
  for general corporate  purposes,  which may include  contributions to subsidiary
  banks  to  fund  their   operations,   the  financing  of  one  or  more  future
  acquisitions,  repayment  of  indebtedness  of the Company or of its  subsidiary
  banks,  investments  in or  extensions  of  credit to its  subsidiaries,  or the
  repurchase  of shares  of the  Company's  outstanding  common  stock.  All $57.5
  million of the Trust Capital Securities qualify as Tier 1 capital for regulatory
  capital purposes.
  
  G.   Earnings Per Share
  
  The  calculation  of earnings per share  follows (in  thousands,  except for per
  share amounts):
  Three Months Ended      Nine Months Ended
                                                  September 30,          September 30,
                                             -----------------------------------------------
                                                1999        1998       1999        1998
  ------------------------------------------------------------------------------------------
  Basic:
  Net income applicable to common stock       $16,840     $14,102     $48,337     $40,434
                                              =======     =======     =======     =======
  
  Average common shares outstanding            27,816      27,016      27,605      26,710
                                              =======     =======     =======     =======
  
  Net income per common share - basic         $  0.61     $  0.52     $  1.75     $  1.51
                                              =======     =======     =======     =======
  
  Diluted:
  Net income applicable to common stock
     on a diluted basis                       $16,840     $14,102     $48,337     $40,434
                                              =======     =======     =======     =======
  
  Average common shares outstanding            27,816      27,016      27,605      26,710
  Additional shares considered in diluted
     Computation assuming:
  Exercise of stock options                     1,033       1,202       1,227       1,226
  Conversion of preferred stock                                                       140
                                              -------     -------     -------     -------
  Average common shares outstanding
     on a diluted basis                        28,849      28,218      28,832      28,076
                                              =======     =======     =======     =======
  
  Net income per common share - diluted       $  0.58     $  0.50     $  1.68     $  1.44
                                              =======     =======     =======     =======
  H.   Pending Acquisitions
  
  On  July  27,  1999,  Commerce  Insurance,  the  Company's  insurance  brokerage
  subsidiary,  reached an agreement in  principle  to acquire  Mullaney  Insurance
  Associates,  Oakhurst,  New Jersey.  On October 27, 1999, the Company reached an
  agreement in principle  to acquire  Traber and  Vreeland,  Inc.,  Randolph,  New
  Jersey. The acquisitons of these insurance  brokerage agencies will be completed
  by the issuance of common stock of the Company  totaling  approximately  325,000
  shares.  The Company expects the  acquisitions to close in the fourth quarter of
  1999. The transactions will be accounted for as poolings of interests.  However,
  the Company does not expect to restate the  financial  statements of the periods
  prior to the acquisitions, as the changes, in the aggregate, will be immaterial.
  
                                         6
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation
  
  Capital Resources
  
  At September 30, 1999,  stockholders'  equity totaled $342.0 million or 5.45% of
  total  assets,  compared to $325.7  million or 6.01% of total assets at December
  31, 1998.
  
  The table below presents the Company's and Commerce NJ's risk-based and leverage
  ratios at September 30, 1999 and 1998:
  Per Regulatory Guidelines
                                                                    -------------------------------------------------
                                                    Actual                Minimum             "Well Capitalized"
                                              Amount      Ratio      Amount      Ratio       Amount          Ratio
  -------------------------------------------------------------------------------------------------------------------
  September 30, 1999
  Company
    Risk based capital ratios:
        Tier 1                               $424,423     11.48%     $147,915     4.00%     $221,873         6.00%
        Total capital                         474,141     12.82       295,830     8.00       369,788        10.00
    Leverage ratio                            424,423      7.02       242,000     4.00       302,500         5.00
  
  Commerce NJ
    Risk based capital ratios:
        Tier 1                               $212,741     10.31%     $ 82,527     4.00%     $123,791         6.00%
        Total capital                         232,317     11.26       165,055     8.00       206,319        10.00
    Leverage ratio                            212,741      6.35       134,007     4.00       167,509         5.00
  
  September 30, 1998
  Company
    Risk based capital ratios:
        Tier 1                               $370,401     13.62%     $108,753     4.00%     $163,130         6.00%
        Total capital                         417,119     15.34       217,506     8.00       271,883        10.00
    Leverage ratio                            370,401      7.50       148,190     3.00       246,983         5.00
  
  Commerce NJ
    Risk based capital ratios:
        Tier 1                               $190,741     12.74%     $ 59,903     4.00%     $ 89,854         6.00%
        Total capital                         206,842     13.81       119,805     8.00       149,756        10.00
    Leverage ratio                            190,741      6.68        85,702     3.00       142,836         5.00
  At September 30, 1999, the Company's consolidated capital levels and each of the
  Company's  bank   subsidiaries   met  the  regulatory   definition  of  a  "well
  capitalized" financial institution, i.e., a leverage capital ratio exceeding 5%,
  a Tier 1 risk-based  capital ratio exceeding 6%, and a total risk-based  capital
  ratio  exceeding  10%.  Management  believes that as of September 30, 1999,  the
  Company and its  subsidiaries  meet all capital  adequacy  requirements to which
  they are subject.
  
  Deposits
  
  Total deposits at September 30, 1999 were $5.50 billion,  up $898.7 million,  or
  20% over total deposits of $4.61 billion at September 30, 1998, and up by $575.9
  million,  or 12% from year-end 1998. Deposit growth during the first nine months
  of 1999  included core deposit  growth in all  categories as well as growth from
  the public sector. The Company  experienced  "same-store core deposit growth" of
  17.5% at  September  30,  1999 as  compared  to  deposits  a year ago for  those
  branches open for more than two years.
  
                                         7
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Interest Rate Sensitivity and Liquidity
  
  The Company's risk of loss arising from adverse changes in the fair market value
  of financial instruments, or market risk, is composed primarily of interest rate
  risk.  The  primary  objective  of  the  Company's  asset/liability   management
  activities  is to maximize net interest  income,  while  maintaining  acceptable
  levels of interest rate risk. The Company's  Asset/Liability Committee (ALCO) is
  responsible for  establishing  policies to limit exposure to interest rate risk,
  and to ensure  procedures  are  established  to  monitor  compliance  with these
  policies. The guidelines established by ALCO are reviewed by the Company's Board
  of Directors.
  
  Management considers the simulation of net interest income in different interest
  rate environments to be the best indicator of the Company's  interest rate risk.
  Income  simulation  analysis  captures not only the  potential of all assets and
  liabilities to mature or reprice, but also the probability that they will do so.
  Income  simulation also attends to the relative  interest rate  sensitivities of
  these  items,  and  projects  their  behavior  over an extended  period of time.
  Finally,  income simulation permits management to assess the probable effects on
  the balance  sheet not only of changes in interest  rates,  but also of proposed
  strategies for responding to them.
  
  The Company's  income  simulation  model analyzes  interest rate  sensitivity by
  projecting net income over the next 24 months in a flat rate scenario versus net
  income in alternative  interest rate scenarios.  Management  continually reviews
  and  refines  its  interest  rate risk  management  process in  response  to the
  changing   economic   climate.   Currently,   the  Company's  model  projects  a
  proportionate  200 basis point change during the next year, with rates remaining
  constant in the second year.  The  Company's  ALCO policy has  established  that
  interest income  sensitivity will be considered  acceptable if net income in the
  above  interest  rate  scenario  is  within  15% of net  income in the flat rate
  scenario  in the first  year and  within  30% over the two year time  frame.  At
  September 30, 1999, the Company's  income  simulation model indicates net income
  would  increase  by 5.71% and  0.66% in the first  year and over a two year time
  frame,  respectively,  if rates  decreased as described  above, as compared to a
  decrease of 2.40% and 10.05%, respectively,  at September 30, 1998. At September
  30, 1999,  the model  projects that net income would decrease by 8.92% and 6.67%
  in the  first  year and  over a two  year  time  frame,  respectively,  if rates
  increased  as  described  above,  as  compared to a decrease of 6.13% and 5.98%,
  respectively,  at September 30, 1998.  All of these net income  projections  are
  within  an  acceptable  level of  interest  rate  risk  pursuant  to the  policy
  established by ALCO.
  
  In the event the Company's  interest rate risk models  indicate an  unacceptable
  level of risk, the Company could undertake a number of actions that would reduce
  this risk,  including the sale of a portion of its available for sale portfolio,
  the use of risk  management  strategies such as interest rate swaps and caps, or
  the extension of the maturities of its short-term borrowings.
  
  Management  also  monitors  interest  rate risk by  utilizing a market  value of
  equity model. The model assesses the impact of a change in interest rates on the
  market value of all the  Company's  assets and  liabilities,  as well as any off
  balance  sheet items.  The model  calculates  the market value of the  Company's
  assets and liabilities in excess of book value in the current rate scenario, and
  then  compares the excess of market value over book value given an immediate 200
  basis point change in rates.  The Company's ALCO policy indicates that the level
  of interest  rate risk is  unacceptable  if the immediate 200 basis point change
  would  result in the loss of 60% or more of the excess of market value over book
  value in the current rate  scenario.  At September 30, 1999, the market value of
  equity model indicates an acceptable level of interest rate risk.
  
  Liquidity  involves the Company's ability to raise funds to support asset growth
  or decrease assets to meet deposit  withdrawals  and other  borrowing  needs, to
  maintain reserve requirements and to otherwise operate the Company on an ongoing
  basis.  The  Company's  liquidity  needs  are  primarily  met by  growth in core
  deposits,  its  cash  and  federal  funds  sold  position,  cash  flow  from its
  amortizing  investment  and loan  portfolios,  as well as the use of  short-term
  borrowings, as required.
  
                                         8
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Short-Term Borrowings
  
  Short-term borrowings,  or other borrowed money, consist primarily of securities
  sold under agreements to repurchase and overnight lines of credit,  and are used
  to meet short term funding needs. At September 30, 1999,  short-term  borrowings
  aggregated $297.5 million and had an average rate of 5.56%, as compared to $27.8
  million at an average rate of 4.98% at December 31, 1998.
  
  Interest Earning Assets
  
  For the nine month period ended  September  30, 1999,  interest  earning  assets
  increased $765.0 million from $4.92 billion to $5.69 billion.  This increase was
  primarily in investment securities and the loan portfolio as described below.
  
  Loans
  
  During the first nine months of 1999,  loans increased $456.8 million from $2.25
  billion to $2.71 billion.  At September 30, 1999, loans represented 49% of total
  deposits and 43% of total assets. All segments of the loan portfolio experienced
  growth in the first nine months of 1999,  including  loans secured by commercial
  real estate properties, commercial loans, and consumer loans.
  
  During the third  quarter of 1999,  the Company  securitized  $129.8  million of
  residential  mortgage loans, and included the securities in its held to maturity
  investment portfolio.
  
  Investments
  
  In total, for the first nine months of 1999, securities increased $327.6 million
  from $2.61 billion to $2.94 billion.  Deposit  growth and other funding  sources
  were used to increase the Company's investment portfolio. The available for sale
  portfolio  increased  $436.3 million to $1.74 billion at September 30, 1999 from
  $1.31  billion  at  December  31,  1998,  and the  securities  held to  maturity
  portfolio  decreased  $114.6 million to $1.11 billion at September 30, 1999 from
  $1.22 billion at year-end 1998. In connection with the  acquisitions of CFBC and
  PFC, management reclassified $91.0 million of investment securities from held to
  maturity  to  available  for sale during the first  quarter of 1999.  Unrealized
  losses on those securities  transferred were  approximately  $330 thousand.  The
  portfolio of trading  securities  increased  $6.0 million from  year-end 1998 to
  $91.3 million at September 30, 1999. At September 30, 1999,  the average life of
  the  investment  portfolio  was  approximately  5.5 years,  and the duration was
  approximately 4.1 years. At September 30, 1999, total securities represented 47%
  of total assets.
  
  Net Income
  
  Net income for the third quarter of 1999 was $16.8 million,  an increase of $2.7
  million or 19% over the $14.1  million  recorded for the third  quarter of 1998.
  Net income for the first nine months of 1999 was $48.3  million,  an increase of
  $7.9 million or 20% over the $40.4 million  recorded in the first nine months of
  1998. On a per share basis, diluted net income for the third quarter of 1999 and
  the first nine months of 1999 were $0.58 and $1.68 per common share  compared to
  $0.50 and $1.44 per common share for the respective 1998 periods.
  
  Return on average  assets (ROA) and return on average equity (ROE) for the third
  quarter  of 1999 were  1.12% and  20.32%,  respectively,  compared  to 1.14% and
  17.66%,  respectively,  for the same 1998 period. ROA and ROE for the first nine
  months of 1999 were 1.12% and 19.35%, respectively, compared to 1.13% and 17.61%
  a year ago.
  
  Net Interest Income
  
  Net interest  income  totaled  $63.0  million for the third  quarter of 1999, an
  increase  of $12.9  million  or 26% from $50.1  million in the third  quarter of
  1998.  Net  interest  income for the first nine  months of 1999  totaled  $178.0
  million,  up $35.2  million  or 25% from the  first  nine  months  of 1998.  The
  improvement in net interest  income for both periods was due primarily to volume
  increases in the loan and investment portfolios.
  
                                         9
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Noninterest Income
  
  Noninterest  income  totaled  $28.2  million for the third  quarter of 1999,  an
  increase of $2.9 million or 11% from $25.4 million in the third quarter of 1998.
  The increase was due to increased  deposit charges and service fees,  which rose
  $2.4 million over the third quarter of 1998 primarily due to higher  transaction
  volumes.  In addition,  other operating  income rose $1.2 million over the prior
  year, primarily from increased revenues from Commerce National. The Company also
  recorded $270 thousand in net investment  securities  gains in the third quarter
  of 1999, as compared to $991 thousand a year ago.
  
  For the first nine months of 1999,  noninterest income totaled $83.4 million, an
  increase of $13.9  million or 20% from $69.5 million in the first nine months of
  1998.  Other  operating  income rose $8.8  million over the first nine months of
  1998,  including  increased revenues of $6.2 million from Commerce Insurance and
  $1.0 million from CCMI.  Deposit charges and service fees rose $5.6 million over
  the prior year  primarily  due to higher  transaction  volumes,  and the Company
  recorded  $1.5  million  in net  investment  securities  gains in the first nine
  months of 1999 as compared to $1.9 million a year ago.
  
  Noninterest Expense
  
  For the third quarter of 1999,  noninterest  expense  totaled $64.7 million,  an
  increase of $12.6 million or 24% over the same period in 1998.  Contributing  to
  this  increase was new branch  activity  over the past twelve  months,  with the
  number of branches  increasing from 93 at September 30, 1998 to 111 at September
  30, 1999,  and the growth of Commerce  Insurance and CCMI.  With the addition of
  these new offices,  staff,  facilities,  and related expenses rose  accordingly.
  Other  noninterest  expenses  rose $1.7 million over the third  quarter of 1998.
  This increase resulted primarily from higher bank card-related  service charges,
  increased  business   development   expenses,   and  increased   provisions  for
  non-credit-related losses.
  
  For the first nine months of 1999,  noninterest  expense totaled $183.2 million,
  an increase of $38.3 million or 26% over $144.9 million in the first nine months
  of 1998. Contributing to this increase was new branch activity and the growth of
  Commerce National and CCMI as noted above. Other noninterest  expenses rose $7.2
  million over the first nine months of 1998.  This  increase  resulted  primarily
  from higher bank card-related  service charges,  increased business  development
  expenses, and increased provisions for non-credit-related losses.
  
  The Company's operating efficiency ratio (noninterest expenses,  less other real
  estate expense, divided by net interest income plus noninterest income excluding
  non-recurring gains) was 69.95% for the first nine months of 1999 as compared to
  68.35% for the same 1998 period.  The Company's  efficiency  ratio remains above
  its peer group primarily due to its aggressive growth expansion activities.
  
  Loan and Asset Quality
  
  Total  non-performing  assets  (non-performing  loans  and  other  real  estate,
  excluding  loans  past  due 90 days or more  and  still  accruing  interest)  at
  September  30, 1999 were $13.1  million,  or 0.21% of total  assets  compared to
  $14.7 million or 0.27% of total assets at December 31, 1998 and $13.9 million or
  0.27% of total assets at September 30, 1998.
  
  Total non-performing loans (non-accrual loans and restructured loans,  excluding
  loans past due 90 days or more and still  accruing  interest) at  September  30,
  1999 were $9.3 million or 0.34% of total loans compared to $8.6 million or 0.38%
  of total loans at December  31, 1998 and $8.5 million or 0.41% of total loans at
  September 30, 1998.  At September  30, 1999,  loans past due 90 days or more and
  still accruing  interest  amounted to $581 thousand compared to $945 thousand at
  December  31, 1998 and $2.6  million at September  30,  1998.  Additional  loans
  considered  as potential  problem  loans by the  Company's  internal loan review
  department  ($22.1 million at September 30, 1999) have been evaluated as to risk
  exposure in determining the adequacy of the allowance for loan losses.
  
                                         10
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  Other real estate (ORE) at September  30, 1999 totaled $3.8 million  compared to
  $6.1 million at December 31, 1998 and $5.4 million at September 30, 1998.  These
  properties  have  been  written  down to the  lower of cost or fair  value  less
  disposition costs.
  
  The following pages include tabular  presentations  showing detailed information
  about the  Company's  non-performing  loans and  assets and an  analysis  of the
  Company's  allowance  for loan losses and other  related data for  September 30,
  1999, December 31, 1998, and September 30, 1998.
  
  Year 2000
  
  The Company began the process of preparing its computer systems and applications
  for the Year 2000 in 1996. The process  involves  identifying and resolving date
  recognition  problems in computer systems and software,  and to a lesser extent,
  other operating equipment, that could be caused by the date change from December
  31, 1999 to January 1, 2000.
  
  The Company has completed its assessment of all business processes that could be
  affected by the Year 2000 issue.  Each business  process  assessment  included a
  review of the information  systems used in that process,  including hardware and
  software,  involvement of third parties, and any other operating equipment.  The
  Company licenses substantially all software used in conducting its business from
  third party  vendors.  All vendors have been  contacted  regarding the Year 2000
  issue, and the Company  continues to track the progress each vendor is making in
  reaching  Year 2000  compliance.  The Company is also working  with  significant
  customers and counterparties to monitor their Year 2000 efforts. The Company has
  all  necessary  changes  in place and tested for all  mission  critical  systems
  (those systems defined as absolutely  essential to the daily business  operation
  of the Company).  Additionally,  the Company has completed certification testing
  with all mission  critical service  providers.  Changes for 98% of the remaining
  systems  are in place and  tested.  Contingency  plans have been  completed  and
  validated.
  
  The Company believes it is taking the appropriate steps to address all Year 2000
  issues.  Despite  the  Company's  efforts to address  the Year 2000  problem and
  develop  contingency  plans  in the  event  of  Year  2000  failures,  including
  non-compliance  by third parties  (including  loan  customers),  there can be no
  assurance  that the Year 2000 issue  will not  materially  adversely  impact the
  Company's  financial  position,  results of operations,  or  relationships  with
  customers, vendors, or others.
  
  The  Company  estimates  the  total  cost of the Year 2000  compliance  process,
  including internal and external personnel and any required hardware and software
  modifications, will not exceed $1.0 million.
  
  Forward-Looking Statements
  
  The  Company  may  from  time  to time  make  written  or oral  "forward-looking
  statements",  including  statements  contained in the Company's filings with the
  Securities and Exchange Commission (including this Form 10-Q), in its reports to
  stockholders and in other communications by the Company,  which are made in good
  faith by the Company  pursuant to the "safe  harbor"  provisions  of the Private
  Securities Litigation Reform Act of 1995.
  
  These  forward-looking   statements  include  statements  with  respect  to  the
  Company's  beliefs,  plans,  objectives,  goals,  expectations,   anticipations,
  estimates  and   intentions,   that  are  subject  to   significant   risks  and
  uncertainties  and are subject to change based on various factors (some of which
  are beyond the Company's control). The words "may", "could", "should",  "would",
  believe",  "anticipate",  "estimate",  "expect",  "intend",  "plan" and  similar
  expressions are intended to identify forward-looking  statements.  The following
  factors, among others, could cause the Company's financial performance to differ
  materially from that expressed in such forward-looking  statements: the strength
  of the United States economy in general and the strength of the local  economies
  in which the Company conducts operations; the effects of, and changes in, trade,
  monetary and fiscal policies,  including  interest rate policies of the Board of
  Governors of the Federal Reserve System (the "FRB"); inflation;  interest rates,
  market and monetary  fluctuations;  the timely  development of  competitive  new
  products and  services by the Company and the  acceptance  of such  products and
  services by customers;  the willingness of customers to substitute  competitors'
  products and services  for the  Company's  products and services and vice versa;
  the impact of changes in financial  services'  laws and  regulations  (including
  laws  concerning  taxes,  banking,  securities  and  insurance);   technological
  changes; future acquisitions;  the expense savings and revenue enhancements from
  
                                         11
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  acquisitions  being less than  expected;  the growth  and  profitability  of the
  Company's  noninterest  or fee income  being less than  expected;  unanticipated
  regulatory  or judicial  proceedings;  changes in consumer  spending  and saving
  habits;  and the success of the Company at  managing  the risks  involved in the
  foregoing.
  
  The  Company  cautions  that the  foregoing  list of  important  factors  is not
  exclusive.  The  Company  does  not  undertake  to  update  any  forward-looking
  statement,  whether written or oral, that may be made from time to time by or on
  behalf of the Company.
  
                                         12
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  The following summary presents  information  regarding  non-performing loans and
  assets as of September 30, 1999 and the preceding four quarters: (dollar amounts
  in thousands)
  September 30,     June 30,         March 31,       December 31,     September 30,
                                                        1999            1999             1999              1998             1998
                                                   ----------------------------------------------------------------------------------
  Non-accrual loans:
       Commercial                                     $ 2,827          $ 3,104          $ 2,821          $ 2,466          $ 2,417
       Consumer                                           748              787              846              831              782
       Real estate:
           Construction                                    55              115              115              189              587
           Mortgage                                     5,539            5,144            4,937            4,849            4,631
                                                   ----------------------------------------------------------------------------------
                Total non-accrual loans                 9,169            9,150            8,719            8,335            8,417
                                                   ----------------------------------------------------------------------------------
  
  Restructured loans:
       Commercial                                          15               16               16               17               17
       Consumer
       Real estate:
           Construction
           Mortgage                                       108              110              117              217              104
                                                   ----------------------------------------------------------------------------------
                Total restructured loans                  123              126              133              234              121
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing loans                            9,292            9,276            8,852            8,569            8,538
                                                   ----------------------------------------------------------------------------------
  
  Other real estate                                     3,799            4,118            5,645            6,081            5,409
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing assets                          13,091           13,394           14,497           14,650           13,947
                                                   ----------------------------------------------------------------------------------
  
  Loans past due 90 days or more
       and still accruing                                 581              693              696              945            2,622
                                                   ----------------------------------------------------------------------------------
  
  Total non-performing assets and
       loans past due 90 days or more                 $13,672          $14,087          $15,193          $15,595          $16,569
                                                   ==================================================================================
  
  Total non-performing loans as a
       percentage of total period-end loans              0.34%            0.34%            0.36%            0.38%            0.41%
  
  Total non-performing assets as a
       percentage of total period-end assets             0.21%            0.23%            0.26%            0.27%            0.27%
  
  Total non-performing assets and loans
       past due 90 days or more as a
       percentage of total period-end assets             0.22%            0.24%            0.27%            0.29%            0.33%
  
  Allowance for loan losses as a percentage
       of total non-performing loans                      387%             376%             374%             365%             332%
  
  Allowance for loan losses as a percentage
       of total period-end loans                         1.31%            1.30%            1.34%            1.37%            1.36%
  
  Total non-performing assets and loans
       past due 90 days or more as a
       percentage of stockholders' equity and
       allowance for loan losses                            4%               4%               4%               4%               5%
  13
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  The following  table  presents,  for the periods  indicated,  an analysis of the
  allowance for loan losses and other related data: (dollar amounts in thousands)
  Nine Months Ended                  Year
                                                   ---------------------------             Ended
                                                   09/30/99           09/30/98           12/31/98
                                                   --------           --------           --------
  Balance at beginning of period                   $ 31,265           $ 24,150           $ 24,150
  Provisions charged to operating expenses            6,111              5,441              8,762
                                                   --------           --------           --------
                                                     37,376             29,591             32,912
  
  Recoveries on loans charged-off:
  Commercial                                            446                284                418
  Consumer                                              193                240                305
  Real estate                                            72                 24                764
                                                   --------           --------           --------
  Total recoveries                                      711                548              1,487
  
  Loans charged-off:
  Commercial                                         (1,087)              (534)            (1,281)
  Consumer                                             (805)              (966)            (1,352)
  Real estate                                          (277)              (321)              (501)
                                                   --------           --------           --------
  Total charge-offs                                  (2,169)            (1,821)            (3,134)
                                                   --------           --------           --------
  Net charge-offs                                    (1,458)            (1,273)            (1,647)
                                                   --------           --------           --------
  
  Balance at end of period                         $ 35,918           $ 28,318           $ 31,265
                                                   ========           ========           ========
  
  Net charge-offs as a percentage of
  average loans outstanding                            0.08%              0.09%              0.08%
  Item 3:  Quantitative and Qualitative Disclosures About Market Risk
  
  See Item 2 -  Management's  Discussion  and Analysis of Financial  Condition and
  Results of Operation, Interest Rate Sensitivity and Liquidity.
  
                                         14
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  PART II.  OTHER INFORMATION
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            No  reports  on Form 8-K were filed  during  the third  quarter  ended
            September 30, 1999.
  
                                         15
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
                                     SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
                                             COMMERCE BANCORP, INC.
                                     -------------------------------------------
                                                   (Registrant)
  
        November 15, 1999                        /s/ THOMAS J. SUKAY
  -----------------------------      -------------------------------------------
             (Date)                                THOMAS J. SUKAY
                                                SENIOR VICE PRESIDENT
                                    (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
                                         16