-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FpR26EqKWmCf5IIlYFToWOCT81YYZdC6NfDBYwHjctu3zQ2tovNDpPpzNG6EcIib LUkewyAz+CxdZEnzvLtzvg== 0000950159-05-000814.txt : 20050714 0000950159-05-000814.hdr.sgml : 20050714 20050714090822 ACCESSION NUMBER: 0000950159-05-000814 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050714 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050714 DATE AS OF CHANGE: 20050714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMERCE BANCORP INC /NJ/ CENTRAL INDEX KEY: 0000715096 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222433468 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12069 FILM NUMBER: 05953527 BUSINESS ADDRESS: STREET 1: COMMERCE ATRIUM STREET 2: 1701 RTE 70 E CITY: CHERRY HILL STATE: NJ ZIP: 08034-5400 BUSINESS PHONE: 8567519000 MAIL ADDRESS: STREET 1: 1701 ROUTE 70 EAST CITY: CHERRY HILL STATE: NJ ZIP: 08034-5400 8-K 1 commerce8k.htm COMMERCE 8K Commerce 8K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K 
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported) July 14, 2005
 
Commerce Bancorp, Inc.
(Exact name of Registrant as specified in its charter)
 
New Jersey
 
1-12069
 
22-2433468
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
Commerce Atrium, 1701 Route 70 East, Cherry Hill, NJ 08034-5400
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code:
 
(856) 751-9000
 
N/A
(Former name or former address, if changed since last report.)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 14, 2005 the Registrant issued a press release reporting its results for the second quarter of 2005. A copy of the press release is attached as Exhibit 99.1 to this report.

On July 14, 2005 the Registrant also made certain supplemental information available. A copy of the supplemental information is attached as Exhibit 99.2 to this report.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(c)  Exhibits

99.1  Press Release, dated July 14, 2005.
99.2  Supplemental Information.





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.
       
July 14, 2005
 
 
 
By:
 
/s/ Douglas J. Pauls
 
 
 
 
 
 
Name:
 
Douglas J. Pauls
 
 
 
 
 
 
Title:
 
Senior Vice President and Chief Financial Officer
                 



Exhibit Index
 
Number
Description
   
99.1
Press Release, dated July 14, 2005.
99.2
Supplemental Information.

EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1
 
Commerce Bancorp Logo
 
CONTACTS



Vernon W. Hill, II
C. Edward Jordan, Jr.
Chairman and President
Executive Vice President

(856) 751-9000


COMMERCE BANCORP NET INCOME UP 20%
SECOND QUARTER CORE DEPOSITS UP $1.6 BILLION


July 14, 2005 - Cherry Hill, New Jersey - Commerce Bancorp, Inc. (NYSE Symbol: CBH) reported record earnings and increased deposits, assets and loans for the second quarter of 2005, announced Vernon W. Hill, II, Chairman of the multi-bank holding company.

SECOND QUARTER FINANCIAL HIGHLIGHTS
June 30, 2005
     
%
     
Increase
       
* Total Assets:
$33.4
Billion
25%
       
* Core Deposits:
$29.6
Billion
28%
       
* Total (Net) Loans:
$10.5
Billion
29%
       
* Total Revenues:
$404.1
Million
20%
       
* Net Income:
$79.4
Million
20%
       
* Net Income Per Share:
$ .46
  
15%






Chairman’s Statement

Vernon W. Hill, II, Chairman, noted the following financial highlights:

·  
Net income increased 20% for the second quarter of 2005 to $79.4 million.

·  
Earnings per share rose 15% for the second quarter to $.46.

·  
Net interest income grew 18% during the second quarter despite margin compression to 3.93% caused by the flattening yield curve.

·  
Core deposits grew $1.6 billion to $29.6 billion during the second quarter.

·  
Core deposits, excluding time deposits, grew 31% for the prior 12 months.

·  
Demand deposits increased 34% over the past year, in line with the Company’s five-year growth rate.

·  
Annualized deposit growth per store was $21 million.

·  
Comparable Store Core Deposit Growth:

   
Two Year
One Year
  
         
 
Total
19%
24%
  
         
 
Excluding Time Deposits
22%
27%
  

·  
Deposit charges and service fees grew 31% year over year.

·  
Net loans grew $2.3 billion, or 29%, to $10.5 billion.

·  
Book value per share grew 30% over the past year to $11.48.

·  
The Company expects to meet or exceed the current First Call E.P.S. consensus projections of $.47 for the third quarter of 2005 and $1.87 for the year.

Expansion Plans

The Commerce growth retail model includes the opening of new stores in both existing and new markets.

Consistent with our goal of increasing our store base 15-20% a year, the Company presently has +/- 140 locations under Agreement in various stages of land use development, including approximately 25 under construction.

The Company opened 7 stores in the first half of the year and will open approximately 45 in the second half of the year for a total new store opening of 50 to 55 in 2005.

2


Metropolitan Washington & Baltimore

The Company began its 200 store expansion plan in Washington/Baltimore with the opening of its first 2 stores, at Connecticut Avenue, Dupont Circle, Washington DC and Manassas, Virginia in the second quarter. Both have received tremendous customer acceptance.

The Company will open an additional 6-8 stores in 2005 and approximately 15-20 stores in 2006, including expansion in the suburban Maryland counties of Washington, Metropolitan Baltimore and Annapolis.

Metropolitan New York

Metropolitan New York is now the Company’s largest market with 181 stores, $16.2 billion in deposits and a 31% annual growth rate.

The Company opened 3 new stores in the first half of 2005 in Metropolitan New York and will open approximately 30 additional new stores in the second half of 2005 including:

• 15 stores in New York City and Long Island
• 2 stores in Westchester County
• Our first 2 stores in Fairfield County, Connecticut
• 15 stores in Northern New Jersey

The Company recently opened its first store in Manhattan’s Chinatown which has received record customer acceptance. On August 5th, we will open our new New York City headquarters at 42nd& Madison, together with a location at 109th& Broadway.

Metropolitan Philadelphia

Metropolitan Philadelphia is our home market where Commerce presently has 143 stores with a 200 store market potential.

The Company opened 2 new stores in the first half of 2005 and will open 6-8 additional stores for the balance of 2005.

The 2006 Metropolitan Philadelphia expansion plan projects 6-10 new store openings.

Lehigh Valley

Commerce is expanding into the Lehigh Valley area of Pennsylvania including the Allentown, Bethlehem and Easton areas.

The Company will open its first office in Bethlehem on July 15, 2005 and expects to have 4 open at the end of 2005 in what will ultimately become a 20 store market.

New Markets

During the third quarter, the Company will announce its next Metropolitan expansion market.
 
 
3

Income Statement

   
Three Months Ended
June 30
Six Months Ended
June 30
   
2005
  
2004
  
% Increase
2005
  
2004
  
% Increase
   
(dollar in thousands, except per share data)
  
Total Revenues:
  
$
404,110
  
$
337,024
    
20
%
$
786,700
  
$
653,468
    
20
%
Total Expenses:
    
278,499
    
226,255
    
23
    
536,905
    
438,505
    
22
  
Net Income:
    
79,409
    
66,235
    
20
    
156,546
    
128,210
    
22
  
Net Income Per Share:
  
$
.46
  
$
.40
    
15
%
$
.91
  
$
.77
    
18
%


Balance Sheet

         
Linked Quarter
 
6/30/05
6/30/04
% Increase
3/31/05
$ Increase
% Increase
 
(dollars in millions)
Total Assets:
$33,363
$26,739
25%
$31,870
$1,493
5%
Total Loans (Net):
10,547
8,206
29
9,837
710
7
Core Deposits:
29,625
23,109
28
28,058
1,567
6
Total Deposits:
30,519
24,062
27
29,488
1,031
3


Shareholder Returns

         
     
June 30, 2005
     
Commerce
S & P Index
         
1
  
Year
12%
 6%
5
  
Years
23%
-2%
10
  
Years
28%
10%


4

Growth Targets
   
 
Growth Targets
Last 5 Year
Growth %
Actual %
Second Quarter 2005
               
Total Deposits:
    
25
%
  
38
%
  
27
%
Two-Year Comp Store Deposits:
    
18
    
24
    
19
  
Total Revenue:
    
25
    
32
    
20
  
     
   
       
Net Income:
    
25
    
35
    
20
  
Earnings Per Share:
    
20
    
27
    
15
  

Total Deposits
 
The Company’s deposit growth continues with total deposits at June 30, 2005 of $30.5 billion, a $6.5 billion increase or 27% over total deposits of $24.1 billion a year ago. Core deposits grew $1.6 billion in the second quarter.
 
   
6/30/05
 
6/30/04
 
$ Increase
 
% Increase
   
(dollars in millions)
  
                   
Core Deposits
  
$
29,625
  
$
23,109
  
$
6,516
    
28
%
                           
Total Deposits
  
$
30,519
  
$
24,062
  
$
6,457
    
27
%
                           

Regional Deposit Growth
 
  Deposit growth by region is as follows:
 
 
 # of
Stores
 6/30/05
 6/30/04
  
$
Increase
  
%
Increase
Average
Store
Size
  
Annualized Growth/
Store
  
   
(dollars in millions)
  
 
Northern New Jersey
    
117
  
$
9,877
  
$
8,254
  
$
1,623
    
20
%
  
$
84
  
$
15
  
New York City
    
37
    
3,623
    
2,534
    
1,089
    
43
      
98
    
31
  
Long Island/NY State
    
27
    
2,687
    
1,594
    
1,093
    
69
      
100
    
50
  
Metro New York
    
181
  
$
16,187
  
$
12,382
  
$
3,805
    
31
%
  
$
89
  
$
23
  
Metro Philadelphia
    
143
  
$
14,325
    
11,680
    
2,645
    
23
      
100
    
19
  
Metro Washington
    
2
  
$
7
    
N/A
    
7
    
N/
 A     
N/A
    
N/A
  
Total
    
326
  
$
30,519
  
$
24,062
  
$
6,457
    
27
%
  
$
94
  
$
21
  

5

Comparable Store Core Deposit Growth

Comparable store deposit growth is measured as the year-over-year percentage increase in core deposits for stores open two years or more at the balance sheet date. Additional information is provided below for stores opened one year or more at the balance sheet date.

At June 30, 2005 the Company had 64 stores in New York State. Of these stores, 28 are included in the comparable store growth for stores open 2 years or more and 49 are included in the comparable store growth for stores open one year or more at the balance sheet date.

   
Core Deposit Growth
  
   
Stores Open 2
  
Stores Open 1
  
   
Years or More
  
Year or More
  
   
# of
Stores
  
Comp Store
Increase
  
# of
Stores
  
Comp Store
Increase
  
                   
Metro Philadelphia
    
125
    
19
%
  
134
    
21
%
Northern New Jersey
    
90
    
15
    
106
    
19
  
New York City
    
17
    
32
    
31
    
48
  
Long Island/NY State
    
11
    
25
    
18
    
45
  
Total
    
243
    
19
%
  
289
    
24
%
 
Excluding Time Deposits
          
22
%
        
27
%



Core Deposits

Core deposit growth by type of account is as follows:

   
 
 
6/30/05
  
 
 
6/30/04
  
 
 
$ Increase
  
 
 
% Increase
  
2nd Quarter
Cost of
Funds
  
   
(dollars in millions)
  
Demand
  
$
7,540
  
$
5,623
  
$
1,917
    
34
%
  
.00
%
Interest Bearing Demand
    
11,967
    
9,632
    
2,335
    
24
    
1.78
  
Savings
    
7,469
    
5,387
    
2,082
    
39
    
1.28
  
Subtotal
    
26,976
    
20,642
    
6,334
    
31
%
  
1.17
%
                                 
Time
    
2,649
    
2,467
    
182
    
7
    
2.41
  
Total Core Deposits:
  
$
29,625
  
$
23,109
  
$
6,516
    
28
%
  
1.28
%


6

Core deposit growth by type of customer is as follows:
 
   
 
6/30/05
  
 
% Total
  
 
6/30/04
  
 
% Total
  
Annual
Growth %
  
   
(dollars in millions)
  
Consumer
  
$
13,250
    
45
%
$
11,065
    
48
%
  
20
%
Commercial
    
11,179
    
38
    
8,402
    
36
    
33
  
Government
    
5,196
    
17
    
3,642
    
16
    
43
  
                                 
Total
  
$
29,625
    
100
%
$
23,109
    
100
%
  
28
%
 
 
Government Core Deposits

Government core deposits by state are as follows:

   
 
# of
Relationships
  
 
 
6/30/05
  
Annual
Growth
Rate
  
 
 
% Total
  
   
(dollars in millions)
  
New Jersey
    
663
  
$
3,214
    
34
%
  
62
%
Pennsylvania
    
191
    
1,170
    
61
    
22
  
New York
    
120
    
812
    
56
    
16
  
Total
    
974
  
$
5,196
    
43
%
  
100
%


Government core deposits decreased $31.0 million during the second quarter, reflecting cyclical trends in our government deposit business. The Company added 22 government relationships during the second quarter.

7

Net Income and Earnings Per Share

Net income totaled $79.4 million for the second quarter of 2005, up $13.2 million or 20% over net income of $66.2 million for the second quarter of 2004.

On a diluted per share basis, net income for the second quarter was $.46 compared to $.40 for the second quarter of 2004, a 15% increase.

   
Three Months Ended
  
Six Months Ended
  
   
6/30/05
  
6/30/04
  
% Increase
  
6/30/05
  
6/30/04
  
% Increase
  
   
(dollars in thousands, except per share data)
  
                           
Net Income
  
$
79,409
  
$
66,235
    
20
%
$
156,546
  
$
128,210
    
22
%
Earnings Per Share
  
$
.46
  
$
.40
    
15
%
$
.91
  
$
.77
    
18
%

For the first six months of 2005, net income totaled $156.5 million, up $28.3 million or 22% over net income of $128.2 million for the first six months of 2004.

On a diluted per share basis, net income for the first six months of 2005 was $.91 compared to $.77 for the first six months of 2004, an 18% increase.

Total Revenues

   
Three Months Ended
  
Six Months Ended
  
   
6/30/05
  
6/30/04
  
% Increase
  
6/30/05
  
6/30/04
  
% Increase
  
   
(dollars in thousands, except per share data)
  
Total Revenues
  
$
404,110
  
$
337,024
    
20
%
$
786,700
  
$
653,468
    
20
%
Revenue Per Share
  
$
9.12
  
$
7.81
    
17
%
$
8.90
  
$
7.61
    
17
%

Net Interest Income and Net Interest Margin

Net interest income for the second quarter totaled $288.5 million, an 18% increase over the $244.7 million recorded a year ago. For the first six months of 2005, the Company recorded net interest income of $567.4 million, a 19% increase over the $475.0 million earned in the first six months of 2004. The increase in net interest income in the quarter was due to volume increases in interest earning assets resulting from the Company’s strong, low-cost core deposit growth.

The net interest margin for the second quarter of 2005 was 3.93%, down 11 basis points from the first quarter of 2005, and down 36 basis points from the 4.29% margin for the second quarter of 2004.

On a tax equivalent basis, the Company recorded $293.1 million in net interest income in the second quarter of 2005, an increase of $43.9 million or 18% over the second quarter of 2004. Net interest income on a tax equivalent basis of $576.1 million was earned in the first six months of 2005, an increase of $92.5 million or 19% over the first six months of 2004.


8

Net Interest Income and Rate/Volume Analysis

As shown below, the increase in net interest income on a tax equivalent basis was due to volume increases in the Company’s earning assets, which were fueled by the Company’s continued growth of low-cost core deposits. The Company’s continuing ability to grow core deposits produces net interest income growth, despite rate compression caused by the flattening yield curve.

   
Net Interest Income
  
June
2005 vs. 2004
  
Volume
Increase
  
Rate
Change
  
Total
Increase
  
%
Increase
  
   
(dollars in thousands)
  
                   
Quarter
  
$
67,784
    
($23,902
)
$
43,882
    
18
%
First Six Months
  
$
137,965
    
($45,492
)
$
92,473
    
19
%

Non-Interest Income

Non-interest income for the second quarter of 2005 increased to $115.6 million from $92.3 million a year ago, a 25% increase. Non-interest income for the first six months of 2005 increased to $219.3 million from $178.5 million a year ago, a 23% increase. The increases in non-interest income are primarily attributable to the increases in deposit charges and service fees of 31% for both the second quarter and first six months of 2005.

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

   
Three Months Ended
  
Six Months Ended
  
   
6/30/05
  
6/30/04
  
% Increase
  
6/30/05
  
6/30/04
  
% Increase
  
   
(dollars in thousands)
  
Deposit Charges & Service Fees
  
$
68,802
  
$
52,717
    
31
%
$
128,766
  
$
98,198
    
31
%
Other Operating Income:
                                    
Commerce Insurance
    
18,750
    
18,570
    
1
    
38,539
    
36,906
    
4
  
Commerce Capital Markets
    
7,248
    
6,622
    
9
    
13,687
    
16,349
    
(16
)
Loan Brokerage Fees
    
2,949
    
3,725
    
(21
)
  
5,708
    
6,778
    
(16
)
Other
    
13,205
    
10,006
    
32
    
26,835
    
19,217
    
40
  
Total Other Operating Income
    
42,152
 
$
38,923
    
8
    
84,769
  
$
79,250
    
7
  
Net Investment Securities Gains
    
4,689
    
635
    
638
    
5,797
    
1,059
    
447
  
Total Non-Interest Income
  
$
115,643
  
$
92,275
    
25
%
$
219,332
  
$
178,507
    
23
%

 

9

Non-Interest Expenses

Non-interest expenses for the second quarter of 2005 were $278.5 million, up 23% from $226.3 million a year ago. Non-interest expenses for the first six months of 2005 were $536.9 million, up 22% from $438.5 million a year ago. The increases in non-interest expenses for the second quarter and first six months of 2005 were widespread throughout non-interest expense categories, reflecting the Company’s store expansion program.


Lending

Net loans increased 29% to $10.5 billion from the second quarter of 2004, and the growth was widespread throughout all loan categories.


Geographically, loan growth has occurred in the following markets:

   
6/30/05
  
6/30/04
  
$ Increase
  
% Increase
  
% of Total Growth
  
   
(dollars in millions)
  
                       
Metro Philadelphia
  
$
5,895
  
$
4,945
  
$
950
    
19
%
  
40
%
Northern New Jersey
    
3,125
    
2,481
    
644
    
26
    
27
  
New York/Long Island
    
1,668
    
904
    
764
    
85
    
33
  
                                 
Total:
  
$
10,688
  
$
8,330
  
$
2,358
    
28
%
  
100
%


   
Loan Composition
  
   
6/30/05
  
% of Total
  
6/30/04
  
% of Total
  
$ Increase
  
% Increase
  
   
(dollars in millions)
  
                           
Commercial
  
$
2,873
    
27
%
$
2,158
    
26
%
$
715
    
33
%
Owner-Occupied
    
2,229
    
21
    
1,805
    
22
    
424
    
23
  
Total Commercial
    
5,102
    
48
%
  
3,963
    
48
%
  
1,139
   
29
%
Consumer
    
3,714
    
35
%
  
2,885
    
34
%
  
829
    
29
%
Commercial Real Estate
    
1,872
    
17
    
1,482
    
18
    
390
    
26
  
Gross Loans
  
$
10,688
    
100
%
$
8,330
    
100
%
$
2,358
        
Less: Reserves
    
(141
)
        
(124
)
        
(17
)
      
Net Loans
  
$
10,547
        
$
8,206
        
$
2,341
    
29
%

10

Asset Quality
 
Quarter Ended
 
6/30/05
3/31/05
12/31/04
 6/30/04
                 
Non-Performing Assets/Assets
.11
 %
.10
 %
.11
 % 
 .11
%
Net Loan Charge-Offs
.09
 %
.11
%
.18
 % 
 .17
%
Loan Loss Reserve/Gross Loans
1.32
 % 
1.40
 %
1.43
 % 
 1.50
%
Non-Performing Loan Coverage
396
 %
435
 %
413
 % 
 419
%
Non-Performing Assets/Capital
2
%
2
 %
2
 % 
 2
%
and Reserves
                

Non-performing assets and loans past due 90 days at June 30, 2005 totaled $36.2 million or .11% of total assets, versus $30.7 million, or .11% of total assets a year ago.

Investments

At June 30, 2005, total investments increased to $19.4 billion. The available for sale and held to maturity portfolios totaled $7.7 billion and $11.7 billion, respectively.

Detailed below is information regarding the composition and characteristics of the Company’s investment portfolio, excluding trading securities, as of June 30, 2005.

 
Product Description
  
Available
For Sale
  
Held to
Maturity
  
 
Total
  
 
 (in millions)
  
 
Mortgage-backed Securities:
              
 
Federal Agencies Pass Through
  
$
1,379
  
$
2,398
  
$
3,777
  
Certificates (AAA Rated)
                    
 
Collateralized Mortgage
    
5,725
    
8,294
    
14,019
  
Obligations (AAA Rated)
                    
 
Obligations of State and
   
573
    
1,016
    
1,589
  
Political Subdivisions/Other
                    
 
Total
  
$
7,677
  
$
11,708
  
$
19,385
  
                     
                     
Duration (in years)
    
2.30
    
3.22
    
2.86
  
Average Life (in years)
    
2.68
    
3.95
    
3.45
  
Quarterly Average Yield
   
4.94
%
  
4.87
%
  
4.91
%
 
At June 30, the after tax appreciation of the Company’s available for sale portfolio was $8.4 million.

11

Linked Quarter Comparison

A comparison of financial results for the quarter ended June 30, 2005 to the previous quarter ended March 31, 2005 is as follows: (dollars in thousands, except per share data)

   
Three Months Ended
  
Linked Quarter
  
   
6/30/05
  
3/31/05
 
$ Change
  
 % Change
  
 
Total Assets
  
$
33,362,936
  
$
31,869,976
  
$
1,492,960
    
5
%
Total Loans (Net)
    
10,547,392
    
9,836,604
    
710,788
    
7
  
Core Deposits
    
29,624,831
    
28,058,156
    
1,566,675
    
6
  
Total Deposits
    
30,519,063
    
29,487,958
    
1,031,105
    
3
  
Total Revenues
    
404,110
    
382,590
    
21,520
    
6
  
Net Interest Income
    
288,467
    
278,901
    
9,566
    
3
  
Non-Interest Income
    
115,643
    
103,689
    
11,954
    
12
  
Non-Interest Expense
    
278,499
    
258,406
    
20,093
    
8
  
Net Income
    
79,409
    
77,137
    
2,272
    
3
  
Net Income Per Share
  
$
.46
  
$
.45
  
$
.01
    
2
  

Capital Resources

Stockholders’ equity at June 30, 2005 increased to $1.8 billion, a $521.4 million increase, or 39% over stockholders’ equity of $1.3 billion at June 30, 2004.

The Company may call its $200 million, 5.95% Convertible Trust Preferred Securities, provided various terms and conditions are met, primarily related to the market price of the Company’s common stock. The Company’s common stock must trade at a price of $31.65 or higher for 20 trading days in a period of 30 consecutive trading days in order for the Company to force conversion.

Each outstanding share of the Company’s $200 million, 5.95% Convertible Trust Preferred Securities is convertible into 1.8956 shares of the Company’s common stock at the option of the holder.

Return on average stockholders equity (ROE) for the second quarter and six months ending June 30, 2005 and 2004 is shown in the table below:

 
Return on Equity
 
Three Months Ended
Six Months Ended
 
6/30/05
6/30/04
6/30/05
6/30/04
 
17.68%
19.86%
17.82%
18.87%

At June 30, 2005, the Company’s book value per share was $11.48, a 30% increase over the book value per share of $8.82 at June 30, 2004.

12


The Company’s capital ratios at June 30, 2005 were as follows:

       
 Regulatory Guidelines
   
Commerce
 “Well Capitalized”
           
 
Leverage Ratio
6.20
 %
 5.00
%
 
Tier I
12.41
 %
 6.00
%
 
Total Capital
13.31
 % 
 10.00
%

New Stores

During the second quarter of 2005, the Company opened 7 new stores, increasing the total stores opened to 326. During the last three years, the Company has opened 130 of its 326 stores.

 
Stores opened during the second quarter were as follows:
         
   
Metropolitan New York
  
         
     
Location
County
     
Hauppauge
Suffolk (NY)
     
Larchmont
Westchester (NY)
     
Wayne/Valley Road
Passaic (NJ)
         
   
Metropolitan Philadelphia
  
         
     
Location
County
     
Hatfield
Montgomery (PA)
     
Wildwood
Cape May (NJ)
         
   
Metropolitan Washington D.C.
  
         
     
Location
County
     
Connecticut Avenue
District of Columbia
     
Manassas/Digges
Prince William (VA)

13


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, in its reports to stockholders and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond the Company’s control). The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause the Company’s financial performance to differ materially from that expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System (the “FRB”); inflation; interest rates, market and monetary fluctuations; the timely development of competitive new products and services by the Company and the acceptance of such products and services by customers; the willingness of customers to substitute competitors’ products and services for the Company’s products and services and vice versa; the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); technological changes; future acquisitions; the expense savings and revenue enhancements from acquisitions being less than expected; the growth and profitability of the Company’s non-interest 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.

14
 EX-99.2 3 exhibit99-2.htm EXHIBIT 99.2 Unassociated Document

 
Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
 
 
(unaudited)
  
                         
     
June 30,
  
March 31,
  
Linked Quarter
  
June 30,
      
 
(dollars in thousands)
  
2005
 
2005
 
% Change
  
2004
 
% Change
  
                         
Assets
Cash and due from banks
 
$
1,400,346
  
$
1,066,051
    
31
%
$
1,081,459
    
29
%
 
Federal funds sold
   
13,700
   
10,000
   
37
   
8,500
   
61
 
 
Cash and cash equivalents
    
1,414,046
   
1,076,051
   
31
   
1,089,959
   
30
 
 
Loans held for sale
    
314,437
   
64,087
   
391
   
41,047
   
666
 
 
Trading securities
    
183,894
   
206,113
   
(11
)
  
182,105
   
1
 
 
Securities available for sale
   
7,676,837
   
7,950,643
   
(3
)
  
12,131,104
   
(37
)
 
Securities held to maturity
    
11,708,266
   
11,292,995
   
4
   
3,772,204
   
210
 
 
Loans:
                                
 
Commercial real estate:
                                
 
Investor developer
    
1,626,886
   
1,553,908
   
5
   
1,308,103
   
24
 
 
Residential construction
    
245,369
   
225,239
   
9
   
174,431
   
41
 
       
1,872,255
   
1,779,147
   
5
   
1,482,534
   
26
 
 
Commercial loans:
                                
 
Term
    
1,505,965
   
1,376,663
   
9
   
1,111,848
   
35
 
 
Line of credit
    
1,343,279
   
1,221,096
   
10
   
1,046,104
   
28
 
 
Demand
    
24,000
   
0
   
0
   
0
   
0
 
       
2,873,244
   
2,597,759
   
11
   
2,157,952
   
33
 
 
Owner-occupied
    
2,229,453
   
2,100,289
   
6
   
1,805,336
   
23
 
       
5,102,697
   
4,698,048
   
9
   
3,963,288
   
29
 
 
Consumer:
                                
 
Mortgages (1-4 family residential)
    
1,443,602
   
1,447,365
   
(0
)
  
1,111,049
   
30
 
 
Installment
    
167,663
   
134,965
   
24
   
134,710
   
24
 
 
Home equity
    
2,024,130
   
1,845,963
   
10
   
1,573,454
   
29
 
 
Credit lines
    
78,370
   
70,405
   
11
   
65,421
   
20
 
       
3,713,765
   
3,498,698
   
6
   
2,884,634
   
29
 
 
Total loans
    
10,688,717
   
9,975,893
   
7
   
8,330,456
   
28
 
 
Less allowance for loan losses
   
141,325
   
139,289
   
1
   
124,688
   
13
 
       
10,547,392
   
9,836,604
   
7
   
8,205,768
   
29
 
 
Bank premises and equipment, net
   
1,135,035
   
1,077,488
   
5
   
906,455
   
25
 
 
Other assets
    
383,029
   
365,995
   
5
   
410,029
   
(7
)
 
Total assets
  
$
33,362,936
  
$
31,869,976
    
5
%
$
26,738,671
    
25
%
                                   
Liabilities
Deposits:
                                
 
Demand:
                                
 
Noninterest-bearing
  
$
7,540,381
  
$
6,877,932
    
10
%
$
5,622,574
    
34
%
 
Interest-bearing
    
11,966,515
   
12,402,424
   
(4
)
  
9,632,178
   
24
 
 
Savings
    
7,504,035
   
6,811,580
   
10
   
5,597,767
   
34
 
 
Time
   
3,508,132
   
3,396,022
   
3
   
3,209,229
   
9
 
 
Total deposits
    
30,519,063
   
29,487,958
   
3
   
24,061,748
   
27
 
                                   
 
Other borrowed money
    
567,346
   
136,251
   
316
   
944,040
   
(40
)
 
Other liabilities
    
227,036
   
339,808
   
(33
)
  
204,768
   
11
 
 
Long-term debt
    
200,000
   
200,000
   
0
   
200,000
   
0
 
       
31,513,445
   
30,164,017
   
4
   
25,410,556
   
24
 
                                   
Stockholders'
Common stock
    
164,178
   
162,431
   
1
   
78,658
   
109
 
Equity
Capital in excess of par value
    
1,024,851
   
988,848
   
4
   
936,539
   
9
 
 
Retained earnings
    
664,803
   
603,338
   
10
   
446,260
   
49
 
 
Accumulated other comprehensive (loss) income
    
8,390
   
(35,927
)
  
(123
)
  
(122,003
)
  
(107
)
       
1,862,222
   
1,718,690
   
8
   
1,339,454
   
39
 
                                   
 
Less treasury stock, at cost
    
12,731
   
12,731
   
0
   
11,339
   
12
 
 
Total stockholders' equity
    
1,849,491
   
1,705,959
   
8
   
1,328,115
   
39
 
 
Total liabilities and stockholders' equity
  
$
33,362,936
  
$
31,869,976
    
5
%
$
26,738,671
    
25
%
                                   
 
 
 

 Commerce Bancorp, Inc. and Subsidiaries
 Consolidated Balance Sheets
 (unaudited)
                                 
                                 
                                 
 
(dollars in thousands)
  
June 30,
  
 
  
 March 31, 2005
      
 
  
 June 30, 2004
      
     
2005
 
Actual
 
$ Change
 
% Change
 
Actual
 
$ Change
 
% Change
  
                                 
Assets
Cash and due from banks
 
$
1,400,346
  
$
1,066,051
  
$
334,295
    
31
%
$
1,081,459
  
$
318,887
    
29
%
 
Federal funds sold
   
13,700
   
10,000
   
3,700
   
37
   
8,500
   
5,200
   
61
 
 
Cash and cash equivalents
    
1,414,046
   
1,076,051
   
337,995
   
31
   
1,089,959
   
324,087
   
30
 
 
Loans held for sale
    
314,437
   
64,087
   
250,350
   
391
   
41,047
   
273,390
   
666
 
 
Trading securities
    
183,894
   
206,113
   
(22,219
)
  
(11
)
  
182,105
   
1,789
   
1
 
 
Securities available for sale
   
7,676,837
   
7,950,643
   
(273,806
)
  
(3
)
  
12,131,104
   
(4,454,267
)
  
(37
)
 
Securities held to maturity
    
11,708,266
   
11,292,995
   
415,271
   
4
   
3,772,204
   
7,936,062
   
210
 
                                               
 
Loans
   
10,688,717
   
9,975,893
   
712,824
   
7
   
8,330,456
   
2,358,261
   
28
 
 
Less allowance for loan losses
   
141,325
   
139,289
   
2,036
   
1
   
124,688
   
16,637
   
13
 
       
10,547,392
   
9,836,604
   
710,788
   
7
   
8,205,768
   
2,341,624
   
29
 
 
Reserve %
    
1.32
%
  
1.40
%
              
1.50
%
            
 
Bank premises and equipment, net
   
1,135,035
   
1,077,488
   
57,547
   
5
   
906,455
   
228,580
   
25
 
 
Other assets
    
383,029
   
365,995
   
17,034
   
5
   
410,029
   
(27,000
)
  
(7
)
 
Total assets
  
$
33,362,936
  
$
31,869,976
  
$
1,492,960
    
5
%
$
26,738,671
  
$
6,624,265
    
25
%
                                               
Liabilities
Deposits:
                                            
 
Demand:
                                            
 
Noninterest-bearing
  
$
7,540,381
  
$
6,877,932
  
$
662,449
    
10
%
$
5,622,574
  
$
1,917,807
    
34
%
 
Interest-bearing
    
11,966,515
   
12,402,424
   
(435,909
)
  
(4
)
  
9,632,178
   
2,334,337
   
24
 
 
Savings
    
7,504,035
   
6,811,580
   
692,455
   
10
   
5,597,767
   
1,906,268
   
34
 
 
Time
   
3,508,132
   
3,396,022
   
112,110
   
3
   
3,209,229
   
298,903
   
9
 
 
Total deposits
    
30,519,063
   
29,487,958
   
1,031,105
   
3
   
24,061,748
   
6,457,315
   
27
 
                                               
 
Core deposits
    
29,624,831
   
28,058,156
   
1,566,675
   
6
   
23,108,553
   
6,516,278
   
28
 
                                               
 
Total other liabilities
    
994,382
   
676,059
   
318,323
   
47
   
1,348,808
   
(354,426
)
  
(26
)
       
31,513,445
   
30,164,017
   
1,349,428
   
4
   
25,410,556
   
6,102,889
   
24
 
                                               
 Stockholders' Equity    
1,849,491
   
1,705,959
   
143,532
   
8
   
1,328,115
   
521,376
   
39
 
                                               
 
Total liabilities and stockholders' equity
  
$
33,362,936
  
$
31,869,976
  
$
1,492,960
    
5
%
$
26,738,671
  
$
6,624,265
    
25
%
                                               
 
 
 

 Commerce Bancorp, Inc. and Subsidiaries
 Consolidated Balance Sheets
 (unaudited)
             
     
June 30,
  
December 31,
  
 
(dollars in thousands)
  
2005
  
2004
 
             
Assets
Cash and due from banks
 
$
1,400,346
  
$
1,050,806
  
 
Federal funds sold
   
13,700
   
0
 
 
Cash and cash equivalents
    
1,414,046
   
1,050,806
 
 
Loans held for sale
    
314,437
   
44,072
 
 
Trading securities
    
183,894
   
169,103
 
 
Securities available for sale
   
7,676,837
   
8,044,150
 
 
Securities held to maturity
    
11,708,266
   
10,463,658
 
 
(market value 06/05-$11,692,632; 2004-$10,430,451)
              
 
Loans
   
10,688,717
   
9,454,611
 
 
Less allowance for loan losses
   
141,325
   
135,620
 
       
10,547,392
   
9,318,991
 
 
Bank premises and equipment, net
   
1,135,035
   
1,059,519
 
 
Other assets
    
383,029
   
351,346
 
 
Total assets
  
$
33,362,936
  
$
30,501,645
  
                 
Liabilities
Deposits:
              
 
Demand:
              
 
Noninterest-bearing
  
$
7,540,381
  
$
6,406,614
  
 
Interest-bearing
    
11,966,515
   
11,604,066
 
 
Savings
    
7,504,035
   
6,490,263
 
 
Time
   
3,508,132
   
3,157,942
 
 
Total deposits
    
30,519,063
   
27,658,885
 
                 
 
Other borrowed money
    
567,346
   
661,195
 
 
Other liabilities
    
227,036
   
315,860
 
 
Long-term debt
    
200,000
   
200,000
 
       
31,513,445
   
28,835,940
 
Stockholders'
Common stock, 164,178,009 shares issued (160,635,618 shares in 2004)
    
164,178
   
160,636
 
Equity
Capital in excess of par value
    
1,024,851
   
951,476
 
 
Retained earnings
    
664,803
   
543,978
 
 
Accumulated other comprehensive (loss) income
    
8,390
   
20,953
 
       
1,862,222
   
1,677,043
 
                 
 
Less treasury stock, at cost, 838,758 shares (795,610 shares in 2004)
    
12,731
   
11,338
 
 
Total stockholders' equity
    
1,849,491
   
1,665,705
 
                 
 
Total liabilities and stockholders' equity
  
$
33,362,936
  
$
30,501,645
  
                 
 
 
 
 

 
Commerce Bancorp, Inc. and Subsidiaries  
 
Consolidated Statements of Income  
 
(unaudited)  
                              
     
Three Months Ended
 
 Six Months Ended
  
     
June 30,
  
 June 30,
  
 
(dollars in thousands, except per share amounts)
2005
 
2004
 
% Change
 
 2005
 
2004
 
% Change
  
                              
Interest 
Interest and fees on loans
  
$
161,839
  
$
113,947
    
42
%
$
307,057
  
$
222,160
    
38
%
income
Interest on investments
    
234,970
   
177,929
   
32
   
459,916
   
341,428
   
35
 
 
Other interest
    
889
   
154
   
477
   
1,205
   
494
   
144
 
 
Total interest income
    
397,698
   
292,030
   
36
   
768,178
   
564,082
   
36
 
                                         
Interest
Interest on deposits:
                                      
expense
Demand
    
53,755
   
18,729
   
187
   
100,426
   
34,672
   
190
 
 
Savings
    
23,258
   
10,216
   
128
   
42,338
   
18,002
   
135
 
 
Time
    
22,281
   
14,264
   
56
   
40,679
   
28,907
   
41
 
 
Total interest on deposits
    
99,294
   
43,209
   
130
   
183,443
   
81,581
   
125
 
 
Interest on other borrowed money
    
6,917
   
1,052
   
558
   
11,327
   
1,500
   
655
 
 
Interest on long-term debt
    
3,020
   
3,020
   
0
   
6,040
   
6,040
   
0
 
 
Total interest expense
    
109,231
   
47,281
   
131
   
200,810
   
89,121
   
125
 
                                         
 
Net interest income
    
288,467
   
244,749
   
18
   
567,368
   
474,961
   
19
 
 
Provision for loan losses
   
4,500
   
10,748
   
(58
)
  
10,750
   
20,248
   
(47
)
 
Net interest income after provision for
loan losses
    
283,967
   
234,001
   
21
   
556,618
   
454,713
   
22
 
                                         
Noninterest
Deposit charges and service fees
    
68,802
   
52,717
   
31
   
128,766
   
98,198
   
31
 
income
Other operating income
    
42,152
   
38,923
   
8
   
84,769
   
79,250
   
7
 
 
Net investment securities gains
    
4,689
   
635
   
638
   
5,797
   
1,059
   
447
 
 
Total noninterest income
    
115,643
   
92,275
   
25
   
219,332
   
178,507
   
23
 
                                         
 
Total Revenues
    
404,110
   
337,024
   
20
   
786,700
   
653,468
   
20
 
                                         
Noninterest
Salaries and benefits
    
127,552
   
104,110
   
23
   
246,853
   
201,450
   
23
 
expense
Occupancy
    
39,110
   
27,949
   
40
   
77,103
   
56,059
   
38
 
 
Furniture and equipment
    
28,895
   
27,001
   
7
   
57,821
   
51,180
   
13
 
 
Office
    
12,577
   
10,920
   
15
   
25,254
   
21,840
   
16
 
 
Marketing
    
8,456
   
9,278
   
(9
)
  
14,257
   
17,974
   
(21
)
 
Other
    
61,909
   
46,997
   
32
   
115,617
   
90,002
   
28
 
 
Total noninterest expenses
    
278,499
   
226,255
   
23
   
536,905
   
438,505
   
22
 
                                         
 
Income before income taxes
    
121,111
   
100,021
   
21
   
239,045
   
194,715
   
23
 
 
Provision for federal and state income taxes
    
41,702
   
33,786
   
23
   
82,499
   
66,505
   
24
 
 
Net income
  
$
79,409
  
$
66,235
    
20
%
$
156,546
  
$
128,210
    
22
%
                                         
 
Net income per common and common
equivalent share:
                                      
 
Basic
  
$
0.49
  
$
0.42
    
17
%
$
0.97
  
$
0.82
    
18
%
 
Diluted
 
$
0.46
  
$
0.40
    
15
 
$
0.91
  
$
0.77
    
18
 
 
Average common and common equivalent
shares outstanding:
                                      
 
Basic
    
162,287
   
155,960
   
4
   
161,547
   
155,144
   
4
 
 
Diluted
   
177,202
   
172,520
   
3
   
176,724
   
171,787
   
3
 
 
Cash dividends, common stock
  
$
0.11
  
$
0.10
    
10
%
$
0.22
  
$
0.19
    
16
%
                                         
 
 
 

 Commerce Bancorp, Inc. and Subsidiaries  
 Consolidated Statements of Income  
 (unaudited)  
                          
     
Three Months Ended  
  
     
June 30,
 
March 31,
 
 
 
 June 30,
      
 
(dollars in thousands, except per share amounts)
  
2005
 
2005
 
% Change
 
 2004
 
% Change
  
                          
Interest
Interest and fees on loans
  
$
161,839
  
$
145,218
    
11
%
$
113,947
    
42
%
income
Interest on investments
    
234,970
   
224,946
   
4
   
177,929
   
32
 
 
Other interest
    
889
   
316
   
181
   
154
   
477
 
 
Total interest income
    
397,698
   
370,480
   
7
   
292,030
   
36
 
                                   
Interest 
Interest on deposits:
                                
expense
Demand
    
53,755
   
46,671
   
15
   
18,729
   
187
 
 
Savings
    
23,258
   
19,080
   
22
   
10,216
   
128
 
 
Time
    
22,281
   
18,398
   
21
   
14,264
   
56
 
 
Total interest on deposits
    
99,294
   
84,149
   
18
   
43,209
   
130
 
 
Interest on other borrowed money
    
6,917
   
4,410
   
57
   
1,052
   
558
 
 
Interest on long-term debt
    
3,020
   
3,020
   
0
   
3,020
   
0
 
 
Total interest expense
    
109,231
   
91,579
   
19
   
47,281
   
131
 
                                   
 
Net interest income
    
288,467
   
278,901
   
3
   
244,749
   
18
 
 
Provision for loan losses
   
4,500
   
6,250
   
(28
)
  
10,748
   
(58
)
 
Net interest income after provision for loan losses
    
283,967
   
272,651
   
4
   
234,001
   
21
 
                                   
Noninterest
Deposit charges and service fees
    
68,802
   
59,964
   
15
   
52,717
   
31
 
income
Other operating income
    
42,152
   
42,617
   
(1
)
  
38,923
   
8
 
 
Net investment securities gains
    
4,689
   
1,108
   
323
   
635
   
638
 
 
Total noninterest income
    
115,643
   
103,689
   
12
   
92,275
   
25
 
                                   
 
Total Revenues
    
404,110
   
382,590
   
6
   
337,024
   
20
 
                                   
Noninterest
Salaries and benefits
    
127,552
   
119,301
   
7
   
104,110
   
23
 
expense
Occupancy
    
39,110
   
37,993
   
3
   
27,949
   
40
 
 
Furniture and equipment
    
28,895
   
28,926
   
(0
)
  
27,001
   
7
 
 
Office
    
12,577
   
12,677
   
(1
)
  
10,920
   
15
 
 
Marketing
    
8,456
   
5,801
   
46
   
9,278
   
(9
)
 
Other
    
61,909
   
53,708
   
15
   
46,997
   
32
 
 
Total noninterest expenses
    
278,499
   
258,406
   
8
   
226,255
   
23
 
                                   
 
Income before income taxes
    
121,111
   
117,934
   
3
   
100,021
   
21
 
 
Provision for federal and state income taxes
    
41,702
   
40,797
   
2
   
33,786
   
23
 
 
Net income
  
$
79,409
  
$
77,137
    
3
%
$
66,235
    
20
%
                                   
 
Net income per common and common equivalent share:
                                
 
Basic
  
$
0.49
  
$
0.48
    
2
%
$
0.42
    
17
%
 
Diluted
 
$
0.46
  
$
0.45
    
2
 
$
0.40
    
15
 
 
Average common and common equivalent shares outstanding:
                                
 
Basic
    
162,287
   
160,798
   
1
   
155,960
   
4
 
 
Diluted
   
177,202
   
176,323
   
0
   
172,520
   
3
 
 
Cash dividends, common stock
  
$
0.11
  
$
0.11
    
0
%
$
0.10
    
10
%
                                   
 
Return on average assets
    
0.97
%
  
0.99
%
        
1.03
%
      
 
Return on average equity
    
17.68
   
17.98
         
19.86
       
 
 
 

Commerce Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
                           
   
Three Months Ended
  
Six Months Ended
  
   
June 30,
  
June 30,
  
           
 
          
 
  
   
2005
 
2004
 
Change
 
2005
 
2004
 
Change
  
   
(dollars and shares in thousands)
  
(dollars and shares in thousands)
  
                           
Income Statement Data:
                          
Net interest income
  
$
288,467
  
$
244,749
    
18
%
$
567,368
  
$
474,961
    
19
%
Provision for loan losses
    
4,500
   
10,748
   
(58
)
  
10,750
   
20,248
   
(47
)
Noninterest income
    
115,643
   
92,275
   
25
   
219,332
   
178,507
   
23
 
Total revenues
    
404,110
   
337,024
   
20
   
786,700
   
653,468
   
20
 
Noninterest expense
    
278,499
   
226,255
   
23
   
536,905
   
438,505
   
22
 
Net income
    
79,409
   
66,235
   
20
   
156,546
   
128,210
   
22
 
                                       
                                       
Per Share Data:
                                      
Net income - Basic
  
$
0.49
  
$
0.42
    
17
%
$
0.97
  
$
0.82
    
18
%
Net income - Diluted
    
0.46
   
0.40
   
15
   
0.91
   
0.77
   
18
 
                                       
Book value - Basic
                    
$
11.32
  
$
8.49
    
33
%
Book value - Diluted if converted
                      
11.48
   
8.82
   
30
 
                                       
Revenue per share - Diluted
  
$
9.12
  
$
7.81
    
17
%
$
8.90
  
$
7.61
    
17
%
 
                                      
Weighted Average Shares Outstanding:
                                      
Basic
    
162,287
    
155,960
    
 
    
161,547
    
155,144
    
 
  
Diluted
    
177,202
    
172,520
    
 
    
176,724
    
171,787
    
 
  
                                       
Balance Sheet Data:
                                      
                                       
Total assets
    
 
    
 
    
 
  
$
33,362,936
  
$
26,738,671
    
25
%
Loans (net)
    
 
    
 
    
 
    
10,547,392
    
8,205,768
    
29
 
Allowance for loan losses
    
 
    
 
    
 
    
141,325
    
124,688
    
13
 
Securities available for sale
    
 
    
 
    
 
    
7,676,837
    
12,131,104
    
(37
)
Securities held to maturity
    
 
    
 
    
 
    
11,708,266
    
3,772,204
    
210
 
Total deposits
    
 
    
 
    
 
    
30,519,063
    
24,061,748
    
27
 
Core deposits
    
 
    
 
    
 
    
29,624,831
    
23,108,553
    
28
 
Convertible Trust Capital Securities - Commerce Capital Trust II
  
 
    
 
    
200,000
    
200,000
    
-
 
Stockholders' equity
    
 
    
 
    
 
    
1,849,491
    
1,328,115
    
39
 
                                       
Capital:
                                      
                                       
Stockholders' equity to total assets
    
 
    
 
    
 
    
5.54
%
  
4.97
%
  
 
  
                                       
Risk-based capital ratios:
                                      
Tier I
    
 
    
 
    
 
    
12.41
    
12.37
    
 
  
Total capital
    
 
    
 
    
 
    
13.31
    
13.31
    
 
  
                                       
Leverage ratio
    
 
    
 
    
 
    
6.20
    
6.33
    
 
  
                                       
Performance Ratios:
                                      
                                       
Cost of funds
    
1.46
%
  
0.81
%
  
 
    
1.39
%
  
0.80
%
  
 
  
Net interest margin
    
3.93
    
4.29
    
 
    
3.98
    
4.34
    
 
  
Return on average assets
    
0.97
    
1.03
    
 
    
0.98
    
1.04
    
 
  
Return on average total stockholders' equity
    
17.68
    
19.86
    
 
    
17.82
    
18.87
    
 
  
 
 
 

The following summary presents information regarding non-performing loans and assets as of June 30, 2005 and the preceding four quarters (dollar amounts in thousands).
 
                      
   
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
 
 
2005
 
2005
 
2004
 
2004
 
2004
  
Non-accrual loans:
                      
Commercial
  
$
20,467
  
$
18,376
  
$
17,874
  
$
22,647
  
$
17,382
  
Consumer
    
8,641
   
8,723
   
10,138
   
9,784
   
11,675
 
Commercial real estate:
                                
Construction
    
178
   
178
   
-
   
-
   
-
 
Mortgage
    
3,086
   
1,290
   
1,317
   
1,251
   
675
 
Total non-accrual loans
    
32,372
   
28,567
   
29,329
   
33,682
   
29,732
 
                                 
Restructured loans:
                                
Commercial
    
3,326
   
3,422
   
3,518
   
3,614
   
1
 
Consumer
    
-
   
-
   
-
   
-
   
-
 
Commercial real estate:
                                
Construction
    
-
   
-
   
-
   
-
   
-
 
Mortgage
    
-
   
-
   
-
   
-
   
-
 
Total restructured loans
    
3,326
   
3,422
   
3,518
   
3,614
   
1
 
                                 
Total non-performing loans
    
35,698
   
31,989
   
32,847
   
37,296
   
29,733
 
                                 
Other real estate
    
349
   
777
   
626
   
972
   
653
 
                                 
Total non-performing assets
    
36,047
   
32,766
   
33,473
   
38,268
   
30,386
 
                                 
Loans past due 90 days or more
                                
and still accruing
    
165
   
233
   
602
   
614
   
318
 
                                 
Total non-performing assets and
                                
loans past due 90 days or more
  
$
36,212
  
$
32,999
  
$
34,075
  
$
38,882
  
$
30,704
  
                                 
Total non-performing loans as a
                                
percentage of total period-end
                                
loans
    
0.33
%
  
0.32
%
  
0.35
%
  
0.42
%
  
0.36
%
                                 
Total non-performing assets as a
                                
percentage of total period-end assets
    
0.11
%
  
0.10
%
  
0.11
%
  
0.13
%
  
0.11
%
                                 
Total non-performing assets and loans
                                
past due 90 days or more as a
                                
percentage of total period-end assets
    
0.11
%
  
0.10
%
  
0.11
%
  
0.14
%
  
0.11
%
                                 
Allowance for loan losses as a
                                
percentage of total non-performing
                                
loans
    
396
%
  
435
%
  
413
%
  
353
%
  
419
%
                                 
Allowance for loan losses as a percentage
                                
of total period-end loans
    
1.32
%
  
1.40
%
  
1.43
%
  
1.48
%
  
1.50
%
                                 
Total non-performing assets and loans
                                
past due 90 days or more as a
                                
percentage of stockholders' equity and
                                
allowance for loan losses
    
2
%
  
2
%
  
2
%
  
2
%
  
2
%
                                 
 
 
 

The following table presents, for the periods indicated, an analysis of the allowance for loan losses and other related data: (dollar amounts in thousands)
  
 
                      
                   
Year
  
   
Three Months Ended
  
Six Months Ended
  
Ended
  
   
06/30/05
 
06/30/04
 
06/30/05
 
06/30/04
 
12/31/04
  
                       
                       
                       
Balance at beginning of period
  
$
139,289
  
$
117,329
  
$
135,620
  
$
112,057
  
$
112,057
  
Provisions charged to operating expenses
    
4,500
   
10,748
   
10,750
   
20,248
   
39,238
 
     
143,789
   
128,077
   
146,370
   
132,305
   
151,295
 
                                 
Recoveries on loans charged-off:
                                
Commercial
    
339
   
104
   
990
   
260
   
1,000
 
Consumer
    
254
   
101
   
1,087
   
371
   
1,123
 
Commercial real estate
    
-
   
1
   
50
   
48
   
52
 
Total recoveries
    
593
   
206
   
2,127
   
679
   
2,175
 
                                 
Loans charged-off:
                                
Commercial
    
(1,213
)
  
(2,675
)
  
(3,815
)
  
(4,998
)
  
(9,416
)
Consumer
    
(915
)
  
(916
)
  
(2,402
)
  
(1,676
)
  
(6,733
)
Commercial real estate
    
(929
)
  
(4
)
  
(955
)
  
(1,622
)
  
(1,701
)
Total charge-offs
    
(3,057
)
  
(3,595
)
  
(7,172
)
  
(8,296
)
  
(17,850
)
Net charge-offs
    
(2,464
)
  
(3,389
)
  
(5,045
)
  
(7,617
)
  
(15,675
)
                                 
Balance at end of period
  
$
141,325
  
$
124,688
  
$
141,325
  
$
124,688
  
$
135,620
  
                                 
                                 
Net charge-offs as a percentage of
                                
average loans outstanding
    
0.09
%
  
0.17
%
  
0.10
%
  
0.19
%
  
0.19
%
                                 
Net Reserve Additions
  
$
2,036
  
$
7,359
  
$
5,705
  
$
12,631
  
$
23,563
  
 
 
 

Commerce Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
 
(unaudited)
  
                                       
                                       
   
June 2005
  
March 2005
  
June 2004
  
   
Average
      
Average
  
Average
      
Average
  
Average
      
Average
  
   
Balance
  
Interest
  
Rate
  
Balance
  
Interest
  
Rate
  
Balance
  
Interest
  
Rate
  
(dollars in thousands)
                                      
Earning Assets
                                      
Investment securities
                                                        
Taxable
  
$
18,821,647
  
$
231,275
    
4.93
%
$
18,192,721
  
$
221,886
    
4.95
%
$
14,747,643
  
$
173,678
    
4.74
%
Tax-exempt
   
374,448
   
3,257
   
3.49
   
405,771
   
3,313
   
3.31
   
290,200
   
4,465
   
6.19
 
Trading
    
178,037
   
2,427
   
5.47
   
111,732
   
1,395
   
5.06
   
174,578
   
2,075
   
4.78
 
Total investment securities
    
19,374,132
   
236,959
   
4.91
   
18,710,224
   
226,594
   
4.91
   
15,212,421
   
180,218
   
4.76
 
Federal funds sold
    
117,491
   
889
   
3.03
   
50,311
   
316
   
2.55
   
62,357
   
154
   
0.99
 
Loans
                                                        
Commercial mortgages
    
3,707,963
   
59,684
   
6.46
   
3,527,626
   
55,095
   
6.33
   
3,021,768
   
45,333
   
6.03
 
Commercial
    
2,569,001
   
41,417
   
6.47
   
2,327,438
   
35,581
   
6.20
   
1,961,351
   
25,477
   
5.22
 
Consumer
    
3,720,529
   
55,819
   
6.02
   
3,423,574
   
49,974
   
5.92
   
2,767,826
   
39,079
   
5.68
 
Tax-exempt
   
426,032
   
7,568
   
7.12
   
391,510
   
7,028
   
7.28
   
335,505
   
6,243
   
7.48
 
Total loans
    
10,423,525
   
164,488
   
6.33
   
9,670,148
   
147,678
   
6.19
   
8,086,450
   
116,132
   
5.78
 
                                                         
Total earning assets
 
$
29,915,148
  
$
402,336
    
5.39
%
$
28,430,683
  
$
374,588
    
5.35
%
$
23,361,228
  
$
296,504
    
5.10
%
                                                         
Sources of Funds
                                                        
Interest-bearing liabilities
                                                        
Savings
  
$
7,082,969
  
$
23,258
    
1.32
%
$
6,558,587
  
$
19,080
    
1.18
%
$
5,276,657
  
$
10,216
    
0.78
%
Interest bearing demand
    
12,094,680
   
53,755
   
1.78
   
11,924,947
   
46,671
   
1.59
   
9,643,771
   
18,729
   
0.78
 
Time deposits
    
2,668,791
   
16,085
   
2.42
   
2,566,074
   
13,740
   
2.17
   
2,507,526
   
11,378
   
1.82
 
Public funds
    
828,305
   
6,196
   
3.00
   
781,282
   
4,658
   
2.42
   
856,683
   
2,886
   
1.35
 
Total deposits
    
22,674,745
   
99,294
   
1.76
   
21,830,890
   
84,149
   
1.56
   
18,284,637
   
43,209
   
0.95
 
                                                         
Other borrowed money
    
845,462
   
6,917
   
3.28
   
703,223
   
4,410
   
2.54
   
523,931
   
1,052
   
0.81
 
Long-term debt
    
200,000
   
3,020
   
6.06
   
200,000
   
3,020
   
6.12
   
200,000
   
3,020
   
6.07
 
Total deposits and interest-bearing liabilities
    
23,720,207
   
109,231
   
1.85
   
22,734,113
   
91,579
   
1.63
   
19,008,568
   
47,281
   
1.00
 
                                                         
Noninterest-bearing funds (net)
    
6,194,941
               
5,696,570
               
4,352,660
             
Total sources to fund earning assets
  
$
29,915,148
    
109,231
   
1.46
 
$
28,430,683
    
91,579
   
1.31
 
$
23,361,228
    
47,281
   
0.81
 
                                                         
Net interest income and
                                                        
margin tax-equivalent basis
        
$
293,105
    
3.93
%
      
$
283,009
    
4.04
%
      
$
249,223
    
4.29
%
                                                         
Other Balances
                                                        
Cash and due from banks
  
$
1,241,372
              
$
1,180,375
              
$
1,163,942
              
Other assets
    
1,749,133
               
1,625,412
               
1,419,098
             
Total assets
    
32,763,128
               
31,096,724
               
25,822,157
             
Total deposits
    
29,661,511
               
28,220,513
               
23,541,453
             
Demand deposits (noninterest-bearing)
    
6,986,766
               
6,389,623
               
5,256,816
             
Other liabilities
    
259,873
               
256,677
               
222,779
             
Stockholders' equity
    
1,796,282
               
1,716,311
               
1,333,994
             
Allowance for loan losses
    
142,525
               
139,746
               
122,111
             
                                                         
                                                         
Notes
-Weighted average yields on tax-exempt obligations have been computed on a tax-equivalent basis assuming a federal tax rate of 35%.
                
-Non-accrual loans have been included in the average loan balance.
                                      
-Consumer loans include loans held for sale.
                                                        
                                                         
 
 
 

Commerce Bancorp, Inc. and Subsidiaries
  
Computation of Net Income Per Share
  
(dollars in thousands, except per share amounts)
  
                   
                   
                   
                   
   
Three Months Ended
  
Six Months Ended
  
   
June 30,
  
June 30,
  
                   
   
2005
  
2004
  
2005
  
2004
  
Basic:
                  
Net income applicable to common stock
  
$
79,409
  
$
66,235
  
$
156,546
  
$
128,210
  
                           
Average common shares outstanding
    
162,287
   
155,960
   
161,547
   
155,144
 
                           
Net income per common share
  
$
0.49
  
$
0.42
  
$
0.97
  
$
0.82
  
                           
                           
                           
Diluted:
                          
Net income applicable to common stock
  
$
79,409
  
$
66,235
  
$
156,546
  
$
128,210
  
on a diluted basis
                          
Interest expense on trust preferred securities
    
1,963
   
1,963
   
3,926
   
3,926
 
   
$
81,372
  
$
68,198
  
$
160,472
  
$
132,136
  
                           
Average common shares outstanding
    
162,287
   
155,960
   
161,547
   
155,144
 
Additional shares considered in diluted
                          
computation assuming:
                          
Exercise of stock options
    
7,333
   
8,978
   
7,595
   
9,061
 
Conversion of trust preferred securities
    
7,582
   
7,582
   
7,582
   
7,582
 
                           
Average common and common equivalent
                          
shares outstanding
    
177,202
   
172,520
   
176,724
   
171,787
 
                           
Net income per common and common
                          
equivalent share
  
$
0.46
  
$
0.40
  
$
0.91
  
$
0.77
  
                           
                           
                           
Restated for the March 2005 stock split
                          

 
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