Commerce Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets
(unaudited)
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September 30, December 31, ------------------------------- (dollars
in thousands) 2006 2005
--------------------------------------------------------------------------
Assets Cash and due from banks $1,291,070 $1,284,064 Federal funds
sold 6,800 12,700 ------------------------------- Cash and cash
equivalents 1,297,870 1,296,764 Loans held for sale 79,854 30,091
Trading securities 92,622 143,016 Securities available for sale
10,800,173 9,518,821 Securities held to maturity 14,245,638
13,005,364 (market value 9/06- $13,974,804; 2005- $12,758,552)
Loans 14,697,495 12,658,652 Less allowance for loan losses 146,791
133,664 ------------------------------- 14,550,704 12,524,988 Bank
premises and equipment, net 1,577,738 1,378,786 Goodwill and other
intangible assets 147,653 106,926 Other assets 511,258 461,281
------------------------------- Total assets $43,303,510
$38,466,037 =============================== Liabil- ities Deposits:
Demand: Noninterest-bearing $8,649,757 $8,019,878 Interest-bearing
15,692,939 13,286,678 Savings 10,646,687 9,486,712 Time 5,152,278
3,933,445 ------------------------------- Total deposits 40,141,661
34,726,713 Other borrowed money 118,400 1,106,443 Other liabilities
328,088 323,708 Long-term debt 0 0 -------------------------------
40,588,149 36,156,864 Stock- Common stock, 188,135,291 holders'
shares issued (179,498,717 Equity shares in 2005) 188,135 179,499
Capital in excess of par value 1,689,262 1,450,843 Retained
earnings 920,450 750,710 Accumulated other comprehensive (loss)
income (63,829) (59,169) ------------------------------- 2,734,018
2,321,883 Less treasury stock, at cost, 1,006,804 shares (837,338
shares in 2005) 18,657 12,710 ------------------------------- Total
stockholders' equity 2,715,361 2,309,173
------------------------------- Total liabilities and stockholders'
equity $43,303,510 $38,466,037 ===============================
Commerce Bancorp, Inc. and Subsidiaries Consolidated Statements of
Income (unaudited)
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Three Months Ended September 30, ---------------------------------
(dollars in thousands, except per share amounts) 2006 2005 % Change
--------------------------------------------------------------------------
Interest Interest and fees on loans $255,663 $178,878 43 % income
Interest on investments 339,825 243,187 40 Other interest 1,918
1,774 8 --------------------------------- Total interest income
597,406 423,839 41 --------------------------------- Interest
Interest on deposits: expense Demand 132,349 68,100 94 Savings
70,320 35,215 100 Time 52,375 26,114 101
--------------------------------- Total interest on deposits
255,044 129,429 97 Interest on other borrowed money 20,392 4,697
334 Interest on long-term debt 0 2,339 (100)
--------------------------------- Total interest expense 275,436
136,465 102 --------------------------------- Net interest income
321,970 287,374 12 Provision for credit losses 9,499 3,000 217
--------------------------------- Net interest income after
provision for credit losses 312,471 284,374 10 Noninterest Deposit
charges and service income fees 97,436 72,302 35 Other operating
income 53,121 46,763 14 Net investment securities (losses) gains 0
5,714 (100) --------------------------------- Total noninterest
income 150,557 124,779 21 --------------------------------- Total
Revenues 472,527 412,153 15 Noninterest Salaries and benefits
156,105 134,149 16 expense Occupancy 49,534 41,873 18 Furniture and
equipment 41,543 32,371 28 Office 15,213 14,871 2 Marketing 10,712
12,460 (14) Other 70,362 52,858 33
--------------------------------- Total noninterest expenses
343,469 288,582 19 --------------------------------- Income before
income taxes 119,559 120,571 (1) Provision for federal and state
income taxes 39,890 41,116 (3) ---------------------------------
Net income $79,669 $79,455 0 % =================================
Net income per common and common equivalent share: Basic $0.43
$0.48 (10)% --------------------------------- Diluted $0.41 $0.45
(9) --------------------------------- Average common and common
equivalent shares outstanding: Basic 186,527 165,701 13
--------------------------------- Diluted 194,754 180,360 8
--------------------------------- Cash dividends, common stock
$0.12 $0.11 9 % =================================
--------------------------------------------------------------------------
Nine Months Ended September 30, ----------------------------------
(dollars in thousands, except per share amounts) 2006 2005 % Change
--------------------------------------------------------------------------
Interest Interest and fees on loans $707,527 $485,935 46 % income
Interest on investments 959,923 703,103 37 Other interest 2,581
2,979 (13) ---------------------------------- Total interest income
1,670,031 1,192,017 40 ---------------------------------- Interest
Interest on deposits: expense Demand 348,374 168,526 107 Savings
188,481 77,553 143 Time 129,810 66,793 94
---------------------------------- Total interest on deposits
666,665 312,872 113 Interest on other borrowed money 54,529 16,024
240 Interest on long-term debt 0 8,379 (100)
---------------------------------- Total interest expense 721,194
337,275 114 ---------------------------------- Net interest income
948,837 854,742 11 Provision for credit losses 23,500 13,750 71
---------------------------------- Net interest income after
provision for credit losses 925,337 840,992 10 Noninterest Deposit
charges and service income fees 271,370 201,068 35 Other operating
income 153,145 131,532 16 Net investment securities (losses) gains
0 11,511 (100) ---------------------------------- Total noninterest
income 424,515 344,111 23 ---------------------------------- Total
Revenues 1,373,352 1,198,853 15 Noninterest Salaries and benefits
451,560 381,002 19 expense Occupancy 141,261 118,976 19 Furniture
and equipment 117,159 90,192 30 Office 45,084 40,125 12 Marketing
30,222 26,717 13 Other 207,301 168,475 23
---------------------------------- Total noninterest expenses
992,587 825,487 20 ---------------------------------- Income before
income taxes 357,265 359,616 (1) Provision for federal and state
income taxes 120,779 123,615 (2) ----------------------------------
Net income $236,486 $236,001 0 % ==================================
Net income per common and common equivalent share: Basic $1.29
$1.45 (11)% ---------------------------------- Diluted $1.23 $1.36
(10) ---------------------------------- Average common and common
equivalent shares outstanding: Basic 183,981 162,947 13
---------------------------------- Diluted 192,872 177,951 8
---------------------------------- Cash dividends, common stock
$0.36 $0.33 9 % ================================== Commerce
Bancorp, Inc. and Subsidiaries Consolidated Statements of Income
(unaudited)
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Three Months Ended ------------------------------------------------
(dollars in Sept. 30, June 30, Sept. 30, thousands, except
------------------------------------------------ per share amounts)
2006 2006 % Change 2005 % Change
--------------------------------------------------------------------------
Interest Interest and fees income on loans $255,663 $236,890 8 %
$178,878 43 % Interest on investments 339,825 325,022 5 243,187 40
Other interest 1,918 250 667 1,774 8
------------------------------------------------ Total interest
income 597,406 562,162 6 423,839 41
------------------------------------------------ Interest Interest
on expense deposits: Demand 132,349 118,085 12 68,100 94 Savings
70,320 64,157 10 35,215 100 Time 52,375 41,174 27 26,114 101
------------------------------------------------ Total interest on
deposits 255,044 223,416 14 129,429 97 Interest on other borrowed
money 20,392 19,809 3 4,697 334 Interest on long- term debt 0 0 0
2,339 (100) ------------------------------------------------ Total
interest expense 275,436 243,225 13 136,465 102
------------------------------------------------ Net interest
income 321,970 318,937 1 287,374 12 Provision for credit losses
9,499 7,500 27 3,000 217
------------------------------------------------ Net interest
income after provision for credit losses 312,471 311,437 0 284,374
10 Non- Deposit charges interest and service fees 97,436 91,653 6
72,302 35 income Other operating income 53,121 51,303 4 46,763 14
Net investment securities (losses) gains 0 0 0 5,714 (100)
------------------------------------------------ Total noninterest
income 150,557 142,956 5 124,779 21
------------------------------------------------ Total Revenues
472,527 461,893 2 412,153 15 Non- Salaries and interest benefits
156,105 150,630 4 134,149 16 expense Occupancy 49,534 45,487 9
41,873 18 Furniture and equipment 41,543 39,656 5 32,371 28 Office
15,213 14,398 6 14,871 2 Marketing 10,712 11,699 (8) 12,460 (14)
Other 70,362 71,914 (2) 52,858 33
------------------------------------------------ Total noninterest
expenses 343,469 333,784 3 288,582 19
------------------------------------------------ Income before
income taxes 119,559 120,609 (1) 120,571 (1) Provision for federal
and state income taxes 39,890 41,089 (3) 41,116 (3)
------------------------------------------------ Net income $79,669
$79,520 0 % $79,455 0 %
================================================ Net income per
common and common equivalent share: Basic $0.43 $0.43 0 % $0.48
(10)% ------------------------------------------------ Diluted
$0.41 $0.41 0 $0.45 (9)
------------------------------------------------ Average common and
common equivalent shares outstanding: Basic 186,527 184,437 1
165,701 13 ------------------------------------------------ Diluted
194,754 193,842 0 180,360 8
------------------------------------------------ Cash dividends,
common stock $0.12 $0.12 0 % $0.11 9 %
================================================ Return on average
assets 0.74 % 0.76 % 0.92 % Return on average equity 12.06 12.83
16.62 Commerce Bancorp, Inc. Selected Consolidated Financial Data
(unaudited) Three Months Ended September 30,
------------------------------------ % 2006 2005 Change
-------------- ------------- ------ (dollars and shares in
thousands) Income Statement Data: Net interest income $321,970
$287,374 12 % Provision for credit losses 9,499 3,000 217
Noninterest income 150,557 124,779 21 Total revenues 472,527
412,153 15 Noninterest expense 343,469 288,582 19 Net income 79,669
79,455 0 Per Share Data: Net income - Basic $0.43 $0.48 (10)% Net
income - Diluted 0.41 0.45 (9) Book value - Basic Book value -
Diluted Revenue per share - Diluted $9.71 $9.14 6 % Weighted
Average Shares Outstanding: Basic 186,527 165,701 Diluted 194,754
180,360 Balance Sheet Data: Total assets Loans (net) Allowance for
credit losses Securities available for sale Securities held to
maturity Total deposits Core deposits Stockholders' equity Capital:
Stockholders' equity to total assets Risk-based capital ratios:
Tier I Total capital Leverage ratio Performance Ratios: Cost of
funds 2.74 % 1.71 % Net interest margin 3.27 3.67 Return on average
assets 0.74 0.92 Return on average total stockholders' equity 12.06
16.62 Nine Months Ended September 30,
------------------------------------ % 2006 2005 Change
-------------- ------------- ------ (dollars and shares in
thousands) Income Statement Data: Net interest income $948,837
$854,742 11 % Provision for credit losses 23,500 13,750 71
Noninterest income 424,515 344,111 23 Total revenues 1,373,352
1,198,853 15 Noninterest expense 992,587 825,487 20 Net income
236,486 236,001 0 Per Share Data: Net income - Basic $1.29 $1.45
(11)% Net income - Diluted 1.23 1.36 (10) Book value - Basic $14.51
$12.23 19 % Book value - Diluted 13.85 11.69 18 Revenue per share -
Diluted $9.49 $8.98 6 % Weighted Average Shares Outstanding: Basic
183,981 162,947 Diluted 192,872 177,951 Balance Sheet Data: Total
assets $43,303,510 $36,293,540 19 % Loans (net) 14,550,704
11,150,520 30 Allowance for credit losses 154,572 138,903 11
Securities available for sale 10,800,173 8,965,121 20 Securities
held to maturity 14,245,638 12,961,900 10 Total deposits 40,141,661
33,243,686 21 Core deposits 38,538,568 32,370,994 19 Stockholders'
equity 2,715,361 2,114,361 28 Capital: Stockholders' equity to
total assets 6.27 % 5.83 % Risk-based capital ratios: Tier I 12.01
12.18 Total capital 12.73 13.01 Leverage ratio 6.08 6.17
Performance Ratios: Cost of funds 2.53 % 1.50 % Net interest margin
3.39 3.87 Return on average assets 0.76 0.96 Return on average
total stockholders' equity 12.61 17.40 The following summary
presents information regarding non-performing loans and assets as
of September 30, 2006 and the preceding four quarters (dollar
amounts in thousands). Sept. 30, June 30, March 31, Dec. 31, Sept.
30, 2006 2006 2006 2005 2005 --------- -------- --------- --------
--------- Non-accrual loans: Commercial $33,658 $34,904 $16,975
$16,712 $16,926 Consumer 9,325 8,927 9,285 8,834 8,559 Commercial
real estate: Construction 496 1,708 1,726 1,763 1,882 Mortgage
1,828 2,523 2,096 4,329 3,353 --------- -------- --------- --------
--------- Total non-accrual loans 45,307 48,062 30,082 31,638
30,720 --------- -------- --------- -------- --------- Restructured
loans: Commercial - 2,941 3,037 3,133 3,230 Consumer - - - - -
Commercial real estate: Construction - - - - - Mortgage - - - - -
--------- -------- --------- -------- --------- Total restructured
loans - 2,941 3,037 3,133 3,230 --------- -------- ---------
-------- --------- Total non-performing loans 45,307 51,003 33,119
34,771 33,950 --------- -------- --------- -------- --------- Other
real estate/ foreclosed assets 2,022 1,369 435 279 310 ---------
-------- --------- -------- --------- Total non-performing assets
47,329 52,372 33,554 35,050 34,260 --------- -------- ---------
-------- --------- Loans past due 90 days or more and still
accruing 441 583 332 248 177 --------- -------- --------- --------
--------- Total non-performing assets and loans past due 90 days or
more $47,770 $52,955 $33,886 $35,298 $34,437 ========= ========
======== ======== ========= Total non-performing loans as a
percentage of total period-end loans 0.31% 0.36% 0.25% 0.27% 0.30%
Total non-performing assets as a percentage of total period-end
assets 0.11% 0.12% 0.08% 0.09% 0.09% Total non-performing assets
and loans past due 90 days or more as a percentage of total
period-end assets 0.11% 0.12% 0.08% 0.09% 0.09% Allowance for
credit losses as a percentage of total non-performing loans 341%
291% 432% 407% 409% Allowance for credit losses as a percentage of
total period-end loans 1.05% 1.04% 1.06% 1.12% 1.23% Total
non-performing assets and loans past due 90 days or more as a
percentage of stockholders' equity and allowance for credit losses
2% 2% 1% 1% 2% The following table presents, for the periods
indicated, an analysis of the allowance for credit losses and other
related data: (dollar amounts in thousands) Year Three Months Ended
Nine Months Ended Ended --------------------- --------------------
-------- 09/30/06 09/30/05 09/30/06 09/30/05 12/31/05 Balance at
beginning of period $148,383 $141,325 $141,464 $135,620 $135,620
Provisions charged to operating expenses 9,499 3,000 23,500 13,750
19,150 --------- --------- --------- --------- -------- 157,882
144,325 164,964 149,370 154,770 Recoveries on loans charged-off:
Commercial 1,707 930 4,335 1,920 2,546 Consumer 237 245 1,372 1,332
2,566 Commercial real estate 57 30 375 80 80 --------- ---------
--------- --------- -------- Total recoveries 2,001 1,205 6,082
3,332 5,192 Loans charged-off: Commercial (2,968) (5,287) (10,182)
(9,102) (13,944) Consumer (2,119) (1,318) (5,803) (3,720) (5,912)
Commercial real estate (224) (22) (489) (977) (1,136) ---------
--------- --------- --------- -------- Total charge-offs (5,311)
(6,627) (16,474) (13,799) (20,992) --------- --------- ---------
--------- -------- Net charge-offs (3,310) (5,422) (10,392)
(10,467) (15,800) --------- --------- --------- --------- --------
Allowance for credit loss acquired bank 2,494 --------- Balance at
end of period $154,572 $138,903 $154,572 $138,903 $141,464
========= ========= ========= ========= ========= Net charge-offs
as a percentage of average loans outstanding 0.09 % 0.20 % 0.10 %
0.13 % 0.15 % Net Allowance Additions $6,189 ($2,422) $13,108
$3,283 $5,844 Commerce Bancorp, Inc. and Subsidiaries Average
Balances and Net Interest Income (unaudited)
--------------------------------------------------------------------------
--------------------------------- September 2006
--------------------------------- Average Average Balance Interest
Rate --------------------------------- (dollars in thousands)
Earning Assets --------------------------------------- Investment
securities Taxable $24,566,553 $334,250 5.40 % Tax-exempt 530,542
7,641 5.71 Trading 78,103 934 4.74 ------------ --------- ------
Total investment securities 25,175,198 342,825 5.40 Federal funds
sold 145,897 1,918 5.22 Loans Commercial mortgages 5,001,608 90,050
7.14 Commercial 3,603,790 72,606 7.99 Consumer 5,407,721 87,077
6.39 Tax-exempt 510,950 9,123 7.08 ------------ --------- ------
Total loans 14,524,069 258,856 7.07 ------------ --------- ------
Total earning assets $39,845,164 $603,599 6.01 % ============
Sources of Funds ---------------------------------------
Interest-bearing liabilities Savings $10,592,676 $70,320 2.63 %
Interest bearing demand 14,975,663 132,349 3.51 Time deposits
3,344,257 32,667 3.88 Public funds 1,470,116 19,708 5.32
------------ --------- ------ Total deposits 30,382,712 255,044
3.33 Other borrowed money 1,543,210 20,392 5.24 Long-term debt 0 0
0.00 ------------ --------- ------ Total deposits and
interest-bearing liabilities 31,925,922 275,436 3.42
Noninterest-bearing funds (net) 7,919,242 ------------ ---------
------ Total sources to fund earning assets $39,845,164 275,436
2.74 ============ Net interest income and margin tax-equivalent
basis $328,163 3.27 % ========= ====== Other Balances
--------------------------------------- Cash and due from banks
$1,219,806 Other assets 2,359,885 Total assets 43,279,878 Total
deposits 38,772,316 Demand deposits (noninterest-bearing) 8,389,604
Other liabilities 321,225 Stockholders' equity 2,643,127 Allowance
for loan losses 144,977 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. --------------------------------- June 2006
--------------------------------- Average Average Balance Interest
Rate --------------------------------- (dollars in thousands)
Earning Assets --------------------------------------- Investment
securities Taxable $23,851,645 $319,271 5.37 % Tax-exempt 559,733
7,322 5.25 Trading 113,049 1,525 5.41 ------------ --------- ------
Total investment securities 24,524,427 328,118 5.37 Federal funds
sold 19,898 250 5.04 Loans Commercial mortgages 4,784,584 83,903
7.03 Commercial 3,492,946 66,879 7.68 Consumer 5,115,609 80,560
6.32 Tax-exempt 498,492 8,535 6.87 ------------ --------- ------
Total loans 13,891,631 239,877 6.93 ------------ --------- ------
Total earning assets $38,435,956 $568,245 5.93 % ============
Sources of Funds ---------------------------------------
Interest-bearing liabilities Savings $10,344,463 $64,157 2.49 %
Interest bearing demand 14,597,277 118,085 3.24 Time deposits
3,088,653 25,949 3.37 Public funds 1,224,298 15,225 4.99
------------ --------- ------ Total deposits 29,254,691 223,416
3.06 Other borrowed money 1,624,229 19,809 4.89 Long-term debt 0 0
0.00 ------------ --------- ------ Total deposits and
interest-bearing liabilities 30,878,920 243,225 3.16
Noninterest-bearing funds (net) 7,557,036 ------------ ---------
------ Total sources to fund earning assets $38,435,956 243,225
2.54 ============ Net interest income and margin tax-equivalent
basis $325,020 3.39 % ========= ====== Other Balances
--------------------------------------- Cash and due from banks
$1,278,137 Other assets 2,314,307 Total assets 41,888,789 Total
deposits 37,486,585 Demand deposits (noninterest-bearing) 8,231,894
Other liabilities 299,622 Stockholders' equity 2,478,353 Allowance
for loan losses 139,611 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. --------------------------------- September
2005 --------------------------------- Average Average Balance
Interest Rate --------------------------------- (dollars in
thousands) Earning Assets ---------------------------------------
Investment securities Taxable $19,732,946 $239,481 4.81 %
Tax-exempt 397,351 4,366 4.36 Trading 96,344 1,335 5.50
------------ --------- ------ Total investment securities
20,226,641 245,182 4.81 Federal funds sold 198,260 1,774 3.55 Loans
Commercial mortgages 3,865,284 63,300 6.50 Commercial 2,760,625
47,117 6.77 Consumer 4,087,665 62,720 6.09 Tax-exempt 498,211 8,831
7.03 ------------ --------- ------ Total loans 11,211,785 181,968
6.44 ------------ --------- ------ Total earning assets $31,636,686
$428,924 5.38 % =========== Sources of Funds
--------------------------------------- Interest-bearing
liabilities Savings $8,127,451 $35,215 1.72 % Interest bearing
demand 12,638,411 68,100 2.14 Time deposits 2,734,408 18,760 2.72
Public funds 842,894 7,354 3.46 ------------ --------- ------ Total
deposits 24,343,164 129,429 2.11 Other borrowed money 541,119 4,697
3.44 Long-term debt 163,043 2,339 5.69 ------------ ---------
------ Total deposits and interest-bearing liabilities 25,047,326
136,465 2.16 Noninterest-bearing funds (net) 6,589,360 ------------
--------- ------ Total sources to fund earning assets $31,636,686
136,465 1.71 Net interest income and margin tax-equivalent basis
$292,459 3.67 % ========= ====== Other Balances
--------------------------------------- Cash and due from banks
$1,306,848 Other assets 1,845,602 Total assets 34,644,396 Total
deposits 31,788,250 Demand deposits (noninterest-bearing) 7,445,086
Other liabilities 240,177 Stockholders' equity 1,911,807 Allowance
for loan losses 144,740 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 Nine Months Ended September
30, September 30, ------------------ ----------------- 2006 2005
2006 2005 -------- -------- -------- -------- Basic: Net income
applicable to common stock $79,669 $79,455 $236,486 $236,001
======== ======== ======== ======== Average common shares
outstanding 186,527 165,701 183,981 162,947 ======== ========
======== ======== Net income per common share $0.43 $0.48 $1.29
$1.45 ======== ======== ======== ======== Diluted: Net income
applicable to common stock on a diluted basis $79,669 $79,455
$236,486 $236,001 Interest expense on trust preferred securities
1,520 5,446 -------- -------- -------- -------- $79,669 $80,975
$236,486 $241,447 ======== ======== ======== ======== Average
common shares outstanding 186,527 165,701 183,981 162,947
Additional shares considered in diluted computation assuming:
Exercise of stock options 8,227 8,478 8,891 7,894 Conversion of
trust preferred securities 6,181 7,110 -------- -------- --------
-------- Average common and common equivalent shares outstanding
194,754 180,360 192,872 177,951 ======== ======== ======== ========
Net income per common and common equivalent share $0.41 $0.45 $1.23
$1.36 ======== ======== ======== ======== DATASOURCE: Commerce
Bancorp, Inc.
Copyright