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, 1995
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)
(609) 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 _____
<PAGE>
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 10,679,526
(Title of Class) (No. of Shares Outstanding
as of 11/03/95)
Series C ESOP Cumulative Con-
vertible Preferred Stock 417,000
(Title of Class) (No. of Shares Outstanding
as of 11/03/95)
<PAGE>
COMMERCE BANCORP, INC. AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)
September 30, 1995 and December 31, 1994 .......................1
Consolidated Statements of Income (Unaudited)
Three months ended September 30, 1995 and
September 30, 1994 and nine months ended
September 30, 1995 and September 30, 1994 ....................2
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended September 30, 1995 and
September 30, 1994 .............................................3
Notes to Consolidated Financial Statements ( Unaudited) ............4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation .............................6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ..................................14
<PAGE>1
Commerce Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
(dollars in thousands) 1995 1994
<S> <C> <C>
Assets Cash and due from banks $ 140,740 $ 119,697
Federal funds sold 32,200 9,750
---------- ----------
Cash and cash equivalents 172,940 129,447
Mortgages held for sale 7,633 2,263
Securities available for sale 159,570 118,855
Securities held to maturity:
U.S. Government agency mortgage-backed
obligations 1,038,869 1,113,359
Collateralized mortgage obligations 1,678 2,390
Obligations of state and political subdivisions 10,060 565
Other securities 39,415 28,819
---------- ----------
Total securities held to maturity
(market value 1995-$1,059,366;
1994-$1,039,311) 1,090,022 1,145,133
Trading securities 1,735
Loans 869,883 801,952
Less allowance for loan losses 13,005 12,036
---------- ----------
856,878 789,916
Bank premises and equipment, net 67,539 57,997
Other assets 46,540 47,679
---------- ----------
$2,402,857 $2,291,290
========== ==========
Liabilities Deposits:
Demand:
Interest-bearing $ 634,625 $ 510,345
Noninterest-bearing 395,824 367,421
Savings 473,041 488,282
Time 712,739 468,524
---------- ----------
Total deposits 2,216,229 1,834,572
Other borrowed money 312,895
Other liabilities 2,604 3,565
Obligation to Employee Stock Ownership Plan (ESOP) 4,615 5,385
Long-term debt 23,000 23,000
---------- ----------
2,246,448 2,179,417
Stockholders' Common stock, 10,777,252 shares issued
Equity (8,889,506 shares in 1994) 16,839 13,234
Series C preferred stock, 417,000 shares
authorized, issued and outstanding
(liquidating preference: $18.00 per share
totaling $7,506) 7,506 7,506
Capital in excess of par or stated value 112,318 80,033
Retained earnings 25,985 17,757
---------- ----------
162,648 118,530
Less commitment to ESOP 4,615 5,385
Less treasury stock, at cost, 100,159 common shares
in 1995 (79,520 in 1994) 1,624 1,272
---------- ----------
Total stockholders' equity 156,409 111,873
---------- ----------
$2,402,857 $2,291,290
========== ==========
</TABLE>
<PAGE>2
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) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest Interest and fees on loans $20,552 $16,781 $58,901 $47,784
income Interest on investments 19,986 21,447 61,851 60,095
Other interest 1,036 276 2,833 687
------- ------- ------- -------
Total interest income 41,574 38,504 123,585 108,566
------- ------- ------- -------
Interest Interest on deposits:
expense Demand 4,438 2,468 11,724 6,963
Savings 2,874 3,004 8,355 8,883
Time 9,564 4,870 25,101 14,454
------- ------- ------- -------
Total interest on deposits 16,876 10,342 45,180 30,300
Interest on other borrowed money 220 4,007 6,379 9,744
Interest on long-term debt 507 507 1,519 1,519
------- ------- ------- -------
Total interest expense 17,603 14,856 53,078 41,563
------- ------- ------- -------
Net interest income 23,971 23,648 70,507 67,003
Provision for loan losses 388 1,050 1,633 3,160
------- ------- ------- -------
Net interest income after provision for loan
losses 23,583 22,598 68,874 63,843
Noninterest Deposit charges and service fees 4,249 3,387 11,711 10,282
income Other operating income 1,126 794 3,054 2,351
Net investment securities gains 88 641 106 641
------- ------- ------- -------
Total noninterest income 5,463 4,822 14,871 13,274
------- ------- ------- -------
Noninterest Salaries 6,870 5,924 19,469 16,833
expense Benefits 1,517 1,733 5,165 4,936
Occupancy 2,285 2,030 6,222 5,835
Furniture and equipment 2,441 2,302 6,996 6,158
Office 1,916 1,770 5,259 4,643
Audit and regulatory fees and assessments 275 1,315 2,756 3,662
Marketing 715 555 2,041 1,801
Other real estate (net) 516 800 1,807 2,255
Other 2,657 2,347 6,767 6,738
------- ------- ------- -------
Total noninterest expenses 19,192 18,776 56,482 52,861
------- ------- ------- -------
Income before income taxes 9,854 8,644 27,263 24,256
Provision for federal and state income taxes 3,577 3,128 9,927 8,814
------- ------- ------- -------
Net income 6,277 5,516 17,336 15,442
Dividends on preferred stocks 141 141 422 927
------- ------- ------- -------
Net income applicable to common stock $6,136 $5,375 $16,914 $14,515
======= ======= ======= =======
Net income per common and common equivalent
share:
Primary $0.56 $0.62 $1.59 $1.76
------- ------- ------- -------
Fully diluted $0.53 $0.57 $1.53 $1.59
------- ------- ------- -------
Average common and common equivalent shares
outstanding:
Primary 11,013 8,712 10,601 8,264
------- ------- ------- -------
Fully diluted 11,616 9,682 11,303 9,656
------- ------- ------- -------
Cash dividends declared, common stock $0.16 $0.15 $0.47 $0.43
======= ======= ======= =======
</TABLE>
<PAGE>3
Commerce Bancorp, Inc. And Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
(dollars in thousands) 1995 1994
<S> <C> <C>
Operating activities Net income $ 17,336 $ 15,442
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,633 3,160
Provision for depreciation, amortization accretion 9,779 13,200
Gains on sales of securities available for sale (88) (641)
Proceeds from sales of mortgages held for sale 9,887 73,420
Originations of mortgages held for sale (15,257) (31,422)
Net loan (chargeoffs) (664) (1,855)
Net increase in trading securities (1,735)
(Increase) decrease in other assets (1,708) 8,750
Decrease in other liabilities (961) (19,209)
--------- ---------
Net cash provided by operating activities 18,222 60,845
Investing activities Proceeds from the sales of securities available for sale 128 961
Proceeds from the maturity of securities available for sale 12,943 32,619
Proceeds from the maturity of securities held to maturity 63,624 108,291
Purchase of securities available for sale (48,126) (1,074)
Purchase of securities held to maturity (11,452) (346,002)
Net increase in loans (73,257) (68,771)
Proceeds from sales of loans 5,326 4,839
Purchases of premises and equipment (15,119) (16,482)
--------- ---------
Net cash (used) by investing activities (65,933) (285,619)
Financing activities Net increase in demand and savings deposits 137,442 58,159
Net increase (decrease) in time deposits 244,215 (30,853)
Net (decrease) increase in other borrowed money (312,895) 189,417
Issuance of common stock 25,774
Dividends paid (5,240) (4,288)
Proceeds from issuance of common stock under
dividend reinvestment and other stock plans 2,112 1,610
Purchase of treasury stock (352) (205)
Other 147 44
--------- ---------
Net cash provided by financing activities 91,203 213,884
Increase (decrease) in cash and cash equivalent 43,493 (10,890)
Cash and cash equivalents at beginning of year 129,447 105,725
--------- ---------
Cash and cash equivalents at end of period $ 172,940 $ 94,835
--------- ---------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 53,398 $ 40,216
Income taxes 9,608 9,164
--------- ---------
</TABLE>
<PAGE>4
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. 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 for the period ended December 31, 1994. The
results for the three months ended September 30, 1995, and for the nine
months ended September 30, 1995 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1995.
The consolidated financial statements include the accounts of
Commerce Bancorp, Inc. (the "Company") and all of its subsidiaries,
including Commerce Bank, N.A. ("Commerce NJ"), Commerce
Bank/Pennsylvania, N.A. and Commerce Bank/Shore, N.A. All material
intercompany transactions have been eliminated. Certain amounts from
1994 have been reclassified to conform with the 1995 presentation.
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. Employee Stock Ownership Plan (ESOP) Debt Guarantee
The Company has guaranteed a debt obligation of its Employee
Stock Ownership Plan ("ESOP") which originated at $7,500,000 and has
been reduced to $4,615,000 through principal reductions. Accordingly,
the loan amount is reflected in the Company's consolidated balance
sheet as a liability and an equal amount, representing deferred
employee benefits, has been recorded as a deduction from stockholders'
equity. The ESOP obtained the loan in 1990 to acquire a new class of
Company Cumulative Convertible Preferred Stock (Series C) at a price of
$18.00 per share. The loan was refinanced in 1994, and is payable in
quarterly installments with the final payment due January 28, 2000. The
loan bears interest at a variable rate, although the rate can be fixed
at future repricing dates in accordance with the loan agreement. As the
Company makes annual
<PAGE>5
contributions to the ESOP, these contributions, plus dividends from the
Company's Series C Preferred Stock held by the ESOP, will be used to
repay the loan.
D. Issuance of Common Stock
On February 15, 1995, the Company publicly issued 1,725,000
shares of common stock. Net proceeds to the Company were $25,774,000
after deducting expenses of $1,826,000. The proceeds are earmarked for
general corporate purposes, including providing additional equity
capital to the Company's bank subsidiaries to support the Company's
branch expansion growth strategy.
<PAGE>6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation Capital Resources
At September 30, 1995, stockholders' equity totaled $156.4
million or 6.51% of total assets, compared to $111.9 million or 4.88%
of total assets at December 31, 1994. On February 15, 1995, the Company
issued 1,725,000 shares of common stock, resulting in net proceeds of
$25.8 million.
The table below presents a comparison of the Company's and
each of its three bank subsidiaries risk-based capital ratios and
leverage ratios to the minimum regulatory requirements for the periods
indicated.
<TABLE>
<CAPTION>
Capital
Excess
Minimum as of
September 30, September 30, Regulatory September 30,
1995 1994 Requirements 1995
---- ---- ------------ ----
(in thousands)
<S> <C> <C> <C> <C>
Company
Risk based capital ratios:
Tier 1 12.84% 9.94% 4.00% $103,420
Total capital 15.92 13.17 8.00 92,630
Leverage ratio 6.37 4.67 3.00-5.00 79,300 (1)
Commerce NJ
Risk based capital ratios:
Tier 1 14.78% 11.41% 4.00% $99,030
Total capital 15.92 12.44 8.00 72,770
Leverage ratio 7.21 5.31 3.00-5.00 79,330 (1)
Commerce PA
Risk based capital ratios:
Tier 1 11.77% 12.33% 4.00% $ 9,340
Total capital 12.69 13.39 8.00 5,640
Leverage ratio 6.10 6.30 3.00-5.00 7,200 (1)
Commerce Shore Risk based capital ratios:
Tier 1 13.56% 13.17% 4.00% $12,760
Total capital 14.60 14.42 8.00 8,810
Leverage ratio 6.18 5.97 3.00-5.00 9,320 (1)
<FN>
(1) Based on a minimum regulatory requirement of 3.00%
</FN>
</TABLE>
At September 30, 1995, 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%.
<PAGE>7
Deposits
Total deposits at September 30, 1995 were $2.22 billion, up
$444.0 million, or 25% over total deposits of $1.77 billion at
September 30, 1994, and up by $381.7 million, or 21% from year-end
1994. Deposit growth during the first nine months of 1995 was largely
from the public sector, supported by growth in core deposits,
particularly time deposits.
Interest Rate Sensitivity and Liquidity
An interest rate sensitive asset or liability is one that,
within a defined time period, either matures or experiences an interest
rate change in line with general market interest rates. Historically,
the most common method of estimating interest rate risk was to measure
the maturity and repricing relationships between interest-earning
assets and interest-bearing liabilities at specific points in time
("GAP"), typically one year. Under this method, a company is considered
liability sensitive when the amount of its interest-bearing liabilities
exceeds the amount of its interest-earning assets within the one year
horizon. The following table illustrates the GAP position of the
Company as of September 30, 1995 (dollar amounts in millions):
<TABLE>
<CAPTION>
1-90 91-180 181-365 1-5 Beyond
Days Days Days Years 5 Years Total
<S> <C> <C> <C> <C> <C> <C>
Rate Sensitive:
Interest-earning assets
Loans $ 444 $14 $29 $240 $143 $ 870
Investment securities 61 37 80 426 647 1,251
Federal funds sold 32 32
------- ------- ------- ------- ------- -------
Total interest-earning assets 537 51 109 666 790 2,153
------- ------- ------- ------- ------- -------
Interest-bearing liabilities
Deposits
Transaction accounts 355 752 1,107
Time 304 102 163 125 19 713
Other borrowed money
Long-term debt 23 23
------- ------- ------- ------- ------- -------
Total interest-bearing liabilities 659 102 163 125 794 1,843
------- ------- ------- ------- ------- -------
Period GAP (122) (51) (54) 541 4 $ 310
------- ------- ------- ------- ------- -------
Cumulative GAP $ (122) $(173) $(227) $ 314 $310
======= ======== ======== ======= =======
</TABLE>
The Company's negative one year GAP position has been significantly
reduced during the first nine months of 1995, primarily through the
elimination of short-term borrowings at September 30, 1995.
Management utilizes additional tools, including income
simulation analysis, which it believes provides a more meaningful
measure of 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.
<PAGE>8
The Company's income simulation model indicates that a 100
basis point increase or decrease in general market interest rates over
the next 12 months would have little effect on projected net interest
income. Management continues to review and refine its interest rate
risk management process in response to the changing economic climate.
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, or the use of risk management
strategies such as interest rate swaps and caps.
In order to reduce the potential impact from a dramatic
increase in interest rates, the Company entered into interest-rate cap
agreements during the first quarter of 1995. The strike price of the
agreements exceeds current market interest rates. The agreements are
for a notional amount of $200 million for a period of two years.
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 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.
Short-Term Borrowings
Short-term borrowings consist of securities sold under
agreement to repurchase. These borrowings were used as an additional
source of funding for the investment portfolio and to fund loan growth
during 1994. At December 31, 1994, short-term borrowings aggregated
$312.9 million and had an average rate of 5.94%. During the first nine
months of 1995, the Company eliminated its outstanding short-term
borrowings, primarily through increased deposits.
Interest Earning Assets
For the nine month period ended September 30, 1995, interest
earning assets increased $83.1 million from $2.07 billion to $2.16
billion. This increase was primarily in the loan portfolio which
increased $67.9 million.
<PAGE>9
Loans
During the first nine months of 1995, loans increased $67.9
million from $802.0 million to $869.9 million. At September 30, 1995,
loans represented 39% of total deposits and 36% of total assets.
The increase in the loan portfolio was due primarily to loans
secured by 1-4 family residential properties (including home equity
loans) and loans secured by commercial real estate properties.
Investments
In total, for the first nine months of 1995, securities
decreased $12.7 million from $1.26 billion to $1.25 billion. For the
nine month period ended September 30, 1995, securities available for
sale increased from $118.9 million to $159.6 million, as a result of
securities purchases in the third quarter. Securities held to maturity
decreased from $1.15 billion to $1.09 billion, reflecting payments on
the existing portfolio. Trading securities increased to $1.7 million as
a result of the establishment of Commerce Capital, a bank securities
dealer department of Commerce NJ. At September 30, 1995, the average
life of the investment portfolio is approximately 6.8 years.
Short-term investments (Federal funds sold) increased $22.5
million from $9.8 million to $32.2 million. At September 30, 1995,
total securities and Federal funds sold aggregated $1.28 billion and
represented 53% of total assets.
Net Income
Net income for the third quarter of 1995 was $6.3 million, an
increase of $761 thousand over the $5.5 million recorded for the third
quarter of 1994. Net income for the first nine months of 1995 was $17.3
million, an increase of $1.9 million over the $15.4 million recorded in
the first nine months of 1994. These increases were due to increases in
net interest income, as well as reduced loan loss provisions and
increases in noninterest income which offset increased overhead
expenses. On a per share basis, fully-diluted net income for the third
quarter of 1995 and for the nine months of 1995 were $.53 and $1.53 per
common share compared to $.57 and $1.59 per common share for the
respective 1994 periods. Net income per share for the third quarter of
1995 and for the first nine months of 1995 were impacted by the
issuance of 1,725,000 shares of common stock via an underwritten public
offering in the first quarter of 1995.
Return on average assets (ROA) and return on average equity
(ROE) for the third quarter of 1995 were 1.06% and 16.60%,
respectively, compared to 0.97% and 20.56%, respectively, for the same
1994 period. ROA and ROE for the first nine months of 1995 were 0.99%
and 16.40%, respectively, compared to 0.93% and 19.80% a year ago.
Net Interest Income
Net interest income totaled $24.0 million for the third
quarter of 1995, an increase of $323 thousand or 1%, from $23.6 million
in the third quarter of 1994. Net interest income for the first nine
months of 1995 totaled $70.5 million, up $3.5 million or 5% from the
first nine months of
<PAGE>10
1994. The improvement in net interest income for both reporting periods
was due primarily to volume increases in the loan portfolio.
Noninterest Income
Noninterest income in 1995 increased $641 thousand and $1.6
million for the three and nine months ended September 30, respectively,
over the comparable 1994 periods. These increases were due primarily to
increased deposit charges and service fees, which offset a reduction in
gains from the sale of investment securities.
Noninterest Expense
For the third quarter of 1995, noninterest expense totaled
$19.2 million, an increase of $416 thousand, or 2.2%, over the same
period in 1994. Contributing to this increase was new branch activity
over the past twelve months, with the number of branches increasing
from 42 at September 30, 1994 to 47 at September 30, 1995. As a result
of the addition of these offices, staff, facilities, and related
expenses rose accordingly. Benefits decreased $216 thousand primarily
as a result of favorable claims experience in the employee medical
plan. Audit and regulatory fees and assessments decreased by $1.0
million due to the reduction in Federal deposit insurance rates enacted
retroactive to June 1, 1995.
For the first nine months of 1995, noninterest expense totaled
$56.5 million, an increase of $3.6 million, or 6.9%, over the first
nine months of 1994. Contributing to this increase was new branch
activity as noted above.
One key measure used to monitor progress in controlling
overhead expenses is the ratio of noninterest expenses to average
assets. For the first nine months of 1995, this ratio equaled 3.22%
versus 3.17% for the comparable 1994 period. The operating efficiency
ratio (noninterest expenses, less other real estate expenses, divided
by net interest income plus noninterest income excluding non-recurring
gains) was 64.04% for the first nine months of 1995 as compared to
63.04% for the same 1994 period.
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, 1995 were $17.9 million, or .74% of
total assets compared to $22.3 million or .97% of total assets at
December 31, 1994 and $23.9 million or 1.06% of total assets at
September 30, 1994.
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, 1995 were $7.7 million or .89% of total
loans compared to $11.8 million or 1.47% of total loans at December 31,
1994 and $10.7 million or 1.40% of total loans at September 30, 1994.
At September 30, 1995, loans past due 90 days or more and still
accruing interest amounted to $77 thousand compared to $211 thousand at
December 31, 1994 and $199 thousand at September 30, 1994. Additional
loans considered as potential problem loans by the Company's internal
loan review department ($7.6 million at September 30, 1995, $7.0
million at December 31, 1994 and $6.6 million at September 30, 1994)
have been evaluated as to risk exposure in determining the adequacy of
the allowance for loan losses.
<PAGE>11
Other real estate (ORE) at September 30, 1995 totaled $10.1
million compared to $10.5 million at December 31, 1994 and $13.2
million at September 30, 1994. These properties have been written down
to the lower of cost or fair value less disposition costs.
On pages 12 and 13 are tabular presentation 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, 1995, December 31, 1994, and September 30, 1994.
<PAGE>12
The following summary presents information regarding non-performing
loans and assets as of September 30, 1995 and the preceding four
quarters: (dollar amounts in thousands)
<TABLE>
<CAPTION>
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
1995 1995 1995 1994 1994
<S> <C> <C> <C> <C> <C>
Non-accrual loans:
Commercial $658 $897 $1,379 $1,624 $1,810
Consumer 1,186 1,063 1,025 1,427 1,629
Real Estate:
Construction 911 911 955 955 922
Mortgage 4,441 7,003 7,201 7,240 5,908
------- ------- ------- ------- -------
Total non-accrual loans 7,196 9,874 10,560 11,246 10,269
------- ------- ------- ------- -------
Restructured loans
Commercial 173 140 142 143 157
Consumer 69 70 29 29
Real Estate:
Construction
Mortgage 301 85 302 404 280
------- ------- ------- ------- -------
Total restructured loans 543 295 473 576 437
------- ------- ------- ------- -------
Total non-performing loans 7,739 10,169 11,033 11,822 10,706
------- ------- ------- ------- -------
Other real estate 10,120 8,591 9,880 10,517 13,170
------- ------- ------- ------- -------
Total non-performing assets 17,859 18,760 20,913 22,339 23,876
------- ------- ------- ------- -------
Loans past due 90 days or more
and still accruing 77 86 92 211 199
------- ------- ------- ------- -------
Total non-performing assets and
loans past due 90 days or more $17,936 $18,846 $21,005 $22,550 $24,075
======= ======= ======= ======= =======
Total non-performing loans as a
percentage of total period-end
loans 0.89% 1.20% 1.35% 1.47% 1.40%
Total non-performing assets as a
percentage of total period-end
assets 0.74% 0.79% 0.92% 0.97% 1.06%
Total non-performing assets and loans
past due 90 days or more as a
percentage of total period-end
assets 0.75% 0.80% 0.92% 0.98% 1.07%
Allowance for loan losses as a
percentage of total non-performing
loans 168% 129% 117% 102% 106%
Allowance for loan losses as a
percentage of total period-end loans 1.50% 1.54% 1.57% 1.50% 1.48%
Total non-performing assets and loans
past due 90 days or more as a
percentage of stockholders' equity
and allowance for loan losses 11% 12% 13% 18% 20%
</TABLE>
<PAGE>13
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>
Year
Nine Months Ended Ended
09/30/95 09/30/94 12/31/94
<S> <C> <C> <C>
Balance at beginning of period $12,036 $10,023 $10,023
Provisions charged to operating
expenses 1,633 3,160 4,210
------- ------- -------
13,669 13,183 14,233
Recoveries on loans charged-off:
Commercial 94 71 100
Consumer 120 93 123
Real estate 288 1 22
------- ------- -------
Total recoveries 502 165 245
Loans charged-off:
Commercial (526) (1,285) (1,519)
Consumer (326) (383) (530)
Real estate (314) (352) (393)
------- ------- -------
Total charged-off (1,166) (2,020) (2,442)
------- ------- -------
Net charge-offs (664) (1,855) (2,197)
------- ------- -------
Balance at end of period $13,005 $11,328 $12,036
======= ======= =======
Net charge-offs as a percentage of
average loans outstanding 0.11% 0.33% 0.29%
</TABLE>
<PAGE>14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Net Income Per Share
No reports on Form 8-K were filed during the third
quarter ended September 30, 1995.
<PAGE>15
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 14, 1995 /s/ C. EDWARD JORDAN, JR.
- ----------------- --------------------------
(Date) C. EDWARD JORDAN, JR.
EXECUTIVE VICE PRESIDENT
(PRINCIPAL FINANCIAL OFFICER)
Exhibit No. 11
Commerce Bancorp, Inc. and Subsidiaries
Computation of Net Income Per Share
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Primary Net Income Per Share
Adjustment of income:
Net income $6,277 $5,516 $17,336 $15,442
Preferred stock dividends 141 141 422 927
------- ------- ------- -------
Adjusted net income applicable to
common stock $6,136 $5,375 $16,914 $14,515
======= ======= ======= =======
Average shares of common stock
and equivalents outstanding:
Average common shares outstanding 10,635 8,369 10,312 7,971
Common stock equivalents -
dilutive options 378 343 289 293
------- ------- ------- -------
Average shares of common stock and
equivalents outstanding 11,013 8,712 10,601 8,264
======= ======= ======= =======
Net income per share of common stock $0.56 $0.62 $1.59 $1.76
======= ======= ======= =======
Fully Diluted Net Income Per Share
Net income applicable to common stock
on a fully diluted basis $6,277 $5,516 $17,336 $15,442
Less: additional ESOP contribution
under the if-converted method 33 33 99 112
------- ------- ------- -------
Adjusted net income applicable to
common stock on a fully diluted basis $6,244 $5,483 $17,237 $15,330
======= ======= ======= =======
Average number of shares outstanding on
a fully diluted basis:
Average common shares outstanding 10,635 8,369 10,312 7,971
Additional shares considered in
fully diluted computation
assuming:
Exercise of stock options 422 349 432 362
Conversion of preferred stock 559 964 559 1,323
------- ------- ------- -------
Average number of shares outstanding
on a fully diluted basis 11,616 9,682 11,303 9,656
======= ======= ======= =======
Fully diluted net income per share of
common stock $0.53 $0.57 $1.53 $1.59
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000715096
<NAME> COMMERCE BANCORP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 140,740
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 32,200
<TRADING-ASSETS> 1,735
<INVESTMENTS-HELD-FOR-SALE> 159,570
<INVESTMENTS-CARRYING> 1,090,022
<INVESTMENTS-MARKET> 1,059,366
<LOANS> 869,883
<ALLOWANCE> 13,005
<TOTAL-ASSETS> 2,402,857
<DEPOSITS> 2,216,229
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,604
<LONG-TERM> 27,615
<COMMON> 16,839
0
7,506
<OTHER-SE> 132,064
<TOTAL-LIABILITIES-AND-EQUITY> 2,402,857
<INTEREST-LOAN> 58,901
<INTEREST-INVEST> 61,851
<INTEREST-OTHER> 2,833
<INTEREST-TOTAL> 123,585
<INTEREST-DEPOSIT> 45,180
<INTEREST-EXPENSE> 53,078
<INTEREST-INCOME-NET> 70,507
<LOAN-LOSSES> 1,633
<SECURITIES-GAINS> 106
<EXPENSE-OTHER> 56,482
<INCOME-PRETAX> 27,263
<INCOME-PRE-EXTRAORDINARY> 27,263
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,336
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.53
<YIELD-ACTUAL> 4.46
<LOANS-NON> 7,196
<LOANS-PAST> 77
<LOANS-TROUBLED> 543
<LOANS-PROBLEM> 7,618
<ALLOWANCE-OPEN> 12,036
<CHARGE-OFFS> 664
<RECOVERIES> 502
<ALLOWANCE-CLOSE> 13,005
<ALLOWANCE-DOMESTIC> 13,005
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
