UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): December 3, 2003
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Commerce Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
New Jersey 0-12874 22-2433468
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
Commerce Atrium, 1701 Route 70 East, Cherry Hill, NJ 08034-5400
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 856-751-9000
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ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
The following information is included in this document as a result of the
Company's desire to comply with its policy regarding public disclosure of
corporate information. The Company may or may not continue to provide similar
information in the future using this format.
Forward-looking Statements and Associated Risk Factors
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.
1. Question: How does the Commerce Bancorp model continue to produce such
consistently high results?
Answer
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Any successful company has two features; a unique value-added model and a
culture designed to execute and improve the model. Over the 30+ years of
Commerce Bancorp, we have been able to build from scratch with almost no
acquisitions, a unique model, together with a reinforcing culture.
2. Question: What are your expansion plans in 2004?
Answer
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Our general plans are to increase our store base approximately 18-20% a year. We
opened 40 stores in 2002 and 46 stores in 2003.
We intend to open 50 new branches in 2004 of which approximately 40 will be in
the Metropolitan New York area and 10 in Metropolitan Philadelphia.
3. Question:What are your plans for Metropolitan Washington?
Answer
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We recently announced that we intend to expand into our third metropolitan area,
Metropolitan Washington/Baltimore, starting with 5 to 10 stores in Washington,
DC and Northern Virginia beginning in 2005.
This is part of our long-range plan to build approximately 1,000 units from
Washington through Boston.
Metropolitan Washington was chosen as our next market due to its demographics,
growth rates, stable economy, geographic proximity to our home offices, and the
availability of new free-standing sites.
4. Question: What is the status of your expansion in New York City and
Long Island?
Answer
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Prior to September 2001, we had no offices in New York State. As of this date,
we have 25 offices in New York City, all built de novo, with total deposits of
$1.4 billion. These offices opened in the most dense, high-cost area in America
and continue to exceed our expectations.
From an initial opening in June of 2002, we now have 14 offices open on Long
Island with total deposits exceeding $1.1 billion. Deposit growth in these
offices equal or exceed our New York City experience.
Our plan is to construct 400 branch offices throughout the Metropolitan New York
area. We presently have approximately 150.
5. Question: Why do you build vs. buy?
Answer
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Our strategy is to build a unique retail brand with minimal acquisitions. De
novo expansion allows us to control our locations, staff, culture and business
development. Most importantly, it allows every new expansion to reinforce our
brand.
6. Question: How has the Bank of America/Fleet merger helped Commerce?
Answer
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Every major bank merger in our market in the last 20+ years has been a net
positive for Commerce as the disruption in brand, staff, customers and products
cause both consumer and commercial customers to reassess their options.
In the case of the Bank of America/Fleet announcement, we saw an immediate
reaction as Fleet customers negatively reacted to another major merger.
We expect this merger to have a strong net positive effect on the already high
growth rate of Commerce.
7. Question: In the Commerce investment portfolio, what is the duration,
average life, yield and depreciation in the available for sale
portfolio at November 30, 2003?
Answer
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The duration was approximately 4.2 years, the average life was approximately 5.2
years and the yield was 4.67%. The depreciation was approximately $54 million
(after tax).
8. Question: Does this depreciation in the Company's available for sale
portfolio affect regulatory capital or your ability to grow?
Answer
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Neither appreciation nor depreciation of our bond portfolio is included in
regulatory capital, and thus, neither have an effect on our growth plans.
9. Question: What do you expect your earnings to be in 2004?
Answer
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The current First Call consensus for 2004 is $3.03. We expect to meet or exceed
that estimate.
The current First Call estimate for 2003 is $2.59. Our minimum EPS growth target
remains at 20% a year which, based on the First Call 2003 estimate, would be
$3.11 for 2004.
10. Question: How do the rising rates and steepening yield curve affect
Commerce Bancorp?
Answer
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A steepening yield curve such as we have seen in recent months is positive for
Commerce as it allows us to invest our substantial cash flow at higher yields.
Although the shape of the yield curve is most important, generally speaking,
rising rates help our income as deposit interest rate costs rise at a slower
rate.
11. Question: There have been several news stories regarding the political
activities of your Political Action Committees. Have there been any
changes?
Answer
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In March 2003, we announced that we would end our Political Action Committee in
New Jersey.
We recently ended our Federal Political Action Committee and our Political
Action Committee activities in all other states.
Neither Commerce Bancorp nor any related Political Action Committees now make
political contributions.
Although we believe that participation in the political community is the
responsibility of any corporate citizen, we have ceased Political Action
Committees activities while we evaluate the reputation risks.
12. Question: Have there been any further developments regarding the SEC's
informal inquiry regarding Commerce Capital Markets?
Answer
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None.
13. Question: You recently added Joseph Plumeri to your Board of
Directors. Why?
Answer
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Commerce Bank is growing at 40%+ a year, and in the last five years has grown
from $5 billion to $23 billion in assets. Our Board, like every other part of
our organization, continues to evolve. We are pleased that Joseph Plumeri, CEO
of the Willis Group (NYSE: WSH), a global insurance broker and former executive
in charge of Citibank retail, has agreed to join the Board of Commerce Bancorp.
SIGNATURE
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 hereunto duly authorized.
Date: December 3, 2003 COMMERCE BANCORP, INC.
By: /s/ DOUGLAS J. PAULS
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Douglas J. Pauls
Senior Vice President and Chief
Financial Officer