Commerce Bank Receives Rating Upgrade From Moody's Investors Services.

Business Editors

CHERRY HILL, N.J.--(BUSINESS WIRE)--Aug. 23, 2000

Commerce Bancorp, Inc. (NYSE Symbol: CBH) announced today that Moody's Investors Services has just raised the long-term ratings of Commerce Bank, N.A., the company's largest bank, to A3.

The rating agency said its move reflects "Commerce Bank's continuing success in growing its banking franchise particularly in core deposits, as well as its good intrinsic financial strength."

"These rating upgrades are indicative of the overall power of our unique retail banking model," said Commerce Chairman and President Vernon W. Hill, II. " In an industry characterized by little or no growth, Commerce is producing dramatic increases in low cost core deposits on a consistent basis."

As a growth retailer, Commerce focuses on gathering core deposits through its rapidly growing network of 140 branches that spans New Jersey, Eastern Pennsylvania and Delaware. At June 30, 2000, the Company's deposits exceeded $6.5 billion, a $1.3 billion increase or 26% over total deposits of $5.2 billion a year earlier. In addition, during the first six months of 2000, Commerce's core deposits rose $665 million, including a $459 million increase in the second quarter.

"With a core deposit to loan ratio of around 190%, the core liquidity position of Commerce Bank is among the most robust in the U.S. banking industry. The company also has strong capital ratios and a solid earnings profile," noted Moody's.

The Moody's rating upgrade also recognizes the success of Commerce Bank's lending activities. By implementing a strategy that combines strong underwriting standards with effective collection policies, Commerce is among the industry's leaders in minimizing non-performing assets. Non-performing assets at June 30, 2000 totaled $14.5 million or 0.19% of total assets, and net charge-offs for the first six months of 2000 were $1.5 million, or .10% of average loans outstanding.

Commerce also maintains a loan portfolio that is diversified in terms of both loan size and type. In recent years, Commerce has broadened its loan activities to extend beyond its original focus on commercial real estate. Today, Commerce is a leading originator of loans to small-to-medium size businesses, an active lender in residential mortgages and home equity credit lines, and is one of the region's most active healthcare lenders.

To support the bank's overall expansion efforts, Commerce is building new branches at a time when many of the nation's other banks are attempting to cut expenses by eliminating offices and forcing customers to use electronic channels. During the course of 2000, Commerce will open approximately 30 new branches throughout its market of New Jersey, Eastern Pennsylvania and Delaware. Commerce also plans to continue its rapid expansion by opening 30-plus branches per year over each of the next five years, as it moves toward its goal of having 270 branches and assets of $16 billion by 2004.

As a result of the recent positive review by Moody's, the following Commerce ratings were upgraded:

-- Commerce Bancorp, Inc. - junior subordinated debt to Baa3 from

Ba2.

-- Commerce Bank, N.A. - the rating on the bank for long-term

deposits to A3 from Baa1, the bank's other senior obligations

to A3 from Baa2, the bank's issuer rating to A3 from Baa2, and

the bank financial strength rating to C from D+.

-- Commerce Capital Trust I - Preferred stock to "baa2" from

"ba1."

The following rating was assigned:

-- Commerce Bancorp, Inc. - the holding company's issuer rating

of Baa1.

Commerce Bancorp, the region's fastest growing independent financial services retailer, specializes in providing a full range of banking, insurance and public finance services. Headquartered in Cherry Hill, New Jersey, Commerce has assets of over $7.5 billion and a network of nearly 140 branches serving Pennsylvania, New Jersey and Delaware. For additional information about Commerce, visit the company's interactive financial resource center on-line at www.commerceonline.com.