THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Pennsylvania Commerce Bancorp, Inc. (COBH)

4/14/2006 Proxy Information

During 2005, the Bank had, and expects to have in the future, banking transactions in the ordinary course of business with directors, officers, and principal shareholders (and their associates) of Commerce on the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with others. Management believes that these loans present no more than the normal risk of collectibility or other unfavorable features. The loans to these persons and companies amounted to less than 2% of total loans outstanding as of December 31, 2005.

Howell C. Mette, a director and 2.29% beneficial shareholder of Commerce, is a shareholder in the law firm of Mette, Evans & Woodside, which Commerce retained during 2005, and intends to retain during 2006. The law firm received professional fees totaling $413,000 in 2005, $259,000 in 2004, and $271,000 in 2003.

Michael A. Serluco, a director and 2.90% beneficial shareholder of Commerce receives rental income from the Bank for land that contains an advertising billboard, which is owned by the Bank. The Bank paid $25,000 on the lease during 2005, 2004 and 2003.

James R. Adair, a director and less than 1% beneficial shareholder of Commerce, is the owner of Adair Construction Services (“Construction Services.”) In 2002, prior to the adoption of the Sarbanes-Oxley Act, Construction Services entered into a contract with the Bank to build two branch offices for $1.6 million. These branch offices were completed and payment was made to Construction Services in 2003. No further contracts have been made with Construction Services and no further contracts with Construction Services are planned.

Gary L. Nalbandian, Chairman, President and CEO of Commerce and the Bank, and an 8.83% beneficial shareholder of Commerce owns NAI/Commercial-Industrial Realty Co. The Bank utilizes NAI/Commercial-Industrial Realty Co to identify sites for its store expansions. In connection with these transactions, NAI/Commercial-Industrial Realty Co. received commissions totaling $181,200 in 2005, $111,720 in 2004, $166,470 in 2003, from independent third parties related to real estate transactions conducted on behalf of the Bank. Management believes such expenses were substantially equivalent to those that would have been paid to unaffiliated companies for similar services.

As of March 27, 2006, Commerce Bancorp, Inc. (“Bancorp”), owned 10.99% of Commerce’s common stock, 100% of Commerce’s Series A preferred stock, warrants that entitle Bancorp to purchase 287,332 shares (as adjusted for common stock dividends and stock splits) of our common stock in the event of a “change control” (as defined in the Warrant Agreement) and 100% of Commerce’s Trust Capital Securities. Under a Network Agreement, Bancorp, through its subsidiary, Commerce Bank, N.A., a national bank located in Cherry Hill, New Jersey, provides various services to the Bank including:

Š maintaining the computer wide area network;

Š proof and encoding;

Š deposit and loan account statement rendering;

Š ATM/VISA Check Card processing;

Š data processing;

Š advertising support; and

Š limited call center support.

These services are provided for a monthly fee. The Bank paid approximately $2.1 million, $2.0 million, and $1.4 million for services provided by Bancorp during 2005, 2004, and 2003 respectively. Insurance premiums and commissions, which are paid to a subsidiary of Bancorp, are included in this total.

On September 29, 2004, Commerce issued and sold 200,000 shares (adjusted for stock split) of our common stock to Bancorp in a private placement transaction at a purchase price of $22.83 per share (adjusted for stock split). The purchase price per share was equal to the average of the closing sale prices of Commerce’s common stock on the NASDAQ Small Cap Market for the five trading day (i.e. dates on which trades occurred) period ending on September 28, 2004. In connection with the private placement transaction, Commerce entered into a registration rights agreement with Bancorp whereby Commerce granted Bancorp “demand” and “piggy-back” registration rights with respect to the shares purchased. Bancorp may exercise its “demand” right at any time by providing Commerce with a written request that it file a registration statement covering the shares purchased. Bancorp may only exercise this “demand” right once and this right is subject to certain exceptions. In connection with Bancorp’s “piggy-back” rights, Commerce must notify Bancorp in writing at least 15 days prior to the filing of any registration statement for purposes of a public offering of any of its securities (including, but not limited to, registration statements relating to secondary offerings of its securities, but excluding registration statements relating to employee benefit plans or with respect to corporate reorganizations or other transactions under Rule 145 of the Securities Act) and Commerce must afford Bancorp an opportunity to include in such registration statement all or part of the shares purchased. Bancorp’s registration rights under the registration rights agreement expire if all shares purchased by Bancorp may be immediately sold under Rule 144 promulgated pursuant to the Securities Act.

Additionally, the Bank occasionally participates in loans with Commerce Bank, N.A. At December 31, 2005 approximately $2.0 million of these participations were outstanding.

A federal funds line of credit was established with Commerce Bank, N.A. in the amount of $15.0 million at a rate of interest based upon the overnight federal funds rate, which could be drawn upon if needed. The balance at December 31, 2005 on this line was $12.7million.