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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)
[ X ]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1997

                                       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 number 0-17515

                            COLLECTIVE BANCORP, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                           22-2942769
 (State or other jurisdiction of                             (IRS Employer
  incorporation or organization)                           Identification No.)

   716 West White Horse Pike
      Cologne , New Jersey                                        08213
(Address of principal executive offices)                        (Zip Code)

        Registrant's telephone number, including area code (609) 625-1110


     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 reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                Yes [ X ] No [ ]


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                 Yes [ ] No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

     Common stock, par value $.01 per share,  20,496,019 shares outstanding as
of  March 31, 1997.


================================================================================

================================================================================


<PAGE>
Part 1
Item 1
<TABLE>
<CAPTION>

                                      COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                                   STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION

                                                                         March 31                        June 30
                                                                           1997                            1996
                                                                      ---------------                 ---------------
<S>                                                                   <C>                             <C>
ASSETS                                                              (Dollar amounts in thousands except per share data)
        Cash                                                             $   65,936                    $     65,084
        Federal funds sold                                                   19,595                           3,646
        Securities purchased under agreement to resell                       35,000                               -
                                                                      ---------------                 ---------------
                    Total cash and cash equivalents                         120,531                          68,730

        Loans held for sale, at amortized cost, market
             value of $3,774 and $5,231                                       3,600                           5,186
        Securities available for sale, at market value                      235,951                         162,284
        Investment securities, at amortized cost, market
             value of $302,573 and $271,650                                 307,534                         276,171

        Loans receivable                                                  2,876,031                       2,561,041
        Less allowance for loan losses                                      (13,461)                        (12,891)
                                                                      ---------------                 ---------------
                    Loans receivable, net                                 2,862,570                       2,548,150

        Mortgage-backed securities, at amortized cost,
             market value of $1,727,576 and $1,896,831                    1,860,461                       1,973,642
        Real estate acquired in settlement of loans, net                      4,165                           5,427
        Land, office buildings and equipment, net                            41,096                          39,239
        Other assets                                                         44,810                          42,335
        Core deposit premium                                                  9,980                           8,191
        Goodwill                                                             26,890                          16,116
                                                                      ---------------                 ---------------
                    Total assets                                         $5,517,588                      $5,145,471
                                                                      ===============                 ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
        Deposits:
           Demand deposits, non-interest bearing                        $   140,083                    $     95,792
           Demand deposits, interest bearing                                602,199                         508,295
           Savings and investment accounts                                  863,144                         845,199
           Savings certificates                                           1,893,233                       1,805,101
                                                                      ---------------                 ---------------
                    Total deposits                                        3,498,659                       3,254,387

        Short-term borrowings                                             1,573,385                       1,467,633
        Long-term borrowings                                                  5,486                           5,815
        Advance payments by borrowers for taxes and insurance                25,536                          26,852
        Other liabilities                                                    28,367                          26,480
                                                                      ---------------                 ---------------
                    Total liabilities                                     5,131,433                       4,781,167
                                                                      ---------------                 ---------------

        Stockholders' Equity:
           Common stock,  par value  $.01 per  share;
               authorized  -  37,000,000 shares;
               issued - 20,496,019  shares in March 1997 and 20,418,641
               shares in June 1996;  outstanding  -  20,446,519
               shares in March 1997
               and 20,374,141 shares in June 1996                               205                             204
           Preferred stock, par value $.01 per share;
               authorized - 2,500,000 shares; none outstanding                    -                               -
           Additional paid-in capital                                        60,490                          59,699
           Treasury stock, at cost; 49,500 shares in March 1997
               and 44,500 shares in June 1996                                (1,230)                         (1,093)
           ESOP debt                                                         (5,008)                         (5,816)
           Unrealized appreciation on available for sale securities,
               net of tax                                                     1,311                           1,090
           Retained earnings, substantially restricted                      330,387                         310,220
                                                                      ---------------                 ---------------
                    Total stockholders' equity                              386,155                         364,304
                                                                      ---------------                 ---------------
                    Total liabilities and stockholders' equity           $5,517,588                      $5,145,471
                                                                      ===============                 ===============

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                      STATEMENTS OF CONSOLIDATED OPERATIONS

                                                                    Three Months Ended                    Nine Months Ended
                                                                         March 31                              March 31
                                                                  1997             1996                 1997             1996
                                                             ---------------  ----------------     ---------------  ----------------
<S>                                                          <C>              <C>                  <C>              <C>
                                                                      (Dollar amounts in thousands except per share data)
INTEREST INCOME:
      Interest on mortgage loans                                   $51,736           $43,738            $150,078          $130,404
      Interest on other loans                                        4,154             3,812              11,870            12,140
      Interest on mortgage-backed securities                        32,754            34,841              99,439           106,171
      Interest and dividends on investments                          7,110             6,056              20,711            17,558
                                                             ---------------  ----------------     ---------------  ----------------
             Total interest and dividend income                     95,754            88,447             282,098           266,273
                                                             ---------------  ----------------     ---------------  ----------------

INTEREST EXPENSE:
      Interest on deposits                                          35,521            32,103             105,614            99,131
      Interest on borrowed funds                                    20,275            20,127              60,672            62,699
                                                             ---------------  ----------------     ---------------  ----------------
             Total interest expense                                 55,796            52,230             166,286           161,830
                                                             ---------------  ----------------     ---------------  ----------------

NET INTEREST INCOME BEFORE PROVISION
    FOR LOAN LOSSES                                                 39,958            36,217             115,812           104,443
PROVISION FOR LOAN LOSSES                                            1,010               410               2,554             1,099
                                                             ---------------  ----------------     ---------------  ----------------
NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                                 38,948            35,807             113,258           103,344
                                                             ---------------  ----------------     ---------------  ----------------

OTHER INCOME:
      Loan servicing                                                 1,063             1,239               3,021             3,167
      Gain (Loss) on sale of loans and securities                      266              (162)                375             1,032
      Financial service fees and other income                        3,328             2,453               9,492             7,390
                                                             ---------------  ----------------     ---------------  ----------------
             Total other income                                      4,657             3,530              12,888            11,589
                                                             ---------------  ----------------     ---------------  ----------------
      Total income before other expense                             43,605            39,337             126,146           114,933
                                                             ---------------  ----------------     ---------------  ----------------

OTHER EXPENSE:
      Compensation and employee benefits                             7,900             7,463              22,592            21,377
      Occupancy expense                                              2,966             2,806               8,444             8,036
      Advertising                                                      345               380               1,012               915
      Deposit insurance                                                491             1,521               3,269             4,572
      SAIF recapitalization assessment                                   -                 -              16,653                 -
      Computer services                                              1,119             1,113               3,242             3,667
      Loan expense                                                     735               732               2,240             2,347
      Real estate operations                                           (33)              326                  82               495
      Amortization of intangibles                                    1,627             1,178               4,302             3,578
      Other expenses                                                 3,194             2,787               8,977             7,890
                                                             ---------------  ----------------     ---------------  ----------------
             Total other expense                                    18,344            18,306              70,813            52,877
                                                             ---------------  ----------------     ---------------  ----------------

INCOME BEFORE INCOME TAXES                                          25,261            21,031              55,333            62,056
INCOME TAXES                                                         9,264             7,508              19,857            22,215
                                                             ---------------  ----------------     ---------------  ----------------
NET INCOME                                                         $15,997           $13,523             $35,476           $39,841
                                                             ===============  ================     ===============  ================

PER SHARE DATA:
      Primary and fully diluted net income per share                 $0.78             $0.66               $1.73             $1.95
      Dividends per common share                                     $0.25             $0.20               $0.75             $0.60
      Average primary shares outstanding                        20,510,349        20,457,753          20,473,728        20,446,517
      Average fully diluted shares outstanding                  20,514,570        20,457,780          20,500,714        20,448,803

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                          COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                                      STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY

                                                                                          Unrealized
                                                                                        Appreciation
                                                  Additonal                             on Available
                                       Common       Paid-In     Treasury         ESOP       for Sale    Retained
                                        Stock       Capital        Stock         Debt     Securities    Earnings        Total
                                    -------------------------------------------------------------------------------------------
<S>                                 <C>          <C>            <C>          <C>          <C>          <C>           <C>
                                                        (Dollar amounts in thousands except per share data)
BALANCE JUNE 30, 1995                    $204       $59,299            -      $(6,892)        $2,136    $273,045     $327,792

  Net income for the year                   -             -            -            -              -      54,500       54,500
  Stock options exercised                   -           279            -            -              -           -          279
  Dividends on common
     stock - $.85 per share                 -             -            -            -              -     (17,325)     (17,325)
  Purchase of treasury stock                -             -      $(1,093)           -              -           -       (1,093)
  ESOP debt repayment                       -             -            -        1,076              -           -        1,076
  ESOP shares released                      -           121            -            -              -           -          121
  Securities valuation                      -             -            -            -         (1,046)          -       (1,046)
                                    -------------------------------------------------------------------------------------------

BALANCE JUNE 30, 1996                     204        59,699       (1,093)      (5,816)         1,090     310,220      364,304

  Net income fiscal year to date            -             -            -            -              -      35,476       35,476
  Stock options exercised                   1           548            -            -              -           -          549
  Dividends on common
     stock - $.75 per share                 -             -            -            -              -     (15,309)     (15,309)
  Purchase of treasury stock                -             -         (137)           -              -           -         (137)
  ESOP debt repayment                       -             -            -          808              -           -          808
  ESOP shares released                      -           243            -            -              -           -          243
  Securities valuation                      -             -            -            -            221           -          221
                                    -------------------------------------------------------------------------------------------

BALANCE MARCH 31, 1997                   $205       $60,490      $(1,230)     $(5,008)        $1,311    $330,387     $386,155
                                    ===========================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                                    STATEMENTS OF CONSOLIDATED CASH FLOWS

                                                                                     Nine Months Ended
                                                                                          March 31
                                                                               -------------------------------
                                                                                   1997              1996
                                                                               -------------     -------------
<S>                                                                             <C>              <C>
                                                                                (Dollar amounts in thousands)
OPERATING ACTIVITIES:
Interest received                                                                        $                 $
                                                                                   284,073           262,163
Interest paid                                                                     (165,042)         (159,794)
Operating expenses                                                                 (71,072)          (52,273)
Sales of trading securities                                                              -            13,328
Loan fees                                                                            3,299             3,721
Other income received                                                               12,888            11,791
Income taxes paid                                                                  (21,024)          (16,075)
                                                                               -------------     -------------
Net cash provided by operating activities                                           43,122            62,861
                                                                               -------------     -------------

INVESTING ACTIVITIES:
Loan originations                                                                 (633,880)         (412,467)
Purchases of loans                                                                    (659)          (17,224)
Purchases of mortgage-backed securities                                                (64)          (14,042)
Repayment of loan principal                                                        339,465           269,403
Repayment of mortgage-backed security principal                                    120,327            99,181
Sales of loans held for sale                                                        41,520            98,367
Purchases of investment securities                                                (109,253)         (294,630)
Sales of investment securities available for sale                                   48,060                 -
Purchases of mortgage-backed securities available for sale                         (36,177)          (90,854)
Sales of mortgage-backed securities available for sale                               7,018            55,157
Repayment of principal on mortgage-backed securities available for sale             14,860            13,020
Maturities of investment securities                                                 41,211           318,960
Net decrease in real estate owned                                                    1,893             1,844
Net change in loans maturing in 3 months or less                                     5,000            (6,500)
Purchase of Continental Bancorporation                                             (25,703)                -
Cash obtained from Continental Bancorporation acquisition                           11,264                 -
Other investing, net                                                                 2,265             1,846
                                                                               -------------     -------------
Net cash (used for) provided by investing activities                              (172,853)           22,061
                                                                               -------------     -------------

FINANCING ACTIVITIES:
Net change in deposits                                                             114,452          (134,467)
Net change in short-term borrowings                                                 87,126            61,938
Net change in long-term borrowings                                                  (1,421)             (807)
Net decrease in advance payments by borrowers
   for taxes and insurance                                                          (1,408)           (5,769)
Dividends paid                                                                     (15,326)          (12,222)
Other financing, net                                                                (1,891)           (2,606)
                                                                               -------------     -------------
Net cash provided by (used for) financing activities                               181,532           (93,933)
                                                                               -------------     -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                51,801            (9,011)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                      68,730            69,973
                                                                               -------------     -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                 $        $   60,962
                                                                                   120,531
                                                                               =============     =============

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Net income                                                                      $   35,476        $   39,841
Net change in trading securities                                                         -            13,328
Amortization and accretion of deferred charges and credits, net                        (92)           (2,166)
Amortization of intangibles                                                          4,302             3,578
Accrued income and expense                                                           6,924            14,067
Deferred income and expense                                                        (10,713)          (11,347)
Provision for loan and real estate owned losses                                      2,761             1,239
Depreciation and amortization                                                        3,656             3,514
ESOP debt repayment                                                                    808               807
                                                                               -------------     -------------
Net cash provided by operations                                                 $   43,122        $   62,861
                                                                               =============     =============

</TABLE>
<PAGE>
                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   The  unaudited  interim  consolidated  financial  statements  of Collective
     Bancorp, Inc. and subsidiary  ("Collective") included herein should be read
     in  conjunction  with the audited  financial  statements for the year ended
     June 30, 1996 included in Collective's  1996 Annual Report and incorporated
     by  reference  in the Form  10-K  for  that  year.  The  unaudited  interim
     financial  statements  reflect all adjustments which are, in the opinion of
     management,  necessary  for a fair  presentation  of the  results  for  the
     periods  presented.  Such  adjustments  consist  only of  normal  recurring
     accruals.  The results of operations for the three and  nine-month  periods
     ended March 31, 1997 are not  necessarily  indicative  of the results to be
     expected for the fiscal year ending June 30, 1997. 

2.   On February 27,  1997,  Collective  entered  into an Agreement  and Plan of
     Merger with Summit Bancorp. ("Summit") pursuant to which Collective will be
     merged with and into Summit and shares of Collective's common stock will be
     converted  into whole  shares of Summit's  common stock and cash in lieu of
     fractional shares based on an exchange ratio of Summit common to Collective
     common  of  .895.  The  merger  is  subject  to  approval  by  Collective's
     stockholders and certain regulatory agencies.  The merger is expected to be
     consummated during the third calendar quarter of 1997.

3.   In connection with the enactment of the Deposit Insurance Funds Act of 1996
     ("DIFA") on September 30, 1996, Collective Bank, a wholly-owned  subsidiary
     of  Collective  Bancorp,  Inc.,  was  required  to pay a  one-time  special
     assessment of $16.653 million to the Federal Deposit Insurance  Corporation
     ("FDIC") to capitalize the Savings  Association  Insurance Fund ("SAIF") to
     its required reserve ratio.  The special  assessment rate of 65.7 cents per
     $100 of  SAIF-assessable  deposits  was applied as of March 31,  1995.  The
     assessment  was paid in November  1996.  

     DIFA also requires the Financing Corporation ("FICO") bond obligation to be
     shared by insured  depository  institutions  pro rata beginning in the year
     2000. For the transition  period from January 1, 1997 to December 31, 1999,
     banks will pay  one-fifth of the  assessment  rate  imposed  upon  thrifts.
     During this period, the FICO assessment rates are estimated to be 1.3 basis
     points for banks  calculated on their Bank Insurance  Fund ("BIF")  deposit
     base and 6.4 basis points for thrifts,  such as Collective  Bank calculated
     on their SAIF deposit base. 

     DIFA  directs the  Treasury  Department  to present a report to Congress by
     March 31,  1997  regarding  the  development  of a common  charter  for all
     depository  institutions.  The  report is to include a  recommendation  for
     legislative and administrative  action.  DIFA requires that the BIF and the
     SAIF be merged  into a single  new fund  (the  Deposit  Insurance  Fund) on
     January 1, 1999,  provided "no insured depository  institution is a savings
     association on that date".

4.   On August 20, 1996, the Small Business Job Protection Act of 1996 ("SBJPA")
     was enacted,  which included a repeal of the thrift bad debt reserve method
     (percentage-of-taxable  income  method)  under  section 593 of the Internal
     Revenue Code.  The repeal is effective for  Collective's  1997 fiscal year.
     Since 1993, Collective has used the percentage-of-taxable  income method in
     its income tax returns.  Effective July 1, 1996, Collective was required to
     change  from the  reserve  method  to the  specific  charge-off  method  to
     calculate  its bad debt  deduction.  The change in bad debt tax  accounting
     methods  has not had,  nor is it  expected  to have,  a material  impact on
     Collective's results of operations.

     The SBJPA also  provided for the recapture of a thrift's  post-1987  excess
     bad  debt  reserve  resulting  from  the  use of  the  reserve  method  for
     calculating the bad debt  deduction.  Pre-1988 excess bad debt reserves are
     not subject to recapture.  The recaptured amount must be taken into taxable
     income ratably over a six-year period commencing with the thrift's tax year
     beginning in 1996.  The timing of the recapture may be delayed for a one-or
     two-year  period  provided  the  residential   loan   requirement  is  met.
     Collective  expects to meet the residential  loan  requirement for its 1996
     and 1997 tax years. Therefore, its estimated tax liability of approximately
     $5.5 million, resulting from the recapture, will be payable over a six-year
     period  commencing with  Collective's 1999 fiscal year. The excess bad debt
     reserve recapture is not expected to have a material impact on Collective's
     results of operations or financial position because Collective has recorded
     deferred income tax provisions on its excess bad reserves since 1987.

5.   On October 1, 1996,  Collective  acquired the outstanding  capital stock of
     Continental  Bancorporation  for  $25.7  million  in  cash  pursuant  to an
     agreement   entered  into  on  May  21,  1996.   Simultaneously   with  the
     acquisition,  Continental Bancorporation was liquidated and its subsidiary,
     Continental  Bank of New Jersey  ("Continental"),  became a  subsidiary  of
     Collective.  Continental's name was changed subsequently to Collective Bank
     of New  Jersey.  Collective  Bank  of  New  Jersey  was a  state-chartered,
     BIF-insured  commercial  bank  with  total  assets of  $161.3  million  and
     deposits of $129.5 million on the date of acquisition.  The acquisition was
     accounted for by the purchase method. It has not had, nor is it expected to
     have, a material effect on Collective's  results of operations or financial
     position.  Collective Bank of New Jersey was merged into Collective Bank in
     February 1997.

<PAGE>

Item 2
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                       OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General Financial Institution Legislation and Regulation

Collective's  subsidiary,  Collective Bank, is subject to extensive  regulation,
supervision and examination by the Office of Thrift Supervision  ("OTS"), as its
chartering  authority and primary federal regulator,  and by the Federal Deposit
Insurance  Corporation  ("FDIC"),  which  insures its deposits up to  applicable
limits. Such regulation and supervision  establish a comprehensive  framework of
activities in which an institution can engage and are intended primarily for the
protection of the insurance fund and depositors.  The regulatory  structure also
gives the regulatory  authorities  extensive discretion in connection with their
supervisory and enforcement activities.  Any change in such regulation,  whether
by the OTS,  FDIC, or the Congress,  could have a material  impact on Collective
Bank and its operations. See note 3 to the consolidated financial statements.

Assets

Total assets increased $372 million during the nine months ended March 31, 1997.
The net  increase,  primarily  in  interest-earning  assets,  was  comprised  of
increases in loans receivable, net of $314 million, cash and cash equivalents of
$52 million, securities available for sale of $74 million, investment securities
of $31  million and  goodwill  of $11 million and a decrease in  mortgage-backed
securities of $113 million. All other assets combined increased $3 million.

Loans receivable, net increased because loan originations and purchases exceeded
loan repayments and sales by $254 million.  The increase  occurred as Collective
continued  its  strategy  of  relying  more on loans and less on  collateralized
mortgage  obligations  ("CMO's") as investment  vehicles.  Also, the Continental
Bancorporation  ("Continental")  acquisition  increased loans  receivable by $64
million.  The elements of the increase  were as follows (in  millions): 
<TABLE>
<CAPTION>
                    <S>                                       <C>

                      Residential first mortgage               $ 112
                      Commercial                                 123
                      Home equity                                 81
                      Construction                                16
                      Other                                     (18)
                                                             ---------
                                    Total                       $314
                                                             =========
</TABLE>

Collective's  strategy to increase loans as a percentage of total earning assets
(from 51.4% at June 30, 1996 to 53.8% at March 31, 1997) was implemented through
more  aggressive  advertising  and  marketing  initiatives  combined  with  more
competitive  pricing.  The  growth in  Collective's  loan  portfolio  was funded
primarily by deposit growth, CMO principal repayments and borrowings.

Cash and cash  equivalents  increased  because cash  provided by  operating  and
financing activities exceeded cash used in investing activities.

The increase in securities  available  for sale  resulted  from the  Continental
acquisition,  and the  increase  in  investment  securities  primarily  from the
addition of medium-term U.S. agency  structured notes and Federal Home Loan Bank
of New York ("FHLB of NY") stock.  The stock purchases were required  because of
increased borrowings from the FHLB of NY and, to a lesser extent, asset growth.

<PAGE>

Collective  has the  positive  intent  and  ability to hold its  investment  and
mortgage-backed securities portfolios to maturity under all foreseeable economic
conditions.  Therefore,  it is not  expected  that any gains or  losses  will be
realized from sales of securities from Collective's held-to-maturity portfolios.
In recent years, since authoritative  guidance and/or accounting  standards have
been developed for the definitive  classification of securities,  Collective has
not sold securities from its held-to-maturity portfolios.  Collective has always
been able to satisfy its liquidity  needs from the cash flows from operating and
financing  activities,  and there is no present  indication that Collective will
not be able to do so in the future.  Unrealized  gains or losses in Collective's
held-to-maturity   securities   portfolios  are  primarily  a  function  of  the
interest-rate  environment at any given point in time and,  therefore,  are only
temporary in nature. If presently  unforeseen  economic conditions should result
in the sale of those  securities at some future date,  any realized gain or loss
will be determined by their market value when sold.

Liabilities

The increase in liabilities of $350 million from June 30, 1996 to March 31, 1997
was comprised  primarily of increases in deposits of $244 million and borrowings
of $105  million.  Other  liabilities  increased  $1  million.  The  increase in
deposits  resulted from more  aggressive  marketing and pricing  initiatives  as
Collective  sought to fund asset  growth  with lower cost  deposits  rather than
borrowings.  Also, the Continental  acquisition  added deposits of $129 million.
The deposit increase occurred in the following categories (in millions):

<TABLE>
<CAPTION>
                         <S>                                           <C>
                          Non-interest bearing demand                  $  44
                          Interest bearing demand                         94
                          Savings and Investment Accounts                  8
                          Savings certificates                            88
                                                                      -------
                                           Total                       $ 244
                                                                      =======
</TABLE>

The increase in  non-interest  bearing demand  deposits  consisted of commercial
checking  accounts,  and the increase in interest  bearing  demand  deposits was
comprised  of  cash   management   accounts,   primarily  with   municipalities.
Certificates  of deposit with  maturities of twelve  months and eighteen  months
primarily   comprised  the  increase  in  savings   certificates  as  Collective
attractively  priced these CD's to induce holders of  shorter-term  certificates
into longer-term maturities.

Stockholders' Equity

The increase in stockholders' equity during the nine months ended March 31, 1997
resulted primarily from increased  retained  earnings.  The increase in retained
earnings was  comprised of net income of $35.5  million less  dividends of $15.3
million.


Liquidity and Capital Resources

Collective  Bank is  required  by  regulation  to  maintain  certain  levels  of
liquidity.  Regulations  currently in effect require Collective Bank to maintain
liquid  assets  of  not  less  than  5% of its  net  withdrawable  deposits  and
short-term  borrowings,  of which at least 1% must be short-term  liquid assets.
Throughout  the three  months  ended  March  31,  1997,  Collective  Bank was in
compliance with that regulation and at that date had an overall  liquidity ratio
of 5.72% and a short-term ratio of 2.56%.

<PAGE>

At March 31, 1997,  capital  resources were sufficient to meet  outstanding loan
origination commitments of $96 million and commitments on unused lines of credit
of $143  million.  Loans  originated  or purchased  during the nine months ended
March 31, 1997 were funded from normal  sources  including  investment  security
maturities,  amortization  of the existing loan and  mortgage-backed  securities
portfolios and borrowings.

Collective  Bank is subject to capital  requirements  mandated by the  Financial
Institutions  Reform,  Recovery and Enforcement  Act  ("FIRREA").  Under FIRREA,
thrift institutions must have tangible capital equal to 1.5% of tangible assets,
core capital  equal to 3% of adjusted  tangible  assets and  risk-based  capital
equal to 8% of risk-weighted assets. At March 31, 1997, Collective Bank exceeded
those requirements as follows:
<TABLE> 
<CAPTION>
               <S>                                 <C>                          <C>


                 Tangible Capital:                  (In Thousands)                Percent

                          Actual                          $ 358,303                    6.52%
                          Required                           82,471                    1.50
                                                  ------------------            ------------
                     Excess                               $ 275,832                    5.02%
                                                  ------------------            ------------

                 Core Capital:

                          Actual                          $ 358,303                    6.52%
                          Required                          164,941                    3.00
                                                  ------------------            ------------
                          Excess                          $ 193,362                    3.52%
                                                  ------------------            ------------

                 Risk-based Capital:

                          Actual                          $ 367,638                   16.48%
                          Required                          178,427                    8.00
                                                  ------------------            ------------
                          Excess                          $ 189,211                    8.48%
                                                  ------------------            ------------
</TABLE>


Collective Bank is considered  well-capitalized  (the highest capital  category)
under the  Prompt  Corrective  Action  regulations  resulting  from the  Federal
Deposit Insurance Corporation Improvement Act of 1991.

Three Months Ended March 31, 1997
Compared to Three Months Ended March 31, 1996

Net income for the three months ended March 31, 1997  increased  $2.474  million
compared to net income for the quarter ended March 31, 1996. The increase in net
income was comprised of a $3.741 million  increase in net interest income before
provision for loan losses, a $600,000 increase in the provision for loan losses,
a $1.127 million  increase in other income,  a $38,000 increase in other expense
and a $1.756 million increase in income taxes.

The increase in net interest  income  resulted  from an increase in net interest
spread (the difference  between the weighted  average yield on  interest-earning
assets and the weighted average rate paid on interest-bearing  liabilities) from
2.78%  for the 1996  period  to  2.81%  for the 1997  period,  combined  with an
increase in average  interest-earning assets of $382 million. The combination of
the  increases in net interest  spread and  interest-earning  assets  caused net
interest margin (net interest income divided by average interest-earning assets)
to rise  from  2.97%  for the 1996  period  to 2.99%  for the 1997  period.  The
increase  in net  interest  spread  resulted  from an  increase  in the yield on
interest-earning  assets of 5 basis  points  which was  partially  offset by a 2
basis  point  increase  in the cost of funds.  The  increase  in yield  occurred
because  loans,  which are the  highest-yielding  category  of  interest-earning
assets,  increased  from 49.5% of average  earning assets in the 1996 quarter to
54.3% in the 1997 quarter.  The largest  increase in loan assets occurred in the
commercial  loan category which generally bears higher interest rates than other
types of loans.

<PAGE>

The increase in cost of funds during the 1997 quarter primarily  resulted from a
greater reliance on jumbo certificates of deposit than in the 1996 quarter.  The
average  balance  of jumbo  CD's was $132  million  higher in 1997.  The cost of
borrowings  also was slightly  higher in the 1997 quarter  because of a 25 basis
point increase in the federal funds rate in March 1997.

Collective's  net  interest  income  tends to increase  in periods of  declining
interest rates because its shorter-term  interest-bearing  liabilities generally
reprice faster than its longer-term  interest-earning assets. (See the "Maturity
and Rate Sensitivity Analysis", page 13.) Conversely,  Collective's net interest
income  tends to decrease  in periods of rising  interest  rates.  Substantially
higher long-term  interest rates in the 1997 quarter compared to the 1996 period
more than offset the marginally  higher  short-term rates in 1997 resulting in a
steeper yield curve which  contributed to the increased net interest  spread and
margin in the 1997 quarter.

Although  Collective's  classified asset ratio decreased from 0.44% at March 31,
1996 to 0.33% at March 31, 1997,  the loan loss  provision was higher during the
1997 quarter  because of increased  general loss provisions for the growing loan
portfolio, particularly the commercial loan segment.

Gain on sale of loans and  securities  increased  from a loss of $162,000 in the
1996  period to a gain of $266,000  in the 1997  quarter  because of the sale of
securitized  Small  Business   Administration  ("SBA")  loans  acquired  in  the
Continental acquisition. The increase in financial service fees and other income
resulted  primarily  from increased fee income from the growth in demand deposit
balances and a more aggressive  strategy in charging and collecting fees related
to deposit accounts.

Other expense was  virtually  unchanged  because  increases  resulting  from the
Continental  acquisition  and other asset growth were offset by reduced  deposit
insurance  premiums resulting from the Deposit Insurance Funds Act of 1996. (See
note 3 to the consolidated financial statements,  page 6.) Collective's ratio of
operating expenses to assets was 1.22% in the 1997 quarter compared to 1.32% for
the 1996 period.

The increase in income taxes  resulted from the increased  pre-tax  income.  The
effective  income tax rate was 36.7% for the three  months  ended March 31, 1997
compared to 35.7% for the three months ended March 31, 1996.  The  effective tax
rate increased in the 1997 quarter because of the Continental  acquisition.  The
intangible asset  amortization  resulting from the acquisition is not deductible
for income tax purposes.  Also,  Continental's income was taxed at a higher rate
than Collective Bank's income by the State of New Jersey.

Nine Months Ended March 31, 1997
Compared to Nine Months Ended March 31, 1996

Net income for the nine months  ended March 31, 1997  decreased  $4.365  million
compared to net income for the nine months  ended  March 31,  1996.  Without the
SAIF  recapitalization  assessment  (see  note 3 to the  consolidated  financial
statements),  which reduced net income by $10.500 million, net income would have
been $45.976 million for the 1997 period, an increase of $6.135 million over the
1996  period.  The actual  decrease  in net income  was  comprised  of a $11.369
million  increase  in net  interest  income,  a $1.455  million  increase in the
provision for loan losses,  a $1.299 million increase in other income, a $17.936
million increase in other expense and a $2.358 million decrease in income taxes.

<PAGE>

The increase in net interest  income  resulted  from an increase in net interest
spread (the difference  between the weighted  average yield on  interest-earning
assets and the weighted average rate paid on interest-bearing  liabilities) from
2.70%  for the 1996  period  to  2.79%  for the 1997  period,  combined  with an
increase in average  interest-earning assets of $301 million. The combination of
the  increases in net interest  spread and  interest-earning  assets  caused net
interest margin (net interest income divided by average interest-earning assets)
to rise  from  2.89%  for the 1996  period  to 2.98%  for the 1997  period.  The
increase in net interest  spread  resulted from a 9 basis point  decrease in the
cost of funds.  The overall  yield on  interest-earning  assets was the same for
both the 1997 and 1996  periods.  Although the yields on loans,  mortgage-backed
securities and investment  securities all were slightly lower in 1997, the lower
yields were  offset by the fact that loans made up a greater  portion of average
interest-earning   assets   in  the   1997   period.   Loans,   which   are  the
highest-yielding  component of interest-earning  assets, increased from 49.4% of
earning assets in the 1996 period to 53.3% in the 1997 period. The lower cost of
funds in the 1997 period resulted from a 23 basis point reduction in the cost of
borrowings compared to 1996.  Collective's  borrowings are primarily short-term,
and changes in the cost of its borrowings  usually correlate with changes in the
federal  funds rate.  The federal funds rate was  approximately  35 basis points
lower in the 1997 period  than it was in the 1996  period.  The average  cost of
deposits was 4.08% for the 1997 period compared to 4.09% for the 1996 period.  A
steeper yield curve in the nine-month period ended March 31, 1997, when compared
to the 1996 period,  contributed to the increased net interest spread and margin
in the 1997 period.

Although  Collective's  classified asset ratio decreased from 0.44% at March 31,
1996 to 0.33% at March 31, 1997,  the loan loss  provision was higher during the
1997 period  because of increased  general loss  provisions for the growing loan
portfolio, particularly the commercial loan segment.

Gain on sale of loans and  securities  decreased from $1.032 million in the 1996
period to $375,000 in the 1997 period.  Because longer-term  interest rates were
higher in the 1997 period than in the comparable 1996 period,  the percentage of
residential  first  mortgage  loan  origination's  that  met  the  criteria  for
long-term  investment  increased  from 85% in the 1996 period to 94% in the 1997
period.  Another  contributing  factor  was that 76% of such  originations  were
adjustable rate loans in the 1997 period compared to 18% in 1996. All adjustable
rate loan originations are placed in the held-to-maturity portfolio.  Therefore,
sales of securitized  loans  decreased from $55 million in 1996 to $7 million in
1997.  Most of the gain in the 1997 period resulted from the sale of securitized
SBA loans acquired in the Continental acquisition (see page 11). The increase in
financial  service fees and other income  resulted  primarily from increased fee
income from the growth in demand deposit balances and a more aggressive strategy
in charging and collecting fees related to deposit accounts.

The increase in other expense resulted primarily from the SAIF  recapitalization
assessment  and the  Continental  acquisition,  partially  offset by the reduced
deposit  insurance  premiums,   previously  discussed.   Collective's  ratio  of
operating  expenses to assets was 1.23% in the 1997 period,  excluding  the SAIF
assessment, compared to 1.28% for the 1996 period.

The decrease in income  taxes  resulted  from the reduced  pre-tax  income.  The
effective  income tax rate was 35.9% for the nine  months  ended  March 31, 1997
compared to 35.8% for the nine months ended March 31, 1996.  The effective  rate
for the 1997 period was reduced  because the  marginal  tax benefit rate for the
SAIF  assessment  deduction  was higher  than  Collective's  effective  tax rate
without such  deduction.  However,  such benefit was more than offset by factors
resulting from the Continental acquisition (see page 11).

<PAGE>
<TABLE>
<CAPTION>
                                            COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                                          MATURITY AND RATE SENSITIVITY ANALYSIS (1)

                                                                               March 31, 1997

                                             ---------------        --------------        ---------------        ---------------
                                                 1 Year                1 Year                  Over
                                                or Less              to 5 Years              5 Years                 Total
                                             ---------------        --------------        ---------------        ---------------
<S>                                          <C>                    <C>                   <C>                     <C>
Assets:                                                                 (Dollar amounts in thousands)
  Mortgage loans:
   Balloon and adjustable rate first
     mortgages                                  $  694,742            $  649,403               $147,298            $ 1,491,443
   Fixed rate mortgages                            187,314  (2)          561,026                449,636              1,197,976
  Mortgage-backed securities                       419,110  (3)        1,198,015                363,501              1,980,626
  Consumer and other commercial loans              138,217                34,920                  3,614                176,751
  Federal funds sold                                19,595                     -                      -                 19,595
  Repurchase agreements                             35,000                     -                      -                 35,000
  Investment securities                            423,181  (4)                -                    139                423,320
                                             ---------------        --------------        ---------------        ---------------

Total rate sensitive assets                      1,917,159             2,443,364                964,188              5,324,711
                                             ---------------        --------------        ---------------        ---------------

Liabilities:
  Fixed maturity deposits                      $ 1,424,508            $  453,876               $ 14,847            $ 1,893,233

  Demand deposits, interest bearing                      -               602,199                      -                602,199
  Money market demand accounts                     302,810                     -                      -                302,810
  Passbook accounts                                100,320               236,405                223,609                560,334
  Borrowings                                     1,573,385                 5,486                      -              1,578,871
                                             ---------------        --------------        ---------------        ---------------

Total rate sensitive liabilities                 3,401,023             1,297,968                238,456              4,937,447
                                             ---------------        --------------        ---------------        ---------------


  Dollar gap (5)                               $(1,483,864)           $1,145,396               $725,732            $   387,264
                                             ===============        ==============        ===============        ===============


<FN>
     (1)  As presented in the above table,  Collective  calculates interest rate
          sensitivity  information  employing techniques developed by the Office
          of Thrift Supervision.
     (2)  Includes $3,600 of loans classified as held for sale.
     (3)  Includes  $120,165  of   mortgage-backed   securities   classified  as
          available for sale.
     (4)  Includes $115,786 of securities classified as available for sale.
     (5)  Rate sensitive assets less rate sensitive liabilities.
</FN>
</TABLE>



PART II
Item 6.  Exhibits and Reports on Form 8-K
(a) Exhibits
      (11)  Statement Re Computation of Per Share Earnings
      (27)  Financial Data Schedule


<PAGE>



                                   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.


                            COLLECTIVE BANCORP, INC.


                                        EDWARD J. MCCOLGAN
Date   May  15, 1997                    Edward J. McColgan
                                        Vice Chairman & Chief Financial Officer





                                        BERNARD H. BERKMAN
Date  May 15, 1997                      Bernard H. Berkman
                                        Executive Vice President &
                                        Chief Accounting Officer