--------------------------------------------------------------------------------

                                  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 December 31, 1996

                                       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, 20,440,808 shares outstanding as of
December 31, 1996.


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


<PAGE>
PART 1
Item 1
                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                 STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                                          December 31                June 30
                                                                              1996                    1996
                                                                         ---------------         ----------------
<S>                                                                       <C>                     <C>   
ASSETS                                                                         (Dollar amounts in thousands)
        Cash                                                                $   105,327             $     65,084
        Federal funds sold                                                       52,096                    3,646
                                                                         ---------------         ----------------
                    Total cash and cash equivalents                             157,423                   68,730

        Loans held for sale, at amortized cost, market
             value of $7,705 and $5,231                                           7,670                    5,186
        Securities available for sale, at market value                          222,044                  162,284
        Investment securities, at amortized cost, market
             value of $294,057 and $271,650                                     296,384                  276,171
        Loans receivable, net                                                 2,851,705                2,548,150
        Mortgage-backed securities, at amortized cost,
             market value of $1,803,021 and $1,896,831                        1,874,818                1,973,642
        Real estate acquired in settlement of loans, net                          5,108                    5,427
        Land, office buildings and equipment, net                                41,642                   39,239
        Other assets                                                             48,836                   42,335
        Core deposit premium                                                     10,779                    8,191
        Goodwill                                                                 27,515                   16,116
                                                                         ---------------         ----------------
                    Total assets                                             $5,543,924               $5,145,471
                                                                         ===============         ================

LIABILITIES AND STOCKHOLDERS' EQUITY
        Deposits:
           Demand deposits, non-interest bearing                            $   136,678             $     95,792
           Demand deposits, interest bearing                                    584,776                  508,295
           Savings and investment accounts                                      858,121                  845,199
           Savings certificates                                               1,973,339                1,805,101
                                                                         ---------------         ----------------
                    Total deposits                                            3,552,914                3,254,387

        Borrowed funds                                                        1,565,607                1,473,448
        Advance payments by borrowers for
           taxes and insurance                                                   22,778                   26,852
        Other liabilities                                                        26,363                   26,480
                                                                         ---------------         ----------------
                    Total liabilities                                         5,167,662                4,781,167
                                                                         ---------------         ----------------

        Stockholders' Equity:
           Common stock, par value $.01 per share; authorized - 37,000,000
               shares; issued - 20,440,808 shares in December 1996 and
               20,418,641 shares in June 1996; outstanding - 20,391,308
               shares in December 1996 and 20,374,141 shares
               in June 1996                                                         204                      204
           Preferred stock, par value $.01 per share;
               authorized - 2,500,000 shares; none outstanding                        -                        -
           Additional paid-in capital                                            60,135                   59,699
           Treasury stock, at cost; 49,500 shares in December 1996
               and 44,500 shares in June 1996                                    (1,230)                  (1,093)
           ESOP debt                                                             (5,277)                  (5,816)
           Unrealized appreciation on available for sale securities,
               net of tax                                                         2,922                    1,090
           Retained earnings, substantially restricted                          319,508                  310,220
                                                                         ---------------         ----------------
                    Total stockholders' equity                                  376,262                  364,304
                                                                         ---------------         ----------------
                    Total liabilities and stockholders' equity               $5,543,924               $5,145,471
                                                                         ===============         ================

</TABLE>
                                       2

<PAGE>

                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                      STATEMENTS OF CONSOLIDATED OPERATIONS
<TABLE>
<CAPTION>
                                                                           Three Months Ended                Six Months Ended
                                                                               December 31                      December 31
                                                                           1996           1995              1996           1995
                                                                       -------------  -------------     -------------  -------------
                                                                            (Dollar amounts in thousands except per share data)
<S>                                                                    <C>            <C>               <C>             <C>
INTEREST INCOME:
 Interest on mortgage loans                                                 $50,972        $43,792           $98,342        $86,666
 Interest on other loans                                                      4,099          4,185             7,715          8,328
 Interest on mortgage-backed securities                                      33,078         35,166            66,685         71,330
 Interest and dividends on investments                                        7,397          5,815            13,601         11,502
                                                                       -------------   ------------     -------------   ------------
        Total interest and dividend income                                   95,546         88,958           186,343        177,826
                                                                       -------------  -------------     -------------  -------------

INTEREST EXPENSE:
 Interest on deposits                                                        35,976         33,750            70,093         67,029
 Interest on Federal Home Loan Bank
     advances and other borrowed funds                                       20,593         20,688            40,397         42,571
                                                                       -------------     -------------  -------------  -------------
        Total interest expense                                               56,569         54,438           110,490        109,600
                                                                       -------------  -------------     -------------  -------------

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES                         38,977         34,520            75,853         68,226
PROVISION FOR LOAN LOSSES                                                       829            403             1,544            690
                                                                       -------------  -------------     -------------  -------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                          38,148         34,117            74,309         67,536
                                                                       -------------  -------------     -------------  -------------


OTHER INCOME:
 Loan servicing                                                                 952            979             1,958          1,928
 Gain on sale of loans and securities                                            76            560               108          1,195
 Financial service fees and other income                                      3,098          2,471             6,166          4,936
                                                                       -------------  -------------     -------------  -------------
        Total other income                                                    4,126          4,010             8,232          8,059
                                                                       -------------  -------------     -------------  -------------
 Total income before other expense                                           42,274         38,127            82,541         75,595
                                                                       -------------  -------------     -------------  -------------

OTHER EXPENSE:
 Compensation and employee benefits                                           7,658          6,935            14,691         13,914
 Occupancy expense                                                            2,843          2,552             5,479          5,230
 Advertising                                                                    343            281               668            536
 Deposit insurance                                                            1,287          1,627             2,778          3,051
 SAIF recapitalization assessment                                                 -              -            16,653              -
 Computer services                                                            1,104          1,312             2,123          2,554
 Loan expense                                                                   729            900             1,505          1,615
 Real estate operations                                                          33            192               114            169
 Amortization of intangibles                                                  1,627          1,195             2,675          2,399
 Other expenses                                                               3,006          2,625             5,783          5,103
                                                                       -------------  -------------     -------------  -------------
        Total other expense                                                  18,630         17,619            52,469         34,571
                                                                       -------------  -------------     -------------  -------------

INCOME BEFORE INCOME TAXES                                                   23,644         20,508            30,072         41,024
INCOME TAXES                                                                  8,544          7,387            10,594         14,706
                                                                       -------------  -------------     -------------  -------------
NET INCOME                                                                  $15,100        $13,121           $19,478        $26,318
                                                                       =============  =============     =============  =============

PER SHARE DATA:
 Primary and fully diluted net income per share                               $0.74          $0.64             $0.95           $1.29
 Dividends per common share                                                   $0.25          $0.20             $0.50           $0.40
 Average primary shares outstanding                                      20,477,282     20,451,792        20,455,061      20,444,689
 Average fully diluted shares outstanding                                20,488,767     20,451,792        20,485,565      20,449,014
</TABLE>

                                       3
<PAGE>

                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                 STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                            Unrealized
                                                                                          Appreciation
                                                   Additonal                              on Available
                                          Common     Paid-In     Treasury         ESOP        for Sale     Retained
                                           Stock     Capital        Stock         Debt      Securities     Earnings        Total
                                      -------------------------------------------------------------------------------------------
                                                                  (Dollar amounts in thousands)
<S>                                    <C>          <C>        <C>           <C>               <C>        <C>          <C>
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               -           -            -            -               -       19,478       19,478
  Stock options exercised                      -         297            -            -               -            -          297
  Dividends on common
     stock - $.50 per share                    -           -            -            -               -      (10,190)     (10,190)
  Purchase of treasury stock                   -           -         (137)           -               -            -         (137)
  ESOP debt repayment                          -           -            -          539               -            -          539
  ESOP shares released                         -         139            -            -               -            -          139
  Securities valuation                         -           -            -            -           1,832            -        1,832
                                      -------------------------------------------------------------------------------------------

BALANCE DECEMBER 31, 1996                   $204     $60,135     $(1,230)      $(5,277)         $2,922     $319,508     $376,262
                                      ===========================================================================================
</TABLE>

                                       4
<PAGE>


                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                      STATEMENTS OF CONSOLIDATED CASH FLOWS
<TABLE>
<CAPTION>

                                                                                Six Months Ended
                                                                                   December 31
                                                                         --------------------------------
                                                                             1996               1995
                                                                         --------------    --------------
                                                                          (Dollar amounts in thousands)
<S>                                                                      <C>            <C>
OPERATING ACTIVITIES:
Interest received                                                           $  187,447        $  176,711
Interest paid                                                                 (109,283)         (107,165)
Operating expenses                                                             (51,885)          (31,761)
Sales of trading securities                                                                       13,328
                                                                                     -
Loan fees                                                                        2,390             2,792
Other income received                                                            8,232             8,260
Income taxes paid                                                              (14,389)          (13,046)
                                                                         --------------    --------------
Net cash provided by operating activities                                       22,512            49,119
                                                                         --------------    --------------

INVESTING ACTIVITIES:
Loan originations                                                             (477,165)         (269,510)
Purchases of loans                                                                (659)          (16,686)
Purchases of mortgage-backed securities                                            (16)                -
Repayment of loan principal                                                    217,215           172,924
Repayment of mortgage-backed security principal                                105,314            77,479
Sales of loans held for sale                                                    26,480            61,833
Purchases of investment securities                                             (54,842)         (184,886)
Sale of investment securities available for sale                                18,906                 -
Purchases of mortgage-backed securities available for sale                     (22,094)          (56,601)
Sales of mortgage-backed securities available for sale                           7,018            55,157
Repayment of principal on mortgage-backed securities available for sale          8,445             7,961
Maturities of investment securities                                             38,130           270,960
Net decrease in real estate owned                                                  950             1,257
Net change in loans maturing in 3 months or less                                (7,800)          (10,025)
Pruchase of Continental Bancorporation                                         (25,703)                -
Cash obtained from acquisition                                                  11,264                 -
Other investing, net                                                            (3,633)           (9,825)
                                                                         --------------    --------------
Net cash (used for) provided by investing activities                          (158,190)          100,038
                                                                         --------------    --------------

FINANCING ACTIVITIES:
Net change in deposits                                                         168,708           (88,029)
Net change in Federal Home Loan Bank advances                                  (18,648)         (395,000)
Net change in other borrowed funds                                              91,089           360,485
Net decrease in advance payments by borrowers
   for taxes and insurance                                                      (4,165)           (8,495)
Dividends paid                                                                 (10,210)           (8,145)
Other financing, net                                                            (2,403)           (1,195)
                                                                         --------------    --------------
Net cash provided by (used for) financing activities                           224,371          (140,379)
                                                                         --------------    --------------
Net increase in cash and cash equivalents                                       88,693             8,778
Cash and cash equivalents, beginning of period                                  68,730            69,973
                                                                         --------------    --------------
Cash and cash equivalents, end of period                                    $  157,423        $   78,751
                                                                         ==============    ==============

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Net income                                                                  $   19,478        $   26,318
Net change in trading securities                                                                  13,328
                                                                                     -
Amortization and accretion of deferred charges and credits, net                    290              (409)
Amortization of intangibles                                                      2,901             2,399
Accrued income and expense                                                       3,113             9,578
Deferred income and expense                                                     (7,790)           (5,631)
Provision for loan and real estate owned losses                                  1,588               660
Depreciation and amortization                                                    2,394             2,338
ESOP debt repayment                                                                538               538
                                                                         --------------    --------------
Net cash provided by operations                                             $   22,512        $   49,119
                                                                         ==============    ==============
</TABLE>
Note: Certain  reclassifications have been made to the Statement of Consolidated
Cash Flows for the six months  ended  December  31,  1995 to conform to the 1996
presentation.

                                       5

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


1.   The  unaudited  interim  consolidated  financial  statements  of Collective
     Bancorp,  Inc. and  subsidiaries  ("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  six-month  periods
     ended December 31, 1996 are not necessarily indicative of the results to be
     expected for the fiscal year ending June 30, 1997.

2.   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 was applied to SAIF-assessable deposits held 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 on their Bank Insurance Fund ("BIF")  deposit base 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 and 6.4
     basis points for thrifts,  such as Collective Bank. From 2000 to 2019, when
     the FICO bonds are retired,  the FICO  assessment  rate is estimated to run
     under 2.5 basis points per $100 of each institution's insured 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".

3.   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  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

                                       6
<PAGE>
                                       

     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.

4.   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  is 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 is not expected to have a material
     effect on Collective's results of operations or financial position.



                                       7
<PAGE>
Item 2
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                       OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General Financial Institution Legislation and Regulation

With the acquisition of Collective Bank of New Jersey,  Collective Bancorp, Inc.
became a bank holding company subject to regulation, supervision and examination
by the Board of Governors of the Federal Reserve System..

Collective's  primary  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").  Collective  Bancorp's other
subsidiary,  Collective Bank of New Jersey, is subject to extensive  regulation,
supervision  and  examination  by the  State  of New  Jersey  as its  chartering
authority,  and by the FDIC, as its primary federal  regulator.  The deposits of
both  Collective  Bank and Collective Bank of New Jersey are insured by the FDIC
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 Federal Reserve, OTS, FDIC, State of New Jersey
or the Congress,  could have a material impact on Collective and its operations.
See notes 2 and 3 to the consolidated financial statements.

Assets

Total assets  increased  $398 million  during the six months ended  December 31,
1996. The net increase,  primarily in interest-earning  assets, was comprised of
increases  in  loans  receivable,  net of $304  million,  cash  of $87  million,
securities  available for sale of $60 million and  investment  securities of $20
million and a decrease in mortgage-backed  securities of $99 million.  All other
assets combined increased $26 million.

Loans receivable, net increased because loan originations and purchases exceeded
loan repayments and sales by $240 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
acquisition  increased  loans  receivable  by $64  million.  The elements of the
increase were as follows (in millions):

<TABLE>
<S>                                                           <C> 
                      Residential first mortgage                 $121
                      Commercial                                  115
                      Home equity                                  61
                      Construction                                 20
                      Other                                       (13)
                                                             ---------
                                                                 $304
                                                             =========
</TABLE>

Collective's  strategy to increase loans as a percentage of total earning assets
(increased  from  51.4% at June 30,  1996 to 53.9% at  December  31,  1996)  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.

                                       8
<PAGE>

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  resulted  primarily from
the addition of medium-term U.S. agency structured notes.

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 $386 million from June 30, 1996 to December 31,
1996 was  comprised  primarily  of  increases  in deposits  of $298  million and
borrowings of $92 million.  Other liabilities decreased $4 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>
<S>                                                           <C> 
                  Non-interest bearing demand                   $ 41
                  Interest bearing demand                         76
                  Savings and Investment Accounts                 13
                  Savings certificates                           168
                                                              -------
                                                                $298
                                                              =======
</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.  Municipal
jumbo certificates of deposit (in excess of $100,000)  comprised the increase in
savings certificates.


Stockholders' Equity

The increase in retained  earnings during the six months ended December 31, 1996
was comprised of net income of $19.5 million less dividends of $10.2 million.

                                       9
<PAGE>

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  December  31, 1996,  Collective  Bank was in
compliance with that regulation and at that date had an overall  liquidity ratio
of 5.34% and a short-term  ratio of 2.40%.  Collective Bank of New Jersey has no
regulatory liquidity requirement.

At December 31, 1996, capital resources were sufficient to meet outstanding loan
origination  commitments  of $107  million and  commitments  on unused  lines of
credit of $71 million. Loans originated or purchased during the six months ended
December 31, 1996 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 December  31, 1996,  Collective  Bank
exceeded those requirements as follows:


<TABLE>
<S>                                     <C>                         <C>
        Tangible Capital:              (In Thousands)              Percent
                 Actual                     $ 336,078                    6.26%
                 Required                      80,593                    1.50
                                      ---------------             ------------
                 Excess                    $  255,485                    4.76%
                                      ---------------             ------------

        Core Capital:
                 Actual                    $  336,078                    6.26%
                 Required                     161,186                    3.00
                                      ---------------             ------------
                 Excess                    $  174,892                    3.26%
                                      ---------------             ------------

        Risk-based Capital:
                 Actual                    $  343,708                   16.00% 
                 Required                     171,869                    8.00
                                      ---------------             ------------
                 Excess                    $  171,839                    8.00%
                                      ---------------             ------------
</TABLE>

Collective  Bancorp,  Inc. and Collective Bank of New Jersey exceeded their FDIC
regulatory capital requirements as follows:

<TABLE>
<S>                                   <C>                         <C>   
                                       (In Thousands)              Percent
      Collective Bancorp, Inc:
        Tier I Risk-Based Capital:
                 Actual                    $  334,910                   14.66%
                 Required                      91,353                    4.00
                                      ---------------             ------------
                 Excess                    $  243,557                   10.66%
                                      ---------------             ------------
</TABLE>
                                       10

<PAGE>
<TABLE>
<S>                                   <C>                         <C>
        Total Risk-Based Capital:
                 Actual                    $  349,076                   15.28%
                 Required                     182,706                    8.00  
                                      ---------------             ------------
                 Excess                    $  166,370                    7.28%
                                      ---------------             ------------

        Tier I Leverage Ratio
                 Actual                    $  334,910                    6.16%
                 Required                     217,574                    4.00
                                      ---------------             ------------
                 Excess                    $  117,336                    2.16%
                                      ---------------             ------------

      Collective Bank of New Jersey:
         Tier I Risk-Based Capital:
                 Actual                    $    8,505                   11.67%
                 Required                       2,915                    4.00
                                      ---------------             ------------
                 Excess                    $    5,590                    7.67%
                                      ---------------             ------------

        Total Risk-Based Capital:
                 Actual                    $    9,631                   13.22%
                 Required                       5,829                    8.00
                                      ---------------             ------------
                 Excess                    $    3,802                    5.22 %
                                      ---------------             ------------

        Tier I Leverage Ratio:
                 Actual                    $    8,505                    5.75%
                 Required                       5,921                    4.00
                                      ---------------             ------------
                 Excess                    $    2,584                    1.75%
                                      ---------------             ------------
</TABLE>

Collective Bancorp,  Inc., Collective Bank and Collective Bank of New Jersey are
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 December 31, 1996
Compared to Three Months Ended December 31, 1995

Net income for the three months ended December 31, 1996 increased $1.979 million
compared to net income for the quarter ended  December 31, 1995. The increase in
net income was  comprised of a $4.457  million  increase in net interest  income
before provision for loan losses, a $426,000  increase in the provision for loan
losses, a $116,000  increase in other income, a $1.011 million increase in other
expense and a $1.157 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
2.67%  for the 1995  period  to  2.81%  for the 1996  period,  combined  with an
increase in average  interest-earning assets of $379 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  2.86%  for the 1995  period  to 2.99%  for the 1996  period.  The
increase in net interest  spread  resulted from a 14 basis point decrease in the
cost of funds from 4.59% to 4.45% while the yield on interest-earning assets was
unchanged  at  7.26%.  The  lower  cost of funds in the  1996  quarter  resulted

                                       11
<PAGE>

primarily  from a 30  basis  point  reduction  in the cost of  borrowings  which
decreased  from  5.61% in 1995 to 5.31% in  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  45 basis points lower in the 1996 quarter than it was in the 1995
quarter.  Another  contributing  factor to the lower cost of funds in 1996 was a
reduction in the cost of deposits from 4.13% to 4.07%.  The decrease in the cost
of deposits resulted from lower short-term  interest rates and a greater portion
of  Collective's  interest-bearing  liabilities  being  lower  costing  checking
accounts.  In the  1996  period  checking  accounts  comprised  14.1%  of  total
interest-bearing  liabilities  compared to 12.2%  during the 1995  quarter.  The
increased  ratio of  checking  accounts  to total  interest-bearing  liabilities
primarily resulted from the Continental acquisition.

Collective's  net  interest  income  tends to increase  in periods of  declining
interest rates because its interest-bearing liabilities generally reprice faster
than its  interest-earning  assets.  (See  the  "Maturity  and Rate  Sensitivity
Analysis",  page 14.)  Conversely,  Collective's  net  interest  income tends to
decrease in periods of rising  interest  rates.  The lower  short-term  interest
rates discussed above, combined with a steeper yield curve, when compared to the
three months ended December 31, 1995,  contributed to the increased net interest
spread and margin in the 1996 quarter.

Although  Collective's  classified  asset ratio decreased from 0.45% at December
31, 1995 to 0.38% at  December  31,  1996,  the loan loss  provision  was higher
during the 1996 quarter  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 $560,000 in the 1995 period
to $76,000 in the 1996 period. Because longer-term interest rates were higher in
the 1996 quarter than they were in the comparable 1995 period, the percentage of
loan originations that met the criteria for long-term  investment increased from
78% in the 1995 period to 91% in the 1996 quarter.  Another  contributing factor
was  that  37% of  total  residential  first  mortgage  loan  originations  were
adjustable rate loans in the 1996 period compared to 21% in 1995. All adjustable
rate loan originations are placed in the held-to-maturity portfolio.  Therefore,
sales of loans and  securitized  loans decreased from $28 million in 1995 to $13
million  in 1996.  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  acquisition  of
Continental   Bancorporation   previously  discussed  and  other  asset  growth.
Collective's ratio of operating expenses to assets was 1.24% in the 1996 quarter
compared to 1.28% for the 1995 period.

The increase in income taxes  resulted from the increased  pre-tax  income.  The
effective income tax rate was 36.1% for the three months ended December 31, 1996
compared to 36.0% for the three months ended December 31, 1995.

Six Months Ended December 31, 1996
Compared to Six Months Ended December 31, 1995

Net income for the six months ended December 31, 1996  decreased  $6.840 million
compared to net income for the six months ended  December 31, 1995.  Without the
SAIF  recapitalization  assessment  (See  note 2 to the  consolidated  financial
statements),  which reduced net income by $10.500 million, net income would have
been $29.978 million for the 1996 period, an increase of $3.660 million over the
1995 period. The actual decrease in net income was comprised of a $7.627 million
increase in net interest income,  a $854,000  increase in the provision for loan
losses, a $173,000 increase in other income, a $17.898 million increase in other
expense and a $4.112 million decrease in income taxes.

                                       12
<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
2.66%  for the 1995  period  to  2.78%  for the 1996  period,  combined  with an
increase in average  interest-earning assets of $260 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  2.84%  for the 1995  period  to 2.97%  for the 1996  period.  The
increase in net interest  spread  consisted  of a 4 basis point  decrease in the
yield on  interest-earning  assets coupled with a 16 basis point decrease in the
cost of funds. The decline in yield on interest-earning  assets occurred because
Collective's  yields  on  loans,   mortgage-backed   securities  and  investment
securities all were lower in the 1996 period compared to the 1995 period because
shorter-term  interest rates were  generally  lower  throughout the  intervening
twelve-month  period. A greater portion of Collective's loan originations during
that period were  adjustable  rate  products  which have a lower  (teaser)  rate
during the initial  period to their first  repricing.  This was offset by rising
longer-term  rates during the second half of the intervening  period.  The lower
cost of funds in the 1996 period resulted from a 39 basis point reduction in the
cost of  borrowings  compared to 1995.  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  45
basis  points  lower in the 1996  period  than it was in the  1995  period.  The
average cost of deposits was 4.08% for the 1996 period compared to 4.12% for the
1995 period also contributing to the lower cost of funds in 1996.

The lower  short-term  interest rates discussed  above,  combined with a steeper
yield  curve,  when  compared  to  the  six  months  ended  December  31,  1995,
contributed to the increased net interest spread and margin in the 1996 period.

Although  Collective's  classified  asset ratio decreased from 0.45% at December
31, 1995 to 0.38% at  December  31,  1996,  the loan loss  provision  was higher
during the 1996 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 $1.195 million in the 1995
period to $108,000 in the 1996 period.  Because longer-term  interest rates were
higher in the 1996 period than in the comparable 1995 period,  the percentage of
residential first mortgage loan originations that met the criteria for long-term
investment  increased  from 75% in the 1995  period  to 94% in the 1996  period.
Another  contributing  factor  was  that  51% of total  loan  originations  were
adjustable rate loans in the 1996 period compared to 21% in 1995. All adjustable
rate loan originations are placed in the held-to-maturity  portfolio.  Therefore
sales of loans and  securitized  loans decreased from $62 million in 1995 to $26
million  in 1996.  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  Bancorporation acquisition previously discussed.
Collective's ratio of operating expenses to assets was 1.24% in the 1996 period,
excluding the SAIF assessment, compared to 1.26% for the 1995 period.

The decrease in income  taxes  resulted  from the reduced  pre-tax  income.  The
effective  income tax rate was 35.2% for the six months ended  December 31, 1996
compared  to 35.8%  for the six  months  ended  December  31,  1995.  The  lower
effective  rate for the 1996 period  resulted  because the  marginal tax benefit
rate for the SAIF assessment  deduction was higher than  Collective's  effective
tax rate without such deduction.

                                       13
<PAGE>

                     COLLECTIVE BANCORP, INC. AND SUBSIDIARY
                   MATURITY AND RATE SENSITIVITY ANALYSIS (1)
<TABLE>
<CAPTION>
                                                                          December 31, 1996

                                           ---------------       ---------------       ---------------       ---------------
                                               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                              $   749,135           $   592,455           $   164,614           $ 1,506,204
    Fixed rate mortgages                          188,163 (2)           527,159               450,314             1,165,636
    Mortgage-backed securities                    402,122 (3)         1,199,589               387,706             1,989,417
    Consumer and other commercial loans           147,486                37,876                 2,173               187,535
    Federal funds sold                             52,096                     -                     -                52,096
    Investment securities                         403,657 (4)                 -                   172               403,829
                                           ---------------       ---------------       ---------------       ---------------

Total rate sensitive assets                     1,942,659             2,357,079             1,004,979             5,304,717
                                           ---------------       ---------------       ---------------       ---------------

Liabilities:
  Fixed maturity deposits                     $ 1,523,397           $   434,395           $    15,547           $ 1,973,339
  Demand deposits, interest bearing                     -               584,776                     -               584,776
  Money market demand accounts                    299,002                     -                     -               299,002
  Passbook accounts                                97,493               237,147               224,479               559,119
  FHLB advances                                         -                     -                 1,069                 1,069
  Other borrowings                              1,559,260                 5,278                     -             1,564,538
                                           ---------------       ---------------       ---------------       ---------------

Total rate sensitive liabilities                3,479,152             1,261,596               241,095             4,981,843
                                           ---------------       ---------------       ---------------       ---------------

Dollar gap (5)                                $(1,536,493)         $  1,095,483           $   763,884           $   322,874
                                           ===============       ===============       ===============       ===============

<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 $7,670 of loans classified as held for sale.
(3)  Includes $114,599 of mortgage-backed securities classified as available for
     sale.
(4)  Includes $107,445 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
(b) Reports on Form 8-K
      During the quarter ended December 31, 1996, Collective Bancorp, Inc. filed
      a Form  8-K  dated  October  4,  1996  to  report  the  completion  of the
      acquisition of Continental Bancorporation.

                                       14

<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  February 14, 1997                         Edward J. McColgan
                                         Vice Chairman & Chief Financial Officer





                                                BERNARD H. BERKMAN
Date  February 14, 1997                  -----------------------------------
                                                Bernard H. Berkman
                            Executive Vice President & Chief Accounting Officer



                                       15