UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K

X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended December 31, 1995
                                       OR

__   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

    For the transition period from __________________ to __________________.
                            Commission File #0-12874

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

        New Jersey                                     22-2433468
(State of other jurisdiction            (I.R.S. Employee Identification Number)
    of incorporation
    or organization)

     Commerce Atrium                                   08034-5400
   1701 Route 70 East                                  (Zip Code)
 Cherry Hill, New Jersey
 (Address of principal 
   executive offices)
        Registrant's telephone number, including area code: 609-751-9000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                 Title of Class

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   X

     The aggregate market value of voting stock held by non-affiliates of the
Registrant is $218,226,000.(1)

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Common Stock $1.5625 Par Value                           11,297,014
      Title of Class                    No. of Shares Outstanding as of 3/8/96

Series C ESOP Cumulative Convertible                      417,000
        Preferred Stock                 No. of Shares Outstanding as of 3/8/96
        Title of Class

DOCUMENTS INCORPORATED BY REFERENCE

     Parts II and IV incorporate certain information by reference from the
Registrant's Annual Report to Shareholders for the fiscal year ended December
31, 1995 (the "Annual Report"). Part III incorporates certain information by
reference from the Registrant's Proxy Statement for the 1996 Annual Meeting of
Shareholders.

(1)  The aggregate dollar amount of the voting stock set forth equals the number
     of shares of the Registrant's Common Stock outstanding, reduced by the
     amount of Common Stock held by officers, directors, and shareholders owning
     in excess of 10% of the Registrant's Common Stock multiplied by the last
     sale price for the Registrant's Common Stock on March 8, 1996. The
     information provided shall in no way be construed as an admission that the
     officer, director, or 10% shareholder in the Registrant may be deemed an
     affiliate of the Registrant or that he is the beneficial owner of the
     shares reported as being held by him, and any such inference is hereby
     disclaimed. The information provided herein is included solely for the
     recordkeeping purpose of the Securities and Exchange Commission.
<PAGE>

                             COMMERCE BANCORP, INC.
                        FORM 10-K CROSS-REFERENCE INDEX

     The preceding Annual Report and Form 10-K incorporates into a single
document the requirements of the accounting profession and the Securities and
Exchange Commission. There has been no action by the Commission, however, to
approve or disapprove or pass upon the accuracy or adequacy of the Annual Report
and Form 10-K.


Part I
Item 1.   Business
Item 2.   Properties 
Item 3.   Legal Proceedings
Item 4.   Submission of Matters to a Vote of 
          Security Holders (This item is
          omitted since no matters were submitted 
          for security vote during the
          fourth quarter of 1995.)

Part II
Item 5.   Market for the Registrant's Common Stock 
          and Related Stockholders Matters 
Item 6.   Selected Financial Data 
Item 7.   Management's Discussion and Analysis of 
          Financial Condition and Results of Operations 
Item 8.   Financial Statements and Supplementary Financial Data 
Item 9.   Disagreements on Accounting and Financial Disclosure
          (This item is omitted since it is not applicable)

Part III
Item 10.  Directors and Executive Officers of the Registrant
Item 11.  Management Remuneration and Transactions
Item 12.  Security Ownership of Certain Beneficial Owners and Management
Item 13.  Certain Relationships and Related Transactions
          (The information required by the items in this part 
          has been omitted since it will be contained in the 
          definitive proxy statement to be filed pursuant to 
          Regulation 14A.)

Part IV
Item 14.  Exhibits, Financial Statement Schedules and 
          Reports on Form 8-K 

          (a)  (3) - Exhibits:

                3.1     Restated Certificate of Incorporation of the Company, as
                        amended. (I)
                3.2     Certificate of Amendment to the Restated Certificate of
                        Incorporation of the Company, setting forth the
                        preferences, limitations and relative rights of the
                        Company's Series C ESOP Cumulative Convertible Preferred
                        Stock. (I)
                3.3     By-laws of the Company, as amended. (C)
                4.1     Form of Trust Indenture, dated July 15, 1993, between
                        the Company and United Jersey Bank, with respect to the
                        Company's $23,000,000 8 3/8% Subordinated Notes due July
                        15, 2003. (I)
                10.1    Ground lease, dated July 1, 1984, between Commerce NJ
                        and Group Four Equities, relating to the branch office
                        in Gloucester Township, New Jersey. (A)
                10.2    Ground lease, dated April 15, 1986, between Commerce NJ
                        and Mount Holly Equities, relating to Commerce NJ's
                        branch office in Mt. Holly, New Jersey. (C)
                *10.3   The Company's 1984 Incentive Stock Option Plan. (A)
                *10.4   The Company's Employee Stock Ownership Plan. (F)
                10.5    Lease, dated March 29, 1985, between Commerce PA and
                        Devon Properties (Ltd.), and lease dated September 4,
                        1985, between Commerce PA and Devon Properties (Ltd.),
                        relating to Commerce PA's branch office in Devon,
                        Pennsylvania. (B)
                10.6    Assignment of Lease and Assumption Agreement dated
                        November 30, 1987, between the Company and Commerce PA,
                        relating to Commerce PA's branch office in Devon,
                        Pennsylvania. (C)
                10.7    Lease between the Company and Astoria Associates,
                        relating to the Company's and Commerce NJ's headquarters
                        facilities. (B)
                10.8    Ground lease, dated April 15, 1986, between Commerce NJ
                        and U.S. Equities, relating to one of Commerce NJ's
                        branch offices in Washington Township, New Jersey. (D)
<PAGE>
                10.9    Ground lease, dated February 1, 1988, between Commerce
                        NJ and Diversified Properties of New Jersey, relating to
                        one of Commerce NJ's branch offices in Washington
                        Township, New Jersey. (D)
                10.10   Ground lease, dated February 15, 1988, between Commerce
                        NJ and Diversified Properties of New Jersey, relating to
                        one of Commerce NJ's branch offices in Cherry Hill, New
                        Jersey. (D)
                *10.11  The Company's 1989 Stock Option Plan for Non-Employee
                        Directors. (E)
                *10.12  A copy of employment contracts with Vernon W. Hill, II,
                        C. Edward Jordan, Jr., and Peter Musumeci, Jr., dated
                        January 2, 1992. (G)
                *10.13  A copy of the Retirement Plan for Outside Directors of
                        Commerce Bancorp, Inc. (H)
                *10.14  The Company's 1994 Employee Stock Option Plan. (J)
                10.15   Term Loan Agreement between Commerce Bancorp, Inc.
                        Employee Stock Ownership Trust and Mellon Bank, N.A.
                        dated as of November 29, 1994. (J)
                11.1    Computation of Net Income Per Share.
                21.1    Subsidiaries of the Company (incorporated 
                        by reference from PART I, Item 1. "BUSINESS" 
                        of this Report on Form 10-K.) 
                23.1    Consent of Ernst & Young, LLP.

_______________________

                (A)     Incorporated by reference from the Company's
                        Registration Statement on Form S-1, and Amendments Nos.
                        1 and 2 thereto (Registration No. 2-94189).
                (B)     Incorporated by reference from the Company's
                        Registration Statement on Form S-2 (Registration No
                        33-12603).
                (C)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1987.
                (D)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1988.
                (E)     Incorporated by reference from the Company's
                        Registration Statement on Form S-2, and Amendments Nos.
                        1 and 2 thereto (Registration No. 33-31042).
                (F)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1989.
                (G)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1991.
                (H)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1992.
                (I)     Incorporated by reference from the Company's
                        Registration Statement on Form S-2 and Amendments Nos. 1
                        and 2 thereto (Registration No. 33-62702).
                (J)     Incorporated by reference from the Company's Annual
                        Report on Form 10-K for the fiscal year ended December
                        31, 1994.

                        * Management contract or compensation plan or
                          arrangement.

        (b) There were no reports on Form 8-K filed in the fourth quarter of
        1995.

        (c)(d) Exhibits and Financial Statement Schedules - All other exhibits
        and schedules for which provision is made in the applicable accounting
        regulation of the Securities and Exchange Commission are not required
        under the related instruction or are inapplicable and, therefore, have
        been omitted.

Item 15.  Signatures

<PAGE>
                                     PART I

Item 1. Business

General

     Commerce Bancorp, Inc. (the "Company") is a New Jersey business corporation
which is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "Holding Company Act"). The Company was incorporated on
December 9, 1982 and became an active bank holding company on June 30, 1983
through the acquisition of 100% of the outstanding shares of Commerce Bank, N.A.
("Commerce NJ"). On January 2, 1987, the Company acquired all of the outstanding
shares of Commerce Bank/Pennsylvania, N.A. ("Commerce PA"). On December 31, 1988
the Company acquired all of the outstanding shares of Citizens State Bank of New
Jersey, Forked River, which was subsequently converted to a national charter and
renamed Commerce Bank/Shore, N.A. ("Commerce Shore"). On September 30, 1993, the
Company acquired all of the outstanding shares of The Coastal Bank, Ocean City,
New Jersey, ("Coastal") which was merged into Commerce NJ.

     Except as otherwise indicated, all references herein to the Company include
Commerce NJ, Commerce PA and Commerce Shore.

     The Company's principal executive offices are located at Commerce Atrium,
1701 Route 70 East, Cherry Hill, New Jersey 08034-5400, and its telephone number
is (609) 751-9000.

     The total number of full-time equivalent persons employed by the Company
was 1,287 as of December 31, 1995. The Company believes that its relationship
with its employees is good.

Commerce NJ

     Commerce NJ provides retail and commercial banking services through 33
retail branch offices in Camden, Burlington, Gloucester, Atlantic, and Cape May
Counties in Southern New Jersey. It currently has six offices in Cherry Hill,
three offices in Washington Township, two offices each in Marlton, Medford and
Moorestown, and one office each in Absecon, Atco, Bellmawr, Berlin, Brigantine,
Glassboro, Gloucester Township, Haddonfield, Marmora, Mt. Holly, Northfield,
Ocean City, Sicklerville, Somers Point, Voorhees, West Deptford, Williamstown,
and Woodbury. Commerce NJ's deposits are insured by the Federal Deposit
Insurance Corporation ("FDIC").

     In March of 1995, Commerce NJ acquired Cypress Securities, Inc. a municipal
bond underwriter and investment banking company. Vernon W. Hill, II, the
Chairman, President and Chief Executive Officer of the Company, was the
principal shareholder of Cypress Securities, Inc.

     As of December 31, 1995, Commerce NJ had total assets of $1.910 billion,
total deposits of $1.695 billion and total stockholders' equity of $135.0
million.

Service Area

     Commerce NJ's primary service area includes Burlington, Camden, Gloucester,
Atlantic and Cape May Counties, New Jersey. Commerce NJ has attempted to locate
its branches in the fastest growing communities within its service area. Retail
deposits gathered through these focused branching activities are used to support
Commerce NJ's lending throughout Southern New Jersey.

Retail Banking Activities

     Commerce NJ provides a broad range of retail banking services and products,
including free checking accounts (subject to minimum balances) and savings
programs, money market accounts, negotiable orders of withdrawal ("NOW")
accounts, certificates of deposit, safe deposit facilities, consumer loan
programs (including installment loans for home improvement and the purchase of
consumer goods and automobiles), home equity and Visa Gold card revolving lines
of credit, overdraft checking and automated teller facilities. Commerce NJ also
offers construction loans and permanent mortgages for houses.

Trust Activities

     Commerce NJ offers trust services primarily focusing on corporate trust
activities, particularly as bond trustee, paying agent, and registrar for
municipal bond offerings.

<PAGE>

Commercial Banking Activities

     Commerce NJ offers a broad range of commercial banking services, including
free checking accounts (subject to minimum balance), night depository
facilities, money market accounts, certificates of deposit, short-term loans for
seasonal or working capital purposes, term loans for fixed assets and expansion
purposes, revolving credit plans and other commercial loans to fit the needs of
its customers. Commerce NJ also finances the construction of business properties
and makes real estate mortgage loans on completed buildings. Where the needs of
a customer exceed Commerce NJ's legal lending limit for any one customer
(approximately $21.9 million as of December 31, 1995), Commerce NJ may
participate with other banks, including Commerce PA and Commerce Shore, in
making a loan.

Commerce PA

     In 1987, the Company acquired all of the issued and outstanding shares of
capital stock of Commerce PA. As a result of this transaction, Commerce PA
became a wholly-owned subsidiary of the Company.

     Commerce PA was organized as a national bank on December 28, 1983 and
commenced operations on June 29, 1984. As of December 31, 1995, Commerce PA had
total assets of $274.0 million, total deposits of $254.8 million and total
stockholders' equity of $18.4 million.

     Commerce PA provides retail and commercial banking services through 11
retail branch offices in Philadelphia, Chester, Delaware and Montgomery Counties
in Southeastern Pennsylvania. It currently has one office in Center City
Philadelphia, one in West Philadelphia, and one office each in the Philadelphia
suburbs of Chichester, Devon, Haverford, Lawrence Park, Newtown Square,
Springfield, Trooper, Wayne and Whitpain. Commerce PA's deposits are insured by
the FDIC.

     Commerce PA generally provides the same retail and commercial banking
services and products as Commerce NJ and Commerce Shore. Commerce PA does not
offer trust services.

Commerce Shore

     In 1988, the Company acquired all of the issued and outstanding shares of
capital stock of Commerce Shore. As a result of this transaction, Commerce Shore
became a wholly-owned subsidiary of the Company.

     Commerce Shore was organized as a state-chartered bank on December 8, 1972
and commenced operations on January 29, 1973. In 1989, Commerce Shore converted
to a national charter. As of December 31, 1995, Commerce Shore had total assets
of $306.1 million, total deposits of $285.6 million and total stockholders'
equity of $19.0 million.

     Commerce Shore provides retail and commercial banking services through six
retail branch offices in Ocean County, New Jersey. It currently has two offices
in Forked River and one office each in Barnegat, Long Beach Island, Manahawkin
and Toms River. Commerce Shore's deposits are insured by the FDIC.

     Commerce Shore generally provides the same retail and commercial banking
services and products as Commerce NJ and Commerce PA. Commerce Shore does not
offer trust services.

Other Activities

     Commerce NJ Equities Corporation, a New Jersey corporation, is a
wholly-owned subsidiary of Commerce NJ which purchases, holds and sells
investments of Commerce NJ. Commerce Shore Equities Corporation, a New Jersey
corporation, is a wholly-owned subsidiary of Commerce Shore which purchases,
holds and sells investments of Commerce Shore.

     As part of the Commerce Network, the Company has equity investments in
Commerce Bank/Harrisburg, Camp Hill, Pennsylvania and Independence Bancorp,
Inc., Ramsey, New Jersey. The Commerce Network provides certain marketing
support and technical support services to its members.

Competition

     The Company's service area is characterized by intense competition in all
aspects and areas of its business from commercial banks, savings and loan
associations, mutual savings banks and other financial institutions. Other
competitors, including credit unions, consumer finance companies, factors,
insurance companies and money market mutual funds, compete with certain lending
and deposit gathering services offered by the Company. Many competitors have
substantially greater financial resources and larger lending limits and larger
branch systems than those of the Company.

<PAGE>
     In commercial transactions, Commerce NJ's, Commerce PA's and Commerce
Shore's legal lending limit to a single borrower (approximately $21.9 million,
$2.9 million, and $3.1 million, respectively, as of December 31, 1995) enables
them to compete effectively for the business of smaller and mid-sized
businesses. However, these legal lending limits are considerably lower than that
of various competing institutions and thus may act as a constraint on Commerce
NJ's, Commerce PA's and Commerce Shore's effectiveness in competing for
financing in excess of these limits.

     The Company believes that it is able to compete on a substantially equal
basis with larger financial institutions because it offers longer hours of
operation than those offered by most of its competitors, free checking accounts
for customers maintaining certain minimum balances and competitive interest
rates on savings and time accounts with low minimum deposit requirements.

     The Company seeks to provide personalized services through management's
knowledge and awareness of its market area, customers and borrowers. The Company
believes this knowledge and awareness provides a business advantage in serving
the retail depositors and the small and mid-sized commercial borrowers that
comprise the Company's customer base.

Supervision and Regulation

The Company

     The Company is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended ("Holding Company Act"), and is therefore
subject to regulation by the Board of Governors of the Federal Reserve System
("FRB").

     Under the Holding Company Act, the Company is required to secure the prior
approval of the FRB before it can merge or consolidate with any other bank
holding company or acquire all or substantially all of the assets of any bank or
acquire direct or indirect ownership or control of any voting shares of any bank
that is not already majority owned by it, if after such acquisition it would
directly or indirectly own or control more than 5% of the voting shares of such
bank. The Holding Company Act currently also prohibits the acquisition, directly
or indirectly, by the Company of voting shares of, or interests in, or all or
substantially all of the assets of, any bank located outside the State of New
Jersey in a transaction requiring FRB approval unless an acquisition is
specifically authorized by the laws of the state in which such bank is located.
See "Recent Legislation/Interstate Banking."

     The Company is generally prohibited under the Holding Company Act from
engaging in, or acquiring direct or indirect ownership or control or more than
5% of the voting shares of any company engaged in non-banking activities unless
the FRB, by order or regulation, has found such activities to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto. In making such a determination, the FRB considers whether the
performance of these activities by a bank holding company can reasonably be
expected to produce benefits to the public which outweigh the possible adverse
effects. The FRB has by regulation determined that certain activities are
closely related to banking within the meaning of the Holding Company Act. These
activities include, among others, operating a mortgage, finance, credit card or
factoring company; performing certain data processing operations; providing
investment and financial advice; acting as an insurance agent for certain types
of credit-related insurance; leasing property on a full-payout, non-operating
basis; and certain stock brokerage and investment advisory services.

     In addition, under the Holding Company Act, the Company is required to file
periodic reports of its operations with, and is subject to examination by, the
FRB.

     The Company is under the jurisdiction of the Securities and Exchange
Commission and various state securities commissions for matters relating to the
offering and sale of its securities and is subject to the Securities and
Exchange Commission's rules and regulations relating to periodic reporting,
reporting to shareholders, proxy solicitation and insider trading.

     The Company, as an affiliate of Commerce NJ, Commerce PA and Commerce Shore
within the meaning of the Federal Reserve Act, is subject to certain
restrictions under the Federal Reserve Act regarding, among other things,
extensions of credit to it by Commerce NJ, Commerce PA and Commerce Shore, and
the use of the stock or other securities of the Company as collateral for loans
by Commerce NJ, Commerce PA and Commerce Shore to any borrower. Further, under
the Federal Reserve Act and the FRB regulations, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with extensions of credit or provisions of property or services.
These so-called "anti-tie-in provisions" generally provide that a bank may not
extend credit, lease or sell property or furnish any service, or fix or vary the
consideration for any of the foregoing, to a customer on the condition or
requirement that the customer provide some additional credit, property or
service to (obtain the same from) the bank, the bank's holding company or any
other subsidiary of the bank's holding company, or on the condition or
requirement that the customer not obtain other credit, property or services from
a competitor of the bank, the bank's holding company or any subsidiary of the
bank's holding company.

<PAGE>
Commerce NJ, Commerce PA, and Commerce Shore

     Commerce NJ, Commerce PA and Commerce Shore, as national banks, are subject
to the National Bank Act. Each is also subject to the supervision of, and is
regularly examined by, the Office of the Comptroller of the Currency ("OCC") and
is required to furnish quarterly reports to the OCC. The approval of the OCC is
required for the establishment of additional branch offices by any national
bank, subject to applicable state law restrictions. Under present New Jersey
law, Commerce NJ and Commerce Shore would be permitted to operate offices at any
location in New Jersey which is approved by the OCC. Under present Pennsylvania
law, Commerce PA would be permitted to operate offices within any county in
Pennsylvania, subject to the prior approval of the OCC.

     Under the Community Reinvestment Act, as amended ("CRA"), as implemented by
OCC regulations, a bank has a continuing and affirmative obligation consistent
with its safe and sound operation to help meet the credit needs of its entire
community, including low- and moderate-income neighborhoods. CRA does not
establish specific lending requirements or programs for financial institutions
nor does it limit an institution's discretion to develop the types of products
and services that it believes are best suited to its particular community,
consistent with CRA. CRA requires the OCC to assess an institution's record of
meeting the credit needs of its community and to take such record into account
in its evaluation of certain applications by such institution. The CRA requires
public disclosure of an institution's CRA rating and requires that the OCC
provide a written evaluation of an institution's CRA performance utilizing a
four-tiered descriptive rating system. An institution's CRA rating is considered
in determining whether to grant charters, branches and other deposit facilities,
relocations, mergers, consolidations and acquisitions. Performance less than
satisfactory may be the basis for denying an application. In addition, under
applicable regulations a bank having a less than satisfactory rating is not
entitled to participate on the bid list for FDIC offerings. In 1995, Commerce
NJ, Commerce PA and Commerce Shore each received a "satisfactory" rating.

     Commerce NJ, Commerce PA and Commerce Shore are members of the FDIC and
members of the FRB and, therefore, are subject to additional regulation by these
agencies. Some of the aspects of the lending and deposit business of Commerce
NJ, Commerce PA and Commerce Shore which are regulated by these agencies include
personal lending, mortgage lending and reserve requirements. The operations of
Commerce NJ, Commerce PA and Commerce Shore are also subject to numerous
federal, state and local laws and regulations which set forth specific
restrictions and procedural requirements with respect to interest rates on
loans, the extension of credit, credit practices, the disclosure of credit terms
and discrimination in credit transactions.

     Commerce NJ, Commerce PA and Commerce Shore are subject to certain
limitations on the amount of cash dividends that they can pay. See Note 17 of
the Company's Notes to Consolidated Financial Statements which appears elsewhere
herein.

Recent Legislation/Interstate Banking

     On September 29, 1994, the President signed into law the "Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994" (the "Interstate Act").
Among other things, the Interstate Act permits bank holding companies to acquire
banks in any state one year after enactment. Pennsylvania law was recently
amended to authorize any out-of-state bank holding company to acquire control of
any state or national bank located in Pennsylvania after it receives prior
written approval from the Pennsylvania Department of Banking. Beginning June 1,
1997, a bank may merge with a bank in another state so long as both states have
not opted out of interstate branching between the date of enactment of the
Interstate Act and May 31, 1997. States may enact laws opting out of interstate
branching before June 1, 1997, subject to certain conditions. States may also
enact laws permitting interstate merger transactions before June 1, 1997 and
host states may impose conditions on a branch resulting from an interstate
merger transaction that occurs before June 1, 1997, if the conditions do not
discriminate against out-of-state banks, are not preempted by Federal law and do
not apply or require performance after May 31, 1997. Pennsylvania has recently
enacted a law opting in immediately to interstate merger and interstate
branching transactions. Interstate acquisitions and mergers would both be
subject, in general, to certain concentration limits and state entry rules
relating to the age of the bank.

     Under the Interstate Act, the Federal Deposit Insurance Act is amended to
permit the responsible Federal regulatory agency to approve the acquisition of a
branch of an insured bank by an out-of-state bank or bank holding company
without the acquisition of the entire bank or the establishment of a "de novo"
branch only if the law of the state in which the branch is located permits
out-of-state banks to acquire a branch of a bank without acquiring the bank or
permits out-of-state banks to establish "de novo" branches. Pennsylvania
recently passed such a law. New Jersey has legislation pending which attempts to
take full advantage of interstate branching.

     On September 23, 1994, the President signed into law the "Riegle Community
Development and Regulatory Improvement Act of 1994" (the "Development Act").
Among other things, the Development Act
<PAGE>

establishes a $382 million fund (the "Fund") to promote economic development and
credit availability in underserved communities by providing financial and
technical assistance to community development financial institutions ("CDFI's").

     CDFI's include banks, savings associations and bank holding companies which
have a primary mission of promoting community development. Institutions
receiving monies from the Fund will be required to provide matching funds dollar
for dollar. Under the Fund, a CDFI may receive up to $5 million over a 3-year
period, with affiliates in other states not presently served eligible to receive
up to an additional $3.75 million over 3 years.

     One third of the Fund will be used to finance the Bank Enterprise Act, an
existing (but previously unfunded) incentive program designed to encourage
depository institutions to increase funding in distressed neighborhoods.

     In addition to the above, the Development Act contains provisions relating
to, among others, small business capital formation, small business loan
securitization, consumer protection for "reverse mortgages," paperwork reduction
and reform of the national flood insurance program.

     The foregoing necessarily is a summary and general description of certain
provisions of each of the Interstate Act and the Development Act and does not
purport to be complete. Many of the provisions of each will be implemented
through the adoption of regulation by the various Federal banking agencies.
Moreover, many of the significant provisions of the legislation have not yet
become effective. As of the date thereof, the Company is continuing to study the
legislation and regulations relating to the legislation but cannot yet assess
its impact on the Company.

National Monetary Policy

     In addition to being affected by general economic conditions, the earnings
and growth of the Company, Commerce NJ, Commerce PA and Commerce Shore are
affected by the policies of regulatory authorities, including the OCC, the FRB
and the FDIC. An important function of the FRB is to regulate the money supply
and credit conditions. Among the instruments used to implement these objectives
are open market operations in U.S. Government securities, setting the discount
rate, and changes in reserve requirements against bank deposits. These
instruments are used in varying combinations to influence overall growth and
distribution of credit, bank loans, investments and deposits, and their use may
also affect interest rates charged on loans or paid on deposits.

     The monetary policies and regulations of the FRB have had a significant
effect on the operating results of commercial banks in the past and are expected
to continue to do so in the future. The effects of such policies upon the future
business, earnings and growth of the Company, Commerce NJ, Commerce PA and
Commerce Shore cannot be predicted.

Legal Proceedings

     Other than routine litigation incidental to its business, none of the
Company, Commerce NJ, Commerce PA, Commerce Shore or any of their properties is
subject to any material legal proceedings, nor are any such proceedings known to
be contemplated.

Employee Stock Ownership Plan

     Effective January 1, 1989, the Company's Board of Directors approved the
restatement of the Company's Stock Bonus Plan to an Employee Stock Ownership
Plan ("ESOP"). The ESOP is intended to be a qualified retirement plan
established and maintained in accordance with the Employee Retirement Income
Security Act of 1974 for the benefit of the Company's and its bank subsidiaries'
eligible employees. The ESOP is intended to invest primarily in "Qualifying
Employer Securities" (i.e., common stock or preferred stock which is convertible
into common stock). The assets of the ESOP are held in a trust fund pursuant to
a Trust Agreement. The trustees under the Trust Agreement are authorized to
invest up to 100% of the trust fund in Qualifying Employer Securities. The
trustees are also authorized to borrow money for the purpose of purchasing
Qualifying Employer Securities.

     Generally, each participant in the ESOP is entitled to direct the trustees
with respect to the voting rights, if any, of the Qualifying Employer Securities
allocated to the participant's account. In other cases (i.e., unallocated
shares), the voting of shares held by the ESOP is determined by the trustees.
The current trustees are Vernon W. Hill, II and C. Edward Jordan, Jr., the
trustees under the Company's former Stock Bonus Plan.

     The Company is responsible for the operation and administration of the
ESOP. The Company determines investment policies under which the trustees act.
These duties are carried out by a committee appointed by the Board of Directors.
The Board of Directors has the sole responsibility to appoint and

<PAGE>


remove members of the committee of trustees, to determine the amount of
contributions to the ESOP by the Company and its subsidiary banks, and to amend
or terminate, in whole or in part, the ESOP or the Trust Agreement.

     The Company's Board of Directors approved the creation of a new series of
cumulative convertible preferred stock known as "Series C ESOP Cumulative
Convertible Preferred Stock." On January 31, 1990, the ESOP borrowed $7.5
million from another financial institution to complete the purchase of 417,000
shares of Series C ESOP Cumulative Convertible Preferred Stock from the Company,
at $18.00 per share, with an annual dividend rate of $1.35. This loan was
guaranteed by the Company. During 1994, the loan was refinanced with another
financial institution, also with the guarantee of the Company. The balance of
the loan at December 31, 1995 was $4,359,000.

     At December 31, 1995, the ESOP owned of record approximately 5.5% of the
Company's Common Stock outstanding on a fully diluted basis. Of the shares owned
of record, approximately 48% have been allocated to participants' accounts.


<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                Commerce Bancorp, Inc.


                                        By /s/ VERNON W. HILL, II
                                           ------------------------------
                                           Vernon W. Hill, II
                                           Chairman of the Board and President

Date: March 28, 1996

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. 

<TABLE>
<CAPTION>
   Signature                       Title                                             Date
<S>                                <C>                                            <C>
/s/ Vernon W. Hill, II
----------------------------       Chairman of the Board and President               March 28, 1996
Vernon W. Hill, II                  (Principal Executive Officer)

/s/ C. Edward Jordan, Jr.          Executive Vice President and Director             March 28, 1996
----------------------------        (Principal Financial and Accounting
C. Edward Jordan, Jr.               Officer)

/s/ Robert C. Beck
----------------------------       Secretary and Director                            March 28, 1996
Robert C. Beck

/s/ David Baird, IV
----------------------------       Director                                          March 28, 1996
David Baird, IV

/s/ Jack R Bershad
----------------------------       Director                                          March 28, 1996
Jack R Bershad

/s/ Morton N. Kerr
----------------------------       Director                                          March 28, 1996
Morton N. Kerr

/s/ Steven M. Lewis
----------------------------       Director                                          March 28, 1996
Steven M. Lewis

/s/ Daniel J. Ragone
----------------------------       Director                                          March 28, 1996
Daniel J. Ragone

/s/ Joseph T. Tarquini, Jr.
----------------------------       Director                                          March 28, 1996
Joseph T. Tarquini, Jr.
</TABLE>