<PAGE> 1


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB
                    ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 1996   Commission File No. 1-6663
-------------------------------------------   --------------------------

                           COLONIAL COMMERCIAL CORP.
                           -------------------------
             (Exact Name of Registrant as Specified in its Charter)
             ------------------------------------------------------

    New  York                                           11-2037182   
    ---------                                           ----------
(State  or  other   jurisdiction  of         (IRS  Employer Identification No.)
Incorporation or Organization)

3601 Hempstead Turnpike, Levittown, New York                11756-1315
--------------------------------------------                ----------
  (Address of Principal Executive Offices)                  (Zip Code)

Registrants Telephone Number, Including Area Code:    516-796-8400
                                                      ------------

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Class                     Name of Exchange on Which Registered
--------------                     ------------------------------------
    None                                           None

          Securities Registered Pursuant to Section 12(g) of the Act:
                     Common Stock, Par Value $.01 Per Share
             Convertible Preferred Stock, Par Value $.01 Per Share
             -----------------------------------------------------
                                (Title of Class)

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
Registrants  best  knowledge,   in  definitive  proxy   information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. (x)

Indicate by check mark whether  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 Registrant was required
to file such reports) and (2) has been subject to such filing  requirements  for
the past 90 days.

                      Yes  x          No
                          ---

Revenues for the fiscal year ended December 31, 1996 were $25,194,337.

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
Registrant was approximately $6,618,835 as of March 10, 1997.

Indicate  the  number of shares  outstanding  of  Registrants  Common  Stock and
Convertible Preferred Stock as of March 10, 1997

Common Stock,               par value $.01 per share -6,985,931 shares.  
Convertible Preferred Stock par value $.01 per share -8,500,454 shares.

                          Documents Incorporated by Reference

Document                                               Part
Registrants 1997 Proxy Statement for Annual Meeting
  of Shareholders on June 11, 1997                      III
Registrants 1996 Annual Report to Shareholders          I, II






<PAGE> 2



PART I.

Item 1(a)  Business Developments
--------------------------------

     Colonial  Commercial  Corp.  (the  "Company"  or  "Registrant")  is a New  
York corporation  which was  incorporated  on  October  28,  1964.  Unless 
otherwise indicated,  the term ("Registrant" or "Company" refers to Colonial 
Commercial Corp. and its consolidated subsidiaries).

     On May 19,  1995,  Registrant  purchased  the  capital  stock  of  Atlantic
Hardware and Supply  Corporation  ("Atlantic"),  a distributor of door hardware,
doors and door frames, for approximately $3.8 million in cash.
   
  The  Company  owns 8.5% of Monroc,  Inc.,  ("Monroc")  a concrete  products
company,  headquartered  in Utah and holds  several  parcels of land for sale in
Utah.

     In May 1994,  Monroc  completed the public sale of 600,000 shares of common
stock representing  approximately 21% of the post-offering outstanding shares of
common stock. Accordingly,  the Company's ownership was reduced from 17% to 13%.
In December,  1995,  Colonial's  ownership in Monroc  decreased to 8.5% from 13%
because a private investment fund purchased  1,650,000 shares of Monroc's common
stock and a warrant for the purchase of an  additional  1,500,000  shares for an
aggregate purchase price of $9,075,000.  The purchaser owns approximately 37% of
the total shares of Monroc's  common stock.  Upon  exercise of the warrant,  and
assuming that no additional Monroc common stock was issued, the investment funds
percentage  ownership would increase to 53%, and Colonial's ownership percentage
would decrease to 6.3%.

     The Company has signed a  non-binding  memorandum of intent to purchase all
the  outstanding  stock of US Computer  Group,  Inc. and  subsidiaries  (USCG)in
exchange for 1,800,000  shares of the Company's  Common Stock.  Headquartered in
Farmingdale,  Long Island, NY, USCG has three fully-equipped and staffed offices
in Manhattan,  NY;  Carlstadt,  NJ and Fort  Washington,  PA. From its operating
divisions,  US  Computer  Maintenance,  US  Computer  Products  and US  Computer
Solutions,  the Company offers maintenance for equipment manufactured by Digital
Equipment Corporation,  IBM Midrange,  Sun Microsystems,  Inc. and leading brand
PCs, the sale of new and used computer equipment, network integration and design
services,  disaster  recovery  and  business  relocation  services.  On closing,
Colonial would purchase certain  obligations of USCG by issuing 700,000 warrants
to purchase the Company's  Common Stock at $1.25 per share and a $500,000  note.
The closing is subject to the execution of a definitive purchase agreement,  due
diligence and other  conditions.  There can be no assurance that the transaction
will be completed.

Item 1(b)  Business Description
-------------------------------

     Since 1993,  the  Registrant  has been  offering  consulting  and  advisory
services to  financial  institutions  while it was in the process of  evaluating
investment  opportunities.  Since the May 19, 1995 acquisition of Atlantic,  the
Registrant's  principal  business  activity  is the  distribution  of  builder's
hardware,  which is described in more detail below. The Registrant  continues to
seek acquisitions of going concerns.

Atlantic - Builders' Hardware
-----------------------------

     Atlantic's primary business is the distribution of door hardware, doors and
door frames used in new building  construction,  buildings being  rehabilitated,
interior tenant buildouts,  and building maintenance.  Products sold by Atlantic
include all types of mechanical and  electronic  hardware,  such as locks,  door
knobs, door closers,  hinges and other door-related hardware.  Atlantic services
the contract  hardware  market,  usually as a material  supplier only, on a wide
range of commercial,  residential, and institutional construction projects, such
as  office  buildings,   hospitals,  schools,  hotels  and  high-rise  apartment
buildings.




<PAGE> 3




     Atlantic had  approximately  600  customers in 1996.  In 1996,  no customer
accounted for more than 10% of sales. Atlantic does not believe that the loss of
any one customer would have a material adverse effect on its business.

     As of December 31, 1996, Atlantic had $9,630,000 in firm backlog of orders.
Atlantic expects that  approximately 95% of the backlog of orders as of December
31, 1996 will be filled within the current fiscal year.  Atlantic's  business is
not subject to significant seasonal variations.

     Atlantic purchases  products from approximately 790 suppliers.  In 1996, no
supplier accounted for more than 10% of Atlantic's purchases.  Atlantic believes
that the loss of any one supplier would not have a material  adverse effect upon
its business.

     Atlantic  competes  primarily  with  other  hardware  distributors  who are
selected by the architects,  owners,  and/or construction  managers, on a job to
job  basis.   Atlantic  has  its  estimators  evaluate  plans  received  from  a
contractor,  and  prepare and submit a price for the  project,  which is awarded
through bid or  negotiation.  If  Atlantic  receives  the job,  it supplies  the
required hardware by placing orders with manufacturers or from goods on hand, or
both.

     Atlantic's  competition  varies  widely  from  region to region,  primarily
because builder's hardware distributors are generally local single market firms.
Within each  geographical  market,  contractors  generally  limit their hardware
suppliers to a few local firms. Also, in certain markets, Atlantic competes with
firms that supply the complete door package  (i.e.,  door,  frame and hardware).
Atlantic  has  been  one of the  largest  "hardware  only"  suppliers;  however,
Atlantic is in the process of changing its marketing  focus from a hardware only
supplier to a complete door package supplier.

Management and Employees
------------------------

     As of December 31, 1996, the  Registrant  had 66 employees,  of whom 2 were
executive  officers at its corporate  offices in Levittown,  New York. Sixty two
(62) of the  employees  are  employed  by  Atlantic.  The Company  believes  its
employee relations are satisfactory.

Item 2.  Properties
-------------------

     Registrant's  principal  executive  offices are  located at 3601  Hempstead
Turnpike,  Levittown,  New York  11756-1315,  in leased premises  (approximately
1,306 square feet).

     Atlantic  maintains  office and  warehouse  space of  approximately  28,000
square feet at 601 West 26th Street,  New York,  New York under a lease expiring
in April 2000.  Atlantic also  maintains  leased sales  offices in  Bensenville,
Illinois;  Norcross,  Georgia; Wilkes Barre,  Pennsylvania.  Atlantic closed its
Farmingdale, New York office in January 1997.

     The Registrant's  premises are suitable and adequate for their intended use
and are adequately covered by insurance.

     Although it is not the customary policy of the Registrant to invest in real
estate, the Company owned a 50% interest in two parcels of raw land in Salt Lake
County,  Utah at December  31,  1996.  The  parcels,  together  with three other
parcels  which  have  been  sold,  were  received  as  a  distribution   from  a
restructuring of Monroc in 1986. The Registrant,  together with its 50% partner,
intends to continue its efforts to sell the remaining  parcels without incurring
significant development costs.





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Item 3.  Legal Proceedings
--------------------------

     In January  1996,  the  Company  demanded  payment of its  $1,000,000  note
receivable from Breskel  Associates.  On January 11, 1996,  Breskel  Associates,
Wilbur Breslin and the Estate of Robert Frankel instituted an action against the
Company and Bernard Korn, who is a director and chief  executive  officer of the
Company,  to declare  the note  unenforceable  and for  $3,000,000  in  punitive
damages.  On January 16,1996,  the Company  instituted an action against Breskel
Associates,  Wilbur Breslin and Estate of Robert Frankel for summary judgment to
enforce  payment of the note.  Both actions were brought in the Supreme Court of
the State of New York, County of Nassau. In March 1996, a written  understanding
to restructure the terms of the note was reached,  which provided for collateral
and scheduled  principal  payments beginning in April 1996. The restructuring of
the note was not  consummated and the Company pursued its legal action to obtain
summary  judgment.  On June 27, 1996, the Company's  motion for summary judgment
was denied and the Company's action was consolidated  with the action instituted
by Breskel and the other plaintiffs (the consolidated  action). On September 26,
1996, the Company filed an appeal of the decision denying Summary  Judgement and
is also proceeding with the consolidated action.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

                            Not Applicable

Additional Item - Executive Officers of the Registrant
------------------------------------------------------

     The names,  ages and positions of the Registrant's  executive  officers are
listed below, along with a brief account of their business experience during the
last five years.  Officers are  appointed  annually by the Board of Directors at
its first meeting  following the Annual Meeting of Stockholders and from time to
time at the pleasure of the Board. There are no family relationships among these
officers, nor any arrangement or understanding between any such officers and any
other person  pursuant to which any of such  officers were selected as executive
officers.
<TABLE>
<CAPTION>

Name, Age                     Business Experience
and Position                  During Past Five Years
------------                  ----------------------

<C>                           <C>             
Bernard Korn,  71             From prior to January 1992 to present,
  Chairman of the Board,        Chairman of the Board and President,
  President, Chief Executive    Chief Executive Officer of the Company

James W. Stewart, 50          From prior to January 1992, Executive
  Executive Vice President,     Vice President and Treasurer of the
  Secretary, Treasurer          Company.  From December 31, 1993,
  and Director                  to the present, Secretary of the
                                Company.
</TABLE>

Item 5.   Market for the Registrant's Common Stock, Convertible Preferred
-------------------------------------------------------------------------   
Stock and Related Stockholder Matters 
-------------------------------------
   
  The  information  required to be provided is incorporated by reference from
page 3 of the Registrants 1996 Annual Report to Stockholders.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

     The information required to be provided is incorporated by a reference from
pages 4 and 5 of the Registrant's  1996 Annual Report to Shareholders  under the
caption,  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations".




<PAGE> 5


Item 7.  Financial Statements and Supplementary Data
----------------------------------------------------

     The consolidated financial statements of the Registrant and the Independent
Auditors' Report thereon of KPMG Peat Marwick LLP, independent  certified public
accountants,  as of December  31, 1995 and 1996 and for each of the years in the
three year period ended December 31, 1996, are incorporated  herein by reference
from pages 6 through 20 of the Registrant's 1996 Annual Report to Stockholders.

Item 8.  Disagreements on Accounting and Financial Disclosures
--------------------------------------------------------------

                            None

PART III

Item 9.  Directors and Executive Officers of the Registrant
-----------------------------------------------------------

     The  information  required to be provided is  incorporated  by reference to
Registrant's  1997  definitive  proxy  statement to be filed with the Commission
pursuant to Regulation  14A no later than 120 days after the close of its fiscal
year.  Information  relative to executive officers of the Registrant is included
in Part I of this report on Form 10-KSB under the caption,  "Executive  Officers
of the Registrant".

Item 10.  Executive Compensation.
---------------------------------

Item 11.  Security Ownership of Certain Beneficial Owners and
-------------------------------------------------------------
Management.
-----------

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

     The information required to be provided under Part III, Items 10, 11 and 12
is incorporated by reference to the Registrant's 1996 definitive proxy statement
to be filed with the  Commission  pursuant to  Regulation  14A no later than 120
days after the close of its fiscal year.

Item 13.  Exhibits and Report on Form 8-K
-----------------------------------------

Exhibits
--------

        The exhibits  listed on the Index to Exhibits  following  the  Signature
Page herein are filed as part of this Form 10-KSB.

Reports on Form 8-K
-------------------

        Registrant  filed no reports  on Form 8-K  during the fourth  quarter of
1996.






<PAGE> 6




SIGNATURES

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

                                      COLONIAL COMMERCIAL CORP.
                                      (Registrant)

                                      By:/s/ Bernard Korn
                                         ----------------
                                         Bernard Korn, Pres.

                                      By:/s/ James W. Stewart
                                         --------------------
                                         James W. Stewart
                                         Treasurer, Chief Financial
                                         and Accounting Officer

Dated:  March 19, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been duly signed below on March 19, 1997 by the following  persons on behalf
of the Registrant and in the capacities indicated:

                                By:  /s/ Bernard Korn
                                     ----------------
                                    Bernard Korn, President & Director

                                By:  /s/ James W. Stewart
                                     --------------------
                                    James W. Stewart, Executive Vice
                                    President, Treasurer and
                                    Secretary/Director

                                By:  /s/ Raphael M. Brackman
                                     -----------------------
                                    Raphael M. Brackman, Director

                                By:  /s/ Gerald S. Deutsch
                                     ---------------------
                                    Gerald S. Deutsch, Director

                                By:  /s/ William Koon
                                     ----------------
                                    William Koon, Director

                                By:  /s/ Donald K. MacNeill
                                     ----------------------
                                    Donald K. MacNeill, Director

                                By:  /s/ Ronald Miller
                                     -----------------
                                    Ronald Miller, Director

                                By:  /s/ Jack Rose
                                     -------------
                                    Jack Rose, Director

                                By:  /s/ Carl L. Sussman
                                     -------------------
                                    Carl L. Sussman, Director





<PAGE> 7
<TABLE>
<CAPTION>
                                   INDEX TO EXHIBITS
                                        Item 1

                                                              Incorporated by
                                      Filed                   Reference From
Exhibits                              Herewith     Form        Date  Exhibit
--------                              ---------    ----        ----  -------

<S>                                   <C>           <C>       <C>        <C>
3(a)  Certificate of Incor-
      poration of Registrant                        8-K       1/5/83     1

 (b)  By-Laws of Registrant                         8-K       1/5/83     1

4     Indenture dated as of 
      January 17, 1983 between 
      Registrant and IBJ Schroder
      Bank and Trust Co., relating 
      to 6% Notes (approved by the 
      Bankruptcy Court but not yet
      signed)                                       10-K     4/12/83     4(a)

10(a) Employment Agreement dated
      as of November 1, 1989 between
      Registrant and Bernard Korn                   10-K     3/30/90    10(a)

      (i) Amendment No. 1 dated
          January 1, 1995 to Employ-
          ment Agreement dated
          January 1, 1989                           10KSB    3/30/95    10(a)(I)

  (b) Employment Agreement dated
      as of January 1, 1995 between
      Registrant and James W. Stewart               10KSB    3/30/95    10(b)

  (c) Certain Monroc, Inc. documents

      (i) Promissory Note from
          Monroc, Inc. (formerly
          Monroc Acquisition, Inc.)
          to Wel-Com Financial
          Services, Inc.                            10-K     3/30/88   10(b)(v)

     (ii) Subordination Agreement
          dated July 27, 1993 with
          reference to Promissory
          Note filed as Exhibit
          10(c) (i)                                 10KSB    3/30/95   10(c)(ii)

    (iii) Voting  Agreement  dated  
          December 28, 1995 between  
          Registrant and Building and
          Construction Partners, L.P.

   (d) 1986 Stock Option Plan                       10-K     3/30/88   10(c)(ii)

   (e)(i)  Agreement dated
            December 19, 1986
            by and between
            Breskel Associates
            and Registrant                          10-K    3/30/87 10(m)xxx(ii)
</TABLE>


<PAGE> 8

<TABLE>
<CAPTION>

                                INDEX TO EXHIBITS
                                     Item 1

                                                         Incorporated by
                                   Filed                 Reference From
Exhibits                           Herewith     Form      Date  Exhibit
--------                           --------     ----      ----  -------
<S>                                <C>           <C>       <C>      <C>
     (ii) Promissory Note dated
          December 19, 1986 for
          $1,000,000 Breskel
          Associates to
          Registrant                             10-K     3/30/87  10(m)xxx
                                                                     (iii)
          (a) Restated and Amended
              Promissory Note dated
              January 31, 1994 for
              $1,000,000 from Breskel
              Associates to Registrant           10-KSB   3/29/94  10(f)(ii)(A)

(f)  Certain documents relating to
     Atlantic Hardware and Supply
     Corporation

      (i) Stock Purchase Agreement
          dated May 19, 1995 by and
          among Thackeray Corporation,
          Rennand-Paige Industries,
          Inc. and Colonial
          Commercial Corp.                       8-K      6/5/95   10(g)(i)

     (ii) Revolving Credit Agreement
          between Atlantic Hardware
          and Supply Corporation and
          Sterling National Bank &
          Trust Company of New York              8-K      6/5/95   10(g)(ii)

    (iii) Guarantee of all
          liabilities and
          security agreement
          of Atlantic Hardware
          and Supply Corpora-
          tion by Colonial
          Commercial Corp. to
          Sterling National
          Bank and Trust of
          New York                               8-K      6/5/95   10(g)(iii)

     (iv) Secured interest
          bearing note between
          Colonial Commercial
          Corp. and National
          Westminster Bank                       8-K      6/5/95   10(g)(iv)

      (v) Employment Agreement
          dated May 19, 1995
          between Atlantic
          Hardware and Supply
          Corporation and Paul
          Selden                                 8-K      6/5/95   10(g)(v)

</TABLE>


<PAGE> 9

<TABLE>
<CAPTION>



                              INDEX TO EXHIBITS
                                   Item 1


                                                         Incorporated by
                                   Filed                 Reference From
Exhibits                           Herewith     Form      Date   Exhibit
--------                           --------     ----      ----   -------
<S>                                   <C>       <C>       <C>      <C>

      (g)Lease dated February 27,
      1992 by and between
      Registrant and 3601
      Turnpike Associates             

      (i) Renewal letter
          dated May 6, 1996          Yes       10-KSB    3/29/93   10 (h)(iii)

11 Statement re computation of
   per share earnings (loss)
  (not filed since computations
   are readily apparent from the
   consolidated financial statements)

13 Annual Report of the Registrant
   for the fiscal year ended
   December 31, 1996.  Such
   report except for those portions
   which are expressly  incorporated 
   by reference  herein,  is 
   furnished for the information  
   of the Commission and is not to 
   be deemed "filed" as part of this
   filing.  Financial statement 
   schedules that are not applicable 
   are omitted or included in the 
   consolidated financial statement 
   footnotes.                         Yes 

21 Subsidiaries of Registrant         Yes

27 Financial Data Schedule            Yes

</TABLE>