SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    Form 10-Q


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

                      For the quarter ended March 31, 1997

                                       OR

     ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


                 For the transition period from ______ to ______


                            Commission File #0-12874


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


            New Jersey                                      22-2433468
 (State or other jurisdiction of                  (IRS Employer Identification
  incorporation or organization)                                Number)


     Commerce Atrium, 1701 Route 70 East, Cherry Hill, New Jersey 08034-5400
               (Address of Principal Executive Offices) (Zip Code)


                                 (609) 751-9000
              (Registrant's telephone number, including area code)


         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  


<PAGE>

                      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 practical date.




         Common Stock                                 15,704,561
         (Title of Class)                    (No. of Shares Outstanding
                                                     as of 5/08/97)



Series C ESOP Cumulative Con-
   vertible Preferred Stock                             417,000
         (Title of Class)                    (No. of Shares Outstanding
                                                     as of 5/08/97)


<PAGE>

                     COMMERCE BANCORP, INC. AND SUBSIDIARIES

                                      INDEX

                                                                         Page


PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Consolidated Balance Sheets (unaudited)
                           March 31, 1997 and December 31, 1996

                  Consolidated  Statements  of Income  (unaudited)  
                           Three months ended March 31, 1997 and 
                           March 31, 1996


                  Consolidated Statements of Cash Flows (unaudited)
                           Three months ended March 31, 1997 and
                            March 31, 1996

                  Notes to Consolidated Financial Statements (unaudited)

Item 2.           Management's Discussion and Analysis of Financial
                           Condition and Results of Operation

PART II.          OTHER INFORMATION

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

Item 6.           Exhibits and Reports on Form 8-K


<PAGE>
                     Commerce Bancorp, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                             March 31,         December 31,
                 (dollars in thousands)                                                        1997               1996
<S>                                                                                          <C>                <C>     
Assets           Cash and due from banks                                                     $181,918           $181,859
                 Federal funds sold                                                            25,650             26,975
                                                                                           ----------         ----------
                                Cash and cash equivalents                                     207,568            208,834
                 Mortgages held for sale                                                        1,818              1,314
                 Trading securities                                                             8,165             15,327
                 Securities available for sale                                                812,418            767,487
                 Securities held to maturity:
                              U.S. Government agency and mortgage-backed obligations          823,524            797,045
                              Obligations of state and political subdivisions                  22,638             22,674
                              Other securities                                                 17,970             17,793
                                                                                           ----------         ----------
                                Total securities held to maturity
                                 (market value 1997-$828,344; 1996-$816,910)                  864,132            837,512
                 Loans                                                                      1,305,779          1,266,815
                              Less allowance for loan losses                                   19,544             17,975
                                                                                           ----------         ----------
                                                                                            1,286,235          1,248,840
                 Bank premises and equipment, net                                              95,692             94,339
                 Other assets                                                                  69,334             58,563
                                                                                           ----------         ----------
                                                                                           $3,345,362         $3,232,216
                                                                                           ==========         ==========

Liabilities      Deposits:
                              Demand:
                                Interest-bearing                                             $956,632           $884,310
                                Noninterest-bearing                                           635,976            626,664
                              Savings                                                         657,827            638,660
                              Time                                                            822,024            770,036
                                                                                           ----------         ----------
                                Total deposits                                              3,072,459          2,919,670

                 Other borrowed money                                                          25,000             70,000
                 Other liabilities                                                             17,397             12,141
                 Obligation to Employee Stock Ownership Plan (ESOP)                             3,077              3,333
                 Long-term debt                                                                23,000             23,000
                                                                                           ----------         ----------
                                                                                            3,140,933          3,028,144

Stockholders'    Common stock, 15,721,180 shares issued (14,717,764 shares in 1996)            24,564             23,343
Equity           Series C preferred stock, 417,000 shares authorized, issued
                              and outstanding (liquidating preference:
                               $18.00 per share totaling $7,506)                                7,506              7,506
                 Capital in excess of par or stated value                                     166,101            142,193
                 Retained earnings                                                             10,959             35,987
                                                                                           ----------         ----------
                                                                                              209,130            209,029
                 Less commitment to ESOP                                                        3,077              3,333
                 Less treasury stock, at cost, 100,159 common shares
                              in 1997 and 1996                                                  1,624              1,624
                                                                                           ----------         ----------
                                Total stockholders' equity                                    204,429            204,072
                                                                                           ----------         ----------
                                                                                           $3,345,362         $3,232,216
                                                                                           ==========         ==========
</TABLE>
                                       1

<PAGE>
                     Commerce Bancorp, Inc. and Subsidiaries
                        Consolidated Statements of Income
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                           March 31,
             (dollars in thousands, except per share amounts)          1997         1996
<S>                                                                    <C>          <C>    
Interest     Interest and fees on loans                                $28,113      $24,433
income       Interest on investments                                    26,480       21,319
             Other interest                                                746        1,564
                                                                        ------       ------
                  Total interest income                                 55,339       47,316
                                                                        ------       ------

Interest     Interest on deposits:
expense         Demand                                                   5,471        4,446
                Savings                                                  3,770        3,013
                Time                                                    10,666       10,347
                                                                        ------       ------
                  Total interest on deposits                            19,907       17,806
             Interest on other borrowed money                              460           31
             Interest on long-term debt                                    506          506
                                                                        ------       ------
                  Total interest expense                                20,873       18,343
                                                                        ------       ------

             Net interest income                                        34,466       28,973
             Provision for loan losses                                   1,626          794
                                                                        ------       ------
             Net interest income after provision for loan losses        32,840       28,179

Noninterest  Deposit charges and service fees                            6,198        5,036
income       Other operating income                                      6,751        1,438
             Net investment securities gains                                 0          771
                                                                        ------       ------
                  Total noninterest income                              12,949        7,245
                                                                        ------       ------

Noninterest  Salaries                                                   11,902        8,440
expense      Benefits                                                    2,746        2,260
             Occupancy                                                   3,334        3,008
             Furniture and equipment                                     4,041        3,095
             Office                                                      3,089        2,367
             Audit and regulatory fees and assessments                     375          423
             Marketing                                                   1,239        1,103
             Other real estate (net)                                       469          505
             Other                                                       4,011        3,180
                                                                        ------       ------
                  Total noninterest expenses                            31,206       24,381
                                                                        ------       ------

             Income before income taxes                                 14,583       11,043
             Provision for federal and state income taxes                5,149        3,940
                                                                        ------       ------
             Net income                                                  9,434        7,103

             Dividends on preferred stocks                                 141          254
                                                                        ======       ======
             Net income applicable to common stock                      $9,293       $6,849
                                                                        ======       ======

             Net income per common and common equivalent share:
                Primary                                                  $0.57        $0.46
                                                                        ------       ------
                Fully diluted                                            $0.56        $0.44
                                                                        ------       ------
             Average common and common equivalent shares outstanding:
                Primary                                                 16,292       15,022
                                                                        ------       ------
                Fully diluted                                           16,908       15,638
                                                                        ------       ------
             Cash dividends declared, common stock                       $0.20        $0.16
                                                                        ======       ======
</TABLE>
                                       2
<PAGE>
                     Commerce Bancorp, Inc. And Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                          Three Months Ended March 31,
                        (dollars in thousands)                                                1997          1996
<S>                                                                                          <C>             <C>  
Operating activities     Net income                                                          $9,434          7,103
                         Adjustments to reconcile net income to net cash
                            provided by operating activities:
                               Provision for loan losses                                      1,626            794
                               Provision for depreciation, amortization and accretion         4,113          4,121
                               Gains on sales of securities available for sale                 (771)
                               Proceeds from sales of mortgages held for sale                 3,492          2,105
                               Originations of mortgages held for sale                       (3,996)        (3,376)
                               Net loan (chargeoffs)                                            (57)          (552)
                               Net (increase)decrease in trading securities                   7,162          3,693
                               (Increase) decrease in other assets                           (5,636)         7,419
                               Increase in other liabilities                                  5,256          7,377
                                                                                           --------       --------
                              Net cash provided by operating activities                      21,394         27,913

 Investing activities    Proceeds from the sales of securities available for sale                 0         28,942
                         Proceeds from the maturity of securities available for sale         44,655         22,508
                         Proceeds from the maturity of securities held to maturity           24,461         18,807
                         Purchase of securities available for sale                          (20,336)      (124,589)
                         Purchase of securities held to maturity                           (135,039)       (16,525)
                         Net increase in loans                                              (41,677)       (40,924)
                         Proceeds from sales of loans                                         2,713          1,791
                         Purchases of premises and equipment                                 (4,561)        (3,240)
                                                                                           --------       --------
                               Net cash used by investing activities                       (129,784)      (113,230)

 Financing activities    Net increase in demand and savings deposits                        100,801         22,051
                         Net increase in time deposits                                       51,988         39,092
                         Net (decrease) in other borrowed money                             (45,000)
                         Dividends paid                                                      (2,612)        (2,233)
                         Proceeds from issuance of common stock under
                              dividend reinvestment and other stock plans                     1,837          1,304
                          Other                                                                 109             19
                                                                                           --------       --------
                               Net cash provided by financing activities                    107,123         60,233

                         Decrease in cash and cash equivalents                               (1,266)       (25,084)
                         Cash and cash equivalents at beginning of year                     208,834        209,857
                                                                                           --------       --------
                         Cash and cash equivalents at end of period                        $207,568       $184,773
                                                                                           --------       --------


                         Supplemental disclosures of cash flow information:
                           Cash paid during the period for:
                             Interest                                                       $19,877        $18,444
                             Income taxes                                                       535            131
                           Other noncash activities
                             Transfer of securities to securities available for sale        $82,933             $0
</TABLE>
                                       3
<PAGE>

                     COMMERCE BANCORP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

A.       Consolidated Financial Statements

                  The  consolidated  financial  statements  included herein have
         been prepared  without audit  pursuant to the rules and  regulations of
         the  Securities  and  Exchange  Commission.   Certain  information  and
         footnote disclosures normally included in financial statements prepared
         in accordance with generally accepted  accounting  principles have been
         condensed  or  omitted  pursuant  to such  rules and  regulations.  The
         accompanying  condensed  consolidated  financial statements reflect all
         adjustments  which are, in the opinion of  management,  necessary  to a
         fair statement of the results for the interim periods  presented.  Such
         adjustments  are  of  a  normal  recurring  nature.   The  accompanying
         financial  statements  include the consolidated  accounts of the former
         Independence  Bancorp,  Bergen  County,  New  Jersey,  for all  periods
         presented.  Independence Bancorp was merged into Commerce Bancorp, Inc.
         on January 21, 1997 and its wholly-owned  subsidiary bank, Independence
         Bank of New Jersey,  was thereafter  renamed Commerce  Bank/North.  The
         transaction  was  accounted  for as a  pooling  of  interests.  Certain
         amounts  in  prior  periods  have  been  reclassified  for  comparative
         purposes.  No  restructuring  charges were recorded in connection  with
         this acquisition.

                  These condensed  consolidated  financial  statements should be
         read in conjunction with the audited financial statements and the notes
         thereto included in the registrant's Annual Report for the period ended
         December  31,  1996.  The results for the three  months ended March 31,
         1997 are not necessarily indicative of the results that may be expected
         for the year ended December 31, 1997.

                  The consolidated  financial statements include the accounts of
         Commerce  Bancorp,  Inc. (the  "Company") and all of its  subsidiaries,
         including    Commerce   Bank,   N.A.    ("Commerce    NJ"),    Commerce
         Bank/Pennsylvania,   N.A.,  Commerce  Bank/Shore,  N.A.,  and  Commerce
         Bank/North.   All   material   intercompany   transactions   have  been
         eliminated.

B.       Commitments

                  In  the  normal   course  of   business,   there  are  various
         outstanding commitments to extend credit, such as letters of credit and
         unadvanced   loan   commitments,   which  are  not   reflected  in  the
         accompanying  consolidated  financial  statements.  Management does not
         anticipate any material losses as a result of these transactions.

C.       Employee Stock Ownership Plan (ESOP) Debt Guarantee

                  The Company has  guaranteed a debt  obligation of its Employee
         Stock  Ownership Plan ("ESOP")  which  originated at $7,500,000 and has
         been reduced to $3,077,000 through principal  reductions.  Accordingly,
         the loan amount is  reflected  in the  Company's  consolidated  balance
         sheet  as a  liability  and  an  equal  amount,  representing  deferred
         employee benefits,  has been recorded as a deduction from stockholders'
         equity.  The ESOP  obtained  the loan in 1990 to acquire a new class of
         Company Cumulative Convertible Preferred Stock (Series C) at a price of
         $18.00 per share.

                                       4
<PAGE>

         The  loan  was   refinanced  in  1994,  and  is  payable  in  quarterly
         installments  with the final  payment due January  28,  2000.  The loan
         bears  interest at a variable  rate,  although the rate can be fixed at
         future  repricing dates in accordance  with the loan agreement.  As the
         Company makes annual  contributions to the ESOP,  these  contributions,
         plus dividends from the Company's  Series C Preferred Stock held by the
         ESOP, will be used to repay the loan.

D.       Recent Accounting Statement

                           In February, 1997, the Financial Accounting Standards
         Board issued Statement No. 128, "Earnings per Share," which is required
         to be adopted on December 31, 1997.  At that time,  the Company will be
         required to change the method  currently  used to compute  earnings per
         share and to restate all prior periods.  Under the new requirements for
         calculating  primary  earnings per share,  the dilutive effect of stock
         options  will be  excluded.  The  impact  is  expected  to result in an
         increase in primary earnings per share for the quarters ended March 31,
         1997 and March 31, 1996 of $.03 and $.01 per share,  respectively.  The
         impact of Statement 128 on the calulation of fully diluted earnings per
         share for these quarters is not expected to be material.

                                       5
<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation

         Capital Resources

                  At March 31, 1997, stockholders' equity totaled $204.4 million
         or 6.11% of total assets,  compared to $204.1 million or 6.31% of total
         assets at December 31, 1996.

                  The table below  presents  the  Company's  and  Commerce  NJ's
         risk-based and leverage ratios at March 31, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                   Per Regulatory Guidelines
                                          Actual                Minimum          "Well Capitalized"
                                    Amount        Ratio    Amount        Ratio    Amount       Ratio

March 31, 1997
Company
   Risk based capital ratios:
<S>                               <C>             <C>      <C>            <C>    <C>              <C>
     Tier 1                       $213,082        12.65%   $67,369        4.00%  $101,054         6.00%
     Total capital                 255,626        15.18    134,739        8.00    168,424        10.00
   Leverage ratio                  213,082         6.58     97,133        3.00    161,888         5.00

Commerce NJ
   Risk based capital ratios:
     Tier 1                       $149,347        13.44%   $44,463        4.00%   $66,694         6.00%
     Total capital                 161,923        14.57     88,926        8.00    111,157        10.00
   Leverage ratio                  149,347         7.01     63,918        3.00    106,530         5.00


March 31, 1996
Company
   Risk based capital ratios:
     Tier 1                       $179,270        12.66%   $56,644        4.00%   $84,966         6.00%
     Total capital                 218,526        15.43    113,288        8.00    141,611        10.00
   Leverage ratio                  179,270         6.48     83,019        3.00    138,365         5.00

Commerce NJ 
   Risk based capital ratios:
     Tier 1                       $138,680        14.45%   $38,396        4.00%   $57,593         6.00%
     Total capital                 149,701        15.60     76,791        8.00     95,989        10.00
   Leverage ratio                  138,680         7.35     56,572        3.00     94,287         5.00
</TABLE>


                At March 31, 1997, the Company's consolidated capital levels and
         each of the Company's bank  subsidiaries met the regulatory  definition
         of a "well capitalized" financial institution, i.e., a leverage capital
         ratio exceeding 5%, a Tier 1 risk-based capital ratio exceeding 6%, and
         a total risk-based capital ratio exceeding 10%.  Management believes as
         of March 31,  1997,  that the  Company  and its  subsidiaries  meet all
         capital adequacy requirements to which they are subject.


                                       6
<PAGE>

         Deposits

                  Total deposits at March 31, 1997 were $3.07 billion, up $482.1
         million, or 19% over total deposits of $2.59 billion at March 31, 1996,
         and up by $152.8  million,  or 5% from year-end  1996.  Deposit  growth
         during the first three months of 1997 was largely from core deposits in
         all categories.  In addition, the Company experienced  "same-store core
         deposit  growth" of 11.2% at March 31,  1997 as  compared to deposits a
         year ago.

         Interest Rate Sensitivity and Liquidity

                  An interest  rate  sensitive  asset or  liability is one that,
         within a defined time period, either matures or experiences an interest
         rate change in line with general market interest  rates.  The objective
         of  interest  rate  risk  management  is  to  monitor  and  manage  the
         sensitivity of net interest income to changing interest rates and other
         factors in order to meet the Company's overall financial goals.

                  Management  considers the simulation of net interest income in
         different  interest rate  environments  to be the best indicator of the
         Company's  interest rate risk. Income simulation  analysis captures not
         only the potential of all assets and  liabilities to mature or reprice,
         but also the probability  that they will do so. Income  simulation also
         attends to the relative interest rate sensitivities of these items, and
         projects  their  behavior  over an  extended  period of time.  Finally,
         income simulation  permits management to assess the probable effects on
         the balance  sheet not only of changes in interest  rates,  but also of
         proposed strategies for responding to them.

                  The Company's income  simulation model analyzes  interest rate
         sensitivity  by projecting net income over the next 24 months in a flat
         rate scenario versus net income in alternative interest rate scenarios.
         Management  continually  reviews  and refines  its  interest  rate risk
         management  process  in  response  to the  changing  economic  climate.
         Currently, the Company's model projects a proportionate 200 basis point
         change  during the next  year,  with rates  remaining  constant  in the
         second year. The Company's  Asset/Liability Committee (ALCO) policy has
         established  that  interest  income   sensitivity  will  be  considered
         acceptable if net income in the above  interest rate scenario is within
         15% of net  income in the flat  rate  scenario  in the  first  year and
         within  30% over the two year  time  frame.  At  March  31,  1997,  the
         Company's  income  simulation  model  indicates an acceptable  level of
         interest rate risk.

                  In the event the Company's  interest rate risk models indicate
         an unacceptable  level of risk, the Company could undertake a number of
         actions that would reduce this risk, including the sale of a portion of
         its  available  for  sale  portfolio,  or the  use of  risk  management
         strategies  such as interest  rate swaps and caps,  or the extension of
         the maturities of its short-term borrowings.

                  Management  also  monitors  interest  rate risk by utilizing a
         market value of equity model. The model assesses the impact of a change
         in interest  rates on the market value of all the Company's  assets and
         liabilities,  as  well  as any  off  balance  sheet  items.  The  model
         calculates the market value of the Company's  assets and liabilities in
         excess of book value in the current rate  scenario,  and then  compares
         the excess of market value over book value given an immediate 200 basis
         point change in rates.  The Company's  ALCO policy  indicates  that the
         level of interest rate risk is  unacceptable if the immediate 200 basis
         point  change  would result in the loss of 70% or 


                                       7
<PAGE>

         more of the excess of market  value over book value in the current rate
         scenario. At March 31, 1997, the market value of equity model indicates
         an acceptable level of interest rate risk.

                  Liquidity  involves  the  Company's  ability to raise funds to
         support asset growth or decrease assets to meet deposit withdrawals and
         other  borrowing  needs,  to  maintain  reserve   requirements  and  to
         otherwise  operate  the  Company on an  ongoing  basis.  The  Company's
         liquidity  needs  are met by  growth  in core  deposits,  its  cash and
         federal funds sold position,  cash flow from its amortizing  investment
         and loan portfolios,  as well as the use of short-term  borrowings,  as
         required.

         Short-Term Borrowings

                  Short-term  borrowings,  or other borrowed  money,  consist of
         securities sold under  agreement to repurchase.  During the first three
         months of 1997, these  borrowings were used as an additional  source of
         funding for the investment  portfolio and to fund loan growth. At March
         31, 1997,  short-term  borrowings aggregated $25.0 million, as compared
         to $70.0  million at  December  31,  1996,  and had an average  rate of
         5.77%.

         Interest Earning Assets

                  For the three  month  period  ended March 31,  1997,  interest
         earning  assets  increased  $102.5  million from $2.92 billion to $3.02
         billion.  This increase was primarily in investment  securities and the
         loan portfolio as described below.

         Loans

                  During the first three months of 1997,  loans  increased $39.0
         million from $1.27 billion to $1.31 billion.  At March 31, 1997,  loans
         represented 42% of total deposits and 39% of total assets.

                  The increase in the loan  portfolio was due primarily to loans
         secured by 1-4 family  residential  properties  (including  home equity
         loans) and loans secured by commercial real estate properties.

         Investments

                In  total,  for the  first  three  months  of  1997,  securities
         increased  $64.4 million from $1.62 billion to $1.68  billion.  Deposit
         growth and other  funding  sources were used to increase the  Company's
         investment  portfolio.  The  available  for sale  portfolio  rose $44.9
         million to $812.4 million from $767.5 million at year-end 1996, and the
         securities held to maturity portfolio increased $26.6 million to $864.1
         million from $837.5 million. At March 31, 1997, the average life of the
         investment  portfolio was approximately 6.2 years, and the duration was
         approximately 4.5 years.

                Short-term  investments  (Federal  funds  sold)  decreased  $1.3
         million from $27.0  million at year-end  1996 to $25.7 million at March
         31, 1997. At March 31, 1997,  total  securities  and Federal funds sold
         aggregated $1.71 billion and represented 51% of total assets.

                In connection  with the  acquisition  of  Independence  Bancorp,
         management  reclassified  $83.8 million of investment  securities  from
         held to maturity to available for sale during the first quarter.
         Unrealized losses on those securities transferred were $840 thousand.

                                       8
<PAGE>

         Net Income

                Net income for the first  quarter of 1997 was $9.4  million,  an
         increase of $2.3 million  over the $7.1 million  recorded for the first
         quarter of 1996. On a per share basis, fully diluted net income for the
         first  quarter of 1997 was $.56 per common  share  compared to $.44 per
         common share for the first quarter of 1996.

                Return on average  assets  (ROA) and  return on  average  equity
         (ROE)  for  the  first   quarter  of  1997  were   1.17%  and   18.26%,
         respectively,  compared to 1.02% and 15.70%, respectively, for the same
         1996 period.

          Net Interest Income

                Net interest  income totaled $34.5 million for the first quarter
         of 1997,  an increase of $5.5 million or 19% from $29.0  million in the
         first quarter of 1996. The  improvement in net interest  income was due
         primarily to volume increases in the loan and investment portfolios.

         Noninterest Income

                Noninterest  income  totaled $12.9 million for the first quarter
         of 1997,  an increase of $5.7  million or 79% from $7.2  million in the
         first  quarter of 1996.  The  increase  was due  primarily to increased
         other  operating  income,  which rose $5.3 million over the prior year,
         including  $4.7 million of revenues  from Commerce  National  Insurance
         Services, Inc. (Commerce Insurance), the insurance brokerage subsidiary
         formed in the fourth quarter of 1996. In addition,  deposit charges and
         service fees  increased $1.2 million from the first quarter of 1996 due
         to higher transaction volumes. These increases offset a decrease in net
         investment  securities gains of $771 thousand from the first quarter of
         1996.

         Noninterest Expense

                  For the first  quarter of 1997,  noninterest  expense  totaled
         $31.2 million,  an increase of $6.8 million or 28% over the same period
         in 1996. Contributing to this increase was new branch activity over the
         past twelve months,  with the number of branches  increasing from 59 at
         March 31, 1996 to 68 at March 31, 1997,  and the  formation of Commerce
         Insurance in the fourth quarter of 1996. With the addition of these new
         offices and the insurance business,  staff, facilities,  marketing, and
         related expenses rose accordingly. Other noninterest expenses rose $831
         thousand  over the  first  quarter  of  1996.  This  increase  resulted
         primarily from expenses associated with the acquisition of Independence
         Bancorp and increased provisions for non-credit-related losses.

                  The  Company's   operating   efficiency   ratio   (noninterest
         expenses,  less other real estate,  divided by net interest income plus
         noninterest  income excluding  non-recurring  gains) was 64.83% for the
         first  three  months of 1997 as  compared  to 67.36%  for the same 1996
         period.

          Loan and Asset Quality

                  Total non-performing  assets  (non-performing  loans and other
         real  estate,  excluding  loans  past  due 90 days or  more  and  still
         accruing  interest)  at March 31, 1997 were $18.8  million,  or

                                       9
<PAGE>

         .56% of total assets  compared to $19.5 million or .60% of total assets
         at December 31, 1996 and $19.9 million or .71% of total assets at March
         31, 1996.

                  Total non-performing loans (non-accrual loans and restructured
         loans,  excluding  loans  past due 90 days or more and  still  accruing
         interest)  at March 31, 1997 were $10.7  million or .82% of total loans
         compared to $11.2  million or .89% of total loans at December  31, 1996
         and $10.2  million or .93% of total loans at March 31,  1996.  At March
         31, 1997,  loans past due 90 days or more and still  accruing  interest
         amounted to $300  thousand  compared to $259  thousand at December  31,
         1996 and $693 thousand at March 31, 1996.  Additional  loans considered
         as  potential  problem  loans by the  Company's  internal  loan  review
         department  ($13.8 million at March 31, 1997) have been evaluated as to
         risk  exposure in  determining  the adequacy of the  allowance for loan
         losses.

                  Other real estate (ORE) at March 31, 1997 totaled $8.0 million
         compared to $8.3 million at December 31, 1996 and $9.7 million at March
         31, 1996.  These properties have been written down to the lower of cost
         or fair value less disposition costs.

                  On pages 11 and 12 are tabular  presentation  showing detailed
         information about the Company's  non-performing loans and assets and an
         analysis of the  Company's  allowance for loan losses and other related
         data for March 31, 1997, December 31, 1996, and March 31, 1996.

                                       10
<PAGE>

     The following summary presents information  regarding  non-performing loans
     and assets as of March 31, 1997 and the preceding  four  quarters:  (dollar
     amounts in thousands)

<TABLE>
<CAPTION>
                                              March 31,    Dec. 31,     Sept. 30,     June 30,    March 31,
                                                1997         1996         1996         1996         1996
<S>                                            <C>          <C>          <C>          <C>          <C>   
Non-accrual loans:
  Commercial                                   $1,349       $1,595       $1,293       $1,230       $1,436
  Consumer                                      1,109          956        1,247        1,093        1,063
  Real Estate:
    Construction                                2,155        2,156        2,196        1,687        1,787
    Mortgage                                    6,074        6,005        6,032        6,931        5,611
                                              -------      -------      -------      -------      -------
      Total non-accrual loans                  10,687       10,712       10,768       10,941        9,897
                                              -------      -------      -------      -------      -------

Restructured loans
  Commercial                                       21           21           21           22          144
  Consumer                                                      29           29           59           60
  Real Estate:
    Construction
    Mortgage                                                   481          500                        84
                                              -------      -------      -------      -------      -------
      Total restructured loans                     21          531          550           81          288
                                              -------      -------      -------      -------      -------

  Total non-performing loans                   10,708       11,243       11,318       11,022       10,185
                                              -------      -------      -------      -------      -------

Other real estate                               8,042        8,252        8,323        8,606        9,694
                                              -------      -------      -------      -------      -------

Total non-performing assets                    18,750       19,495       19,641       19,628       19,879
                                              -------      -------      -------      -------      -------

Loans past due 90 days or more
  and still accruing                              300          259          632          923          693
                                              -------      -------      -------      -------      -------

Total non-performing assets and
  loans past due 90 days or more              $19,050      $19,754      $20,273      $20,551      $20,572
                                              =======      =======      =======      =======      =======

Total non-performing loans as a
  percentage of total period-end
  loans                                          0.82%        0.89%        0.92%        0.93%        0.93%

Total non-performing assets as a
  percentage of total period-end assets          0.56%        0.60%        0.64%        0.66%        0.71%

Total non-performing assets and loans
  past due 90 days or more as a
  percentage of total period-end assets          0.57%        0.61%        0.66%        0.69%        0.73%

Allowance for loan losses as a
  percentage of total non-performing
  loans                                           183%         160%         149%         150%         160%

Allowance for loan losses as a percentage
  of total period-end loans                      1.50%        1.42%        1.38%        1.39%        1.49%

Total non-performing assets and loans
  past due 90 days or more as a
  percentage of stockholders' equity and
  allowance for loan losses                         9%           9%          10%          10%          11%
</TABLE>

                                       11

<PAGE>
        The following table presents, for the periods indicated,  an analysis of
        the allowance for loan losses and other related data: (dollar amounts in
        thousands)
<TABLE>
<CAPTION>
                                                                          Year
                                             Three Months Ended           Ended
                                            03/31/97       03/31/96     12/31/96
<S>                                          <C>             <C>           <C>    
Balance at beginning of period                $17,975        $16,014        $16,014
Provisions charged to operating expenses        1,626            794          4,857
                                             --------       --------       --------
                                               19,601         16,808         20,871
Recoveries on loans charged-off:
  Commercial                                       53             66            286
  Consumer                                         72             94            274
  Real estate                                      18              8             95
                                             --------       --------       --------
Total recoveries                                  143            168            655

Loans charged-off:
  Commercial                                      (42)          (186)        (1,202)
  Consumer                                       (158)          (169)        (1,046)
  Real estate                                       0           (365)        (1,303)
                                             --------       --------       --------
Total charged-off                                (200)          (720)        (3,551)
                                             --------       --------       --------
Net charge-offs                                   (57)          (552)        (2,896)
                                             --------       --------       --------

Balance at end of period                      $19,544        $16,256        $17,975
                                             ========       ========       ========


Net charge-offs as a percentage of
average loans outstanding                        0.02%          0.21%          0.25%
</TABLE>
                                       12
<PAGE>

                           PART II. OTHER INFORMATION


Item 4.           Submission of Matters to a Vote of Securities Holders

                  A Special Meeting of the  Registrants's  Shareholders was held
on January 8, 1997. The only item of business acted upon at the Special  Meeting
was a proposal to approve  the  issuance  of shares of the  Registrant's  common
stock in connection  with the merger of  Independence  Bancorp with and into the
Registrant.  The  number  of votes  cast for and  against  the  proposal  was as
follows:

                  For        Against        Abstain   Broker-Non-Votes
               7,345,964      891,638        50,617          0

Item 6.           Exhibits and Reports on Form 8-K

                  (a)      Exhibit 11 - Computation of Net Income Per Share

                           A  Current  Report  on Form 8-K , dated  January  28,
                           1997, relating to the consummation of the acquisition
                           of Independence  Bancorp,  Inc. was filed on February
                           4, 1997.

                                       13
<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.



                                          COMMERCE BANCORP, INC.
                                              (Registrant)



  May 14,1997
    (Date)                                 C. EDWARD JORDAN, JR.
                                          EXECUTIVE VICE PRESIDENT
                                        (PRINCIPAL FINANCIAL OFFICER)