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, 1999

                                       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                               27,570,311   
       (Title of Class)                    (No. of Shares Outstanding
                                                 as of  5/07/99)





<PAGE>
                     COMMERCE BANCORP, INC. AND SUBSIDIARIES


                                      INDEX

                                                                           Page

PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Consolidated Balance Sheets (unaudited)
                           March 31, 1999 and December 31, 1998

                  Consolidated  Statements  of Income  (unaudited)  
                           Three months ended March 31, 1999 and 
                           March 31, 1998

                  Consolidated Statements of Cash Flows (unaudited) 
                           Three months ended March 31, 1999 and 
                           March 31, 1998

                  Notes to Consolidated Financial Statements (unaudited)

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

Item 3.           Quantitative and Qualitative Disclosures About Market Risk

PART II.          OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K


                                      -1-
<PAGE>

                     Commerce Bancorp, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                                   (unaudited)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                 March 31,         December 31,
                                                                                               ----------------------------------
                    (dollars in thousands)                                                          1999               1998
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>                <C>     
Assets              Cash and due from banks                                                          $206,500           $267,220
                    Federal funds sold                                                                 17,500             10,395
                                                                                               ----------------------------------
                                     Cash and cash equivalents                                        224,000            277,615
                    Loans held for sale                                                                10,559             22,418
                    Trading securities                                                                 54,236             85,359
                    Securities available for sale                                                   1,520,192          1,305,004
                    Securities held to maturity                                                     1,086,212          1,220,874
                (market value 03/99-$1,083,054; 12/98-$1,223,667)
                    Loans                                                                           2,475,496          2,280,326
                                   Less allowance for loan losses                                      33,149             31,265
                                                                                               ----------------------------------
                                                                                                    2,442,347          2,249,061
                    Bank premises and equipment, net                                                  155,593            147,448
                    Other assets                                                                      140,687            116,411
                                                                                               ----------------------------------
                                                                                                   $5,633,826         $5,424,190
                                                                                               ==================================

Liabilities         Deposits:
                                   Demand:
                                     Interest-bearing                                             $ 1,674,636        $ 1,682,958
                                     Noninterest-bearing                                            1,129,285          1,162,126
                                   Savings                                                          1,001,224            973,324
                                   Time                                                             1,236,792          1,110,400
                                                                                               ----------------------------------
                                     Total deposits                                                 5,041,937          4,928,808

                    Other borrowed money                                                              134,790             27,845
                    Other liabilities                                                                  40,468             60,027
                    Obligation to Employee Stock Ownership Plan (ESOP)                                  1,026              1,282
                    Trust Capital Securities - Commerce Capital Trust I                                57,500             57,500
                    Long-term debt                                                                     23,000             23,000
                                                                                               ----------------------------------
                                                                                                    5,298,721          5,098,462

Stockholders'       Common stock, 27,578,515 shares issued (27,373,983 shares in 1998)                 43,087             40,988
Equity              Capital in excess of par or stated value                                          291,154            236,928
                    Retained earnings                                                                   2,362             43,712
                    Accumulated other comprehensive income                                              1,152              7,006
                                                                                               ----------------------------------
                                                                                                      337,755            328,634
                    Less commitment to ESOP                                                             1,026              1,282

                     Less treasury stock, at cost                                                       1,624              1,624
                                                                                               ----------------------------------
                                     Total stockholders' equity                                       335,105            325,728
                                                                                               ----------------------------------

                                                                                                   $5,633,826         $5,424,190
                                                                                               ==================================
</TABLE>
<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)                            1999           1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>            <C>    
Interest        Interest and fees on loans                                                   $48,003        $37,428
income          Interest on investments                                                       39,007         38,291
                Other interest                                                                   156            527
                                                                                        ----------------------------
                     Total interest income                                                    87,166         76,246
                                                                                        ----------------------------

Interest        Interest on deposits:
expense            Demand                                                                      9,625          7,915
                   Savings                                                                     4,795          5,003
                   Time                                                                       15,007         14,906
                                                                                        ----------------------------
                     Total interest on deposits                                               29,427         27,824
                Interest on other borrowed money                                                 775          2,002
                Interest on long-term debt                                                     1,782          1,782
                                                                                        ----------------------------
                     Total interest expense                                                   31,984         31,608
                                                                                        ----------------------------

                Net interest income                                                           55,182         44,638
                Provision for loan losses                                                      2,184          1,437
                                                                                        ----------------------------
                Net interest income after provision for loan losses                           52,998         43,201

Noninterest     Deposit charges and service fees                                               9,740          8,486
income          Other operating income                                                        17,128         12,997
                Net investment securities gains                                                  865              9
                                                                                        ----------------------------
                     Total noninterest income                                                 27,733         21,492
                                                                                        ----------------------------

Noninterest     Salaries                                                                      23,512         17,710
expense         Benefits                                                                       5,056          3,787
                Occupancy                                                                      5,093          4,371
                Furniture and equipment                                                        6,943          5,737
                Office                                                                         5,298          4,007
                Audit and regulatory fees and assessments                                        572            554
                Marketing                                                                      1,663          1,933
                Other real estate (net)                                                          474            420
                Other                                                                          8,866          6,402
                                                                                        ----------------------------
                     Total noninterest expenses                                               57,477         44,921
                                                                                        ----------------------------

                Income before income taxes                                                    23,254         19,772
                Provision for federal and state income taxes                                   7,773          6,989
                                                                                        ============================
                Net income                                                                    15,481         12,783
                                                                                        ============================

                Net income per common and common equivalent share:
                   Basic                                                                       $0.56          $0.49
                                                                                        ----------------------------
                   Diluted                                                                     $0.54          $0.46
                                                                                        ----------------------------
                Average common and common equivalent shares outstanding:
                   Basic                                                                      27,401         26,264
                                                                                        ----------------------------
                   Diluted                                                                    28,661         27,826
                                                                                        ----------------------------
                Cash dividends declared, common stock                                          $0.21          $0.17
                                                                                        ============================
</TABLE>

                                      -2-
<PAGE>

                     Commerce Bancorp, Inc. And Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                                              Three Months Ended
                        (dollars in thousands)                                                    March 31,
                                                                                           -------------------------
                                                                                              1999          1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>           <C>   
Operating activities    Net income                                                             $15,481       12,783
                        Adjustments to reconcile net income to net cash
                           provided by operating activities:
                              Provision for loan losses                                          2,184        1,437
                              Provision for depreciation, amortization and accretion             7,606        5,766
                              Gains on sales of securities available for sale                     (865)          (9)
                              Proceeds from sales of mortgages held for sale                    39,794       17,478
                              Originations of mortgages held for sale                          (27,935)     (25,712)
                              Net loan (chargeoffs)                                               (300)        (592)
                              Net decrease (increase) in trading securities                     31,123       (1,887)
                              Increase in other assets                                         (21,119)        (277)
                              (Decrease) increase in other liabilities                         (19,559)      15,087
                      ----------------------------------------------------------------------------------------------
                                       Net cash provided  by financing activities               26,410       24,074

Investing activities    Proceeds from the sales of securities available for sale               185,808      104,207
                        Proceeds from the maturity of securities available for sale             96,870       64,018
                        Proceeds from the maturity of securities held to maturity               77,100       68,708
                        Purchase of securities available for sale                             (415,463)    (137,255)
                        Purchase of securities held to maturity                                (35,522)    (222,287)
                        Net increase in loans                                                 (197,854)     (74,029)
                        Proceeds from sales of loans                                             2,684        2,360
                        Purchases of premises and equipment                                    (13,217)      (8,480)
                        --------------------------------------------------------------------------------------------
                                       Net cash used by financing activities                  (299,594)    (202,758)

Financing activities    Net increase (decrease) in demand and savings deposits                 (13,263)     123,249
                        Net increase in time deposits                                          126,392      276,684
                        Net increase(decrease) in other borrowed money                         106,945     (198,300)
                        Dividends paid                                                          (5,074)      (4,180)
                        Proceeds from issuance of common stock under
                             dividend reinvestment and other stock plans                         4,564        2,924
                        Purchase of treasury stock
                        Other                                                                        4        8,317
                        --------------------------------------------------------------------------------------------
                                       Net cash provided  by financing activities              219,568      208,694

                        (Decrease) increase in cash and cash equivalents                       (53,615)      30,010
                        Cash and cash equivalents at beginning of year                         277,615      204,776
                        --------------------------------------------------------------------------------------------
                        Cash and cash equivalents at end of period                            $224,000     $234,786
                        --------------------------------------------------------------------------------------------

                        Supplemental disclosures of cash flow information:  
                          Cash paid during the period for:
                            Interest                                                          $ 29,024      $29,712
                            Income taxes                                                            18          125
                          Other noncash activities:
                            Transfer of securities to securities available for sale             91,010            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
         Community First Banking Company (CFBC),  Tinton Falls, New Jersey,  and
         the former Prestige Financial Corp. (PFC), Flemington,  New Jersey, for
         all periods  presented.  Effective January 15, 1999,  Commerce Bancorp,
         Inc.  (the  Company)  acquired  CFBC,  and  CFBC's   wholly-owned  bank
         subsidiary,  Tinton Falls State Bank, was merged with and into Commerce
         Bank/Shore,  N.A. Also effective January 15, 1999, the Company acquired
         PFC, and PFC's  wholly-owned bank subsidiary,  Prestige State Bank, was
         re-chartered as a national bank and renamed Commerce Bank/Central, N.A.
         The transactions  were accounted for as poolings of interests.  Certain
         amounts  in  prior  periods  have  been  reclassified  for  comparative
         purposes.

         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 on Form 10-K for the period
         ended  December 31, 1998.  The results for the three months ended March
         31, 1999 are not  necessarily  indicative  of the  results  that may be
         expected for the year ended December 31, 1999.

         The consolidated  financial statements include the accounts of Commerce
         Bancorp,  Inc. and all of its  subsidiaries,  including  Commerce Bank,
         N.A.  (Commerce  NJ),  Commerce   Bank/Pennsylvania,   N.A.,   Commerce
         Bank/Shore,  N.A., Commerce Bank/North,  Commerce  Bank/Central,  N.A.,
         Commerce Capital Trust I, and Commerce  Capital  Markets,  Inc. (CCMI).
         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.

                                      -4-
<PAGE>
C.       Comprehensive Income

             Total  comprehensive  income,  which for the Company  included  net
         income and unrealized  gains and losses on the Company's  available for
         sale   securities,   amounted  to  $9.6  million  and  $16.1   million,
         respectively, for the three months ended March 31, 1999 and 1998.

D.       Segment Information

         Selected segment information is as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                           Three Months Ended March 31, 1999          Three Months Ended March 31, 1998
                                        Community       Parent/                     Community     Parent/
                                           Banks         Other          Total         Banks        Other           Total
-------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>            <C>           <C>           <C>            <C>    
Net interest income                       $56,799       $(1,617)       $55,182       $46,305       $(1,667)       $44,638
Provision for loan losses                   2,184            --          2,184         1,437            --          1,437
                                       ----------    ----------     ----------    ----------    ----------     ----------

Net interest income after provision        54,615        (1,617)        52,998        44,868        (1,667)        43,201
Noninterest income                         14,788        12,945         27,733        13,089         8,403         21,492
Noninterest expense                        47,094        10,383         57,477        38,326         6,595         44,921
                                       ----------    ----------     ----------    ----------    ----------     ----------
Income before income taxes                 22,309           945         23,254        19,631           141         19,772
Income tax expense                          7,329           444          7,773         6,921            68          6,989
                                       ----------    ----------     ----------    ----------    ----------     ----------
Net income                                $14,980          $501        $15,481       $12,710           $73        $12,783
                                       ==========    ==========     ==========    ==========    ==========     ==========

Average assets (in millions)           $4,870,848      $567,219     $5,438,067    $4,076,668      $424,147     $4,500,815
                                       ==========    ==========     ==========    ==========    ==========     ==========

</TABLE>

                                      -5-
<PAGE>
E.       Recent Accounting Statement

         In June  1998,  the FASB  issued  Statement  No.  133  "Accounting  for
         Derivative  Instruments and Hedging Activities" (FAS 133). FAS 133 will
         require the Company to recognize all  derivatives  on the balance sheet
         at fair value. Derivatives that are not hedges must be adjusted to fair
         value through  income.  If the derivative is a hedge,  depending on the
         nature of the hedge,  changes in the fair value of the derivative  will
         either be offset  against the change in fair value of the hedged  asset
         or liability  through  earnings or  recognized  in other  comprehensive
         income until the hedged item is recognized in earnings. The ineffective
         portion of a  derivative's  change in fair  value  will be  immediately
         recognized  in  earnings.  FAS 133  becomes  effective  for the Company
         beginning  January 1, 2000.  Although  early adoption is allowed in any
         quarterly period after June 1998, the Company has no plans to adopt FAS
         133 prior to the effective date. Based on the Company's  minimal use of
         derivatives  at the  current  time,  management  does  not  expect  the
         adoption  of FAS  133 to  have  a  significant  effect  on  results  of
         operations  or the  financial  position of the  Company.  However,  the
         impact from  adopting  FAS 133 will depend on the nature and purpose of
         the derivative instruments in use by the Company at that time.

F.       Trust Capital Securities

         On June 9, 1997,  the  Company  issued  $57.5  million  of 8.75%  Trust
         Capital  Securities  through  Commerce  Capital Trust I, a newly formed
         Delaware business trust subsidiary of the Company.  The net proceeds of
         the offering  will be used for general  corporate  purposes,  which may
         include contributions to subsidiary banks to fund their operations, the
         financing of one or more future acquisitions, repayment of indebtedness
         of the Company or of its subsidiary banks, investments in or extensions
         of  credit  to its  subsidiaries,  or the  repurchase  of shares of the
         Company's  outstanding  common  stock.  All $57.5  million of the Trust
         Capital  Securities  qualify as Tier 1 capital for  regulatory  capital
         purposes.

                                      -6-
<PAGE>
G.       Earnings Per Share

         The calculation of earnings per share follows (in thousands, except for
          per share amounts):

                                              Three Months Ended
                                                   March 31   
                                                1999        1998
                                             --------     -------

Basic:

Net income applicable to common stock        $ 15,481     $12,783
                                             ========     =======

Average common shares outstanding              27,401      26,264
                                             ========     =======

Net income per common share - basic          $   0.56     $  0.49
                                             ========     =======

Diluted:

Net income applicable to common stock
         on a diluted basis                  $ 15,481     $12,783
                                             ========     =======

Average common shares outstanding              27,401      26,264
Additional shares considered in diluted
         computation assuming:
           Exercise of stock options            1,260       1,138
           Conversion of preferred stock                      424
                                             --------     -------
Average common shares outstanding
         on a diluted basis                    28,661      27,826
                                             ========     =======

Net income per common share - diluted        $   0.54     $  0.46
                                             ========     =======


                                      -7-
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operation

         Capital Resources

         At March 31, 1999, stockholders' equity totaled $335.1 million or 5.95%
         of total assets, compared to $325.7 million or 6.01% of total assets at
         December 31, 1998.

         The table below presents the Company's and Commerce NJ's risk-based and
         leverage ratios at March 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                                        Per Regulatory Guidelines
                                                      Actual                        Minimum              "Well Capitalized"
                                               Amount          Ratio        Amount           Ratio      Amount           Ratio
<S>       <C>                                 <C>                <C>       <C>                <C>      <C>                 <C> 
March 31, 1999
Company
   Risk based capital ratios:
     Tier 1                                   $386,771           11.64%    $132,954           4.00%    $199,431            6.00%
     Total capital                             438,320           13.19      265,908           8.00      332,385           10.00
   Leverage ratio                              386,771            7.12      217,174           4.00      271,468            5.00

Commerce NJ Risk based capital ratios:
     Tier 1                                   $200,137           10.92%    $ 73,300           4.00%    $109,950            6.00%
     Total capital                             218,152           11.90      146,600           8.00      183,250           10.00
   Leverage ratio                              200,137            6.57      121,771           4.00      152,214            5.00

March 31, 1998
Company
   Risk based capital ratios:
     Tier 1                                   $350,375           15.18%    $ 92,319           4.00%    $138,478            6.00%
     Total capital                             398,370           17.26      184,638           8.00      230,797           10.00
   Leverage ratio                              350,375            7.80      134,709           3.00      224,515            5.00

Commerce NJ Risk based capital ratios:
     Tier 1                                   $177,218           13.08%    $ 54,185           4.00%    $ 81,278            6.00%
     Total capital                             191,617           14.15      108,371           8.00      135,464           10.00
   Leverage ratio                              177,218            6.50       81,760           3.00      136,267            5.00

</TABLE>

                                      -8-
<PAGE>
         At March 31, 1999, 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
         that as of March 31, 1999,  the Company and its  subsidiaries  meet all
         capital adequacy requirements to which they are subject.

         Deposits

         Total deposits at March 31, 1999 were $5.04 billion, up $857.4 million,
         or 20% over total  deposits of $4.18 billion at March 31, 1998,  and up
         by $113.1 million,  or 2% from year-end 1998. Deposit growth during the
         first three  months of 1999  included  core  deposit  growth in savings
         balances  as well  as  growth  from  the  public  sector.  The  Company
         experienced "same-store core deposit growth" of 21.1% at March 31, 1999
         as  compared to  deposits a year ago for those  branches  open for more
         than two years.

         Interest Rate Sensitivity and Liquidity

         The  Company's  risk of loss arising  from adverse  changes in the fair
         market value of  financial  instruments,  or market  risk,  is composed
         primarily of interest rate risk. The primary objective of the Company's
         asset/liability  management  activities  is to  maximize  net  interest
         income, while maintaining  acceptable levels of interest rate risk. The
         Company's   Asset/Liability   Committee   (ALCO)  is  responsible   for
         establishing  policies to limit  exposure to interest rate risk, and to
         ensure  procedures  are  established to monitor  compliance  with these
         policies.  The  guidelines  established  by ALCO  are  reviewed  by the
         Company's Board of Directors.

         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 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,  1999,  the  Company's  income  simulation  model
         indicates  net income  would  decrease  by 0.32% and 6.22% in the first
         year and over a two year time frame,  respectively,  if rates decreased
         as  described  above,  as  compared  to a decrease  of 1.31% and 4.03%,
         respectively,  at March 31, 1998. At March 31, 1999, the model projects
         that net income would decrease by 2.81% and 1.98% in the first year and
         over a two  year  time  frame,  respectively,  if  rates  increased  as
         described  above,  as  compared  to a  decrease  of  6.69%  and  9.25%,
         respectively,  at March 31, 1998.  All of these net income  projections
         are within an  acceptable  level of interest  rate risk pursuant to the
         policy established by ALCO.

                                      -9-
<PAGE>
         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, 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 60% or more of the  excess of market  value  over
         book value in the current rate scenario.  At March 31, 1999, 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  primarily  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 primarily of
         securities  sold under  agreements to repurchase and overnight lines of
         credit,  and are used to meet short term  funding  needs.  At March 31,
         1999,  short-term  borrowings  aggregated  $134.8  million  and  had an
         average rate of 5.23%,  as compared to $27.8 million at an average rate
         of 4.98% at December 31, 1998.

         Interest Earning Assets

         For the three month  period  ended  March 31,  1999,  interest  earning
         assets  increased  $232.7  million from $4.91 billion to $5.15 billion.
         This  increase was  primarily  in  investment  securities  and the loan
         portfolio as described below.

         Loans

         During the first three months of 1999,  loans increased  $193.3 million
         from  $2.25  billion  to  $2.44  billion.  At  March  31,  1999,  loans
         represented 48% of total deposits and 43% of total assets. All segments
         of the loan portfolio  experienced  growth in the first three months of
         1999,  including  loans secured by commercial  real estate  properties,
         commercial loans, and consumer loans.

                                      -10-
<PAGE>
         Investments

         In total,  for the first  three  months of 1999,  securities  increased
         $49.4 million from $2.61 billion to $2.66  billion.  Deposit growth and
         other funding  sources were used to increase the  Company's  investment
         portfolio. The available for sale portfolio increased $215.2 million to
         $1.52  billion at March 31,  1999 from $1.31  billion at  December  31,
         1998, and the securities held to maturity  portfolio  decreased  $134.7
         million  to $1.09  billion  at March 31,  1999 from  $1.22  billion  at
         year-end  1998. In connection  with the  acquisitions  of CFBC and PFC,
         management  reclassified  $91.0 million of investment  securities  from
         held to maturity  to  available  for sale  during the first  quarter of
         1999.   Unrealized   losses  on  those   securities   transferred  were
         approximately  $330  thousand.  The  portfolio  of  trading  securities
         decreased  $31.1  million from  year-end 1998 to $54.2 million at March
         31,  1999.  At March  31,  1999,  the  average  life of the  investment
         portfolio   was   approximately   4.2  years,   and  the  duration  was
         approximately   3.2  years.  At  March  31,  1999,   total   securities
         represented 47% of total assets.

         Net Income 

         Net income for the first quarter of 1999 was $15.5 million, an increase
         of $2.7  million or 21% over the $12.8  million  recorded for the first
         quarter of 1998. On a per share basis, diluted net income for the first
         quarter of 1999 was $0.54 per common share compared to $0.46 per common
         share for the first quarter of 1998.

         Return on average  assets (ROA) and return on average  equity (ROE) for
         the first quarter of 1999 were 1.14% and 18.76%, respectively, compared
         to 1.14% and 17.25%, respectively, for the same 1998 period.

         Net Interest Income

         Net interest  income  totaled  $55.2  million for the first  quarter of
         1999,  an  increase of $10.5  million or 24% from $44.6  million in the
         first quarter of 1998. The  improvement in net interest  income was due
         primarily to volume increases in the loan and investment portfolios.

         Noninterest Income

         Noninterest income totaled $27.7 million for the first quarter of 1999,
         an  increase  of $6.2  million or 29% from  $21.5  million in the first
         quarter of 1998.  The  increase was due  primarily  to increased  other
         operating  income,  which  rose  $4.1  million  over  the  prior  year,
         including  increased  revenues of $2.1 million from  Commerce  National
         Insurance Services, Inc. (Commerce Insurance),  the Company's insurance
         brokerage subsidiary,  and $1.5 million from CCMI. In addition, deposit
         charges and service fees  increased $1.3 million over the first quarter
         of 1998 primarily due to higher transaction  volumes.  The Company also
         recorded $865 thousand in net investment  securities gains in the first
         quarter of 1999.

                                      -11-
<PAGE>
         Noninterest Expense

         For the  first  quarter  of 1999,  noninterest  expense  totaled  $57.5
         million,  an increase  of $12.6  million or 28% over the same period in
         1998.  Contributing  to this increase was new branch  activity over the
         past twelve months,  with the number of branches  increasing from 89 at
         March 31, 1998 to 97 at March 31, 1999,  and the  expansion of Commerce
         Insurance  and CCMI.  With the  addition of these new  offices,  staff,
         facilities,  and related expenses rose  accordingly.  Other noninterest
         expenses  rose  $2.5  million  over the  first  quarter  of 1998.  This
         increase  resulted  primarily  from  higher bank  card-related  service
         charges,   increased  business  development  expenses,   and  increased
         provisions for non-credit-related losses.

         The Company's operating  efficiency ratio (noninterest  expenses,  less
         other  real  estate  expense,  divided  by  net  interest  income  plus
         noninterest  income excluding  non-recurring  gains) was 69.47% for the
         first  three  months of 1999 as  compared  to 67.30%  for the same 1998
         period.  The  Company's  efficiency  ratio remains above its peer group
         primarily due to its aggressive growth expansion activities.

         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,  1999  were  $14.5  million,  or 0.26% of total
         assets  compared to $14.7  million or 0.27% of total assets at December
         31, 1998 and $18.4 million or 0.40% of total assets at March 31, 1998.

         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, 1999 were $8.9 million or 0.36% of total loans compared to
         $8.6  million or 0.38% of total  loans at  December  31, 1998 and $12.4
         million or 0.71% of total loans at March 31,  1998.  At March 31, 1999,
         loans past due 90 days or more and still accruing  interest amounted to
         $696  thousand  compared to $945 thousand at December 31, 1998 and $1.2
         million at March 31, 1998.  Additional  loans  considered  as potential
         problem loans by the Company's  internal loan review  department ($19.3
         million at March 31, 1999) have been  evaluated as to risk  exposure in
         determining the adequacy of the allowance for loan losses.

         Other real estate (ORE) at March 31, 1999 totaled $5.6 million compared
         to $6.1  million at  December  31,  1998 and $6.0  million at March 31,
         1998.  These  properties have been written down to the lower of cost or
         fair value less disposition costs.

         On  pages  xx  and  xx  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, 1999, December 31, 1998, and March 31, 1998.


                                      -12-
<PAGE>
         Year 2000

         The Company  began the process of preparing  its  computer  systems and
         applications   for  the  Year  2000  in  1996.  The  process   involves
         identifying and resolving date recognition problems in computer systems
         and software,  and to a lesser extent, other operating equipment,  that
         could be caused by the date change from December 31, 1999 to January 1,
         2000.

         The Company has completed its assessment of all business processes that
         could be  affected  by the  Year  2000  issue.  Each  business  process
         assessment  included a review of the  information  systems used in that
         process, including hardware and software, involvement of third parties,
         and any other operating equipment.  The Company licenses  substantially
         all software used in conducting  its business from third party vendors.
         All vendors have been contacted  regarding the Year 2000 issue, and the
         Company  continues  to track  the  progress  each  vendor  is making in
         reaching  Year  2000  compliance.  The  Company  is also  working  with
         significant  customers  and  counterparties  to monitor their Year 2000
         efforts.  The Company has all necessary changes in place and tested for
         all mission  critical  systems  (those  systems  defined as  absolutely
         essential   to  the  daily   business   operation   of  the   Company).
         Additionally, the Company has completed certification testing with most
         mission critical service providers.  Changes for most remaining systems
         are in place and testing should be  substantially  completed by the end
         of the second quarter of 1999.  Contingency plans will be completed and
         validated during the second quarter of 1999.

         The Company believes it is taking the appropriate  steps to address all
         Year 2000  issues.  Despite the  Company's  efforts to address the Year
         2000  problem and develop  contingency  plans in the event of Year 2000
         failures,  including  non-compliance  by third parties  (including loan
         customers), there can be no assurance that the Year 2000 issue will not
         materially  adversely impact the Company's financial position,  results
         of operations, or relationships with customers, vendors, or others.

         The  Company  estimates  the  total  cost of the Year  2000  compliance
         process,  including  internal and external  personnel  and any required
         hardware and software modifications, will not exceed $1.0 million.

         Forward-Looking Statements

         The Company may from time to time make written or oral "forward-looking
         statements",  including  statements  contained in the Company's filings
         with the Securities and Exchange Commission (including this Form 10-Q),
         in its  reports  to  stockholders  and in other  communications  by the
         Company,  which are made in good faith by the  Company  pursuant to the
         "safe harbor"  provisions of the Private  Securities  Litigation Reform
         Act of 1995.

         These forward-looking statements include statements with respect to the
         Company's   beliefs,   plans,    objectives,    goals,    expectations,
         anticipations,   estimates   and   intentions,   that  are  subject  to
         significant  risks and uncertainties and are subject to change based on
         various factors (some of which are beyond the Company's  control).  The
         words  "may",  "could",  "should",  "would",  believe",   "anticipate",
         "estimate",  "expect",  "intend",  "plan" and similar  expressions  are
         intended to identify forward-looking statements. The following factors,
         among others, could cause the Company's financial performance to differ
         materially from that expressed in such forward-looking  statements: the
         strength of the United  States  economy in general and the  strength of
         the local  economies  in which the  Company  conducts  operations;  the
         effects  of, and  changes  in,  trade,  monetary  and fiscal  policies,
         including  interest  rate  policies  of the Board of  

                                      -13-
<PAGE>
         Governors  of  the  Federal  Reserve  System  (the  "FRB");  inflation;
         interest   rates,   market  and  monetary   fluctuations;   the  timely
         development of competitive new products and services by the Company and
         the  acceptance  of  such  products  and  services  by  customers;  the
         willingness  of  customers  to  substitute  competitors'  products  and
         services for the  Company's  products and services and vice versa;  the
         impact  of  changes  in  financial   services'  laws  and   regulations
         (including laws concerning taxes,  banking,  securities and insurance);
         technological  changes;  future  acquisitions;  the expense savings and
         revenue  enhancements from acquisitions  being less than expected;  the
         growth and  profitability  of the Company's  noninterest  or fee income
         being  less  than  expected;   unanticipated   regulatory  or  judicial
         proceedings;  changes in consumer  spending and saving habits;  and the
         success of the Company at managing the risks involved in the foregoing.

         The Company  cautions that the foregoing  list of important  factors is
         not   exclusive.   The  Company  does  not   undertake  to  update  any
         forward-looking  statement,  whether  written or oral, that may be made
         from time to time by or on behalf of the Company.

                                      -14-
<PAGE>
The following summary presents  information  regarding  non-performing loans and
assets as of March 31, 1999 and the preceding four quarters:  (dollar amounts in
thousands)
<TABLE>
<CAPTION>
<S>                                                    <C>              <C>             <C>              <C>              <C>   
                                                   March 31,        December 31,    September 30,     June 30,        March 31,
                                                      1999             1998            1998             1998             1998
                                                ---------------  ---------------  --------------  ---------------  ---------------
Non-accrual loans:
       Commercial                                      $2,821           $2,466          $2,417           $2,021           $2,638
       Consumer                                           846              831             782              851              949
       Real estate:
         Construction                                     115              189             587              603              613
         Mortgage                                       4,937            4,849           4,631            5,500            8,026
                                               ---------------  ---------------  --------------  ---------------  ---------------
             Total non-accrual loans                    8,719            8,335           8,417            8,975           12,226
                                               ---------------  ---------------  --------------  ---------------  ---------------

Restructured loans:
       Commercial                                          16               17              17               18               19
       Consumer
       Real estate:
         Construction
         Mortgage                                         117              217             104              109              114
                                               ---------------  ---------------  --------------  ---------------  ---------------
             Total restructured loans                     133              234             121              127              133
                                               ---------------  ---------------  --------------  ---------------  ---------------

       Total non-performing loans                       8,852            8,569           8,538            9,102           12,359
                                               ---------------  ---------------  --------------  ---------------  ---------------

Other real estate                                       5,645            6,081           5,409            5,649            6,029
                                               ---------------  ---------------  --------------  ---------------  ---------------

Total non-performing assets                            14,497           14,650          13,947           14,751           18,388
                                               ---------------  ---------------  --------------  ---------------  ---------------

Loans past due 90 days or more
       and still accruing                                 696              945           2,622            1,187            1,188
                                               ---------------  ---------------  --------------  ---------------  ---------------

Total non-performing assets and
       loans past due 90 days or more                 $15,193          $15,595         $16,569          $15,938          $19,576
                                               ===============  ===============  ==============  ===============  ===============

Total non-performing loans as a
       percentage of total period-end
       loans                                            0.36%            0.38%           0.41%            0.47%            0.71%

Total non-performing assets as a
       percentage of total period-end assets            0.26%            0.27%           0.27%            0.30%            0.40%

Total non-performing assets and loans
       past due 90 days or more as a
       percentage of total period-end assets            0.27%            0.29%           0.33%            0.32%            0.42%

Allowance for loan losses as a
       percentage of total non-performing
       loans                                             374%             365%            332%             293%             202%

Allowance for loan losses as a percentage
       of total period-end loans                        1.34%            1.37%           1.36%            1.36%            1.44%

Total non-performing assets and loans
       past due 90 days or more as a
       percentage of stockholders' equity and
       allowance for loan losses                           4%               4%              5%               5%               6%
</TABLE>

                                      -15-
<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
                                              ----------------------------
                                               03/31/99         03/31/98           12/31/98
                                              -----------       ----------        -----------
<S>                                           <C>              <C>                <C>    
Balance at beginning of period                   $31,265          $24,150            $24,150
Provisions charged to operating expenses           2,184            1,437              8,762
                                              -----------       ----------        -----------
                                                  33,449           25,587             32,912

Recoveries on loans charged-off:
    Commercial                                       220               52                418
    Consumer                                          36               98                305
    Real estate                                        2                9                764
                                              -----------       ----------        -----------
Total recoveries                                     258              159              1,487

Loans charged-off:
    Commercial                                      (368)            (262)            (1,281)
    Consumer                                        (168)            (287)            (1,352)
    Real estate                                      (22)            (202)              (501)
                                              -----------       ----------        -----------
Total charge-offs                                   (558)            (751)            (3,134)
                                              -----------       ----------        -----------
Net charge-offs                                     (300)            (592)            (1,647)
                                              -----------       ----------        -----------

Balance at end of period                         $33,149          $24,995            $31,265
                                              ===========       ==========        ===========



Net charge-offs as a percentage of
average loans outstanding                           0.05  %          0.14  %            0.08  %
</TABLE>


Item 3:  Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------------------

See Item 2 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operation, Interest Rate Sensitivity and Liquidity.

                                      -16-
<PAGE>
                           PART II. OTHER INFORMATION







Item 6. Exhibits and Reports on Form 8-K


         No reports on Form 8-K were filed during the first  quarter ended March
         31, 1999.



                                      -17-
<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, 1999                                /s/ THOMAS J. SUKAY
  (Date)                                        THOMAS J. SUKAY
                                             SENIOR VICE PRESIDENT
                                    (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)




                                      -18-