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 June 30, 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                                  15,893,337
         (Title of Class)                      (No. of Shares Outstanding
                                                     as of  8/08/97)



Series C ESOP Cumulative Con-
   vertible Preferred Stock                              417,000
         (Title of Class)                      (No. of Shares Outstanding
                                                     as of  8/08/97)


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES




                                      INDEX



                                                                            Page


PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets (unaudited)
             June 30, 1997 and December 31, 1996 ..........................1

          Consolidated Statements of Income (unaudited) 
            Three months ended June 30, 1997 and June 30, 1996 
            and six months ended June 30, 1997 and June 30, 1996 ..........2

          Consolidated Statements of Cash Flows (unaudited)
             Six months ended June 30, 1997 and June 30, 1996 .............3

          Notes to Consolidated Financial Statements (unaudited) ........4-5

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operation ...........................6-13

PART II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders ............14

Item 6.   Exhibits and Reports on Form 8-K ...............................15

<PAGE>
                     Commerce Bancorp, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                         June 30,         December 31,
     (dollars in thousands)                                                                1997              1996
<S>                                                                                     <C>               <C>       
Assets
     Cash and due from banks                                                            $  183,937        $  181,858
     Federal funds sold                                                                                       26,975
                                                                                        ----------        ----------
               Cash and cash equivalents                                                   183,937           208,833
     Mortgages held for sale                                                                 2,675             1,314
     Trading securities                                                                     25,677            15,327
     Securities available for sale                                                         939,782           767,487
     Securities held to maturity:
          U.S. Government agency and mortgage-backed obligations                           890,995           797,045
          Obligations of state and political subdivisions                                   24,706            22,674
          Other securities                                                                  18,986            17,793
                                                                                        ----------        ----------
               Total securities held to maturity
                    (market value 1997-$914,019; 1996-$815,888)                            934,687           837,512
     Loans                                                                               1,361,884         1,266,855
               Less allowance for loan losses                                               20,371            17,975
                                                                                        ----------        ----------
                                                                                         1,341,513         1,248,880
     Bank premises and equipment, net                                                      100,031            94,339
     Other assets                                                                           69,677            58,460
                                                                                        ----------        ----------
                                                                                        $3,597,979        $3,232,152
                                                                                        ==========        ==========

Liabilities
     Deposits:
          Demand:
            Interest-bearing                                                            $  972,697        $  884,310
            Noninterest-bearing                                                            701,623           626,664
          Savings                                                                          691,820           638,660
          Time                                                                             821,139           770,036
                                                                                        ----------        ----------
            Total deposits                                                               3,187,279         2,919,670

     Other borrowed money                                                                   90,000            70,000
     Other liabilities                                                                      15,727            12,185
     Obligation to Employee Stock Ownership Plan (ESOP)                                      2,821             3,333
     Trust Capital Securities - Commerce Capital Trust I                                    57,500
     Long-term debt                                                                         23,000            23,000
                                                                                        ----------        ----------
                                                                                         3,376,327         3,028,188

Stockholders'
Equity
     Common stock, 15,828,784 shares issued (15,689,167 shares in 1996)                     24,732            23,546
     Series C preferred stock, 417,000 shares authorized, issued and outstanding
          (liquidating preference: $18.00 per share totaling $7,506)                         7,506             7,506
     Series A preferred stock                                                                                     30
     Capital in excess of par or stated value                                              168,310           144,551
     Retained earnings                                                                      25,549            36,086
                                                                                        ----------        ----------
                                                                                           226,097           211,719
     Less commitment to ESOP                                                                 2,821             4,403
     Less treasury stock, at cost, 100,159 shares in 1997
          (267,378 in 1996)                                                                  1,624             3,352
                                                                                        ----------        ----------
               Total stockholders' equity                                                  221,652           203,964
                                                                                        ----------        ----------

                                                                                        $3,597,979        $3,232,152
                                                                                        ==========        ==========
</TABLE>
                                       1
<PAGE>
                     Commerce Bancorp, Inc. and Subsidiaries
                        Consolidated Statements of Income
                                   (unaudited)
<TABLE>
<CAPTION>
                                                              Three Months Ended        Six Months Ended
                                                                  June 30,                  June 30,
          (dollars in thousands, 
          except per share amounts)                          1997         1996         1997         1996
<S>                                                        <C>          <C>          <C>          <C>     
Interest
income    Interest and fees on loans                       $ 29,819     $ 25,575     $ 57,932     $ 49,981
          Interest on investments                            29,010       23,166       55,824       44,848
          Other interest                                        319          352          731        1,553
                                                           --------     --------     --------     --------
            Total interest income                            59,148       49,093      114,487       96,382
                                                           --------     --------     --------     --------

Interest
expense   Interest on deposits:
            Demand                                            5,838        4,839       11,309        9,285
            Savings                                           4,108        3,152        7,878        6,165
            Time                                             10,926        9,417       21,592       19,737
                                                           --------     --------     --------     --------
              Total interest on deposits                     20,872       17,408       40,779       35,187
          Interest on other borrowed money                    1,004          612        1,464          643
          Interest on long-term debt                            818          506        1,324        1,012
                                                           --------     --------     --------     --------
              Total interest expense                         22,694       18,526       43,567       36,842
                                                           --------     --------     --------     --------

          Net interest income                                36,454       30,567       70,920       59,540
          Provision for loan losses                           1,326          774        2,952        1,568
                                                           --------     --------     --------     --------
          Net interest income after
               provision for loan losses                     35,128       29,793       67,968       57,972

Non-
interest
income    Deposit charges and service fees                    6,463        5,291       12,661       10,327
          Other operating income                              7,108        2,107       13,859        3,545
          Net investment securities gains                         0           48            0          819
                                                           --------     --------     --------     --------
            Total noninterest income                         13,571        7,446       26,520       14,691
                                                           --------     --------     --------     --------

Non-
interest
expense   Salaries                                           12,669        9,044       24,571       17,423
          Benefits                                            2,949        2,155        5,695        4,415
          Occupancy                                           3,260        2,943        6,594        5,951
          Furniture and equipment                             4,440        3,397        8,481        6,492
          Office                                              3,305        2,614        6,394        4,981
          Audit and regulatory fees and assessments             379          470          754          893
          Marketing                                           1,421        1,144        2,660        2,247
          Other real estate (net)                               492          501          961        1,006
          Other                                               4,192        3,354        8,203        6,537
                                                           --------     --------     --------     --------
            Total noninterest expenses                       33,107       25,622       64,313       49,945
                                                           --------     --------     --------     --------

          Income before income taxes                         15,592       11,617       30,175       22,718
          Provision for federal and state income taxes        5,558        4,107       10,707        8,047
                                                           --------     --------     --------     --------
          Net income                                         10,034        7,510       19,468       14,671

          Dividends on preferred stocks                         140          280          281          561
                                                           --------     --------     --------     --------
          Net income applicable to common stock            $  9,894     $  7,230     $ 19,187     $ 14,110
                                                           ========     ========     ========     ========

          Net income per common and common
           equivalent share:
            Primary                                        $   0.60     $   0.51     $   1.17     $   1.00
                                                           --------     --------     --------     --------
            Fully diluted                                  $   0.58     $   0.48     $   1.14     $   0.93
                                                           --------     --------     --------     --------
          Average common and common equivalent
           shares outstanding:
            Primary                                          16,438       14,137       16,368       14,078
                                                           --------     --------     --------     --------
            Fully diluted                                    17,155       15,536       17,127       15,492
                                                           --------     --------     --------     --------
          Cash dividends declared, common stock            $   0.20     $   0.17     $   0.40     $   0.33
                                                           ========     ========     ========     ========
</TABLE>
                                       2
<PAGE>

                     Commerce Bancorp, Inc. And Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                    Six Months Ended June 30,
                     (dollars in thousands)                                            1997            1996
<S>                                                                                 <C>               <C>   
Operating
activities           Net income                                                     $  19,468         14,671
                     Adjustments to reconcile net income to net cash
                       provided by operating activities:
                         Provision for loan losses                                      2,952          1,568
                         Provision for depreciation, amortization and accretion         8,124          7,892
                         Gains on sales of securities available for sale                                (899)
                         Proceeds from sales of mortgages held for sale                10,598         13,442
                         Originations of mortgages held for sale                      (11,959)       (11,504)
                         Net loan (chargeoffs)                                           (556)        (1,055)
                         Net (increase) in trading securities                         (10,350)        (2,763)
                         (Increase) decrease in other assets                          (11,145)         6,384
                         Increase in other liabilities                                  3,542          2,238
                                                                                    ---------      ---------
                              Net cash provided by operating activities                10,674         29,974

Investing
activities          Proceeds from the sales of securities available for sale                0         56,583
                    Proceeds from the maturity of securities available for sale        60,692         25,912
                    Proceeds from the maturity of securities held to maturity          53,481         49,874
                    Purchase of securities available for sale                        (151,963)      (225,202)
                    Purchase of securities held to maturity                          (234,236)       (42,981)
                    Net increase in loans                                            (101,598)      (141,171)
                    Proceeds from sales of loans                                        6,569          4,290
                    Purchases of premises and equipment                               (12,141)       (12,692)
                                                                                    ---------      ---------
                              Net cash used by investing activities                  (379,196)      (285,387)

Financing
activities          Net increase in demand and savings deposits                       216,506        137,499
                    Net increase in time deposits                                      51,103         23,263
                    Net increase in other borrowed money                               20,000         61,800
                    Dividends paid                                                     (5,730)        (4,549)
                    Proceeds from issuance of Trust Capital Securities                 57,500
                    Proceeds from issuance of common stock under
                      dividend reinvestment and other stock plans                       3,103          2,228

                    Other                                                               1,144            213
                                                                                    ---------      ---------
                              Net cash provided  by financing activities              343,626        220,454

                    Decrease in cash and cash equivalents                             (24,896)       (34,959)
                    Cash and cash equivalents at beginning of year                    208,833        209,857
                                                                                    ---------      ---------
                    Cash and cash equivalents at end of period                      $ 183,937      $ 174,898
                                                                                    =========      =========

                    Supplemental disclosures of cash flow information:
                      Cash paid during the period for:
                        Interest                                                    $  44,088      $  36,063
                        Income taxes                                                   11,547          8,241
                                                                                    ---------      ---------
</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  of  Bergen  County,   New  Jersey,   for  all  periods  presented.
     Independence Bancorp was merged into Commerce Bancorp,  Inc. on January 21,
     1997 and its wholly-owned bank subsidiary, Independence Bank of New Jersey,
     was 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 June 30, 1997 and the six
     months ended June 30, 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., Commerce Bank/North, and Commerce Capital Trust
     I. 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.   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 $2,821,000 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. 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 June 30, 1997 and June 30, 1996 of $.03 and $.04 per
     share, respectively,  and an increase in primary earnings per share for the
     six  months  ended  June 30,  1997  and June 30,  1996 of $.06 and $.07 per
     share,  respectively.  The impact of Statement  128 on the  calculation  of
     fully diluted  earnings per share for these  quarters is not expected to be
     material.

E.   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.

                                       5
<PAGE>

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

          Capital Resources

               At June 30, 1997,  stockholders' equity totaled $221.7 million or
          6.16% of total  assets,  compared to $204.0  million or 6.31% of total
          assets at December 31, 1996.

               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.

               The  table  below   presents  the  Company's  and  Commerce  NJ's
          risk-based and leverage ratios at June 30, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                               Per Regulatory Guidelines
                                                    Actual                    Minimum              "Well Capitalized"
                                            Amount         Ratio       Amount         Ratio       Amount         Ratio
<S>                                        <C>             <C>        <C>             <C>        <C>              <C>  
June 30, 1997
Company
   Risk based capital ratios:
     Tier 1                                $280,148        15.58%     $ 71,914        4.00%      $107,872         6.00%
     Total capital                          323,519        17.99       143,829        8.00        179,786        10.00
   Leverage ratio                           280,148         8.14       103,237        3.00        172,062         5.00

Commerce NJ Risk based capital ratios:
     Tier 1                                $152,428        12.70%     $ 48,020        4.00%      $ 72,030         6.00%
     Total capital                          165,604        13.79        96,040        8.00        120,051        10.00
   Leverage ratio                           152,428         6.74        67,878        3.00        113,130         5.00

June 30, 1996
Company
   Risk based capital ratios:
     Tier 1                                $186,451        12.23%     $ 60,963        4.00%      $ 91,445         6.00%
     Total capital                          225,978        14.83       121,927        8.00        152,409        10.00
   Leverage ratio                           186,451         6.44        86,863        3.00        144,771         5.00

Commerce NJ Risk based capital ratios:
     Tier 1                                $142,282        13.83%     $ 41,154        4.00%      $ 61,731         6.00%
     Total capital                          153,473        14.92        82,308        8.00        102,885        10.00
   Leverage ratio                           142,282         7.21        59,229        3.00         98,716         5.00
</TABLE>

                                       6
<PAGE>

               At June 30, 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 June 30,  1997,  that the  Company and its
          subsidiaries meet all capital adequacy  requirements to which they are
          subject.





          Deposits

               Total  deposits  at June 30, 1997 were $3.19  billion,  up $497.3
          million, or 18% over total deposits of $2.69 billion at June 30, 1996,
          and up by $267.6  million,  or 9% from year-end  1996.  Deposit growth
          during the first six months of 1997 was largely from core  deposits in
          all categories.  In addition, the Company experienced "same-store core
          deposit  growth" of 9.5% at June 30,  1997 as  compared  to deposits a
          year ago for those branches open for more than two years.

          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 June 30,
          1997, the Company's  income  simulation  model indicates an acceptable
          level of interest rate risk.

                                       7
<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,  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 60% or more of the
          excess of market value over book value in the current  rate  scenario.
          At June 30,  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 six
          months of 1997, these borrowings were used as an additional  source of
          funding for the investment  portfolio and to fund loan growth. At June
          30, 1997,  short-term  borrowings  aggregated $90.0 million and had an
          average rate of 5.67%.

          Interest Earning Assets

               For the six month period ended June 30,  1997,  interest  earning
          assets  increased  $349.2 million from $2.92 billion to $3.26 billion.
          This  increase was  primarily in  investment  securities  and the loan
          portfolio as described below.

          Loans

               During  the  first  six  months of 1997,  loans  increased  $95.0
          million from $1.27 billion to $1.36 billion.  At June 30, 1997,  loans
          represented 43% of total deposits and 38% 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.

                                       8
<PAGE>

          Investments

               In total, for the first six months of 1997,  securities increased
          $279.8 million from $1.62 billion to $1.90 billion. Deposit growth and
          other funding  sources were used to increase the Company's  investment
          portfolio.  The available for sale  portfolio  rose $172.3  million to
          $939.8   million  from  $767.5  million  at  year-end  1996,  and  the
          securities  held to  maturity  portfolio  increased  $97.2  million to
          $934.7 million from $837.5 million. At June 30, 1997, the average life
          of the  investment  portfolio  was  approximately  5.9 years,  and the
          duration  was  approximately  4.4  years.  At  June  30,  1997,  total
          securities  and  Federal  funds  sold  aggregated  $1.90  billion  and
          represented 53% of total assets.

          Net Income

               Net income for the second quarter of 1997 was $10.0  million,  an
          increase of $2.5 million over the $7.5 million recorded for the second
          quarter of 1996. Net income for the first six months of 1997 was $19.5
          million,  an increase of $4.8 million over the $14.7 million  recorded
          in the first six months of 1996.  On a per share basis,  fully diluted
          net income for the second  quarter of 1997 and the first six months of
          1997 were $.58 and $1.14 per common  share  compared  to $.48 and $.93
          per common share for the respective 1996 periods.

               Return on average assets (ROA) and return on average equity (ROE)
          for the second  quarter of 1997 were 1.17% and  19.15%,  respectively,
          compared to 1.04% and 16.97%, respectively,  for the same 1996 period.
          ROA and ROE for the first six  months of 1997 were  1.17% and  18.71%,
          respectively, compared to 1.04% and 16.39% a year ago.

          Net Interest Income

               Net interest  income totaled $36.5 million for the second quarter
          of 1997,  an increase of $5.9 million or 19% from $30.6 million in the
          second quarter of 1996.  Net interest  income for the first six months
          of 1997 totaled $70.9 million,  up $11.4 million or 19% from the first
          six months of 1996. The  improvement  in net interest  income for both
          periods  was  due  primarily  to  volume  increases  in the  loan  and
          investment portfolios.

          Noninterest Income

               Noninterest  income  totaled $13.6 million for the second quarter
          of 1997,  an increase of $6.1  million or 82% from $7.4 million in the
          second  quarter of 1996.  The increase was due  primarily to increased
          other operating  income,  which rose $5.0 million over the prior year,
          including  $3.9 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 second
          quarter of 1996 due to higher transaction volumes.

                                       9
<PAGE>

               For the first  six  months of 1997,  noninterest  income  totaled
          $26.5 million,  an increase of $11.8 million or 81% from $14.7 million
          in the first six months of 1996.  Other  operating  income  rose $10.3
          million over the first six months of 1996,  including  $8.6 million of
          revenues from  Commerce  Insurance.  Deposit  charges and service fees
          rose  $2.3  million  over the  prior  year due to  higher  transaction
          volumes.   These  increases   offset  a  decrease  in  net  investment
          securities gains of $819 thousand from the first six months of 1996.

          Noninterest Expense

               For the second quarter of 1997, noninterest expense totaled $33.1
          million,  an increase  of $7.5  million or 29% 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 62 at
          June 30, 1996 to 69 at June 30,  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
          $838 thousand over the first quarter of 1996.  This increase  resulted
          primarily from higher bank card-related services charges and increased
          provisions for non-credit-related losses.

               For the first six  months of 1997,  noninterest  expense  totaled
          $64.3 million,  an increase of $14.4 million or 29% over $49.9 million
          in the first six months of 1996. Contributing to this increase was new
          branch  activity  and the  formation  of Commerce  Insurance  as noted
          above. Other noninterest expenses rose $1.7 million over the first six
          months of 1996. This increase resulted primarily from higher bank-card
          related service charges,  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 65.02% for the
          first six  months  of 1997 as  compared  to  66.66%  for the same 1996
          period. The Company's efficiency ratio remains slightly above its peer
          group primarily due to its aggressive growth expansion  activities and
          investments in technology.

          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 June 30, 1997 were $17.3 million, or .48% of total assets
          compared to $19.5 million or .60% of total assets at December 31, 1996
          and $19.6 million or .66% of total assets at June 30, 1996.

               Total  non-performing  loans  (non-accrual loans and restructured
          loans,  excluding  loans  past due 90 days or more and still  accruing
          interest)  at June 30, 1997 were $10.3  million or .76% of total loans
          compared to $11.2  million or .89% of total loans at December 31, 1996
          and $11.0 million or .93% of total loans at June 30, 1996. At June 30,
          1997,  loans  past due 90 days or more  and  still  accruing  interest
          amounted to $458  thousand  compared to $259  thousand at December 31,
          1996 and $923 thousand at June 30, 1996.  Additional  loans considered
          as  potential  problem  loans by the  Company's  internal  loan review
          department  ($14.0 million at June 30, 1997) have been evaluated as to
          risk  exposure in  determining  the adequacy of the allowance for loan
          losses.

                                       10
<PAGE>

               Other real estate  (ORE) at June 30, 1997  totaled  $7.0  million
          compared to $8.3 million at December 31, 1996 and $8.6 million at June
          30, 1996. These properties have been written down to the lower of cost
          or fair value less disposition costs.

               On  pages 12 and 13 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 June 30, 1997, December 31, 1996, and June 30, 1996.

                                       11
<PAGE>
The following summary presents  information  regarding  non-performing loans and
assets as of June 30, 1997 and the preceding four quarters:  (dollar  amounts in
thousands)

<TABLE>
<CAPTION>
                                              June 30,     March 31,   December 31, September 30,  June 30,
                                                1997         1997         1996         1996         1996
<S>                                           <C>          <C>          <C>          <C>          <C>    
Non-accrual loans:
  Commercial                                  $ 1,057      $ 1,349      $ 1,595      $ 1,293      $ 1,230
  Consumer                                      1,254        1,109          956        1,247        1,093
  Real Estate:
    Construction                                2,155        2,155        2,156        2,196        1,687
    Mortgage                                    5,818        6,074        6,005        6,032        6,931
                                              -------      -------      -------      -------      -------
      Total non-accrual loans                  10,284       10,687       10,712       10,768       10,941
                                              -------      -------      -------      -------      -------

Restructured loans
  Commercial                                       20           21           21           21           22
  Consumer                                                                   29           29           59
  Real Estate:
    Construction
    Mortgage                                                                481          500
                                              -------      -------      -------      -------      -------
      Total restructured loans                     20           21          531          550           81
                                              -------      -------      -------      -------      -------

  Total non-performing loans                   10,304       10,708       11,243       11,318       11,022
                                              -------      -------      -------      -------      -------

Other real estate                               7,035        8,042        8,252        8,323        8,606
                                              -------      -------      -------      -------      -------

Total non-performing assets                    17,339       18,750       19,495       19,641       19,628
                                              -------      -------      -------      -------      -------

Loans past due 90 days or more
  and still accruing                              458          300          259          632          923
                                              -------      -------      -------      -------      -------

Total non-performing assets and
  loans past due 90 days or more              $17,797      $19,050      $19,754      $20,273      $20,551
                                              =======      =======      =======      =======      =======

Total non-performing loans as a
  percentage of total period-end
  loans                                          0.76%        0.82%        0.89%        0.92%        0.93%

Total non-performing assets as a
  percentage of total period-end assets          0.48%        0.56%        0.60%        0.64%        0.66%

Total non-performing assets and loans
  past due 90 days or more as a
  percentage of total period-end assets          0.49%        0.57%        0.61%        0.66%        0.69%

Allowance for loan losses as a
  percentage of total non-performing
  loans                                           198%         183%         160%         149%         150%

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

Total non-performing assets and loans
  past due 90 days or more as a
  percentage of stockholders' equity and
  allowance for loan losses                         7%           9%           9%          10%          10%
</TABLE>

                                       12
<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
                                                 Six Months Ended            Ended
                                             06/30/97       06/30/96       12/31/96
<S>                                          <C>            <C>            <C>     
Balance at beginning of period               $ 17,975       $ 16,014       $ 16,014
Provisions charged to operating expenses        2,952          1,568          4,857
                                             --------       --------       --------
                                               20,927         17,582         20,871
Recoveries on loans charged-off:
  Commercial                                      104            112            286
  Consumer                                        134            134            274
  Real estate                                      42             72             95
                                             --------       --------       --------
Total recoveries                                  280            318            655

Loans charged-off:
  Commercial                                     (369)          (274)        (1,202)
  Consumer                                       (432)          (395)        (1,046)
  Real estate                                     (35)          (704)        (1,303)
                                             --------       --------       --------
Total charged-off                                (836)        (1,373)        (3,551)
                                             --------       --------       --------
Net charge-offs                                  (556)        (1,055)        (2,896)
                                             --------       --------       --------

Balance at end of period                     $ 20,371       $ 16,527       $ 17,975
                                             ========       ========       ========



Net charge-offs as a percentage of
average loans outstanding                        0.08%          0.19%          0.25%
</TABLE>

                                       13
<PAGE>

                           PART II. OTHER INFORMATION


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

          The Annual Meeting of the  Registrant's  Shareholders was held on June
          17, 1997.  The only items of business acted upon at the Annual Meeting
          were (i) the  election  of nine  directors  for one year  terms;  (ii)
          approval of the amendment to the  Company's  Restated  Certificate  of
          Incorporation  to increase  the number of shares of Common  Stock that
          the Company is authorized to issue by 30,000,000 shares and the number
          of shares of Preferred  Stock that the Company is  authorized to issue
          by 5,000,000 shares; and (iii) approval of the Commerce Bancorp,  Inc.
          1997  Employee  Stock  Option  Plan.  The  number  of votes  cast for,
          against, or withheld,  as well as the number of abstentions and broker
          non-votes was as follows:

          (i)  Election of directors:

           Name of                                (Withhold Authority) 
           Nominee                       For           Against

           Vernon W. Hill II          14,307,516       135,981
           C. Edward Jordan, Jr.      14,310,791       132,706
           David Baird, IV            14,308,724       134,773
           Robert C. Beck             14,188,388       255,109
           Jack R Bershad             14,179,749       263,748
           Joseph M. Buckelew         14,298,689       144,808
           Steven M. Lewis            14,310,881       132,616 
           Morton N. Kerr             14,301,479       142,018
           Daniel J. Ragone           14,296,997       146,500 
           Joseph T. Tarquini, Jr     14,124,991       132,506 

          (ii) Approval of the amendment to the Company's  Restated  Certificate
               of Incorporation to increase the number of shares of Common Stock
               that the Company is authorized to issue by 30,000,000  shares and
               the  number of shares of  Preferred  Stock  that the  Company  is
               authorized to issue by 5,000,000 shares:

                                                                    Broker
                  For             Against         Abstain          Non-Vote
               8,948,995         2,685,048        98,970          2,710,484

          (iii)Approval  of the  Commerce  Bancorp,  Inc.  1997  Employee  Stock
               Option Plan:

                                                                    Broker
                  For             Against         Abstain          Non-Vote
               9,016,928         2,881,733        136,057         2,408,779

                                       14
<PAGE>

Item 6.   Exhibits and Reports on Form 8-K

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

               No reports on Form 8-K were filed during the second quarter ended
               June 30, 1997.

                                       15


<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)




                                       16





August 13,1997
   (Date)                                        C. EDWARD JORDAN, JR.
                                               EXECUTIVE VICE PRESIDENT
                                            (PRINCIPAL FINANCIAL OFFICER)