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 September 30, 1996

                                       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                              11,462,958
         (Title of Class)                   (No. of Shares Outstanding
                                                  as of 11/08/96)



Series C ESOP Cumulative Con-
   vertible Preferred Stock                            417,000
         (Title of Class)                     (No. of Shares Outstanding
                                                   as of 11/08/96)


<PAGE>


                     COMMERCE BANCORP, INC. AND SUBSIDIARIES




                                      INDEX



                                                                            Page


PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets (unaudited)
               September 30, 1996 and December 31, 1995

          Consolidated Statements of Income (unaudited) Three months
               ended September 30, 1996 and September 30, 1995 and
               nine months ended September 30, 1996 and September
               30, 1995

          Consolidated Statements of Cash Flows (unaudited) Nine months
               ended September 30, 1996 and September 30, 1995

          Notes to Consolidated Financial Statements (unaudited)

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

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K





<PAGE>


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

<TABLE>
<CAPTION>
                                                                                    September 30,   December 31,
          (dollars in thousands)                                                        1996           1995
<S>                                                                                  <C>            <C>       
Assets
           Cash and due from banks                                                   $  123,972     $  147,465
           Federal funds sold                                                            12,850         29,550
                                                                                     ----------     ----------
             Cash and cash equivalents                                                  136,822        177,015
           Mortgages held for sale                                                        1,254          5,442
           Trading securities                                                             3,203          8,843
           Securities available for sale                                                765,893        520,314
           Securities held to maturity:
             U.S. Government agency mortgage-backed obligations                         596,154        653,412
             Obligations of state and political subdivisions                             13,084         12,289
             Other securities                                                            17,135         17,001
                                                                                     ----------     ----------
              Total securities held to maturity
               (market value 1996-$597,736; 1995-$671,539)                              626,373        682,702
           Loans                                                                      1,059,380        907,515
             Less allowance for loan losses                                              14,190         13,320
                                                                                     ----------     ----------
                                                                                      1,045,190        894,195
           Bank premises and equipment, net                                              83,796         74,289
           Other assets                                                                  50,191         53,094
                                                                                     ----------     ----------
                                                                                     $2,712,722     $2,415,894
                                                                                     ==========     ==========

Liabilities
           Deposits:
             Demand:
               Interest-bearing                                                      $  729,686     $  657,568
               Noninterest-bearing                                                      493,294        439,609
             Savings                                                                    528,563        485,522
             Time                                                                       733,550        642,399
                                                                                     ----------     ----------
               Total deposits                                                         2,485,093      2,225,098

           Other borrowed money                                                          25,000
           Other liabilities                                                              5,985          1,417
           Obligation to Employee Stock Ownership Plan (ESOP)                             3,590          4,359
           Long-term debt                                                                23,000         23,000
                                                                                     ----------     ----------
                                                                                      2,542,668      2,253,874

Stockholders'                                                                            18,007         16,880
Equity
          Common stock, 11,524,964 shares issued (11,337,719 shares in 1995)
          Series C preferred stock, 417,000 shares authorized, issued and 
             outstanding (liquidating preference: $18.00 per share totaling
             $7,506)                                                                      7,506          7,506
           Capital in excess of par or stated value                                     126,251        112,894
           Retained earnings                                                             23,504         30,723
                                                                                     ----------     ----------
                                                                                        175,268        168,003
           Less commitment to ESOP                                                        3,590          4,359
           Less treasury stock, at cost, 100,159 common shares
             in 1996 (100,159 in 1995)                                                    1,624          1,624
                                                                                     ----------     ----------
             Total stockholders' equity                                                 170,054        162,020
                                                                                     ----------     ----------

                                                                                     $2,712,722     $2,415,894
                                                                                     ==========     ==========
</TABLE>

                                        1
<PAGE>
                     Commerce Bancorp, Inc. and Subsidiaries
                        Consolidated Statements of Income
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                   Three Months Ended         Nine Months Ended
                                                                      September 30,             September 30,
      (dollars in thousands, except per share amounts)             1996         1995         1996          1995
<S>                                                              <C>          <C>          <C>          <C>     
Interest income
      Interest and fees on loans                                 $ 23,580     $ 20,552     $ 67,063     $ 58,901
      Interest on investments                                      21,583       19,986       61,786       61,851
      Other interest                                                  620        1,036        2,215        2,833
                                                                 --------     --------     --------     --------
         Total interest income                                     45,783       41,574      131,064      123,585
                                                                 --------     --------     --------     --------
Interest expense
      Interest on deposits:
         Demand                                                     4,632        4,438       13,031       11,724
         Savings                                                    3,098        2,874        8,617        8,355
         Time                                                       9,343        9,564       27,415       25,101
                                                                 --------     --------     --------     --------
           Total interest on deposits                              17,073       16,876       49,063       45,180
      Interest on other borrowed money                                479          220        1,122        6,379
      Interest on long-term debt                                      507          507        1,519        1,519
                                                                 --------     --------     --------     --------
           Total interest expense                                  18,059       17,603       51,704       53,078
                                                                 --------     --------     --------     --------

      Net interest income                                          27,724       23,971       79,360       70,507
      Provision for loan losses                                       825          388        2,173        1,633
                                                                 --------     --------     --------     --------
      Net interest income after provision for loan losses          26,899       23,583       77,187       68,874

Noninterest income
      Deposit charges and service fees                              5,193        4,249       14,869       11,711
      Other operating income                                        1,813        1,126        4,746        3,054
      Net investment securities gains                                   0           88          517          106
                                                                 --------     --------     --------     --------
           Total noninterest income                                 7,006        5,463       20,132       14,871
                                                                 --------     --------     --------     --------

Noninterest expense
      Salaries                                                      8,349        6,870       23,339       19,469
      Benefits                                                      2,155        1,517        5,888        5,165
      Occupancy                                                     2,636        2,285        7,815        6,222
      Furniture and equipment                                       3,300        2,441        9,241        6,996
      Office                                                        2,326        1,916        6,812        5,259
      Audit and regulatory fees and assessments                     1,753          275        2,563        2,756
      Marketing                                                       967          715        2,985        2,041
      Other real estate (net)                                         400          516        1,300        1,807
      Other                                                         2,682        2,657        8,004        6,767
                                                                 --------     --------     --------     --------
           Total noninterest expenses                              24,568       19,192       67,947       56,482
                                                                 --------     --------     --------     --------

      Income before income taxes                                    9,337        9,854       29,372       27,263
      Provision for federal and state income taxes                  3,329        3,577       10,507        9,927
                                                                 --------     --------     --------     --------
      Net income                                                    6,008        6,277       18,865       17,336

      Dividends on preferred stocks                                   141          141          422          422
                                                                 ========     ========     ========     ========
      Net income applicable to common stock                      $  5,867     $  6,136     $ 18,443     $ 16,914
                                                                 ========     ========     ========     ========

      Net income per common and common equivalent share:
         Primary                                                 $   0.49     $   0.52     $   1.56     $   1.51
                                                                 --------     --------     --------     --------
         Fully diluted                                           $   0.47     $   0.51     $   1.51     $   1.46
                                                                 --------     --------     --------     --------
      Average common and common equivalent shares
        outstanding:
         Primary                                                   11,877       11,566       11,777       11,147
                                                                 --------     --------     --------     --------
         Fully diluted                                             12,521       12,210       12,476       11,897
                                                                 --------     --------     --------     --------
      Cash dividends declared, common stock                      $   0.18     $   0.15     $   0.52     $   0.46
                                                                 ========     ========     ========     ========
</TABLE>
                                        2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                          Nine Months Ended September 30,
       (dollars in thousands)                                                                  1996           1995
<S>                                                                                         <C>            <C>      
Operating 
activities
       Net income                                                                           $  18,865      $  17,336
       Adjustments to reconcile net income to net cash
          provided by operating activities:
             Provision for loan losses                                                          2,173          1,633
             Provision for depreciation, amortization and accretion                            11,838          9,779
             Gains on sales of securities available for sale                                     (517)           (88)
             Proceeds from sales of mortgages held for sale                                    19,200          9,887
             Originations of mortgages held for sale                                          (15,012)       (15,257)
             Net loan (chargeoffs)                                                             (1,303)          (664)
             Net decrease (increase) in trading securities                                      5,640         (1,735)
             Decrease (increase) in other assets                                                7,178         (1,707)
             Increase (decrease) in other liabilities                                           4,568           (961)
                                                                                            ---------      ---------
                                              Net cash provided by operating activities        52,630         18,223

Investing 
activities
       Proceeds from the sales of securities available for sale                                40,561            128
       Proceeds from the maturity of securities available for sale                             19,609         12,943
       Proceeds from the maturity of securities held to maturity                               67,569         63,624
       Purchase of securities available for sale                                             (320,195)       (48,126)
       Purchase of securities held to maturity                                                (13,364)       (11,452)
       Net increase in loans                                                                 (159,218)       (73,257)
       Proceeds from sales of loans                                                             7,353          5,326
       Purchases of premises and equipment                                                    (17,107)       (15,119)
                                                                                            ---------      ---------
                                              Net cash (used) by investing activities        (374,792)       (65,933)

Financing 
activities
       Net increase in demand and savings deposits                                            168,844        137,442
       Net increase in time deposits                                                           91,151        244,215
       Net increase (decrease) in other borrowed money                                         25,000       (312,895)
       Issuance of common stock                                                                               25,774
       Dividends paid                                                                          (6,290)        (5,240)
       Proceeds from issuance of common stock under
            dividend reinvestment and other stock plans                                         3,116          2,112
       Purchase of treasury stock                                                                               (352)
       Other                                                                                      148            147
                                                                                            ---------      ---------
                                              Net cash provided by financing activities       281,969         91,203

       (Decrease) increase in cash and cash equivalents                                       (40,193)        43,493
       Cash and cash equivalents at beginning of year                                         177,015        129,447
                                                                                            ---------      ---------
       Cash and cash equivalents at end of period                                           $ 136,822      $ 172,940
                                                                                            ---------      ---------

       Supplemental disclosures of cash flow information:
         Cash paid during the period for:
           Interest                                                                         $  52,042      $  53,398
           Income taxes                                                                         9,551          9,608
                                                                                            ---------      ---------
</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.   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, 1995. The
         results for the three months ended  September 30, 1996 and for the nine
         months ended September 30, 1996 are not  necessarily  indicative of the
         results that may be expected for the year ended December 31, 1996.

                  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.  and  Commerce  Bank/Shore,  N.A. All material
         intercompany transactions have been eliminated.

B.       Commitments

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

C.       Employee Stock Ownership Plan (ESOP) Debt Guarantee

                  The Company has  guaranteed a debt  obligation of its Employee
         Stock  Ownership Plan ("ESOP")  which  originated at $7,500,000 and has
         been reduced to $3,590,000 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.

                                        4
<PAGE>

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

         Capital Resources

                  At September 30, 1996,  stockholders'  equity  totaled  $170.1
         million or 6.27% of total assets,  compared to $162.0  million or 6.71%
         of total assets at December 31, 1995.

                  The table below  presents a comparison  of the  Company's  and
         each of its three  bank  subsidiaries  risk-based  capital  ratios  and
         leverage ratios to the minimum regulatory  requirements for the periods
         indicated.

<TABLE>
<CAPTION>
                                                                                                       Capital
                                                                                                       Excess
                                                                                      Minimum           as of
                                              September 30,       September 30,     Regulatory       September 30,
                                                  1996                1995         Requirements          1996
                                                                                                    (in thousands)
<S>                                              <C>                <C>            <C>               <C>    
         Company
                Risk based capital ratios:
                  Tier 1                          12.73%             12.84%          4.00%            $118,290
                  Total capital                   15.47              15.92           8.00              101,260
                Leverage ratio                     6.50               6.37           3.00-5.00          92,860 (1)

         Commerce NJ
                Risk based capital ratios:
                  Tier 1                          13.82%             14.78%          4.00%            $102,070
                  Total capital                   14.93              15.92           8.00               72,030
                Leverage ratio                     7.08               7.21           3.00-5.00          82,820 (1)

         Commerce PA
                Risk based capital ratios:
                  Tier 1                          13.50%             11.77%          4.00%           $  15,150
                  Total capital                   14.32              12.69           8.00               10,080
                Leverage ratio                     6.63               6.10           3.00-5.00          11,790 (1)

         Commerce Shore 
                Risk based capital ratios:
                  Tier 1                          14.12%             13.56%          4.00%             $15,480
                  Total capital                   14.99              14.60           8.00               10,700
                Leverage ratio                     6.55               6.18           3.00-5.00          11,710 (1)
<FN>
         (1) Based on a minimum regulatory requirement of 3.00%
</FN>
</TABLE>

                At September 30, 1996, 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%.

                                        5
<PAGE>

         Deposits

                  Total  deposits at September 30, 1996 were $2.49  billion,  up
         $268.9  million,  or 12%  over  total  deposits  of  $2.22  billion  at
         September  30, 1995,  and up by $260.0  million,  or 12% from  year-end
         1995.  Deposit  growth during the first nine months of 1996 was largely
         from core deposits, primarily demand and savings accounts. In addition,
         the Company  experienced  "same-store  core deposit growth" of 10.9% at
         September  30,  1996 as  compared  to  deposits  a year  ago for  those
         branches open for more than one year.

         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 September  30,  1996,  the
         Company's  income  simulation  model  indicates an acceptable  level of
         interest rate risk.

                  In the event the Company's  interest rate risk models indicate
         an unacceptable  level of risk, the Company could undertake a number of
         actions that would reduce this risk, including the sale of a portion of
         its  available  for  sale  portfolio,  or the  use of  risk  management
         strategies such as interest rate swaps and caps. In order to reduce the
         potential  impact  from a dramatic  increase  in  interest  rates,  the
         Company  entered into  interest-rate  cap  agreements  during the first
         quarter of 1995.  The strike price of the  agreements  exceeds  current
         market interest rates. The agreements are for a notional amount of $200
         million for a period of two years.

                  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

                                        6

<PAGE>

         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 increase in rates.  The Company's ALCO policy  indicates that the
         level of interest rate risk is  unacceptable if the immediate 200 basis
         point increase would result in the loss of 70% or more of the excess of
         market value over book value in the current rate scenario. At September
         30,  1996,  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 nine
         months of 1996, these  borrowings were used as an additional  source of
         funding  for the  investment  portfolio  and to fund  loan  growth.  At
         September 30, 1996,  short-term borrowings aggregated $25.0 million and
         had an average rate of 5.38%.

         Interest Earning Assets

                  For the nine month period ended  September 30, 1996,  interest
         earning  assets  increased  $314.6  million from $2.15 billion to $2.47
         billion.  This increase was primarily in investment  securities and the
         loan portfolio as described below.

         Loans

                  During the first nine months of 1996,  loans increased  $151.9
         million from $907.5  million to $1.06  billion.  At September 30, 1996,
         loans represented 43% of total deposits and 39% of total assets.

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

         Investments

                In  total,  for  the  first  nine  months  of  1996,  securities
         increased  $183.6 million from $1.21 billion to $1.40 billion.  Deposit
         growth and other  funding  sources were used to increase the  Company's
         available  for sale  portfolio,  which  rose  $245.6  million to $765.9
         million  from  $520.3  million at  year-end  1995.  Securities  held to
         maturity  decreased from $682.7  million to $626.4  million  reflecting
         payments on the existing portfolio.  At September 30, 1996, the average
         life of the investment  portfolio was  approximately 6.2 years, and the
         duration was approximately 4.4 years.

                                        7

<PAGE>

                Short-term  investments  (Federal  funds sold)  decreased  $16.7
         million  from  $29.6  million  at  year-end  1995 to $12.9  million  at
         September 30, 1996. At September 30, 1996, total securities and Federal
         funds  sold  aggregated  $1.41  billion  and  represented  52% of total
         assets.

         Net Income

                After the imposition of an historic one-time special  assessment
         of  approximately  $1.3 million in  connection  with  recently  enacted
         legislation  to  recapitalize  the Savings  Association  Insurance Fund
         (SAIF),  net income for the third  quarter of 1996 was $6.0  million as
         compared to $6.3 million  recorded for the third  quarter of 1995.  Net
         income for the first nine months of 1996 was $18.9 million, an increase
         of $1.5  million  over the $17.3  million  recorded  in the first  nine
         months of 1995. The decrease in net income in the third quarter of 1996
         as compared to the third quarter of 1995 was due to increased  overhead
         expenses  (  including  the  SAIF  assessment)  and  higher  loan  loss
         provisions,   which  offset   increases  in  net  interest  income  and
         noninterest  income.  The  increase  in net  income  for the first nine
         months of 1996 as  compared to the first nine months of 1995 was due to
         increases in net interest income and noninterest  income,  which offset
         slightly higher loan loss provisions and increased  overhead expenses (
         including the SAIF assessment). On a per share basis, fully diluted net
         income for the third  quarter of 1996 and for the first nine  months of
         1996 was $.47 and $1.51 per common share compared to $.51 and $1.46 per
         common share for the respective 1995 periods.

                Excluding the SAIF assessment,  net income for the third quarter
         and the first nine months of 1996 was $6.8 million and $19.7 million as
         compared to $6.3 and $17.3 million for the respective 1995 periods.  On
         a per  share  basis,  fully  diluted  net  income  excluding  the  SAIF
         assessment  for the third  quarter of 1996 and the first nine months of
         1996 was $.55 and $1.58 per common share compared to $.51 and $1.46 per
         common share for the respective 1995 periods.

                After the SAIF  assessment,  return on average  assets (ROA) and
         return on average  equity (ROE) for the third quarter of 1996 were .91%
         and 14.70%,  respectively,  compared to 1.06% and 16.60%, respectively,
         for the same 1995 period. ROA and ROE for the first nine months of 1996
         were .99% and 15.55%, respectively,  compared to .99% and 16.40% a year
         ago.

         Net Interest Income

                  Net  interest  income  totaled  $27.7  million  for the  third
         quarter of 1996,  an increase of $3.8 million or 16% from $24.0 million
         in the third  quarter of 1995.  Net interest  income for the first nine
         months of 1996 totaled $79.4  million,  up $8.9 million or 13% from the
         first nine months of 1995. The  improvement in net interest  income for
         both  reporting  periods was due  primarily to volume  increases in the
         loan portfolio.

         Noninterest Income

                Noninterest income totaled $7.0 million for the third quarter of
         1996, an increase of $1.5 million or 28% from $5.5 million in the third
         quarter of 1995.  The increase was due  primarily to increased  deposit
         charges and service fees, which rose $944 thousand over the prior year.
         For the first nine months of 1996,  noninterest  income  totaled  $20.1
         million,  an increase of $5.3 million or 35% from $14.9  million in the
         first nine months of 1995.  The increase was due primarily to increased
         deposit  charges and service  fees,  which rose $3.2  million  over the
         prior year, and net investment  securities  gains which  increased $411
         thousand over 1995.

                                        8
<PAGE>

         Noninterest Expense

                  For the third  quarter of 1996,  noninterest  expense  totaled
         $24.6 million,  an increase of $5.4 million or 28% over the same period
         in 1995.  The one-time  special SAIF  assessment of $1.3 million caused
         audit and regulatory  fees and  assessments  to increase  significantly
         over the  prior  year.  Also  contributing  to the rise in  noninterest
         expenses  was  the  increase  in the  number  of  branches  from  47 at
         September  30, 1995 to 56 at  September  30,  1996.  As a result of the
         addition of these offices, staff,  facilities,  marketing,  and related
         expenses rose accordingly.

                  For the first nine months of 1996, noninterest expense totaled
         $67.9 million, an increase of $11.5 million, or 20%, over $56.5 million
         in the first nine months of 1995. Contributing to this increase was the
         SAIF assessment and new branch activity as noted above.

                  One  key  measure  used to  monitor  progress  in  controlling
         overhead  expenses  is the ratio of  noninterest  expenses  to  average
         assets.  For the first nine months of 1996,  this ratio  equaled  3.56%
         versus 3.22% for the comparable 1995 period.  The operating  efficiency
         ratio (noninterest expenses,  less other real estate expenses,  divided
         by net interest income plus noninterest income excluding  non-recurring
         gains)  was 67.34% for the first  nine  months of 1996 as  compared  to
         64.12% for the same 1995 period.

         Loan and Asset Quality

                  Total non-performing  assets  (non-performing  loans and other
         real  estate,  excluding  loans  past  due 90 days or  more  and  still
         accruing interest) at September 30, 1996 were $17.0 million, or .63% of
         total  assets  compared  to $19.1  million  or .79% of total  assets at
         December  31,  1995  and  $17.9  million  or .74% of  total  assets  at
         September 30, 1995.

                  Total non-performing loans (non-accrual loans and restructured
         loans,  excluding  loans  past due 90 days or more and  still  accruing
         interest)  at  September  30,  1996 were $9.5  million or .90% of total
         loans  compared to $8.5  million or .94% of total loans at December 31,
         1995 and $7.7 million or .89% of total loans at September  30, 1995. At
         September 30, 1996,  loans past due 90 days or more and still  accruing
         interest  amounted  to  $142  thousand  compared  to $126  thousand  at
         December 31, 1995 and $77 thousand at  September  30, 1995.  Additional
         loans considered as potential  problem loans by the Company's  internal
         loan review  department  ($12.1  million at September  30,  1996,  $7.2
         million at December 31, 1995 and $7.6  million at  September  30, 1995)
         have been evaluated as to risk exposure in determining  the adequacy of
         the allowance for loan losses.

                  Other real estate  (ORE) at  September  30, 1996  totaled $7.4
         million  compared  to $10.6  million  at  December  31,  1995 and $10.1
         million at September 30, 1995.  These properties have been written down
         to the lower of cost or fair value less disposition costs.

                  On pages 11 and 12 are tabular  presentation  showing detailed
         information about the Company's  non-performing loans and assets and an
         analysis of the  Company's  allowance for loan losses and other related
         data for September 30, 1996, December 31, 1995, and September 30, 1995.

                                        9
<PAGE>

         Pending Acquisitions

                  On July 31, 1996, the Company reached  agreements in principle
         to acquire two insurance brokerage firms:  Keystone National Companies,
         Inc.,  Cherry Hill,  NJ and Buckelew & Associates,  Toms River,  NJ. On
         October 2, 1996,  the Company  reached an  agreement  in  principle  to
         acquire a third insurance  brokerage firm:  Chesley & Cline,  Inc., Mt.
         Holly, New Jersey.  The acquisitions  will be completed by the issuance
         of common stock of the Company totaling  approximately  750,000 shares.
         The  acquisitions  are  intended to be tax-free  reorganizations  under
         appropriate  provisions of the United States Internal  Revenue Code and
         will be  accounted  for by the Company  under the  pooling-of-interests
         method.  Subject  to  required  governmental  approvals,  the first two
         acquisitions  are  expected to close on or about  November 15, 1996 and
         the third  acquisition  is  expected  to close on or about  December 1,
         1996.  The  effect  of  these   acquisitions  on  the  Company's  total
         consolidated  assets,  stockholders'  equity,  and  net  income  is not
         expected to be material.

                  On October 15, 1996, the Company entered into an agreement and
         Plan of  Reorganization  and  related  Agreement  and  Plan  of  Merger
         (collectively the "Merger Agreement") to acquire Independence  Bancorp,
         Inc. ("IBI"),  the holding company for Independence Bank of New Jersey,
         a $375 million,  8-branch bank headquartered in Ramsey, New Jersey. The
         acquisition is structured as a tax-free merger to be accounted for as a
         pooling-of-interests.  Under the Merger Agreement,  the shareholders of
         IBI will receive .935 shares of the Company's  common stock for each of
         the  outstanding  shares of the common  stock of IBI,  resulting in the
         issuance of  approximately  2,522,000  shares of the  Company's  common
         stock.  Also, in connection with the Merger Agreement,  IBI granted the
         Company  an  option  to  acquire  up to 19.9% of IBI's  authorized  but
         unissued shares of common stock at a price of $21.00 per share, subject
         to certain adjustments and certain  circumstances.  Consummation of the
         acquisition  is  subject  to certain  customary  conditions,  including
         shareholder  and  bank  regulatory  approvals,  and,  subject  to those
         approvals, is expected to close in the first quarter of 1997.

                                       10
<PAGE>


        The following  summary  presents  information  regarding  non-performing
        loans  and  assets  as of  September  30,  1996 and the  preceding  four
        quarters: (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                              September 30,      June 30,       March 31,       Dec. 31,       Sept. 30,
                                                   1996            1996           1996            1995            1995
<S>                                            <C>             <C>             <C>             <C>             <C>    
Non-accrual loans:
  Commercial                                     $ 1,066         $ 1,000         $   701         $   629         $   658
  Consumer                                           979             827             794             853           1,186
  Real Estate:
    Construction                                   2,196           1,687           1,787           1,787             911
    Mortgage                                       4,744           5,015           5,054           4,708           4,441
                                                 -------         -------         -------         -------         -------
      Total non-accrual loans                      8,985           8,529           8,336           7,977           7,196
                                                 -------         -------         -------         -------         -------

Restructured loans
  Commercial                                          21              22             144             161             173
  Consumer                                            29              59              60              60              69
  Real Estate:
    Construction
    Mortgage                                         500                              84             301             301
                                                 -------         -------         -------         -------         -------
      Total restructured loans                       550              81             288             522             543
                                                 -------         -------         -------         -------         -------

  Total non-performing loans                       9,535           8,610           8,624           8,499           7,739
                                                 -------         -------         -------         -------         -------

Other real estate                                  7,422           7,721           8,241          10,561          10,120
                                                 -------         -------         -------         -------         -------

Total non-performing assets                       16,957          16,331          16,865          19,060          17,859
                                                 -------         -------         -------         -------         -------

Loans past due 90 days or more
  and still accruing                                 142             427             163             126              77
                                                 -------         -------         -------         -------         -------

Total non-performing assets and
  loans past due 90 days or more                 $17,099         $16,758         $17,028         $19,186         $17,936
                                                 =======         =======         =======         =======         =======

Total non-performing loans as a
  percentage of total period-end
  loans                                             0.90%           0.83%           0.92%           0.94%           0.89%

Total non-performing assets as a
  percentage of total period-end assets             0.63%           0.63%           0.68%           0.79%           0.74%

Total non-performing assets and loans
  past due 90 days or more as a
  percentage of total period-end assets             0.63%           0.64%           0.69%           0.79%           0.75%

Allowance for loan losses as a
  percentage of total non-performing
  loans                                              149%            159%            156%            157%            168%

Allowance for loan losses as a percentage
  of total period-end loans                         1.34%           1.33%           1.43%           1.47%           1.50%

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

                                       11

<PAGE>
        The following table presents, for the periods indicated,  an analysis of
        the allowance for loan losses and other related data: (dollar amounts in
        thousands)
<TABLE>
<CAPTION>
                                                                          Year
                                             Nine Months Ended           Ended
                                          09/30/96       09/30/95      12/31/95
<S>                                         <C>            <C>          <C>    
Balance at beginning of period              $13,320        $12,036      $12,036
Provisions charged to operating expenses      2,173          1,633        2,215
                                            -------        -------      -------
                                             15,493         13,669       14,251
Recoveries on loans charged-off:
  Commercial                                    167             94          154
  Consumer                                      120            120          144
  Real estate                                    80            288          292
                                            -------        -------      -------
Total recoveries                                367            502          590

Loans charged-off:
  Commercial                                   (349)          (526)        (595)
  Consumer                                     (488)          (326)        (580)
  Real estate                                  (833)          (314)        (346)
                                            -------        -------      -------
Total charged-off                            (1,670)        (1,166)      (1,521)
                                            -------        -------      -------
Net charge-offs                              (1,303)          (664)        (931)
                                            -------        -------      -------

Balance at end of period                    $14,190        $13,005      $13,320
                                            =======        =======      =======


Net charge-offs as a percentage of
average loans outstanding                      0.18%          0.11%        0.11%
</TABLE>

                                       12
<PAGE>
                           PART II. OTHER INFORMATION



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 third quarter ended
                September  30,  1996.  A  report  on  Form  8-K  related  to the
                acquisition of Independence  Bancorp,  Inc. was filed on October
                22, 1996.


                                       13

<PAGE>
                                   SIGNATURES





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                               COMMERCE BANCORP, INC.
                                                   (Registrant)





                                                  /s/ C. EDWARD JORDAN, JR.
November 14, 1996                              -------------------------------
  (Date)                                            C. EDWARD JORDAN, JR.
                                                  EXECUTIVE VICE PRESIDENT
                                                 (PRINCIPAL FINANCIAL OFFICER)




                                       14