content: 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
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 55972}]
metadata_filer: {"company-data": {"conformed-name": "COMMERCE BANCORP INC /NJ/", "cik": "0000715096", "assigned-sic": "6021", "irs-number": "222433468", "state-of-incorporation": "NJ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-12069", "film-number": "96663257"}, "business-address": {"street1": "COMMERCE ATRIUM", "street2": "1701 RTE 70 E", "city": "CHERRY HILL", "state": "NJ", "zip": "08034-5400", "phone": "6097519000"}, "mail-address": {"street1": "1701 ROUTE 70 EAST", "city": "CHERRY HILL", "state": "NJ", "zip": "08034-5400"}}
text: 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  [ ]
  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)
  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
  Commerce Bancorp, Inc. and Subsidiaries
                             Consolidated Balance Sheets
                                     (unaudited)
  September 30,   December 31,
            (dollars in thousands)                                                        1996           1995
  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
                                                                                       ==========     ==========
  1
  Commerce Bancorp, Inc. and Subsidiaries
                          Consolidated Statements of Income
                                     (unaudited)
  Three Months Ended         Nine Months Ended
                                                                        September 30,             September 30,
        (dollars in thousands, except per share amounts)             1996         1995         1996          1995
  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
                                                                   ========     ========     ========     ========
  2
  Commerce Bancorp, Inc. And Subsidiaries
                        Consolidated Statements of Cash Flows
                                     (unaudited)
  Nine Months Ended September 30,
         (dollars in thousands)                                                                  1996           1995
  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
                                                                                              ---------      ---------
  3
  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
  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.
  Capital
                                                                                                         Excess
                                                                                        Minimum           as of
                                                September 30,       September 30,     Regulatory       September 30,
                                                    1996                1995         Requirements          1996
                                                                                                      (in thousands)
  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)
  (1) Based on a minimum regulatory requirement of 3.00%
  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
  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
  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
  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
  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
  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
  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)
  September 30,      June 30,       March 31,       Dec. 31,       Sept. 30,
                                                     1996            1996           1996            1995            1995
  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%
  11
  The following table presents, for the periods indicated,  an analysis of
          the allowance for loan losses and other related data: (dollar amounts in
          thousands)
  Year
                                               Nine Months Ended           Ended
                                            09/30/96       09/30/95      12/31/95
  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%
  12
  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
  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