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 March 31, 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                                            11,344,354
      (Title of Class)                                 (No. of Shares Outstanding
                                                             as of 05/01/96)
  
  Series C ESOP Cumulative Con-
     vertible Preferred Stock                                      417,000
           (Title of Class)                            (No. of Shares Outstanding
                                                              as of 05/01/96)
  
  <PAGE>
  
  
                       COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  
                                        INDEX
  
                                                                           Page
  
  PART I.      FINANCIAL INFORMATION
  
  Item 1.      Financial Statements
  
               Consolidated Balance Sheets (unaudited)
                        March 31, 1996 and December 31, 1995
  
               Consolidated  Statements  of Income  (unaudited)  
                        Three months ended March 31, 1996 and 
                        March 31, 1995
  
               Consolidated Statements of Cash Flows (unaudited)
                        Three months ended March 31, 1996 and
                        March 31, 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>
  
  <TABLE>
  <CAPTION>
  
                       Commerce Bancorp, Inc. and Subsidiaries
                             Consolidated Balance Sheets
                                     (unaudited)
  
                                                                                          March 31,   December 31,
                           (dollars in thousands)                                           1996          1995
  
  
  <S>                                                                                    <C>          <C>       
  Assets
           Cash and due from banks                                                       $  139,683   $  147,465
           Federal funds sold                                                                 6,700       29,550
                                                                                         ----------   ----------
                     Cash and cash equivalents                                              146,383      177,015
           Mortgages held for sale                                                            6,715        5,442
           Trading securities                                                                 5,150        8,843
           Securities available for sale                                                    591,662      520,314
           Securities held to maturity:
                     U.S. Government agency mortgage-backed obligations                     635,986      653,412
                     Obligations of state and political subdivisions                         15,445       12,289
                     Other securities                                                        16,993       17,001
                                                                                         ----------   ----------
                     Total securities held to maturity
                     (market value 1996-$644,440; 1995-$671,539)                            668,424      682,702
           Loans                                                                            942,084      907,515
                     Less allowance for loan losses                                          13,451       13,320
                                                                                         ----------   ----------
                                                                                            928,633      894,195
           Bank premises and equipment, net                                                  74,769       74,289
           Other assets                                                                      49,181       53,094
                                                                                         ----------   ----------
                                                                                         $2,470,917   $2,415,894
                                                                                         ==========   ==========
  
  Liabilities
           Deposits:
                     Demand:
                       Interest-bearing                                                  $  679,443   $  657,568
                       Noninterest-bearing                                                  428,951      439,609
                     Savings                                                                490,611      485,522
                     Time                                                                   675,703      642,399
                                                                                         ----------   ----------
                       Total deposits                                                     2,274,708    2,225,098
  
           Other liabilities                                                                  8,444        1,417
           Obligation to Employee Stock Ownership Plan (ESOP)                                 4,103        4,359
           Long-term debt                                                                    23,000       23,000
                                                                                         ----------   ----------
                                                                                          2,310,255    2,253,874
  
  Stockholders' Equity
           Common stock, 11,414,545 shares issued (11,337,719 shares in 1995)                17,834       16,880
           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                                         124,481      112,894
           Retained earnings                                                                 16,568       30,723
                                                                                         ----------   ----------
                                                                                            166,389      168,003
           Less commitment to ESOP                                                            4,103        4,359
           Less treasury stock, at cost, 100,159 common shares
                     in 1996 (100,159 in 1995)                                                1,624        1,624
                                                                                         ----------   ----------
                       Total stockholders' equity                                           160,662      162,020
                                                                                         ----------   ----------
  
                                                                                         $2,470,917   $2,415,894
                                                                                         ==========   ==========
  
  </TABLE>
  <PAGE>
  
                       Commerce Bancorp, Inc. and Subsidiaries
                          Consolidated Statements of Income
                                     (unaudited)
  <TABLE>
  <CAPTION>
  
                                                                       Three Months Ended
                                                                           March 31,
    (dollars in thousands, except per share amounts)                    1996       1995
  
  <S>                                                                 <C>       <C>    
  Interest income
           Interest and fees on loans                                 $21,185   $18,679
           Interest on investments                                     19,434    21,082
           Other interest                                               1,251       656
                                                                      -------   -------
                Total interest income                                  41,870    40,417
                                                                      -------   -------
  
  Interest expense
           Interest on deposits:
             Demand                                                     4,022     3,408
             Savings                                                    2,682     2,686
             Time                                                       9,516     6,910
                                                                      -------   -------
                Total interest on deposits                             16,220    13,004
           Interest on other borrowed money                                31     4,027
           Interest on long-term debt                                     506       506
                                                                      -------   -------
                Total interest expense                                 16,757    17,537
                                                                      -------   -------
  
           Net interest income                                         25,113    22,880
           Provision for loan losses                                      674       857
                                                                      -------   -------
           Net interest income after provision for loan losses         24,439    22,023
  
  Noninterest income
           Deposit charges and service fees                             4,713     3,684
           Other operating income                                       1,225       909
           Net investment securities gains                                517         0
                                                                      -------   -------
                Total noninterest income                                6,455     4,593
                                                                      -------   -------
  
  Noninterest expense
           Salaries                                                     7,199     6,252
           Benefits                                                     1,909     1,859
           Occupancy                                                    2,617     1,940
           Furniture and equipment                                      2,829     2,146
           Office                                                       2,131     1,633
           Audit and regulatory fees and assessments                      382     1,241
           Marketing                                                      956       657
           Other real estate (net)                                        450       698
           Other                                                        2,652     1,953
                                                                      -------   -------
                Total noninterest expenses                             21,125    18,379
                                                                      -------   -------
  
           Income before income taxes                                   9,769     8,237
           Provision for federal and state income taxes                 3,508     2,994
                                                                      -------   -------
           Net income                                                   6,261     5,243
  
           Dividends on preferred stocks                                  141       141
                                                                      -------   -------
           Net income applicable to common stock                      $ 6,120   $ 5,102
                                                                      =======   =======
  
           Net income per common and common equivalent share:
             Primary                                                  $  0.52   $  0.49
                                                                      -------   -------
             Fully diluted                                            $  0.51   $  0.47
                                                                      -------   -------
           Average common and common equivalent shares outstanding:
             Primary                                                   11,675    10,482
                                                                      -------   -------
             Fully diluted                                             12,261    11,069
                                                                      -------   -------
           Cash dividends declared, common stock                      $  0.17   $  0.15
                                                                      =======   =======
  </TABLE>
  <PAGE>
  <TABLE>
  <CAPTION>
  
  
                       Commerce Bancorp, Inc. And Subsidiaries
                        Consolidated Statements of Cash Flows
                                     (unaudited)
  
  
                                                                             Three Months Ended March 31,
                    (dollars in thousands)                                      1996          1995
  
  <S>                                                                        <C>          <C>      
  Operating activities
           Net income                                                        $   6,261    $   5,243
           Adjustments to reconcile net income to net cash
             provided by operating activities:
                Provision for loan losses                                          674          857
                Provision for depreciation, amortization and accretion           3,981        3,018
                Gains on sales of securities available for sale                   (517)           0
                Proceeds from sales of mortgages held for sale                   2,103        5,214
                Originations of mortgages held for sale                         (3,376)      (4,153)
                Net loan (chargeoffs) recoveries                                  (543)          16
                Net decrease (increase) in trading securities                    3,693       (2,304)
                Decrease (increase) in other assets                              7,766       (4,388)
                Increase in other liabilities                                    7,027        3,662
                                                                             ---------    ---------
                          Net cash provided by operating activities             27,069        7,165
  
  Investing activities
           Proceeds from the sales of securities available for sale             20,395            0
           Proceeds from the maturity of securities available for sale          16,982        4,031
           Proceeds from the maturity of securities held to maturity            16,653       21,782
           Purchase of securities available for sale                          (120,038)        (200)
           Purchase of securities held to maturity                              (3,158)      (1,207)
           Net increase in loans                                               (36,201)     (19,307)
           Proceeds from sales of loans                                          1,632        1,150
           Purchases of premises and equipment                                  (2,859)      (2,748)
                                                                             ---------    ---------
                          Net cash (used) provided by investing activities    (106,594)       3,501
  
  Financing activities
           Net increase (decrease) in demand and savings deposits               16,306      (10,479)
           Net increase in time deposits                                        33,304      133,849
           Net decrease in other borrowed money                                      0     (167,992)
           Issuance of common stock                                                  0       25,851
           Dividends paid                                                       (2,038)      (1,517)
           Proceeds from issuance of common stock under
             dividend reinvestment and other stock plans                         1,272          724
           Purchase of treasury stock                                                0         (343)
           Other                                                                    49           49
                                                                             ---------    ---------
                          Net cash provided (used) by financing activities      48,893      (19,858)
  
           Decrease in cash and cash equivalents                               (30,632)      (9,192)
           Cash and cash equivalents at beginning of year                      177,015      129,447
                                                                             ---------    ---------
           Cash and cash equivalents at end of period                        $ 146,383    $ 120,255
                                                                             ---------    ---------
  
           Supplemental disclosures of cash flow information:
             Cash paid during the period for:
                Interest                                                     $  16,725    $  18,444
                Income taxes                                                        80          131
                                                                             ---------    ---------
  </TABLE>
  
  <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 March 31, 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 $4,103,000 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.
  
  <PAGE>
  
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation Capital Resources
  
                 At March 31, 1996, stockholders' equity totaled $160.7 million or
            6.50% 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
                                                  March 31,           March 31,       Regulatory         March 31,
                                                    1996                1995         Requirements          1996
                                                                                                      (in thousands)
  <S>                                              <C>                <C>             <C>              <C>     
           Company
                  Risk based capital ratios:
                    Tier 1                          13.00%             13.09%          4.00%            $111,310
                    Total capital                   15.95              16.45           8.00               98,300
                  Leverage ratio                     6.59               6.09           3.00-5.00          87,540 (1)
  
           Commerce NJ
                  Risk based capital ratios:
                    Tier 1                          14.45%             14.37%          4.00%            $100,280
                    Total capital                   15.60              15.53           8.00               72,910
                  Leverage ratio                     7.35               6.79           3.00-5.00          82,110 (1)
  
           Commerce PA
                  Risk based capital ratios:
                    Tier 1                          13.99%             12.68%          4.00%           $  13,560
                    Total capital                   14.79              13.82           8.00                9,210
                  Leverage ratio                     6.80               6.63           3.00-5.00          10,600 (1)
  
           Commerce Shore Risk based capital ratios:
                    Tier 1                          13.94%             13.22%          4.00%             $14,140
                    Total capital                   14.89              14.48           8.00                9,800
                  Leverage ratio                     6.28               6.40           3.00-5.00          10,360 (1)
  <FN>
           (1) Based on a minimum regulatory requirement of 3.00%
  </FN>
  </TABLE>
  
                 At March 31, 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%.
  <PAGE>
  
           Deposits
  
                 Total  deposits at March 31, 1996 were $2.27  billion,  up $316.8
            million,  or 16% over  total  deposits  of $1.96  billion at March 31,
            1995,  and up by $49.6  million,  or 2% from  year-end  1995.  Deposit
            growth  during the first  three  months of 1996 was  largely  from the
            public sector.
  
           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 percent of net income in the flat rate  scenario
            in the first year and within 30 percent  over the two year time frame.
            At March 31, 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
            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 100% or more of
            the  excess  of  market  value  over book  value in the  current  rate
            scenario.
  <PAGE>
  
            At March 31,  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.
  
           Interest Earning Assets
  
                 For the three month period ended March 31, 1996, interest earning
            assets  increased  $66.4 million from $2.15 billion to $2.22  billion.
            This  increase was  primarily in  investment  securities  and the loan
            portfolio as described below.
  
           Loans
  
                 During the first  three  months of 1996,  loans  increased  $34.7
            million  from $907.5  million to $942.1  million.  At March 31,  1996,
            loans represented 41% of total deposits and 38% of total assets.
  
                 The  increase in the loan  portfolio  was due  primarily to loans
            secured by 1-4 family  residential  properties  (including home equity
            loans) and loans secured by commercial real estate properties.
  
           Investments
  
                 In  total,  for  the  first  three  months  of  1996,  securities
            increased  $53.4 million from $1.21 billion to $1.27 billion.  Deposit
            growth and other  funding  sources were used to increase the Company's
            available  for sale  portfolio,  which  rose  $71.3  million to $591.7
            million  from $520.3  million at  year-end  1995.  Securities  held to
            maturity  decreased from $682.7  million to $668.4 million  reflecting
            payments on the existing  portfolio.  At March 31,  1996,  the average
            life of the investment portfolio is approximately 6.6 years.
  
                 Short-term  investments  (Federal  funds  sold)  decreased  $22.9
            million from $29.6 million to $6.7 million.  At March 31, 1996,  total
            securities  and  Federal  funds  sold  aggregated  $1.27  billion  and
            represented 51% of total assets.
  
           Net Income
  
                 Net income for the first  quarter  of 1996 was $6.3  million,  an
            increase of $1.0 million over the $5.2 million  recorded for the first
            quarter of 1995.  The  increase was due to an increase in net interest
            income,  as  well  as  reduced  loan  loss  provisions  and  increased
            noninterest income, which offset increased overhead expenses. On a per
            share basis,  fully-diluted  net income for the first  quarter of 1996
            was $.51 per common  share  compared to $.47 per common  share for the
            first quarter of 1995.
  <PAGE>
  
                 Return on average assets (ROA) and return on average equity (ROE)
            for the first  quarter  of 1996 were 1.02% and  15.35%,  respectively,
            compared to 0.91% and 16.60%, respectively, for the same 1995 period.
  
           Net Interest Income
  
                 Net interest  income  totaled $25.1 million for the first quarter
            of 1996, an increase of $2.2 million or 10%, from $22.9 million in the
            first quarter of 1995. The  improvement in net interest income was due
            primarily to volume increases in the loan portfolio.
  
           Noninterest Income
  
                 Noninterest  income for the first  quarter of 1996  totaled  $6.5
            million, an increase of $1.9 million, over the comparable 1995 period.
            The  increase  was due  primarily  to  increased  deposit  charges and
            service fees,  which  increased $1.0 million from the first quarter of
            1995 due to higher transaction volumes, and net investment  securities
            gains of $517 thousand.
  
           Noninterest Expense
  
                 For the first quarter of 1996,  noninterest expense totaled $21.1
            million,  an increase of $2.7 million,  or 14.9%, over the same period
            in 1995.  Contributing  to this increase was new branch  activity over
            the past twelve months, with the number of branches increasing from 44
            at March 31, 1995 to 51 at March 31, 1996. As a result of the addition
            of these offices, staff,  facilities,  marketing, and related expenses
            rose accordingly.  Audit and regulatory fees and assessments decreased
            by $859 thousand due to reductions in Federal deposit  insurance rates
            enacted  as of June 1, 1995 and  January 1,  1996.  Other  noninterest
            expenses  rose $699  thousand  over the first  quarter  of 1995.  This
            increase  resulted  primarily from higher banking  service charges and
            increased provisions for non-credit-related losses.
  
                 One key measure used to monitor progress in controlling  overhead
            expenses is the ratio of noninterest  expenses to average assets.  For
            the first three months of 1996,  this ratio equaled 3.45% versus 3.20%
            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 66.58% for the first  three  months of 1996 as  compared to 64.36%
            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 March 31,  1996  were  $16.9  million,  or .68% of total
            assets  compared to $19.1  million or .79% of total assets at December
            31, 1995 and $21.0 million or .92% of total assets at March 31, 1995.
  
                 Total  non-performing  loans  (non-accrual loans and restructured
            loans,  excluding  loans  past due 90 days or more and still  accruing
            interest)  at March 31, 1996 were $8.6  million or .92% of total loans
            compared to $8.5  million or .94% of total loans at December  31, 1995
            and $11.0  million or 1.35% of total loans at March 31, 1995. At March
            31, 1996,  loans past due 90 days or more and still accruing  interest
            amounted to $163  thousand  compared to $126  thousand 
  <PAGE>
  
            at December 31, 1995 and $92  thousand at March 31,  1995.  Additional
            loans considered as potential problem loans by the Company's  internal
            loan review  department  ($8.9 million at March 31, 1996, $7.2 million
            at  December  31, 1995 and $7.0  million at March 31,  1995) have been
            evaluated  as to risk  exposure  in  determining  the  adequacy of the
            allowance for loan losses.
  
                 Other real estate  (ORE) at March 31, 1996  totaled  $8.2 million
            compared  to $10.6  million at December  31, 1995 and $9.9  million at
            March 31, 1995.  These  properties have been written down to the lower
            of cost or fair value less disposition costs.
  
                 On  pages 13 and 14 are  tabular  presentation  showing  detailed
            information about the Company's non-performing loans and assets and an
            analysis of the Company's  allowance for loan losses and other related
            data for March 31, 1996, December 31, 1995, and March 31, 1995.
  
  
  <PAGE>
  The following summary presents  information  regarding  non-performing loans and
  assets as of March 31, 1996 and the preceding four quarters:  (dollar amounts in
  thousands)
  
  <TABLE>
  <CAPTION>
                                              March 31,   Dec. 31,  Sept. 30,  June 30,   March 31,
                                                1996       1995       1995       1995       1995
  <S>                                         <C>        <C>        <C>        <C>        <C>    
  Non-accrual loans:
    Commercial                                $   701    $   629    $   658    $   897    $ 1,379
    Consumer                                      794        853      1,186      1,063      1,025
    Real Estate:
      Construction                              1,787      1,787        911        911        955
      Mortgage                                  5,054      4,708      4,441      7,003      7,201
                                                -----      -----      -----      -----     ------
        Total non-accrual loans                 8,336      7,977      7,196      9,874     10,560
                                                -----      -----      -----      -----     ------
  
  Restructured loans
    Commercial                                    144        161        173        140        142
    Consumer                                       60         60         69         70         29
    Real Estate:
      Construction
      Mortgage                                     84        301        301         85        302
                                                -----      -----      -----      -----     ------
        Total restructured loans                  288        522        543        295        473
                                                -----      -----      -----      -----     ------
  
    Total non-performing loans                  8,624      8,499      7,739     10,169     11,033
                                                -----      -----      -----      -----     ------
  
  Other real estate                             8,241     10,561     10,120      8,591      9,880
                                                -----      -----      -----      -----     ------
  
  Total non-performing assets                  16,865     19,060     17,859     18,760     20,913
                                                -----      -----      -----      -----     ------
  
  Loans past due 90 days or more
    and still accruing                            163        126         77         86         92
                                                -----      -----      -----      -----     ------
  
  Total non-performing assets and
    loans past due 90 days or more            $17,028    $19,186    $17,936    $18,846    $21,005
                                              =======    =======    =======    =======    =======
  
  Total non-performing loans as a
    percentage of total period-end
    loans                                        0.92%      0.94%      0.89%      1.20%      1.35%
  
  Total non-performing assets as a
    percentage of total period-end assets        0.68%      0.79%      0.74%      0.79%      0.92%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of total period-end assets        0.69%      0.79%      0.75%      0.80%      0.92%
  
  Allowance for loan losses as a
    percentage of total non-performing
    loans                                         156%       157%       168%       129%       117%
  
  Allowance for loan losses as a percentage
    of total period-end loans                    1.43%      1.47%      1.50%      1.54%      1.57%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of stockholders' equity and
    allowance for loan losses                      10%        11%        11%        12%        13%
  
  </TABLE>
  <PAGE>
  
  The following  table  presents,  for the periods  indicated,  an analysis of the
  allowance related data: (dollar amounts in thousands)
  <TABLE>
  <CAPTION>
                                                                               Year
                                                Three Months Ended            Ended
                                               03/31/96       03/31/95      12/31/95
  
  <S>                                           <C>           <C>           <C>    
  Balance at beginning of period                $13,320       $12,036       $12,036
  Provisions charged to operating expenses          674           857         2,215
                                                 ------        ------        ------
                                                 13,994        12,893        14,251
  Recoveries on loans charged-off:
    Commercial                                       42            12           154
    Consumer                                         36            63           144
    Real estate                                       8           101           292
                                                 ------        ------        ------
  Total recoveries                                   86           176           590
  
  Loans charged-off:
    Commercial                                     (110)          (54)         (595)
    Consumer                                       (154)          (58)         (580)
    Real estate                                    (365)          (48)         (346)
                                                 ------        ------        ------
  Total charged-off                                (629)         (160)       (1,521)
                                                 ------        ------        ------
  Net charge-offs                                  (543)           16          (931)
                                                 ------        ------        ------
  
  Balance at end of period                      $13,451       $12,909       $13,320
                                                =======       =======       =======
  
  Net charge-offs as a percentage of
  average loans outstanding                        0.24  %      (0.01) %       0.11  %
  </TABLE>
  
  <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 first  quarter
                     ended March 31, 1996.
  
  <PAGE>
  
  
                                     SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
  
  
                                                         COMMERCE BANCORP, INC.
                                                                (Registrant)
  
  
  May 13, 1996
    (Date)                                                C. EDWARD JORDAN, JR.
                                                        EXECUTIVE VICE PRESIDENT
                                                     (PRINCIPAL FINANCIAL OFFICER)
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 45951}]
metadata_filer: {"company-data": {"conformed-name": "COMMERCE BANCORP INC /NJ/", "cik": "0000715096", "assigned-sic": "6022", "irs-number": "222433468", "state-of-incorporation": "NJ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-12874", "film-number": "96564006"}, "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 March 31, 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                                            11,344,354
      (Title of Class)                                 (No. of Shares Outstanding
                                                             as of 05/01/96)
  
  Series C ESOP Cumulative Con-
     vertible Preferred Stock                                      417,000
           (Title of Class)                            (No. of Shares Outstanding
                                                              as of 05/01/96)
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
                                        INDEX
  
                                                                           Page
  
  PART I.      FINANCIAL INFORMATION
  
  Item 1.      Financial Statements
  
               Consolidated Balance Sheets (unaudited)
                        March 31, 1996 and December 31, 1995
  
               Consolidated  Statements  of Income  (unaudited)  
                        Three months ended March 31, 1996 and 
                        March 31, 1995
  
               Consolidated Statements of Cash Flows (unaudited)
                        Three months ended March 31, 1996 and
                        March 31, 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)
  
                                                                                          March 31,   December 31,
                           (dollars in thousands)                                           1996          1995
  Assets
           Cash and due from banks                                                       $  139,683   $  147,465
           Federal funds sold                                                                 6,700       29,550
                                                                                         ----------   ----------
                     Cash and cash equivalents                                              146,383      177,015
           Mortgages held for sale                                                            6,715        5,442
           Trading securities                                                                 5,150        8,843
           Securities available for sale                                                    591,662      520,314
           Securities held to maturity:
                     U.S. Government agency mortgage-backed obligations                     635,986      653,412
                     Obligations of state and political subdivisions                         15,445       12,289
                     Other securities                                                        16,993       17,001
                                                                                         ----------   ----------
                     Total securities held to maturity
                     (market value 1996-$644,440; 1995-$671,539)                            668,424      682,702
           Loans                                                                            942,084      907,515
                     Less allowance for loan losses                                          13,451       13,320
                                                                                         ----------   ----------
                                                                                            928,633      894,195
           Bank premises and equipment, net                                                  74,769       74,289
           Other assets                                                                      49,181       53,094
                                                                                         ----------   ----------
                                                                                         $2,470,917   $2,415,894
                                                                                         ==========   ==========
  
  Liabilities
           Deposits:
                     Demand:
                       Interest-bearing                                                  $  679,443   $  657,568
                       Noninterest-bearing                                                  428,951      439,609
                     Savings                                                                490,611      485,522
                     Time                                                                   675,703      642,399
                                                                                         ----------   ----------
                       Total deposits                                                     2,274,708    2,225,098
  
           Other liabilities                                                                  8,444        1,417
           Obligation to Employee Stock Ownership Plan (ESOP)                                 4,103        4,359
           Long-term debt                                                                    23,000       23,000
                                                                                         ----------   ----------
                                                                                          2,310,255    2,253,874
  
  Stockholders' Equity
           Common stock, 11,414,545 shares issued (11,337,719 shares in 1995)                17,834       16,880
           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                                         124,481      112,894
           Retained earnings                                                                 16,568       30,723
                                                                                         ----------   ----------
                                                                                            166,389      168,003
           Less commitment to ESOP                                                            4,103        4,359
           Less treasury stock, at cost, 100,159 common shares
                     in 1996 (100,159 in 1995)                                                1,624        1,624
                                                                                         ----------   ----------
                       Total stockholders' equity                                           160,662      162,020
                                                                                         ----------   ----------
  
                                                                                         $2,470,917   $2,415,894
                                                                                         ==========   ==========
  Commerce Bancorp, Inc. and Subsidiaries
                          Consolidated Statements of Income
                                     (unaudited)
  Three Months Ended
                                                                           March 31,
    (dollars in thousands, except per share amounts)                    1996       1995
  Interest income
           Interest and fees on loans                                 $21,185   $18,679
           Interest on investments                                     19,434    21,082
           Other interest                                               1,251       656
                                                                      -------   -------
                Total interest income                                  41,870    40,417
                                                                      -------   -------
  
  Interest expense
           Interest on deposits:
             Demand                                                     4,022     3,408
             Savings                                                    2,682     2,686
             Time                                                       9,516     6,910
                                                                      -------   -------
                Total interest on deposits                             16,220    13,004
           Interest on other borrowed money                                31     4,027
           Interest on long-term debt                                     506       506
                                                                      -------   -------
                Total interest expense                                 16,757    17,537
                                                                      -------   -------
  
           Net interest income                                         25,113    22,880
           Provision for loan losses                                      674       857
                                                                      -------   -------
           Net interest income after provision for loan losses         24,439    22,023
  
  Noninterest income
           Deposit charges and service fees                             4,713     3,684
           Other operating income                                       1,225       909
           Net investment securities gains                                517         0
                                                                      -------   -------
                Total noninterest income                                6,455     4,593
                                                                      -------   -------
  
  Noninterest expense
           Salaries                                                     7,199     6,252
           Benefits                                                     1,909     1,859
           Occupancy                                                    2,617     1,940
           Furniture and equipment                                      2,829     2,146
           Office                                                       2,131     1,633
           Audit and regulatory fees and assessments                      382     1,241
           Marketing                                                      956       657
           Other real estate (net)                                        450       698
           Other                                                        2,652     1,953
                                                                      -------   -------
                Total noninterest expenses                             21,125    18,379
                                                                      -------   -------
  
           Income before income taxes                                   9,769     8,237
           Provision for federal and state income taxes                 3,508     2,994
                                                                      -------   -------
           Net income                                                   6,261     5,243
  
           Dividends on preferred stocks                                  141       141
                                                                      -------   -------
           Net income applicable to common stock                      $ 6,120   $ 5,102
                                                                      =======   =======
  
           Net income per common and common equivalent share:
             Primary                                                  $  0.52   $  0.49
                                                                      -------   -------
             Fully diluted                                            $  0.51   $  0.47
                                                                      -------   -------
           Average common and common equivalent shares outstanding:
             Primary                                                   11,675    10,482
                                                                      -------   -------
             Fully diluted                                             12,261    11,069
                                                                      -------   -------
           Cash dividends declared, common stock                      $  0.17   $  0.15
                                                                      =======   =======
  Commerce Bancorp, Inc. And Subsidiaries
                        Consolidated Statements of Cash Flows
                                     (unaudited)
  
                                                                             Three Months Ended March 31,
                    (dollars in thousands)                                      1996          1995
  Operating activities
           Net income                                                        $   6,261    $   5,243
           Adjustments to reconcile net income to net cash
             provided by operating activities:
                Provision for loan losses                                          674          857
                Provision for depreciation, amortization and accretion           3,981        3,018
                Gains on sales of securities available for sale                   (517)           0
                Proceeds from sales of mortgages held for sale                   2,103        5,214
                Originations of mortgages held for sale                         (3,376)      (4,153)
                Net loan (chargeoffs) recoveries                                  (543)          16
                Net decrease (increase) in trading securities                    3,693       (2,304)
                Decrease (increase) in other assets                              7,766       (4,388)
                Increase in other liabilities                                    7,027        3,662
                                                                             ---------    ---------
                          Net cash provided by operating activities             27,069        7,165
  
  Investing activities
           Proceeds from the sales of securities available for sale             20,395            0
           Proceeds from the maturity of securities available for sale          16,982        4,031
           Proceeds from the maturity of securities held to maturity            16,653       21,782
           Purchase of securities available for sale                          (120,038)        (200)
           Purchase of securities held to maturity                              (3,158)      (1,207)
           Net increase in loans                                               (36,201)     (19,307)
           Proceeds from sales of loans                                          1,632        1,150
           Purchases of premises and equipment                                  (2,859)      (2,748)
                                                                             ---------    ---------
                          Net cash (used) provided by investing activities    (106,594)       3,501
  
  Financing activities
           Net increase (decrease) in demand and savings deposits               16,306      (10,479)
           Net increase in time deposits                                        33,304      133,849
           Net decrease in other borrowed money                                      0     (167,992)
           Issuance of common stock                                                  0       25,851
           Dividends paid                                                       (2,038)      (1,517)
           Proceeds from issuance of common stock under
             dividend reinvestment and other stock plans                         1,272          724
           Purchase of treasury stock                                                0         (343)
           Other                                                                    49           49
                                                                             ---------    ---------
                          Net cash provided (used) by financing activities      48,893      (19,858)
  
           Decrease in cash and cash equivalents                               (30,632)      (9,192)
           Cash and cash equivalents at beginning of year                      177,015      129,447
                                                                             ---------    ---------
           Cash and cash equivalents at end of period                        $ 146,383    $ 120,255
                                                                             ---------    ---------
  
           Supplemental disclosures of cash flow information:
             Cash paid during the period for:
                Interest                                                     $  16,725    $  18,444
                Income taxes                                                        80          131
                                                                             ---------    ---------
  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 March 31, 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 $4,103,000 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.
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation Capital Resources
  
                 At March 31, 1996, stockholders' equity totaled $160.7 million or
            6.50% 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
                                                  March 31,           March 31,       Regulatory         March 31,
                                                    1996                1995         Requirements          1996
                                                                                                      (in thousands)
  Company
                  Risk based capital ratios:
                    Tier 1                          13.00%             13.09%          4.00%            $111,310
                    Total capital                   15.95              16.45           8.00               98,300
                  Leverage ratio                     6.59               6.09           3.00-5.00          87,540 (1)
  
           Commerce NJ
                  Risk based capital ratios:
                    Tier 1                          14.45%             14.37%          4.00%            $100,280
                    Total capital                   15.60              15.53           8.00               72,910
                  Leverage ratio                     7.35               6.79           3.00-5.00          82,110 (1)
  
           Commerce PA
                  Risk based capital ratios:
                    Tier 1                          13.99%             12.68%          4.00%           $  13,560
                    Total capital                   14.79              13.82           8.00                9,210
                  Leverage ratio                     6.80               6.63           3.00-5.00          10,600 (1)
  
           Commerce Shore Risk based capital ratios:
                    Tier 1                          13.94%             13.22%          4.00%             $14,140
                    Total capital                   14.89              14.48           8.00                9,800
                  Leverage ratio                     6.28               6.40           3.00-5.00          10,360 (1)
  (1) Based on a minimum regulatory requirement of 3.00%
  At March 31, 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%.
  Deposits
  
                 Total  deposits at March 31, 1996 were $2.27  billion,  up $316.8
            million,  or 16% over  total  deposits  of $1.96  billion at March 31,
            1995,  and up by $49.6  million,  or 2% from  year-end  1995.  Deposit
            growth  during the first  three  months of 1996 was  largely  from the
            public sector.
  
           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 percent of net income in the flat rate  scenario
            in the first year and within 30 percent  over the two year time frame.
            At March 31, 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
            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 100% or more of
            the  excess  of  market  value  over book  value in the  current  rate
            scenario.
  At March 31,  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.
  
           Interest Earning Assets
  
                 For the three month period ended March 31, 1996, interest earning
            assets  increased  $66.4 million from $2.15 billion to $2.22  billion.
            This  increase was  primarily in  investment  securities  and the loan
            portfolio as described below.
  
           Loans
  
                 During the first  three  months of 1996,  loans  increased  $34.7
            million  from $907.5  million to $942.1  million.  At March 31,  1996,
            loans represented 41% of total deposits and 38% of total assets.
  
                 The  increase in the loan  portfolio  was due  primarily to loans
            secured by 1-4 family  residential  properties  (including home equity
            loans) and loans secured by commercial real estate properties.
  
           Investments
  
                 In  total,  for  the  first  three  months  of  1996,  securities
            increased  $53.4 million from $1.21 billion to $1.27 billion.  Deposit
            growth and other  funding  sources were used to increase the Company's
            available  for sale  portfolio,  which  rose  $71.3  million to $591.7
            million  from $520.3  million at  year-end  1995.  Securities  held to
            maturity  decreased from $682.7  million to $668.4 million  reflecting
            payments on the existing  portfolio.  At March 31,  1996,  the average
            life of the investment portfolio is approximately 6.6 years.
  
                 Short-term  investments  (Federal  funds  sold)  decreased  $22.9
            million from $29.6 million to $6.7 million.  At March 31, 1996,  total
            securities  and  Federal  funds  sold  aggregated  $1.27  billion  and
            represented 51% of total assets.
  
           Net Income
  
                 Net income for the first  quarter  of 1996 was $6.3  million,  an
            increase of $1.0 million over the $5.2 million  recorded for the first
            quarter of 1995.  The  increase was due to an increase in net interest
            income,  as  well  as  reduced  loan  loss  provisions  and  increased
            noninterest income, which offset increased overhead expenses. On a per
            share basis,  fully-diluted  net income for the first  quarter of 1996
            was $.51 per common  share  compared to $.47 per common  share for the
            first quarter of 1995.
  Return on average assets (ROA) and return on average equity (ROE)
            for the first  quarter  of 1996 were 1.02% and  15.35%,  respectively,
            compared to 0.91% and 16.60%, respectively, for the same 1995 period.
  
           Net Interest Income
  
                 Net interest  income  totaled $25.1 million for the first quarter
            of 1996, an increase of $2.2 million or 10%, from $22.9 million in the
            first quarter of 1995. The  improvement in net interest income was due
            primarily to volume increases in the loan portfolio.
  
           Noninterest Income
  
                 Noninterest  income for the first  quarter of 1996  totaled  $6.5
            million, an increase of $1.9 million, over the comparable 1995 period.
            The  increase  was due  primarily  to  increased  deposit  charges and
            service fees,  which  increased $1.0 million from the first quarter of
            1995 due to higher transaction volumes, and net investment  securities
            gains of $517 thousand.
  
           Noninterest Expense
  
                 For the first quarter of 1996,  noninterest expense totaled $21.1
            million,  an increase of $2.7 million,  or 14.9%, over the same period
            in 1995.  Contributing  to this increase was new branch  activity over
            the past twelve months, with the number of branches increasing from 44
            at March 31, 1995 to 51 at March 31, 1996. As a result of the addition
            of these offices, staff,  facilities,  marketing, and related expenses
            rose accordingly.  Audit and regulatory fees and assessments decreased
            by $859 thousand due to reductions in Federal deposit  insurance rates
            enacted  as of June 1, 1995 and  January 1,  1996.  Other  noninterest
            expenses  rose $699  thousand  over the first  quarter  of 1995.  This
            increase  resulted  primarily from higher banking  service charges and
            increased provisions for non-credit-related losses.
  
                 One key measure used to monitor progress in controlling  overhead
            expenses is the ratio of noninterest  expenses to average assets.  For
            the first three months of 1996,  this ratio equaled 3.45% versus 3.20%
            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 66.58% for the first  three  months of 1996 as  compared to 64.36%
            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 March 31,  1996  were  $16.9  million,  or .68% of total
            assets  compared to $19.1  million or .79% of total assets at December
            31, 1995 and $21.0 million or .92% of total assets at March 31, 1995.
  
                 Total  non-performing  loans  (non-accrual loans and restructured
            loans,  excluding  loans  past due 90 days or more and still  accruing
            interest)  at March 31, 1996 were $8.6  million or .92% of total loans
            compared to $8.5  million or .94% of total loans at December  31, 1995
            and $11.0  million or 1.35% of total loans at March 31, 1995. At March
            31, 1996,  loans past due 90 days or more and still accruing  interest
            amounted to $163  thousand  compared to $126  thousand
  at December 31, 1995 and $92  thousand at March 31,  1995.  Additional
            loans considered as potential problem loans by the Company's  internal
            loan review  department  ($8.9 million at March 31, 1996, $7.2 million
            at  December  31, 1995 and $7.0  million at March 31,  1995) have been
            evaluated  as to risk  exposure  in  determining  the  adequacy of the
            allowance for loan losses.
  
                 Other real estate  (ORE) at March 31, 1996  totaled  $8.2 million
            compared  to $10.6  million at December  31, 1995 and $9.9  million at
            March 31, 1995.  These  properties have been written down to the lower
            of cost or fair value less disposition costs.
  
                 On  pages 13 and 14 are  tabular  presentation  showing  detailed
            information about the Company's non-performing loans and assets and an
            analysis of the Company's  allowance for loan losses and other related
            data for March 31, 1996, December 31, 1995, and March 31, 1995.
  The following summary presents  information  regarding  non-performing loans and
  assets as of March 31, 1996 and the preceding four quarters:  (dollar amounts in
  thousands)
  March 31,   Dec. 31,  Sept. 30,  June 30,   March 31,
                                                1996       1995       1995       1995       1995
  Non-accrual loans:
    Commercial                                $   701    $   629    $   658    $   897    $ 1,379
    Consumer                                      794        853      1,186      1,063      1,025
    Real Estate:
      Construction                              1,787      1,787        911        911        955
      Mortgage                                  5,054      4,708      4,441      7,003      7,201
                                                -----      -----      -----      -----     ------
        Total non-accrual loans                 8,336      7,977      7,196      9,874     10,560
                                                -----      -----      -----      -----     ------
  
  Restructured loans
    Commercial                                    144        161        173        140        142
    Consumer                                       60         60         69         70         29
    Real Estate:
      Construction
      Mortgage                                     84        301        301         85        302
                                                -----      -----      -----      -----     ------
        Total restructured loans                  288        522        543        295        473
                                                -----      -----      -----      -----     ------
  
    Total non-performing loans                  8,624      8,499      7,739     10,169     11,033
                                                -----      -----      -----      -----     ------
  
  Other real estate                             8,241     10,561     10,120      8,591      9,880
                                                -----      -----      -----      -----     ------
  
  Total non-performing assets                  16,865     19,060     17,859     18,760     20,913
                                                -----      -----      -----      -----     ------
  
  Loans past due 90 days or more
    and still accruing                            163        126         77         86         92
                                                -----      -----      -----      -----     ------
  
  Total non-performing assets and
    loans past due 90 days or more            $17,028    $19,186    $17,936    $18,846    $21,005
                                              =======    =======    =======    =======    =======
  
  Total non-performing loans as a
    percentage of total period-end
    loans                                        0.92%      0.94%      0.89%      1.20%      1.35%
  
  Total non-performing assets as a
    percentage of total period-end assets        0.68%      0.79%      0.74%      0.79%      0.92%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of total period-end assets        0.69%      0.79%      0.75%      0.80%      0.92%
  
  Allowance for loan losses as a
    percentage of total non-performing
    loans                                         156%       157%       168%       129%       117%
  
  Allowance for loan losses as a percentage
    of total period-end loans                    1.43%      1.47%      1.50%      1.54%      1.57%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of stockholders' equity and
    allowance for loan losses                      10%        11%        11%        12%        13%
  The following  table  presents,  for the periods  indicated,  an analysis of the
  allowance related data: (dollar amounts in thousands)
  Year
                                                Three Months Ended            Ended
                                               03/31/96       03/31/95      12/31/95
  Balance at beginning of period                $13,320       $12,036       $12,036
  Provisions charged to operating expenses          674           857         2,215
                                                 ------        ------        ------
                                                 13,994        12,893        14,251
  Recoveries on loans charged-off:
    Commercial                                       42            12           154
    Consumer                                         36            63           144
    Real estate                                       8           101           292
                                                 ------        ------        ------
  Total recoveries                                   86           176           590
  
  Loans charged-off:
    Commercial                                     (110)          (54)         (595)
    Consumer                                       (154)          (58)         (580)
    Real estate                                    (365)          (48)         (346)
                                                 ------        ------        ------
  Total charged-off                                (629)         (160)       (1,521)
                                                 ------        ------        ------
  Net charge-offs                                  (543)           16          (931)
                                                 ------        ------        ------
  
  Balance at end of period                      $13,451       $12,909       $13,320
                                                =======       =======       =======
  
  Net charge-offs as a percentage of
  average loans outstanding                        0.24  %      (0.01) %       0.11  %
  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 first  quarter
                     ended March 31, 1996.
  SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
                                                         COMMERCE BANCORP, INC.
                                                                (Registrant)
  
  May 13, 1996
    (Date)                                                C. EDWARD JORDAN, JR.
                                                        EXECUTIVE VICE PRESIDENT
                                                     (PRINCIPAL FINANCIAL OFFICER)