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, 1995
  
                                         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                              10,594,506
  
         (Title of Class)                   (No. of Shares Outstanding
                                                  as of 05/08/95)
  
  
  
  Series C ESOP Cumulative Con-
     vertible Preferred Stock                         417,000
           (Title of Class)                 (No. of Shares Outstanding
                                                  as of 05/08/95)
  
  
  
  <PAGE>
  
  
  
                 COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
  
  
  
                                  INDEX
  
  
  
                                                                             Page
  
  
  PART I.           FINANCIAL INFORMATION
  
  Item 1.    Financial Statements
  
             Consolidated Balance Sheets (Unaudited)
             March 31, 1995 and December 31, 1994                               4
  
             Consolidated  Statements of Income 
             (Unaudited) Three months ended March 31, 
             1995 and March 31, 1994                                            5
  
             Consolidated Statements of Cash Flows 
             (Unaudited) Three Months ended March 31, 
             1995 and March 31, 1994                                            6
  
             Notes to Consolidated Financial Statements 
             (Unaudited)                                                        7
  
  Item 2.    Management's Discussion and Analysis of 
             Financial Condition and Results of Operation                       9
  
  PART II.   OTHER INFORMATION
  
  Item 6.    Exhibits and Reports on Form 8-K                                  16
  
  
  <PAGE>
                 Commerce Bancorp, Inc. and Subsidiaries
                       Consolidated Balance Sheets
                               (unaudited)
  
  <TABLE>
  <CAPTION>
                                                                                                     March 31,   December 31,
                 (dollars in thousands)                                                                 1995        1994
  <S>                                                                                               <C>         <C>
  Assets         Cash and due from banks                                                               $110,255    $119,697
                 Federal funds sold                                                                      10,000       9,750
                                                                                                     ----------  ----------
                                    Cash and cash equivalents                                           120,255     129,447
                 Mortgages held for sale                                                                  1,202       2,263
                 Securities available for sale                                                          118,190     118,855
                 Securities held to maturity:
                                  U.S. Government agency mortgage-backed obligations                  1,096,930   1,113,359
                                  Collateralized mortgage obligations                                     2,181       2,390
                                  Obligations of state and political subdivisions                           446         565
                                  Other securities                                                       24,117      28,819
                                                                                                     ----------  ----------
                                    Total securities held to maturity
                                     (market value 1995-$1,054,141; 1994-$1,039,311)                  1,123,674   1,145,133
                 Trading securities                                                                       2,304
                 Loans                                                                                  820,109     801,952
                                  Less allowance for loan losses                                         12,909      12,036
                                                                                                     ----------  ----------
                                                                                                        807,200     789,916
                 Bank premises and equipment, net                                                        59,031      57,997
                 Other assets                                                                            50,647      47,679
                                                                                                     ----------  ----------
                                                                                                     $2,282,503  $2,291,290
                                                                                                     ==========  ==========
  
  Liabilities    Deposits:
                                  Demand:
                                    Interest-bearing                                                   $548,319    $510,345
                                    Noninterest-bearing                                                 346,885     367,421
                                  Savings                                                               460,365     488,282
                                  Time                                                                  602,373     468,524
                                                                                                     ----------  ----------
                                    Total deposits                                                    1,957,942   1,834,572
                 Other borrowed money                                                                   144,903     312,895
                 Other liabilities                                                                        7,227       3,565
                 Obligation to Employee Stock Ownership Plan (ESOP)                                       5,128       5,385
                 Long-term debt                                                                          23,000      23,000
                                                                                                     ----------  ----------
                                                                                                      2,138,200   2,179,417
  
  Stockholders'  Common stock, 10,670,887 shares issued (8,889,506 shares in 1994)                       16,672      13,234
  Equity         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                                               111,075      80,033
                 Retained earnings                                                                       15,793      17,757
                                                                                                     ----------  ----------
                                                                                                        151,046     118,530
                 Less commitment to ESOP                                                                  5,128       5,385
                 Less treasury stock, at cost, 99,667 common shares
                                  in 1995 (79,520 in 1994)                                                1,615       1,272
                                                                                                     ----------  ----------
                                    Total stockholders' equity                                          144,303     111,873
                                                                                                     ----------  ----------
  
                                                                                                     $2,282,503  $2,291,290
                                                                                                     ==========  ==========
  </TABLE>
  
  
  
  <PAGE>
  
                  Commerce Bancorp Inc. and Subsidiaries
                    Consolidated Statements of Income
                               (unaudited)
  
  
  
  <TABLE>
  <CAPTION>
                                                                               Three Months Ended
                                                                              March 31,    March 31,
             (dollars in thousands, except per share amounts)                   1995        1994
  <S>                                                                       <C>         <C>
  Interest     Interest and fees on loans                                     $18,679     $15,275
  income       Interest on investments                                         21,082      17,990
               Other interest                                                     656         242
                                                                             --------    --------
                    Total interest income                                      40,417      33,507
                                                                             --------    --------
  
  Interest     Interest on deposits:
  expense         Demand                                                        3,408       2,173
                  Savings                                                       2,686       2,898
                  Time                                                          6,910       4,906
                                                                             --------    --------
                    Total interest on deposits                                 13,004       9,977
               Interest on other borrowed money                                 4,027       2,292
               Interest on long-term debt                                         506         506
                                                                             --------    --------
                    Total interest expense                                     17,537      12,775
                                                                             --------    --------
  
               Net interest income                                             22,880      20,732
               Provision for loan losses                                          857       1,050
                                                                             --------    --------
               Net interest income after provision for loan losses             22,023      19,682
  
  Noninterest  Deposit charges and service fees                                 3,684       3,462
  income       Other operating income                                             909         767
               Net investment securities gains                                      0           0
                                                                             --------    --------
                    Total noninterest income                                    4,593       4,229
                                                                             --------    --------
  
  Noninterest  Salaries                                                         6,252       5,385
  expense      Benefits                                                         1,859       1,600
               Occupancy                                                        1,940       1,781
               Furniture and equipment                                          2,146       1,797
               Office                                                           1,633       1,408
               Audit and regulatory fees and assessments                        1,241       1,175
               Marketing                                                          657         539
               Other real estate (net)                                            698         800
               Other                                                            1,953       2,148
                                                                             --------    --------
                    Total noninterest expenses                                 18,379      16,633
                                                                             --------    --------
  
               Income before income taxes                                       8,237       7,278
               Provision for federal and state income taxes                     2,994       2,641
                                                                             --------    --------
               Net income                                                       5,243       4,637
  
               Dividends on preferred stocks                                      141         393
                                                                             --------    --------
               Net income applicable to common stock                           $5,102      $4,244
                                                                             ========    ========
  
               Net income per common and common equivalent share:
                  Primary                                                       $0.51       $0.53
                                                                             --------    --------
                  Fully diluted                                                 $0.50       $0.48
                                                                             --------    --------
               Average common and common equivalent shares outstanding:
                  Primary                                                       9,937       7,978
                                                                             --------    --------
                  Fully diluted                                                10,496       9,496
                                                                             --------    --------
               Cash dividends declared, common stock                            $0.15       $0.14
                                                                             ========    ========
  </TABLE>
  
  
  
  <PAGE>
  
  
                 Commerce Bancorp, Inc. and Subsidiaries
                  Consolidated Statements of Cash Flows
                               (unaudited)
  
  <TABLE>
  <CAPTION>
                                                                                                 Three Months Ended March 31,
                                    (dollars in thousands)                                            1995         1994
  <S>                                                                                            <C>           <C>
  Operating activities  Net income                                                                  $5,243        $4,637
                        Adjustments to reconcile net income to net cash
                           provided by operating activities:
                              Provision for loan losses                                                857         1,050
                              Provision for depreciation, amortization and accretion                 3,018         5,198
                              Proceeds from sales of mortgages held for sale                         5,214        55,830
                              Originations of mortgages held for sale                               (4,153)      (20,902)
                              Net loan recoveries (chargeoffs)                                          16          (686)
                              (Increase) decrease in other assets                                   (4,388)        4,659
                              Increase (decrease) in other liabilities                               3,662       (16,858)
                                                                                                  --------      --------
                                            Net cash provided by operating activities                9,469        32,928
  
  Investing activities  Proceeds from the maturity of securities available for sale                  4,031        13,750
                        Rollover of money market funds                                              65,425        36,695
                        Proceeds from the maturity of securities held to maturity                   15,837        62,703
                        Purchase of securities available for sale                                     (200)            0
                        Purchase of securities held to maturity                                    (60,687)     (330,334)
                        Purchase of trading securities                                              (2,304)            0
                        Net increase in loans                                                      (19,307)      (14,867)
                        Proceeds from sales of loans                                                 1,150         1,063
                        Purchases of premises and equipment                                         (2,748)       (2,607)
                                                                                                  --------      --------
                                            Net cash provided (used) by investing activities         1,197      (233,597)
  
  Financing activities  Net (decrease) increase in demand and savings deposits                     (10,479)       30,573
                        Net increase in time deposits                                              133,849         2,287
                        Net (decrease) increase in other borrowed money                           (167,992)      179,260
                        Issuance of common stock                                                    25,851             0
                        Dividends paid                                                              (1,517)       (1,449)
                        Proceeds from issuance of common stock under
                          dividend reinvestment and other stock plans                                  724           464
                        Purchase of treasury stock                                                    (343)         (109)
                        Other                                                                           49            49
                                                                                                  --------      --------
                                            Net cash (used) provided by financing activities       (19,858)      211,075
  
                        (Decrease) increase  in cash and cash equivalents                           (9,192)       10,406
                        Cash and cash equivalents at beginning of year                             129,447       105,725
                                                                                                  --------      --------
                        Cash and cash equivalents at end of period                                $120,255      $116,131
                                                                                                  --------      --------
  
                        Supplemental disclosures of cash flow
                          information: Cash paid during the period
                          for:
                            Interest                                                               $15,000       $12,460
                            Income taxes                                                               131            42
                                                                                                  --------      --------
  </TABLE>
  
  
  <PAGE>
  
                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, 1994. The
           results for the three months  ended March 31, 1995 are not  necessarily
           indicative  of the  results  that may be  expected  for the year  ended
           December 31, 1995.
  
                    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.  Certain amounts from
           1994 have been reclassified to conform with 1995 presentation.
  
                    Effective  January  1, 1995,  the  Company  adopted  Financial
           Accounting Standards Board Statements No. 114, "Accounting by Creditors
           for  Impairment  of a Loan" and No. 118, "Accounting  by Creditors  for
           Impairment of a Loan-Income Recognition and Disclosures." The impact of
           adopting these statements was not material.
  
                    In March of 1995,  Commerce  NJ acquired  Cypress  Securities,
           Inc.  ("Cypress"),  a municipal bond underwriter and investment banking
           company.  Vernon  W.  Hill,  II,  the  Chairman,  President,  and Chief
           Executive  Officer of the Company,  was the  principal  shareholder  of
           Cypress.
  
  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 $5,128,000 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 
  
  <PAGE>
  
           future  repricing dates in accordance  with the loan agreement.  As the
           Company makes annual  contributions to the ESOP,  these  contributions,
           plus dividends from the Company's  Series C Preferred Stock held by the
           ESOP, will be used to repay the loan.
  
  D.       Issuance of Common Stock
  
                    On February 15, 1995, the Company  publicly  issued  1,725,000
           shares of common  stock.  Net proceeds to the Company were  $25,851,000
           after deducting expenses of $1,749,000.  The proceeds are earmarked for
           general  corporate  purposes,  including  providing  additional  equity
           capital to the  Company's  bank  subsidiaries  to support the Company's
           branch expansion growth strategy.
  
  
  <PAGE>
  
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation Capital Resources
  
                    At March 31, 1995, stockholders' equity totaled $144.3 million
           or 6.32% of total assets,  compared to $111.9 million or 4.88% of total
           assets at December 31, 1994. On February 15, 1995,  the Company  issued
           1,725,000  shares of common  stock,  resulting in net proceeds of $25.9
           million.
  
                    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,
                                                    1995                1994         Requirements          1995
                                                    ----                ----         ------------          ----
                                                                                                     (in thousands)
  <S>                                              <C>             <C>          <C>               <C>
           Company
                  Risk based capital ratios:
                    Tier 1                          13.09%              9.52%          4.00%              97,010
                    Total capital                   16.45              12.81           8.00               90,220
                  Leverage ratio                     6.09               4.49      3.00-5.00               70,810 (1)
  
           Commerce NJ
                  Risk based capital ratios:
                    Tier 1                          14.37%             11.15%          4.00%              91,800
                    Total capital                   15.53              12.13           8.00               66,670
                  Leverage ratio                     6.79               5.18      3.00-5.00               71,130 (1)
  
           Commerce PA
                  Risk based capital ratios:
                    Tier 1                          12.68%             11.20%          4.00%               8,960
                    Total capital                   13.82              12.30           8.00                6,010
                  Leverage ratio                     6.63               5.77      3.00-5.00                7,180 (1)
  
           Commerce Shore 
                  Risk based capital ratios:
                    Tier 1                          13.22%             12.92%          4.00%              10,230
                    Total capital                   14.48              14.17           8.00                7,180
                  Leverage ratio                     6.40               5.79      3.00-5.00                7,810 (1)
  <FN>
           (1) Based on a minimum regulatory requirement of 3.00%
  </FN>
  </TABLE>
  
  
                    At March 31, 1995, 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, 1995 were $1.96 billion, up $180.2
           million, or 10% over total deposits of $1.78 billion at March 31, 1994,
           and up by $123.3  million,  or 7% from year-end  1994.  Deposit  growth
           during the first quarter of 1995 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.  Historically,
           the most common method of estimating  interest rate risk was to measure
           the  maturity  and  repricing  relationships  between  interest-earning
           assets and  interest-bearing  liabilities  at  specific  points in time
           ("GAP"), typically one year. Under this method, a company is considered
           liability sensitive when the amount of its interest-bearing liabilities
           exceeds the amount of its  interest-earning  assets within the one year
           horizon.  The  following  table  illustrates  the GAP  position  of the
           Company as of March 31, 1995:
  
  <TABLE>
  <CAPTION>
                                                              1-90      91-180     181-365    1-5     Beyond
                                                              Days       Days       Days     Years    5 Years      Total
  <S>                                                     <C>         <C>        <C>       <C>       <C>       <C>
           Rate Sensitive:
           Interest-earning assets
             Loans                                           $416         $12        $23      $251       $108    $   810
             Investment securities                             25          17         33       238        932      1,245
             Federal funds sold                                10                                                     10
                                                            -----       -----      -----     -----      -----      -----
           Total interest-earning assets                      451          29         56       489      1,040      2,065
                                                            -----       -----      -----     -----      -----      -----
           Interest-bearing liabilities
             Deposits
               Transaction accounts                           323                                         685      1,008
               Time                                           306          74         74       139          9        602
             Other borrowed money                             145                                                    145
             Long-term debt                                                                                23         23
                                                            -----       -----      -----     -----      -----      -----
           Total interest-bearing liabilities                 774          74         74       139        717      1,778
                                                            -----       -----      -----     -----      -----      -----
  
           Period GAP                                        (323)        (45)       (18)      350        323     $  287
                                                            -----       -----      -----     -----      -----      -----
           Cumulative GAP                                   $(323)      $(368)     $(386)     $(36)      $287
                                                            =====       =====      =====     =====      =====
  </TABLE>
  
  
                    Management   utilizes   additional  tools,   including  income
           simulation  analysis,  which  provide  a  more  meaningful  measure  of
           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 is used to predict the
           impact on net interest  income of a 300 basis point increase in general
           market interest rates over the next twelve months.  The Company's Asset
           Liability Committee has determined that in the current economic
  
  <PAGE>
  
           environment,  as much as a 10% decrease in net  interest  income over a
           two year period  compared to projected  net  interest  income in a flat
           rate  scenario is an acceptable  level of interest rate risk.  Based on
           its interest rate sensitivity  analysis  prepared as of March 31, 1995,
           it  is  projected  that  net  interest   income  would  be  reduced  by
           approximately  5.8%  over the next two years as a result of a 300 basis
           point   increase   in   general   market   interest   rates   occurring
           proportionately over the next twelve months.
  
                    In the event the Company's interest rate risk models indicated
           an unacceptable  level of risk, the Company could undertake a number of
           actions that would reduce this risk, including the sale of a portion of
           its available for sale portfolio, the use of risk management strategies
           such  as  interest  rate  swaps  and  caps,  or  the  extension  of the
           maturities  of its  short-term  borrowings.  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.
  
                    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.
  
           Short-Term Borrowings
  
                    Short-term  borrowings  consist  primarily of securities  sold
           under  agreement  to  repurchase.  These  borrowings  were  used  as an
           additional  source of funding for the investment  portfolio and to fund
           loan growth  during 1994. At December 31, 1994,  short-term  borrowings
           aggregated $312.9 million and had an average rate of 5.94%.  During the
           first  quarter  of  1995,   the  Company   significantly   reduced  its
           outstanding  short-term  borrowings,  primarily  through increased time
           deposits.  At March 31, 1995,  short-term  borrowings aggregated $144.9
           million and had an average rate of 6.01%.
  
           Interest Earning Assets
  
                    For the three  month  period  ended March 31,  1995,  interest
           earning  assets  remained at $2.07  billion as compared to December 31,
           1994, as payments from the amortizing investment portfolio were used to
           help fund growth in the loan portfolio.
  
           Loans
  
                    During  the  first  quarter  of 1995,  loans  increased  $18.1
           million from $802.0 million to $820.1 million. At March 31, 1995, loans
           represented 42% of total deposits and 36% 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.
  
  
  <PAGE>
  
           Investments
  
                    During the first quarter of 1995, total  securities  decreased
           $19.8  million  from  $1.26  billion to $1.24  billion,  as a result of
           payments  on the  existing  portfolio.  For  the  three  month  period,
           securities  available for sale  decreased from $118.9 million to $118.2
           million,  and securities held to maturity  decreased from $1.15 billion
           to $1.12  billion.  Trading  securities  increased to $2.3 million as a
           result of the  establishment  of Commerce  Capital,  a Bank  Securities
           Dealer  department of Commerce NJ. At March 31, 1995,  the average life
           of the investment portfolio is approximately 7.9 years.
  
                  Short-term  investments  (Federal  funds  sold)  increased  $250
           thousand to $10.0  million.  At March 31, 1995,  total  securities  and
           Federal  funds sold  aggregated  $1.25 billion and  represented  55% of
           total assets.
  
           Net Income
  
                    Net income for the first quarter of 1995 was $5.2 million,  an
           increase of $600 thousand over the $4.6 million  recorded for the first
           quarter of 1994. The increase was due to increased 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 1995 was $.50 per
           common share compared to $.48 per common share for the first quarter of
           1994.
  
                  Return on average  assets  (ROA) and  return on  average  equity
           (ROE)  for  the  first   quarter  of  1995  were   0.91%  and   16.60%,
           respectively,  compared to 0.86% and 18.42%, respectively, for the same
           1994 period.
  
           Net Interest Income
  
                    Net  interest  income  totaled  $22.9  million  for the  first
           quarter of 1995, an increase of $2.2 million or 10%, from $20.7 million
           in the first quarter of 1994. 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 1995  totaled $4.6
           million,  an increase of $364 thousand as compared to the first quarter
           of 1994.  Increased  deposit charges and service fees,  which rose $222
           thousand  from the  first  quarter  of 1994 due to  higher  transaction
           volumes, were primarily responsible for the increase.
  
           Noninterest Expense
  
                    For the first  quarter of 1995,  noninterest  expense  totaled
           $18.4  million,  an increase of $1.7 million,  or 10.5%,  over the same
           period in 1994.  Contributing  to this increase was new branch activity
           in the last three  quarters  of 1994.  As a result of the  addition  of
           these   offices,   staff,   facilities,   and  related   expenses  rose
           accordingly.
  
                    Salaries  increased  $867  thousand due primarily to the 10.3%
           increase in the number of full time  equivalent  (FTE)  employees  from
           1,093 at March 31, 1994 to 1,206 at March 31, 1995. The increase in the
           number of FTE employees  results  primarily  from the branch  expansion
           activities   
  
  <PAGE>
  
           which have  occurred  during the past year.  Benefits  associated  with
           these increased salaries rose $259 thousand.  Occupancy,  furniture and
           equipment,  and  office  expenses  increased  by  $159  thousand,  $349
           thousand,  and $225 thousand,  respectively,  due to additional  branch
           offices and the ongoing refurbishment of existing facilities. Increased
           expenses  included  building rent and real estate taxes,  depreciation,
           maintenance, telecommunications, postage and stationery and supplies.
  
                    Audit  and  regulatory  fees  and  assessments  increased  $66
           thousand over the first  quarter of 1994 due to increased  deposits and
           associated   Federal  deposit  insurance  premiums  on  such  deposits.
           Marketing expense increased $118 thousand due to increased  advertising
           programs,  including  an  emphasis  on the new  markets  served  by the
           expanded  number of  branch  facilities.  Other  real  estate  expenses
           decreased  by $102  thousand as compared to the first  quarter of 1994.
           This decrease is consistent  with the decrease in the other real estate
           portfolio.  Other  noninterest  expenses for the first  quarter of 1995
           decreased $195 thousand from 1994. The decrease resulted primarily from
           decreased  loan  and  printing   expenses  and  lower   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 1995,  this ratio  equaled 3.20%
           versus 3.08% for the comparable 1994 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 64.36% for the first  three  months of 1995 as  compared  to
           63.43% for the same 1994 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, 1995 were $20.9  million,  or .92% of
           total  assets  compared  to $22.3  million  or .97% of total  assets at
           December  31, 1994 and $24.8  million or 1.11% of total assets at March
           31, 1994.
  
                    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, 1995 were $11.0  million or 1.35% of total loans
           compared to $11.8  million or 1.47% of total loans at December 31, 1994
           and $8.9  million or 1.24% of total loans at March 31,  1994.  At March
           31, 1995,  loans past due 90 days or more and still  accruing  interest
           amounted to $92 thousand compared to $211 thousand at December 31, 1994
           and $187  thousand at March 31, 1994.  Additional  loans  considered as
           potential   problem  loans  by  the  Company's   internal  loan  review
           department  ($7.0  million at March 31, 1995,  $7.0 million at December
           31, 1994 and $7.9 million at March 31, 1994) have been  evaluated as to
           risk  exposure in  determining  the adequacy of the  allowance for loan
           losses.
  
                    Other real estate (ORE) at March 31, 1995 totaled $9.9 million
           compared  to $10.5  million at December  31, 1994 and $15.9  million at
           March 31, 1994. These properties have been written down to the lower of
           cost or fair value less disposition costs.
  
                    On pages 14 and 15 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, 1995, December 31, 1994, and March 31, 1994.
  
  
  <PAGE>
  
           The following  summary presents  information  regarding  non-performing
           loans and assets as of March 31, 1995 and the preceding  four quarters:
           (dollar amounts in thousands)
  <TABLE>
  <CAPTION>
                                             March 31,   Dec. 31,  Sept. 30,   June 30,  March 31,
                                               1995       1994       1994       1994       1994
  <S>                                      <C>        <C>        <C>         <C>         <C>
  Non-accrual loans:
    Commercial                                $1,379     $1,624     $1,810     $2,369     $2,747
    Consumer                                   1,025      1,427      1,629      1,603      1,463
    Real Estate:
      Construction                               955        955        922        956        914
      Mortgage                                 7,201      7,240      5,908      4,477      2,349
                                              ------     ------     ------     ------     ------
        Total non-accrual loans               10,560     11,246     10,269      9,405      7,473
                                              ------     ------     ------     ------     ------
  
  Restructured loans
    Commercial                                   142        143        157        160          0
    Consumer                                      29         29
    Real Estate:
      Construction
      Mortgage                                   302        404        280        132      1,383
                                              ------     ------     ------     ------     ------
        Total restructured loans                 473        576        437        292      1,383
                                              ------     ------     ------     ------     ------
  
    Total non-performing loans                11,033     11,822     10,706      9,697      8,856
                                              ------     ------     ------     ------     ------
  
  Other real estate                            9,880     10,517     13,170     15,953     15,921
                                              ------     ------     ------     ------     ------
  
  Total non-performing assets                 20,913     22,339     23,876     25,650     24,777
                                              ------     ------     ------     ------     ------
  
  Loans past due 90 days or more
    and still accruing                            92        211        199        154        187
                                              ------     ------     ------     ------     ------
  
  Total non-performing assets and
    loans past due 90 days or more           $21,005    $22,550    $24,075    $25,804    $24,964
                                             =======    =======    =======    =======    =======
  
  Total non-performing loans as a
    percentage of total period-end
    loans                                       1.35%      1.47%      1.40%      1.31%      1.24%
  
  Total non-performing assets as a
    percentage of total period-end assets       0.92%      0.97%      1.06%      1.12%      1.11%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of total period-end assets       0.92%      0.98%      1.07%      1.13%      1.11%
  
  Allowance for loan losses as a
    percentage of total non-performing
    loans                                        117%       102%       106%       113%       117%
  
  Allowance for loan losses as a percentage
    of total period-end loans                   1.57%      1.50%      1.48%      1.48%      1.45%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of stockholders' equity and
    allowance for loan losses                     13%        18%        20%        22%        22%
  </TABLE>
  
  
  <PAGE>
  
           The following table presents, for the periods indicated, an analysis of
           the allowance for loan losses and other related data:  (dollar  amounts
           in thousands)
  
  <TABLE>
  <CAPTION>
                                                                                                       Year
                                                                       Three Months Ended             Ended
                                                                   03/31/95         03/31/94        12/31/94
  <S>                                                              <C>           <C>              <C>
                 Balance at beginning of period                      $12,036         $10,023         $10,023
                 Provisions charged to operating expenses                857           1,050           4,210
                                                                     -------         -------         -------
                                                                      12,893          11,073          14,233
                 Recoveries on loans charged-off:
                   Commercial                                             12              13             100
                   Consumer                                               63              20             123
                   Real estate                                           101                              22
                                                                     -------         -------         -------
                 Total recoveries                                        176              33             245
  
                 Loans charged-off:
                   Commercial                                            (54)           (446)         (1,519)
                   Consumer                                              (58)           (180)           (530)
                   Real estate                                           (48)            (93)           (393)
                                                                     -------         -------         -------
                 Total charged-off                                      (160)           (719)         (2,442)
                                                                     -------         -------         -------
                 Net charge-offs                                          16            (686)         (2,197)
                                                                     -------         -------         -------
  
                 Balance at end of period                            $12,909         $10,387         $12,036
                                                                     =======         =======         =======
  
  
                 Net charge-offs as a percentage of
                 average loans outstanding                             (0.01) %         0.38  %         0.29  %
  </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, 1995.
  
  
  
  
  
  <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 12, 1995                            /s/ C. Edward Jordan, Jr.
       ------------                            -----------------------------
         (Date)                                   C. EDWARD JORDAN, JR.
                                                EXECUTIVE VICE PRESIDENT
                                              (PRINCIPAL FINANCIAL OFFICER)
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 54226}]
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": "95539370"}, "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, 1995
  
                                         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                              10,594,506
  
         (Title of Class)                   (No. of Shares Outstanding
                                                  as of 05/08/95)
  
  Series C ESOP Cumulative Con-
     vertible Preferred Stock                         417,000
           (Title of Class)                 (No. of Shares Outstanding
                                                  as of 05/08/95)
  COMMERCE BANCORP, INC. AND SUBSIDIARIES
  
                                  INDEX
  
                                                                             Page
  
  PART I.           FINANCIAL INFORMATION
  
  Item 1.    Financial Statements
  
             Consolidated Balance Sheets (Unaudited)
             March 31, 1995 and December 31, 1994                               4
  
             Consolidated  Statements of Income 
             (Unaudited) Three months ended March 31, 
             1995 and March 31, 1994                                            5
  
             Consolidated Statements of Cash Flows 
             (Unaudited) Three Months ended March 31, 
             1995 and March 31, 1994                                            6
  
             Notes to Consolidated Financial Statements 
             (Unaudited)                                                        7
  
  Item 2.    Management's Discussion and Analysis of 
             Financial Condition and Results of Operation                       9
  
  PART II.   OTHER INFORMATION
  
  Item 6.    Exhibits and Reports on Form 8-K                                  16
  Commerce Bancorp, Inc. and Subsidiaries
                       Consolidated Balance Sheets
                               (unaudited)
  March 31,   December 31,
                 (dollars in thousands)                                                                 1995        1994
  Assets         Cash and due from banks                                                               $110,255    $119,697
                 Federal funds sold                                                                      10,000       9,750
                                                                                                     ----------  ----------
                                    Cash and cash equivalents                                           120,255     129,447
                 Mortgages held for sale                                                                  1,202       2,263
                 Securities available for sale                                                          118,190     118,855
                 Securities held to maturity:
                                  U.S. Government agency mortgage-backed obligations                  1,096,930   1,113,359
                                  Collateralized mortgage obligations                                     2,181       2,390
                                  Obligations of state and political subdivisions                           446         565
                                  Other securities                                                       24,117      28,819
                                                                                                     ----------  ----------
                                    Total securities held to maturity
                                     (market value 1995-$1,054,141; 1994-$1,039,311)                  1,123,674   1,145,133
                 Trading securities                                                                       2,304
                 Loans                                                                                  820,109     801,952
                                  Less allowance for loan losses                                         12,909      12,036
                                                                                                     ----------  ----------
                                                                                                        807,200     789,916
                 Bank premises and equipment, net                                                        59,031      57,997
                 Other assets                                                                            50,647      47,679
                                                                                                     ----------  ----------
                                                                                                     $2,282,503  $2,291,290
                                                                                                     ==========  ==========
  
  Liabilities    Deposits:
                                  Demand:
                                    Interest-bearing                                                   $548,319    $510,345
                                    Noninterest-bearing                                                 346,885     367,421
                                  Savings                                                               460,365     488,282
                                  Time                                                                  602,373     468,524
                                                                                                     ----------  ----------
                                    Total deposits                                                    1,957,942   1,834,572
                 Other borrowed money                                                                   144,903     312,895
                 Other liabilities                                                                        7,227       3,565
                 Obligation to Employee Stock Ownership Plan (ESOP)                                       5,128       5,385
                 Long-term debt                                                                          23,000      23,000
                                                                                                     ----------  ----------
                                                                                                      2,138,200   2,179,417
  
  Stockholders'  Common stock, 10,670,887 shares issued (8,889,506 shares in 1994)                       16,672      13,234
  Equity         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                                               111,075      80,033
                 Retained earnings                                                                       15,793      17,757
                                                                                                     ----------  ----------
                                                                                                        151,046     118,530
                 Less commitment to ESOP                                                                  5,128       5,385
                 Less treasury stock, at cost, 99,667 common shares
                                  in 1995 (79,520 in 1994)                                                1,615       1,272
                                                                                                     ----------  ----------
                                    Total stockholders' equity                                          144,303     111,873
                                                                                                     ----------  ----------
  
                                                                                                     $2,282,503  $2,291,290
                                                                                                     ==========  ==========
  Commerce Bancorp Inc. and Subsidiaries
                    Consolidated Statements of Income
                               (unaudited)
  Three Months Ended
                                                                              March 31,    March 31,
             (dollars in thousands, except per share amounts)                   1995        1994
  Interest     Interest and fees on loans                                     $18,679     $15,275
  income       Interest on investments                                         21,082      17,990
               Other interest                                                     656         242
                                                                             --------    --------
                    Total interest income                                      40,417      33,507
                                                                             --------    --------
  
  Interest     Interest on deposits:
  expense         Demand                                                        3,408       2,173
                  Savings                                                       2,686       2,898
                  Time                                                          6,910       4,906
                                                                             --------    --------
                    Total interest on deposits                                 13,004       9,977
               Interest on other borrowed money                                 4,027       2,292
               Interest on long-term debt                                         506         506
                                                                             --------    --------
                    Total interest expense                                     17,537      12,775
                                                                             --------    --------
  
               Net interest income                                             22,880      20,732
               Provision for loan losses                                          857       1,050
                                                                             --------    --------
               Net interest income after provision for loan losses             22,023      19,682
  
  Noninterest  Deposit charges and service fees                                 3,684       3,462
  income       Other operating income                                             909         767
               Net investment securities gains                                      0           0
                                                                             --------    --------
                    Total noninterest income                                    4,593       4,229
                                                                             --------    --------
  
  Noninterest  Salaries                                                         6,252       5,385
  expense      Benefits                                                         1,859       1,600
               Occupancy                                                        1,940       1,781
               Furniture and equipment                                          2,146       1,797
               Office                                                           1,633       1,408
               Audit and regulatory fees and assessments                        1,241       1,175
               Marketing                                                          657         539
               Other real estate (net)                                            698         800
               Other                                                            1,953       2,148
                                                                             --------    --------
                    Total noninterest expenses                                 18,379      16,633
                                                                             --------    --------
  
               Income before income taxes                                       8,237       7,278
               Provision for federal and state income taxes                     2,994       2,641
                                                                             --------    --------
               Net income                                                       5,243       4,637
  
               Dividends on preferred stocks                                      141         393
                                                                             --------    --------
               Net income applicable to common stock                           $5,102      $4,244
                                                                             ========    ========
  
               Net income per common and common equivalent share:
                  Primary                                                       $0.51       $0.53
                                                                             --------    --------
                  Fully diluted                                                 $0.50       $0.48
                                                                             --------    --------
               Average common and common equivalent shares outstanding:
                  Primary                                                       9,937       7,978
                                                                             --------    --------
                  Fully diluted                                                10,496       9,496
                                                                             --------    --------
               Cash dividends declared, common stock                            $0.15       $0.14
                                                                             ========    ========
  Commerce Bancorp, Inc. and Subsidiaries
                  Consolidated Statements of Cash Flows
                               (unaudited)
  Three Months Ended March 31,
                                    (dollars in thousands)                                            1995         1994
  Operating activities  Net income                                                                  $5,243        $4,637
                        Adjustments to reconcile net income to net cash
                           provided by operating activities:
                              Provision for loan losses                                                857         1,050
                              Provision for depreciation, amortization and accretion                 3,018         5,198
                              Proceeds from sales of mortgages held for sale                         5,214        55,830
                              Originations of mortgages held for sale                               (4,153)      (20,902)
                              Net loan recoveries (chargeoffs)                                          16          (686)
                              (Increase) decrease in other assets                                   (4,388)        4,659
                              Increase (decrease) in other liabilities                               3,662       (16,858)
                                                                                                  --------      --------
                                            Net cash provided by operating activities                9,469        32,928
  
  Investing activities  Proceeds from the maturity of securities available for sale                  4,031        13,750
                        Rollover of money market funds                                              65,425        36,695
                        Proceeds from the maturity of securities held to maturity                   15,837        62,703
                        Purchase of securities available for sale                                     (200)            0
                        Purchase of securities held to maturity                                    (60,687)     (330,334)
                        Purchase of trading securities                                              (2,304)            0
                        Net increase in loans                                                      (19,307)      (14,867)
                        Proceeds from sales of loans                                                 1,150         1,063
                        Purchases of premises and equipment                                         (2,748)       (2,607)
                                                                                                  --------      --------
                                            Net cash provided (used) by investing activities         1,197      (233,597)
  
  Financing activities  Net (decrease) increase in demand and savings deposits                     (10,479)       30,573
                        Net increase in time deposits                                              133,849         2,287
                        Net (decrease) increase in other borrowed money                           (167,992)      179,260
                        Issuance of common stock                                                    25,851             0
                        Dividends paid                                                              (1,517)       (1,449)
                        Proceeds from issuance of common stock under
                          dividend reinvestment and other stock plans                                  724           464
                        Purchase of treasury stock                                                    (343)         (109)
                        Other                                                                           49            49
                                                                                                  --------      --------
                                            Net cash (used) provided by financing activities       (19,858)      211,075
  
                        (Decrease) increase  in cash and cash equivalents                           (9,192)       10,406
                        Cash and cash equivalents at beginning of year                             129,447       105,725
                                                                                                  --------      --------
                        Cash and cash equivalents at end of period                                $120,255      $116,131
                                                                                                  --------      --------
  
                        Supplemental disclosures of cash flow
                          information: Cash paid during the period
                          for:
                            Interest                                                               $15,000       $12,460
                            Income taxes                                                               131            42
                                                                                                  --------      --------
  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, 1994. The
           results for the three months  ended March 31, 1995 are not  necessarily
           indicative  of the  results  that may be  expected  for the year  ended
           December 31, 1995.
  
                    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.  Certain amounts from
           1994 have been reclassified to conform with 1995 presentation.
  
                    Effective  January  1, 1995,  the  Company  adopted  Financial
           Accounting Standards Board Statements No. 114, "Accounting by Creditors
           for  Impairment  of a Loan" and No. 118, "Accounting  by Creditors  for
           Impairment of a Loan-Income Recognition and Disclosures." The impact of
           adopting these statements was not material.
  
                    In March of 1995,  Commerce  NJ acquired  Cypress  Securities,
           Inc.  ("Cypress"),  a municipal bond underwriter and investment banking
           company.  Vernon  W.  Hill,  II,  the  Chairman,  President,  and Chief
           Executive  Officer of the Company,  was the  principal  shareholder  of
           Cypress.
  
  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 $5,128,000 through principal  reductions.  Accordingly,
           the loan amount is  reflected  in the  Company's  consolidated  balance
           sheet  as a  liability  and  an  equal  amount,  representing  deferred
           employee benefits,  has been recorded as a deduction from stockholders'
           equity.  The ESOP  obtained  the loan in 1990 to acquire a new class of
           Company Cumulative Convertible Preferred Stock (Series C) at a price of
           $18.00 per share.  The loan was  refinanced in 1994,  and is payable in
           quarterly installments with the final payment due January 28, 2000. The
           loan bears interest at a variable rate, although the
           rate can be fixed at
  future  repricing dates in accordance  with the loan agreement.  As the
           Company makes annual  contributions to the ESOP,  these  contributions,
           plus dividends from the Company's  Series C Preferred Stock held by the
           ESOP, will be used to repay the loan.
  
  D.       Issuance of Common Stock
  
                    On February 15, 1995, the Company  publicly  issued  1,725,000
           shares of common  stock.  Net proceeds to the Company were  $25,851,000
           after deducting expenses of $1,749,000.  The proceeds are earmarked for
           general  corporate  purposes,  including  providing  additional  equity
           capital to the  Company's  bank  subsidiaries  to support the Company's
           branch expansion growth strategy.
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operation Capital Resources
  
                    At March 31, 1995, stockholders' equity totaled $144.3 million
           or 6.32% of total assets,  compared to $111.9 million or 4.88% of total
           assets at December 31, 1994. On February 15, 1995,  the Company  issued
           1,725,000  shares of common  stock,  resulting in net proceeds of $25.9
           million.
  
                    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,
                                                    1995                1994         Requirements          1995
                                                    ----                ----         ------------          ----
                                                                                                     (in thousands)
  Company
                  Risk based capital ratios:
                    Tier 1                          13.09%              9.52%          4.00%              97,010
                    Total capital                   16.45              12.81           8.00               90,220
                  Leverage ratio                     6.09               4.49      3.00-5.00               70,810 (1)
  
           Commerce NJ
                  Risk based capital ratios:
                    Tier 1                          14.37%             11.15%          4.00%              91,800
                    Total capital                   15.53              12.13           8.00               66,670
                  Leverage ratio                     6.79               5.18      3.00-5.00               71,130 (1)
  
           Commerce PA
                  Risk based capital ratios:
                    Tier 1                          12.68%             11.20%          4.00%               8,960
                    Total capital                   13.82              12.30           8.00                6,010
                  Leverage ratio                     6.63               5.77      3.00-5.00                7,180 (1)
  
           Commerce Shore 
                  Risk based capital ratios:
                    Tier 1                          13.22%             12.92%          4.00%              10,230
                    Total capital                   14.48              14.17           8.00                7,180
                  Leverage ratio                     6.40               5.79      3.00-5.00                7,810 (1)
  (1) Based on a minimum regulatory requirement of 3.00%
  At March 31, 1995, 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, 1995 were $1.96 billion, up $180.2
           million, or 10% over total deposits of $1.78 billion at March 31, 1994,
           and up by $123.3  million,  or 7% from year-end  1994.  Deposit  growth
           during the first quarter of 1995 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.  Historically,
           the most common method of estimating  interest rate risk was to measure
           the  maturity  and  repricing  relationships  between  interest-earning
           assets and  interest-bearing  liabilities  at  specific  points in time
           ("GAP"), typically one year. Under this method, a company is considered
           liability sensitive when the amount of its interest-bearing liabilities
           exceeds the amount of its  interest-earning  assets within the one year
           horizon.  The  following  table  illustrates  the GAP  position  of the
           Company as of March 31, 1995:
  1-90      91-180     181-365    1-5     Beyond
                                                              Days       Days       Days     Years    5 Years      Total
  Rate Sensitive:
           Interest-earning assets
             Loans                                           $416         $12        $23      $251       $108    $   810
             Investment securities                             25          17         33       238        932      1,245
             Federal funds sold                                10                                                     10
                                                            -----       -----      -----     -----      -----      -----
           Total interest-earning assets                      451          29         56       489      1,040      2,065
                                                            -----       -----      -----     -----      -----      -----
           Interest-bearing liabilities
             Deposits
               Transaction accounts                           323                                         685      1,008
               Time                                           306          74         74       139          9        602
             Other borrowed money                             145                                                    145
             Long-term debt                                                                                23         23
                                                            -----       -----      -----     -----      -----      -----
           Total interest-bearing liabilities                 774          74         74       139        717      1,778
                                                            -----       -----      -----     -----      -----      -----
  
           Period GAP                                        (323)        (45)       (18)      350        323     $  287
                                                            -----       -----      -----     -----      -----      -----
           Cumulative GAP                                   $(323)      $(368)     $(386)     $(36)      $287
                                                            =====       =====      =====     =====      =====
  Management   utilizes   additional  tools,   including  income
           simulation  analysis,  which  provide  a  more  meaningful  measure  of
           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 is used to predict the
           impact on net interest  income of a 300 basis point increase in general
           market interest rates over the next twelve months.  The Company's Asset
           Liability Committee has determined that in the current economic
  environment,  as much as a 10% decrease in net  interest  income over a
           two year period  compared to projected  net  interest  income in a flat
           rate  scenario is an acceptable  level of interest rate risk.  Based on
           its interest rate sensitivity  analysis  prepared as of March 31, 1995,
           it  is  projected  that  net  interest   income  would  be  reduced  by
           approximately  5.8%  over the next two years as a result of a 300 basis
           point   increase   in   general   market   interest   rates   occurring
           proportionately over the next twelve months.
  
                    In the event the Company's interest rate risk models indicated
           an unacceptable  level of risk, the Company could undertake a number of
           actions that would reduce this risk, including the sale of a portion of
           its available for sale portfolio, the use of risk management strategies
           such  as  interest  rate  swaps  and  caps,  or  the  extension  of the
           maturities  of its  short-term  borrowings.  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.
  
                    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.
  
           Short-Term Borrowings
  
                    Short-term  borrowings  consist  primarily of securities  sold
           under  agreement  to  repurchase.  These  borrowings  were  used  as an
           additional  source of funding for the investment  portfolio and to fund
           loan growth  during 1994. At December 31, 1994,  short-term  borrowings
           aggregated $312.9 million and had an average rate of 5.94%.  During the
           first  quarter  of  1995,   the  Company   significantly   reduced  its
           outstanding  short-term  borrowings,  primarily  through increased time
           deposits.  At March 31, 1995,  short-term  borrowings aggregated $144.9
           million and had an average rate of 6.01%.
  
           Interest Earning Assets
  
                    For the three  month  period  ended March 31,  1995,  interest
           earning  assets  remained at $2.07  billion as compared to December 31,
           1994, as payments from the amortizing investment portfolio were used to
           help fund growth in the loan portfolio.
  
           Loans
  
                    During  the  first  quarter  of 1995,  loans  increased  $18.1
           million from $802.0 million to $820.1 million. At March 31, 1995, loans
           represented 42% of total deposits and 36% 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
  
                    During the first quarter of 1995, total  securities  decreased
           $19.8  million  from  $1.26  billion to $1.24  billion,  as a result of
           payments  on the  existing  portfolio.  For  the  three  month  period,
           securities  available for sale  decreased from $118.9 million to $118.2
           million,  and securities held to maturity  decreased from $1.15 billion
           to $1.12  billion.  Trading  securities  increased to $2.3 million as a
           result of the  establishment  of Commerce  Capital,  a Bank  Securities
           Dealer  department of Commerce NJ. At March 31, 1995,  the average life
           of the investment portfolio is approximately 7.9 years.
  
                  Short-term  investments  (Federal  funds  sold)  increased  $250
           thousand to $10.0  million.  At March 31, 1995,  total  securities  and
           Federal  funds sold  aggregated  $1.25 billion and  represented  55% of
           total assets.
  
           Net Income
  
                    Net income for the first quarter of 1995 was $5.2 million,  an
           increase of $600 thousand over the $4.6 million  recorded for the first
           quarter of 1994. The increase was due to increased 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 1995 was $.50 per
           common share compared to $.48 per common share for the first quarter of
           1994.
  
                  Return on average  assets  (ROA) and  return on  average  equity
           (ROE)  for  the  first   quarter  of  1995  were   0.91%  and   16.60%,
           respectively,  compared to 0.86% and 18.42%, respectively, for the same
           1994 period.
  
           Net Interest Income
  
                    Net  interest  income  totaled  $22.9  million  for the  first
           quarter of 1995, an increase of $2.2 million or 10%, from $20.7 million
           in the first quarter of 1994. 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 1995  totaled $4.6
           million,  an increase of $364 thousand as compared to the first quarter
           of 1994.  Increased  deposit charges and service fees,  which rose $222
           thousand  from the  first  quarter  of 1994 due to  higher  transaction
           volumes, were primarily responsible for the increase.
  
           Noninterest Expense
  
                    For the first  quarter of 1995,  noninterest  expense  totaled
           $18.4  million,  an increase of $1.7 million,  or 10.5%,  over the same
           period in 1994.  Contributing  to this increase was new branch activity
           in the last three  quarters  of 1994.  As a result of the  addition  of
           these   offices,   staff,   facilities,   and  related   expenses  rose
           accordingly.
  
                    Salaries  increased  $867  thousand due primarily to the 10.3%
           increase in the number of full time  equivalent  (FTE)  employees  from
           1,093 at March 31, 1994 to 1,206 at March 31, 1995. The increase in the
           number of FTE employees  results  primarily  from the branch  expansion
           activities
  which have  occurred  during the past year.  Benefits  associated  with
           these increased salaries rose $259 thousand.  Occupancy,  furniture and
           equipment,  and  office  expenses  increased  by  $159  thousand,  $349
           thousand,  and $225 thousand,  respectively,  due to additional  branch
           offices and the ongoing refurbishment of existing facilities. Increased
           expenses  included  building rent and real estate taxes,  depreciation,
           maintenance, telecommunications, postage and stationery and supplies.
  
                    Audit  and  regulatory  fees  and  assessments  increased  $66
           thousand over the first  quarter of 1994 due to increased  deposits and
           associated   Federal  deposit  insurance  premiums  on  such  deposits.
           Marketing expense increased $118 thousand due to increased  advertising
           programs,  including  an  emphasis  on the new  markets  served  by the
           expanded  number of  branch  facilities.  Other  real  estate  expenses
           decreased  by $102  thousand as compared to the first  quarter of 1994.
           This decrease is consistent  with the decrease in the other real estate
           portfolio.  Other  noninterest  expenses for the first  quarter of 1995
           decreased $195 thousand from 1994. The decrease resulted primarily from
           decreased  loan  and  printing   expenses  and  lower   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 1995,  this ratio  equaled 3.20%
           versus 3.08% for the comparable 1994 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 64.36% for the first  three  months of 1995 as  compared  to
           63.43% for the same 1994 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, 1995 were $20.9  million,  or .92% of
           total  assets  compared  to $22.3  million  or .97% of total  assets at
           December  31, 1994 and $24.8  million or 1.11% of total assets at March
           31, 1994.
  
                    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, 1995 were $11.0  million or 1.35% of total loans
           compared to $11.8  million or 1.47% of total loans at December 31, 1994
           and $8.9  million or 1.24% of total loans at March 31,  1994.  At March
           31, 1995,  loans past due 90 days or more and still  accruing  interest
           amounted to $92 thousand compared to $211 thousand at December 31, 1994
           and $187  thousand at March 31, 1994.  Additional  loans  considered as
           potential   problem  loans  by  the  Company's   internal  loan  review
           department  ($7.0  million at March 31, 1995,  $7.0 million at December
           31, 1994 and $7.9 million at March 31, 1994) have been  evaluated as to
           risk  exposure in  determining  the adequacy of the  allowance for loan
           losses.
  
                    Other real estate (ORE) at March 31, 1995 totaled $9.9 million
           compared  to $10.5  million at December  31, 1994 and $15.9  million at
           March 31, 1994. These properties have been written down to the lower of
           cost or fair value less disposition costs.
  
                    On pages 14 and 15 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, 1995, December 31, 1994, and March 31, 1994.
  The following  summary presents  information  regarding  non-performing
           loans and assets as of March 31, 1995 and the preceding  four quarters:
           (dollar amounts in thousands)
  March 31,   Dec. 31,  Sept. 30,   June 30,  March 31,
                                               1995       1994       1994       1994       1994
  Non-accrual loans:
    Commercial                                $1,379     $1,624     $1,810     $2,369     $2,747
    Consumer                                   1,025      1,427      1,629      1,603      1,463
    Real Estate:
      Construction                               955        955        922        956        914
      Mortgage                                 7,201      7,240      5,908      4,477      2,349
                                              ------     ------     ------     ------     ------
        Total non-accrual loans               10,560     11,246     10,269      9,405      7,473
                                              ------     ------     ------     ------     ------
  
  Restructured loans
    Commercial                                   142        143        157        160          0
    Consumer                                      29         29
    Real Estate:
      Construction
      Mortgage                                   302        404        280        132      1,383
                                              ------     ------     ------     ------     ------
        Total restructured loans                 473        576        437        292      1,383
                                              ------     ------     ------     ------     ------
  
    Total non-performing loans                11,033     11,822     10,706      9,697      8,856
                                              ------     ------     ------     ------     ------
  
  Other real estate                            9,880     10,517     13,170     15,953     15,921
                                              ------     ------     ------     ------     ------
  
  Total non-performing assets                 20,913     22,339     23,876     25,650     24,777
                                              ------     ------     ------     ------     ------
  
  Loans past due 90 days or more
    and still accruing                            92        211        199        154        187
                                              ------     ------     ------     ------     ------
  
  Total non-performing assets and
    loans past due 90 days or more           $21,005    $22,550    $24,075    $25,804    $24,964
                                             =======    =======    =======    =======    =======
  
  Total non-performing loans as a
    percentage of total period-end
    loans                                       1.35%      1.47%      1.40%      1.31%      1.24%
  
  Total non-performing assets as a
    percentage of total period-end assets       0.92%      0.97%      1.06%      1.12%      1.11%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of total period-end assets       0.92%      0.98%      1.07%      1.13%      1.11%
  
  Allowance for loan losses as a
    percentage of total non-performing
    loans                                        117%       102%       106%       113%       117%
  
  Allowance for loan losses as a percentage
    of total period-end loans                   1.57%      1.50%      1.48%      1.48%      1.45%
  
  Total non-performing assets and loans
    past due 90 days or more as a
    percentage of stockholders' equity and
    allowance for loan losses                     13%        18%        20%        22%        22%
  The following table presents, for the periods indicated, an analysis of
           the allowance for loan losses and other related data:  (dollar  amounts
           in thousands)
  Year
                                                                       Three Months Ended             Ended
                                                                   03/31/95         03/31/94        12/31/94
  Balance at beginning of period                      $12,036         $10,023         $10,023
                 Provisions charged to operating expenses                857           1,050           4,210
                                                                     -------         -------         -------
                                                                      12,893          11,073          14,233
                 Recoveries on loans charged-off:
                   Commercial                                             12              13             100
                   Consumer                                               63              20             123
                   Real estate                                           101                              22
                                                                     -------         -------         -------
                 Total recoveries                                        176              33             245
  
                 Loans charged-off:
                   Commercial                                            (54)           (446)         (1,519)
                   Consumer                                              (58)           (180)           (530)
                   Real estate                                           (48)            (93)           (393)
                                                                     -------         -------         -------
                 Total charged-off                                      (160)           (719)         (2,442)
                                                                     -------         -------         -------
                 Net charge-offs                                          16            (686)         (2,197)
                                                                     -------         -------         -------
  
                 Balance at end of period                            $12,909         $10,387         $12,036
                                                                     =======         =======         =======
  
                 Net charge-offs as a percentage of
                 average loans outstanding                             (0.01) %         0.38  %         0.29  %
  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, 1995.
  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 12, 1995                            /s/ C. Edward Jordan, Jr.
       ------------                            -----------------------------
         (Date)                                   C. EDWARD JORDAN, JR.
                                                EXECUTIVE VICE PRESIDENT
                                              (PRINCIPAL FINANCIAL OFFICER)