FORM 10-Q

                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

   (Mark One)
   [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
   SECURITIES EXCHANGE ACT OF 1934

   For the quarterly period ended     June 30, 1999
                                  ----------------------------
                               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 Number:                       1-6451
                                     --------------------------
                             SUMMIT BANCORP.

            (Exact name of registrant as specified in its charter)

       New Jersey                                   22-1903313
   --------------------------------------------------------------
   (State or other jurisdiction of              (I.R.S. Employer
   incorporation or organization               Identification No.)

   301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066
   --------------------------------------------------------------
   (Address of principal executive offices)                 (Zip Code)

                            (609) 987-3200
   --------------------------------------------------------------
     (Registrant's telephone number, including area code)

   -------------------------------------------------------------
           (Former name, former address and former fiscal year, if
                     changed since last report)

        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  reports),  and (2) has been subject to
   such filing requirements for the past 90 days.
                            [X] Yes   [ ] No

   As                 of August 1, 1999 there were 177,061,084  shares of common
                      stock, $.80 par value, outstanding.

   ===================================================================


                         Summit Bancorp
                          Form 10-Q
                           Index

                                                            Page No.
Part I     Financial Information

Item 1.    Financial Statements-Unaudited

           Consolidated Balance Sheets-
           June 30, 1999, December 31, 1998 and June 30,1998      2

           Consolidated Statements of Income-
            Three and Six Months Ended June 30, 1999 and 1998     3

           Consolidated Statements of Cash Flows-
            Six Months Ended June 30, 1999 and 1998               4

           Consolidated Statements of Shareholders' Equity-
            Six Months Ended June 30, 1999 and 1998               5

           Notes to Consolidated Financial Statements             6

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                    8

Item 3.    Quantitative and Qualitative Disclosures
            About Market Risk                                    24

Part II.   Other Information

Item 1.    Legal Proceedings                                     25

Item 2.    Changes in Securities and Use of Proceeds             26

Item 3.    Defaults Upon Senior Securities                       26

Item 4.    Submissions of Matters to a Vote of Security Holders  26

Item 5.    Other Information                                     26

Item 6.    Exhibits and Reports on Form 8-K                      26

           Signature                                             27

           Exhibit Index                                         28




<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Balance Sheets
Unaudited
(In thousands)


                                                                  June 30,      December 31,          June 30,
                                                                     1999              1998              1998
                                                              ------------      ------------      ------------
<S>                                                            <C>               <C>               <C>
Assets
Cash and due from banks                                   $     1,009,863   $     1,129,859   $     1,153,023
Federal funds sold and securities purchased
      under agreements to resell                                   16,463            28,829           176,000
Interest-bearing deposits with banks                               15,297            26,360            34,476
Securities:
Trading account securities                                         18,990            12,553            23,797
Securities available for sale                                   4,375,966         3,970,941         4,295,945
Securities held to maturity                                     6,378,484         6,015,810         5,070,615
                                                              ------------      ------------      ------------
      Total securities                                         10,773,440         9,999,304         9,390,357
Loans (net of unearned discount):
Commercial                                                      7,526,178         7,156,574         6,682,510
Commercial mortgage                                             2,897,752         2,888,597         2,863,378
Residential mortgage                                            5,488,340         5,719,305         5,635,144
Consumer                                                        5,626,550         5,362,101         4,523,071
                                                              ------------      ------------      ------------
Total loans                                                    21,538,820        21,126,577        19,704,103
Less: Allowance for loan losses                                   321,700           322,814           308,753
                                                              ------------      ------------      ------------
Net loans                                                      21,217,120        20,803,763        19,395,350
                                                              ------------      ------------      ------------
Premises and equipment                                            306,528           270,843           249,156
Goodwill and other intangibles                                    316,610           295,461           179,206
Accrued interest receivable                                       202,306           195,708           188,559
Due from customers on acceptances                                  20,901            18,089            16,608
Other assets                                                      347,232           333,098           359,308
                                                              ------------      ------------      ------------
Total Assets                                              $    34,225,760   $    33,101,314   $    31,142,043
                                                              ============      ============      ============

Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand deposits                      $     4,863,591   $     4,933,787   $     4,785,430
Interest-bearing deposits:
Savings and time deposits                                      17,894,879        17,250,295        16,409,298
Commercial certificates of deposit $100,000 and over              684,430           961,046           911,722
                                                              ------------      ------------      ------------
Total deposits                                                 23,442,900        23,145,128        22,106,450
                                                              ------------      ------------      ------------
Other borrowed funds                                            3,734,712         3,189,988         4,152,961
Accrued expenses and other liabilities                            343,443           358,542           317,030
Accrued interest payable                                           80,413            94,430            85,123
Bank acceptances outstanding                                       20,901            18,089            16,608
Long-term debt                                                  4,001,925         3,572,710         1,881,289
                                                              ------------      ------------      ------------
      Total liabilities                                        31,624,294        30,378,887        28,559,461
Shareholders' equity:
Common stock par value $ .80:  Authorized 390,000 shares          142,018           142,106           142,123
Surplus                                                           966,429         1,013,393         1,006,812
Retained earnings                                               1,859,908         1,728,135         1,596,600
Employee stock ownership plan obligation                           (2,250)           (3,394)           (3,663)
Accumulated other comprehensive income, net of tax                (39,478)           12,087            22,669
Common stock held in treasury, at cost                           (325,161)         (169,900)         (181,959)
                                                              ------------      ------------      ------------
Total shareholders' equity                                      2,601,466         2,722,427         2,582,582
                                                              ------------      ------------      ------------
Total Liabilities and Shareholders' Equity                $    34,225,760   $    33,101,314   $    31,142,043
                                                              ============      ============      ============

Common shares at period end:
      Issued                                                      177,523           177,632           177,654
      Treasury                                                      7,883             3,873             3,720
      Outstanding                                                 169,640           173,759           173,934

      See accompanying Notes to Consolidated Financial Statements.

</TABLE>



<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Statements of Income
Unaudited
(In thousands, except per share data)


                                                                     Three Months Ended               Six Months Ended
                                                                           June 30,                       June 30,
                                                                 --------------------------      --------------------------
                                                                    1999           1998             1999           1998
<S>                                                              <C>            <C>              <C>            <C>
                                                                 -----------    -----------      -----------    -----------
Interest Income
Loans                                                          $    407,045   $    392,005     $    810,712   $    772,314
Securities:
  Trading account securities                                            135            331              217            885
  Securities available for sale                                      60,069         76,324          119,630        161,346
  Securities held to maturity                                       100,850         69,117          197,390        131,723
                                                                 -----------    -----------      -----------    -----------
    Total securities                                                161,054        145,772          317,237        293,954
Other interest income                                                   612            611            1,207          1,449
                                                                 -----------    -----------      -----------    -----------
    Total interest income                                           568,711        538,388        1,129,156      1,067,717
                                                                 -----------    -----------      -----------    -----------
Interest Expense
  Savings and time deposits                                         157,347        153,706          308,749        310,574
  Commercial certificates of deposit $100,000 and over                9,460         12,302           21,035         24,559
  Borrowed funds, including long-term debt                           93,313         77,487          185,437        148,533
                                                                 -----------    -----------      -----------    -----------
    Total interest expense                                          260,120        243,495          515,221        483,666
                                                                 -----------    -----------      -----------    -----------
    Net interest income                                             308,591        294,893          613,935        584,051
  Provision for loan losses                                          16,500         18,000           33,000         33,000
                                                                 -----------    -----------      -----------    -----------
    Net interest income after provision for loan losses             292,091        276,893          580,935        551,051
Non-Interest Income
  Service charges on deposit accounts                                29,567         31,653           59,643         61,937
  Service and loan fee income                                        16,011         15,199           31,635         28,113
  Trust income                                                       12,844         10,851           24,770         21,078
  Retail investment and insurance fees                               18,982         13,155           37,010         24,819
  Securities gains                                                    2,094          3,072            2,311          4,498
  Other                                                              16,429         16,213           38,715         29,218
                                                                 -----------    -----------      -----------    -----------
    Total non-interest income                                        95,927         90,143          194,084        169,663
                                                                 -----------    -----------      -----------    -----------
Non-Interest Expenses
  Salaries                                                           82,606         74,422          162,932        150,915
  Pension and other employee benefits                                29,132         27,202           59,149         53,820
  Furniture and equipment                                            22,517         20,816           44,968         41,183
  Occupancy, net                                                     19,263         17,605           39,098         36,105
  Communications                                                      9,696          9,044           19,314         18,576
  Advertising and public relations                                    5,927          6,352           11,455         12,275
  Amoritization of goodwill and other intangibles                     6,468          4,691           12,339          9,414
  Other                                                              31,607         31,787           63,398         61,284
                                                                 -----------    -----------      -----------    -----------
    Total non-interest expenses                                     207,216        191,919          412,653        383,572
                                                                 -----------    -----------      -----------    -----------
Net Income before taxes                                             180,802        175,117          362,366        337,142
  Federal and state income taxes                                     60,465         56,640          123,288        106,248
                                                                 -----------    -----------      -----------    -----------
Net Income                                                     $    120,337   $    118,477     $    239,078   $    230,894
                                                                 ===========    ===========      ===========    ===========
Net Income per Common Share:
    Basic                                                      $       0.71   $       0.67     $       1.39   $       1.31
                                                                 ===========    ===========      ===========    ===========
    Diluted                                                            0.70           0.66             1.38           1.29
                                                                 ===========    ===========      ===========    ===========

Average Common Shares Outstanding:
    Basic                                                           170,656        176,127          172,216        176,528
                                                                 ===========    ===========      ===========    ===========
    Diluted                                                         172,282        178,232          173,861        178,739
                                                                 ===========    ===========      ===========    ===========

See accompanying Notes to Consolidated Financial Statements.

</TABLE>




<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Statements of Cash Flows
Unaudited
(In thousands)



                                                                                Six Months Ended
                                                                                     June 30,
                                                                            --------------------------
Operating activities                                                           1999           1998
                                                                            -----------    -----------
 <S>                                                                          <C>            <C>
 Net income                                                                   $239,078       $230,894
 Adjustments  to  reconcile  net  income  to  net  cash  provided  by  operating
  activities:
   Provision for loan losses and other real estate owned                        33,000         33,120
   Depreciation, amortization and accretion, net                                35,108         22,161
   Gains on sales of securities                                                 (2,311)        (4,498)
   Gains on sales of mortgages held for sale                                   (10,756)        (7,273)
   Gains on the sales of other real estate owned                                  (988)        (2,314)
   Proceeds from the sales of other real estate owned                            6,338          9,784
   Proceeds from the sales of mortgages held for sale                          463,476        395,987
   Originations of mortgages held for sale                                    (480,013)      (474,198)
   Net (increase) decrease in trading account securities                        (6,437)        11,370
   Net change in other accrued and deferred income and expense                 (48,612)       (10,751)
                                                                            -----------    -----------
    Net cash provided by operating activities                                  227,883        204,282
                                                                            -----------    -----------
Investing activities
 Purchases of securities held to maturity                                   (1,630,736)    (2,031,896)
 Purchases of investment securities available for sale                      (2,039,333)    (1,294,197)
 Proceeds from maturities of securities held to maturity                     1,273,983      1,104,088
 Proceeds from maturities of securities available for sale                   1,068,731      1,363,435
 Proceeds from the sales of securities available for sale                      533,850        732,133
 Net decrease (increase) in Federal funds sold, securities purchased under
  agreements to resell and interest bearing deposits with banks                 28,629       (191,944)
 Net increase in loans                                                        (330,514)      (753,147)
 Purchases of premises and equipment, net                                      (39,799)       (44,506)
                                                                            -----------    -----------
    Net cash used in investing activities                                   (1,135,189)    (1,116,034)
                                                                            -----------    -----------
Financing activities
 Net increase (decrease) in deposits                                           143,882       (222,986)
 Net increase in short-term borrowings                                         544,724        755,008
 Principal payments on long-term debt                                          (72,737)      (170,941)
 Proceeds from the issuance of long-term debt                                  501,860        805,895
 Dividends paid                                                               (104,044)       (95,667)
 Purchase of common stock                                                     (239,970)      (192,289)
 Proceeds from issuance of common stock under stock option plans                 7,099         12,637
                                                                            -----------    -----------
    Net cash provided by financing activities                                  780,814        891,657
                                                                            -----------    -----------
Decrease in cash and due from banks                                           (126,492)       (20,095)
Beginning cash balance of acquired entities                                      6,496              -
Cash and due from banks at beginning of period                               1,129,859      1,173,118
                                                                            -----------    -----------
Cash and due from banks at end of period                                    $1,009,863     $1,153,023
                                                                            ===========    ===========


Supplemental disclosure of cash flow information Cash paid:
  Interest payments                                                           $529,238       $470,145
  Income tax payments                                                           84,942         45,358
Noncash investing activities:
  Net transfer of loans to other real estate owned                               5,986          3,831

See accompanying Notes to Consolidated Financial Statements


</TABLE>






<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Statements of Shareholders' Equity
Unaudited
(In thousands)

                                                                                            Accum. Other                Total
                                          Common                   Retained        ESOP     Comprehensive   Treasury   Shareholders'
                                          Stock       Surplus      Earnings     Obligation      Income       Stock      Equity
                                        ----------    ----------    ---------   ----------   -----------  ----------   -----------
<S>                                       <C>          <C>         <C>          <C>          <C>         <C>           <C>
Balance, December 31, 1997              $  141,272   $  987,281   $ 1,467,193   $ (4,201)   $ 20,875      $      -   $ 2,612,420
Comprehensive income:
 Net income                                      -            -       230,894          -           -             -       230,894
Unrealized holding gain on securities
   arising during the period, net of tax         -            -             -          -       1,794             -         1,794
                                                                                                                        --------
  Total comprehensive income                                                                                             232,688
Cash dividend declared on common stock           -            -      (101,487)         -           -             -      (101,487)
Employee stock plans (1,262 shares)            851       19,531             -          -           -        10,330        30,712
Purchase of common stock (3,926 shares)          -            -             -          -           -      (192,289)     (192,289)
ESOP debt repayment                              -            -             -        538           -             -           538
                                        -----------  ----------     ---------    --------     ------    -----------    ---------
Balance, June 30, 1998                $    142,123   $1,006,812    $1,596,600   $ (3,663)  $  22,669  $   (181,959)  $ 2,582,582
                                        ===========  ==========     =========    ========     ======    ===========    =========


Balance, December 31, 1998            $    142,106   $1,013,393    $1,728,135   $ (3,394)  $  12,087  $   (169,900)  $ 2,722,427
Comprehensive income:
  Net income                                     -            -       239,078          -           -             -       239,078
  Unrealized holding loss on securities
   arising during the period, net of tax         -            -             -          -     (51,565)            -       (51,565)
                                                                                                                         --------
Total comprehensive income                                                                                               187,513
Cash dividend declared on common stock           -            -      (107,305)         -           -             -      (107,305)
Employee stock plans (877 shares)              (88)     (48,531)            -          -           -        37,630       (10,989)
Shares issued for acquisitions (1,131 shares)    -        1,567             -          -           -        47,079        48,646
Purchase of common stock (6,018 shares)          -            -             -          -           -      (239,970)     (239,970)
ESOP debt repayment                              -            -             -      1,144           -             -         1,144
                                       -----------    ---------      --------    -------      ------    -----------    ----------
Balance, June 30, 1999                $    142,018   $  966,429   $ 1,859,908   $ (2,250)  $ (39,478)  $  (325,161)  $ 2,601,466
                                       ===========    =========     =========    =======      ======    ===========    ==========


See accompanying Notes to Consolidated Financial Statements.

</TABLE>





                     Summit Bancorp and Subsidiaries
               Notes to Consolidated Financial Statements
                               (Unaudited)

1.) Basis of Presentation

The accompanying financial statements reflect, in the opinion of management, all
normal  recurring  adjustments  necessary  to present  fairly  the  consolidated
financial  position of Summit Bancorp and  subsidiaries  (Summit  Bancorp),  the
consolidated  results  of  operations,  changes  in cash  flows and  changes  in
shareholders'  equity.  All significant  intercompany  accounts and transactions
have been eliminated in consolidation.  In all material respects,  the financial
statements   presented  comply  with  the  current  reporting   requirements  of
supervisory authorities.  Certain prior period amounts have been reclassified to
conform  to  the  financial  statement  presentation  of  1999.  For  additional
information  and  disclosures   required  under  generally  accepted  accounting
principles,  reference is made to Summit  Bancorp's  1998 Annual  Report on Form
10-K.

2.) Acquisitions

On March 31, 1999,  Summit Bancorp  completed the acquisition of New Canaan Bank
and Trust Company.  New Canaan Bank and Trust Company was  headquartered  in New
Canaan, Connecticut and operated four branches with $182 million in assets. This
acquisition  was accounted  for as a purchase,  with the issuance of 1.1 million
shares of  treasury  stock.  The cost in excess of the fair  value of net assets
acquired resulted in goodwill of $35.1 million.

On August 1, 1999,  Summit  Bancorp  competed the  acquistion of Prime  Bancorp.
Prime Bancorp was headquartered in Fort Washington, Pennsylvania and operated 27
branches with $1.0 billion in assets.  This  acquisition  was accounted for as a
purchase,  with the  issuance of  approximately  7.4 million  shares of treasury
stock.

3.) Net Income per Common Share

Basic net income per common  share is  calculated  by dividing net income by the
weighted average common shares outstanding during the period. Diluted net income
per common  share is computed  similarly  to that of basic net income per common
share,  except  that the  denominator  is  increased  to  include  the number of
additional  common shares that would have been  outstanding  if all  potentially
dilutive  common  shares,  principally  stock  options,  were issued  during the
reporting period.

<TABLE>
-------------------------------------------------------------------------------------------
(in  thousands,  except per share data) Three  months  ended June 30, Six months
ended June 30,
-------------------------------------------------------------------------------------------
<S>                                  <C>           <C>               <C>           <C>
                                       1999          1998             1999          1998
-------------------------------------------------------------------------------------------
Net Income                           $120,337      $118,477          $239,078      $230,894
===========================================================================================
Basic weighted-average
  common shares outstanding           170,656       176,127           172,216       176,528
Plus:Common stock equivalents           1,626         2,105             1,645         2,211
-------------------------------------------------------------------------------------------
Diluted weighted-average
  common shares outstanding           172,282       178,232           173,861       178,739
===========================================================================================
Net income per common share:
Basic                                $   0.71      $   0.67          $   1.39      $   1.31
Diluted                                  0.70          0.66              1.38          1.29
-------------------------------------------------------------------------------------------
</TABLE>






4.) Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities. It requires
recognition of all derivative instruments as either assets or liabilities in the
statement of financial  position and  measurement  of those  instruments at fair
value. The adoption of SFAS No. 133 is not expected to have a material impact on
the  financial  position or results of operations  of Summit  Bancorp.  With the
issuance of SFAS No. 137  "Accounting  for  Derivative  Instruments  and Hedging
Activities-Deferral  of  the  effective  date  of  FASB  Statement  No.133"  the
effective  date of SFAS No. 133 has been deferred to all fiscal years  beginning
after June 15, 2000.

In October 1998, the FASB issued SFAS No. 134,  "Accounting for Mortgage- Backed
Securities  Retained after the Securitization of Mortgage Loans Held for Sale by
an Mortgage Banking  Enterprise." This statement is an amendment of SFAS No. 65.
"Accounting for Certain  Mortgage  Banking  Activities," and requires that after
the  securitization  of  mortgage  loans  held for sale,  an entity  engaged  in
mortgage banking activities classify the resulting mortgage-backed securities or
retained  interests  based  on its  ability  and  intent  to sell or hold  those
investments.  This statement is effective for the first fiscal quarter beginning
after  December 15, 1998. The adoption of the provisions of SFAS No. 134 did not
have a material  impact on the  financial  position or results of  operations of
Summit Bancorp.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
   FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Summit Bancorp is a bank holding company headquartered in Princeton, New Jersey.
Summit  Bancorp  owns  bank   subsidiaries  in  New  Jersey,   Pennsylvania  and
Connecticut  and several active  non-bank  subsidiaries.  Summit  Bancorp's bank
subsidiaries provide a broad range of retail, insurance,  commercial and private
banking  services  as well as trust  and  investment  services  to  individuals,
businesses,   not-for-profit   organizations,   government  entities  and  other
financial institutions.  These services are provided through an extensive branch
network,  including supermarket branches and private banking facilities, as well
as through automated teller machines, personal computers and the internet.

FINANCIAL CONDITION

Total assets at June 30, 1999, were $34.2 billion,  an increase of $1.1 billion,
or 3.4 percent,  from year-end  1998. The growth came most notably from the loan
and  securities  portfolios,  and was  generally  funded  with  savings and time
deposits,  and borrowed funds. The purchase of New Canaan Bank and Trust Company
added $208.5 million to total assets.

Total  securities  at June 30,  1999 were $10.8  billion,  an increase of $774.1
million,  or 7.7% from year-end  1998.  Securities  held to maturity at June 30,
1999, were $6.4 billion and mainly comprised of $4.2 billion of U.S.  Government
and Federal agency securities,  $2.1 billion of other securities,  predominately
corporate  collateralized  mortgage obligations ("CMOs"),  and $132.2 million of
state and political  subdivision  securities.  These securities increased $362.7
million  or 6.0  percent  from  year-end  1998,  primarily  as cash  flows  from
increased  borrowings were invested in securities held to maturity.  For the six
months of 1999,  $1.6  billion of held to maturity  securities  were  purchased,
offset by principal repayments and maturities of $1.3 billion. At June 30, 1999,
and December 31, 1998,  net  unrealized  (losses)  gains on  securities  held to
maturity amounted to ($140.2) million and $15.0 million,  respectively.  At June
30,  1999,  securities  available  for sale  amounted  to $4.4  billion and were
predominately comprised of U.S. Government and Federal agency securities.  These
securities  increased $405.0 million,  or 10.2 percent,  from year-end 1998. The
increase  resulted from $2.0 billion in purchases  partially offset by sales and
maturities of $1.6 billion.

At June 30, 1999,  total loans amounted to $21.5 billion,  an increase of $412.2
million,  or 2.0 percent,  from year-end 1998.  Increases in commercial loans of
$369.6  million,  commercial  mortgages of $9.2  million and  consumer  loans of
$264.4  million  were  offset by the  $231.0  million  decrease  in  residential
mortgages.  The increase in commercial loans was primarily  related to growth in
asset based lending and commercial  media. The decline in residential  mortgages
of $231.0  million or 4.0  percent  from  December  31, 1998 was due to mortgage
sales and  prepayments  exceeding the demand for new loans.  Mortgage loans held
for sale amounted to $91.7  million,  $183.3  million and $115.7 million for the
periods ended June 30, 1999, December 31, 1998, and June 30, 1998, respectively.
The increase in the consumer  loan  portfolio  can  generally be  attributed  to
purchases of home equity loans.

Total  deposits  were $23.4  billion at June 30,  1999,  an  increase  of $297.8
million,  or 1.3 percent,  from December 31, 1998.  Savings and time deposits at
$17.9 billion, increased $644.6 million, or 3.7 percent, from December 31, 1998.
The growth came most notably  from  Summit's new cash  management  product,  the
Summit  Navigator  account,  which  increased  $1.9 billion from year-end  1998.
Partially offsetting this increase was a decrease in commercial  certificates of
deposit  $100,000 and over,  which were down $276.6  million,  or 28.8  percent,
compared to December 31,  1998.  Also  decreasing  were demand  deposits,  which
declined $70.2 million, or 1.4 percent,  from year-end 1998 to $4.9 billion. The
decrease in demand deposits came mainly from business accounts.

Other  borrowed  funds at June  30,  1999,  increased  $544.7  million,  or 14.6
percent, from December 31, 1998, to $3.7 billion. The increase in other borrowed
funds can be  attributed  to  increases  in  short-term  repurchase  agreements,
partially  offset by a decrease in federal funds  purchased.  Long-term  debt at
June 30, 1999,  increased  $429.2  million,  or 12.0 percent,  from December 31,
1998, to $4.0 billion. The increase in long-term debt was principally the result
of the  increase in  repurchase  agreements  and  Federal  Home Loan Bank notes.
Included in long-term  debt at each of the periods  presented are $150.0 million
of 8.4 percent pass-through securities qualifying as Tier I Capital.

Total  shareholders'  equity at June 30,  1999 was $2.6  billion,  a decrease of
$121.0 million or 4.4 percent from December 31, 1998. The decrease was primarily
attributed to the purchase of Treasury  stock.  Treasury  stock at June 30, 1999
amounted to $325.2 million and was comprised of 7.9 million shares. On August 1,
1999,  approximately  7.4 million shares were used with the acquisition of Prime
Bancorp.  Included in  shareholders'  equity at June 30, 1999,  was  accumulated
other  comprehensive  income (loss),  net of tax,  amounting to ($39.5) million,
compared to $12.1  million at year-end  1998.  Accumulated  other  comprehensive
income is comprised  principally  of  unrealized  gains and losses on securities
available for sale. The decline in accumulated  other  comprehensive  income was
due to the increase in interest rates,  having a negative effect on fixed income
securities.

Summit  Bancorp's  capital  ratios for June 30,  1999,  compared to select prior
periods and regulatory  requirements,  are shown in the following table.  Summit
Bancorp's bank  subsidiaries met the  well-capitalized  requirements for each of
the  periods  presented.  The  decreases  in the ratios at June 30,  1999,  were
principally attributable to treasury stock purchases and asset growth.

<TABLE>

-----------------------------------------------------------------------------------------------
<S>                                      <C>         <C>        <C>       <C>       <C>
                                     Minimum
                                         June 30,    Dec. 31,   June 30,  Required  Well
Selected Capital Ratios                     1999       1998       1999    Capital   Capitalized
-----------------------------------------------------------------------------------------------
Equity to assets                            7.60%       8.22%    8.29%        -%       -%
Leverage ratio                              7.47        8.00     8.39      3.00      5.00
Tier I capital                              9.97       10.86    11.68      4.00      6.00
Total risk-based capital                   11.76       12.72    13.76      8.00     10.00
-----------------------------------------------------------------------------------------------
</TABLE>

Non-Performing Assets

Non-performing  assets include  non-performing loans and other real estate owned
(OREO) and are shown in the following table as of the dates indicated.

------------------------------------------------------------------------------
Non-performing Assets          June 30,          Dec. 31,          June 30,
(in thousands)                    1999              1998              1998
------------------------------------------------------------------------------
Non-performing loans:
  Commercial and industrial    $76,737           $55,245           $46,405
  Commercial mortgage           11,764            26,446            22,484
  Construction and development   6,324             5,046             2,566
------------------------------------------------------------------------------
   Non-performing loans         94,825            86,737            71,455
OREO, net                        6,342             2,829             8,913
------------------------------------------------------------------------------
   Non-performing assets      $101,167           $89,566           $80,368
------------------------------------------------------------------------------
Non-performing loans to
  total loans                     0.44%             0.41%             0.36%
Non-performing assets to total
  loans and OREO                  0.47              0.42              0.41
------------------------------------------------------------------------------


The average balances of  non-performing  loans amounted to $83.9 million,  $87.5
million and $75.5 million,  for the six months ended June 30, 1999, December 31,
1998 and June 30, 1998, respectively. Interest income received on non-performing
loans amounted to $1.2 million for the six months ended June 30, 1999,  compared
to $1.0 million for the
six months ended June 30, 1998.

Loans,  not  included  in the  table  above,  which are past due 90 days or more
amounted to $37.7  million,  $45.3  million and $57.0  million at June 30, 1999,
December 31, 1998,  and June 30, 1998,  respectively.  These loans are primarily
residential  mortgage  and  consumer  loans  which are well  secured  and in the
process of collection.

Potential problem loans, which are also excluded from the table above, are loans
where  information about possible credit problems of borrowers causes management
to have doubts as to the ability of such borrowers to comply with loan repayment
terms. These loans amounted to $64.5 million,  $8.0 million and $11.3 million at
June 30, 1999, December 31, 1998, and June 30, 1998, respectively.  The increase
in potential problem loans at June 30,1999 was attributed to one borrower,  with
a total relationship of approximately $60.0 million. Subsequent to June 30, 1999
there  was a  deterioration  in this  borrower's  credit  quality.  As a result,
management  expects to  transfer  this credit from  potential  problem  loans to
nonaccrual loans in the third quarter.  As of the date of this filing,  the loss
exposure  on this  credit and its  potential  impact on the  provision  for loan
losses cannot be reasonably estimated.




Allowance for Loan Losses

The  allowance  for loan  losses is  maintained  at a level to absorb  estimated
credit losses in the loan portfolio as of the date of the financial  statements.
A standardized process has been established to assess the appropriateness of the
allowance  for loan  losses  and to  identify  the  risks  inherent  in the loan
portfolio.  This process consists of (1) the identification of specific reserves
for identified  problem loans,  (2) the calculation of general  reserves,  which
includes a combination of formula-driven  allocations and minimum reserve levels
by loan type and grade, and (3) the determination of the unallocated reserves.

Specific  reserves,  if any, are determined  through a loan-by-loan  analysis of
non-performing  loans, with assessments made on the borrower's  ability to repay
and the fair value of the underlying collateral for collateral-dependent  loans.
If a loan's carrying value is in excess of the discounted expected cash flows or
the value of the underlying  collateral,  the excess is specifically reserved or
charged off. The level of specific reserves is generally the smallest  component
of the allowance for loan losses.

There are three steps in the calculation of the general  reserves.  Reserves are
first  determined  by applying  historical  loss factors to each loan and unused
commitment by business  segment and loan grade.  The historical loss factors are
calculated using a trailing six quarter loss migration analysis. Adjustments are
then made to the  historical  loss factor  based on six  quantitative  objective
elements ("Delinquency",  "Non-performing Assets", "Watch Lists", "Charge-offs",
"Concentrations  of Credit",  and  "Recoveries",  and three subjective  elements
("Economic  Conditions",  "Credit Audit's Rating",  and "Other Factors"),  which
have been developed to provide greater accuracy to the process. This methodology
is applied to both the commercial and retail portfolios. The reserves calculated
for the  retail  portfolios  (residential  mortgages  and  consumer  loans)  are
generally  sufficient to absorb one year of expected losses.  For the commercial
portfolios,  the historical loss factor,  inclusive of the  adjustment,  is then
compared to minimum  reserve  levels for each loan grade.  The larger of the two
factors are used in the  determination  of the  reserves.  The minimum  level of
reserves by loan  classification  is .25% for pass loans,  .75% for close follow
loans, 1% for special mention loans, 10% for substandard loans, 50% for doubtful
loans,  and 100%  for  loss  loans.  These  minimum  reserve  levels  have  been
consistently applied for all reported periods.

The last  component of the loan loss  reserve is the  unallocated  reserve.  The
unallocated  reserve is based upon  management's  evaluation  of the  underlying
inherent risk in the loan portfolio.  The  appropriate  level of reserves in the
aggregate  is based on several  factors:  industry  concentrations,  delinquency
trends,  economic  trends,  loan growth relative to the overall  allowance,  the
level of substandard  assets and allocated reserves and the level of unallocated
reserves, to the total loan portfolio.  The unallocated portion of the allowance
for loan losses, in excess of specific and general reserves,  was $154.2 million
at June 30, 1999, compared to $164.5 million at December 31, 1998.

The 1999 provision for loan losses for the second  quarter was $16.5 million,  a
$1.5 million decrease from the prior year, and $33.0 million, for the six months
ended,  unchanged from the same period a year ago. Provision for loan losses are
charged to  expense to bring the  allowance  for loan  losses at a level  deemed
appropriate  by  management  to  cover  the  credit  risk  inherent  in the loan
portfolio. The provision for loan losses may vary from quarter to quarter due to
loan growth or if there is a  significant  increase in the inherent  risk in the
loan portfolios.


Transactions  in the allowance for loan losses,  by loan  category,  for the six
month periods ended June 30, 1999, and 1998 and selected loan quality ratios for
the dates indicated are shown in the following tables:

<TABLE>
Allowance for Loan Losses                          Three months ended        Six months ended
                                                        June 30,                 June 30,
(in thousands)                                     1999         1998        1999         1998
------------------------------------------------------------------------------------------------

<S>                                             <C>          <C>          <C>        <C>
Balance, Beginning of period                     $328,302     $301,264     $322,814     $296,494
        Allowance of acquired institutions              -            -        2,140            -
        Provision for loan losses                  16,500       18,000       33,000       33,000
------------------------------------------------------------------------------------------------
                                                  344,802      319,264      357,954      329,494
------------------------------------------------------------------------------------------------
        Loans charged off:
                Commercial and industrial          20,268        2,824       28,399       11,490
                Construction and development            -          939           13        1,295
                Commercial mortgage                 1,070        1,847        2,272        2,107
                Residential mortgage                  322        3,330        2,948        3,649
                Consumer                            7,178        8,524       15,165       17,856
------------------------------------------------------------------------------------------------
                Total loans charged off            28,838       17,464       48,797       36,397
------------------------------------------------------------------------------------------------
        Recoveries:
                Commercial and industrial           2,348        1,755        5,865        6,404
                Construction and development          452        1,019          847        2,817
                Commercial mortgage                   193        1,431          741        1,718
                Residential mortgage                  116          555          435          829
                Consumer                            2,627        2,193        4,655        3,888
------------------------------------------------------------------------------------------------
        Total recoveries                            5,736        6,953       12,543       15,656
------------------------------------------------------------------------------------------------
        Net charge offs                            23,102       10,511       36,254       20,741
------------------------------------------------------------------------------------------------
Balance, end of period                           $321,700     $308,753     $321,700     $308,753
================================================================================================
</TABLE>

<TABLE>
------------------------------------------------------------------------------
                                    Jun. 30,     Dec. 31,     Jun.30
                                      1999         1998        1998
------------------------------------------------------------------------------
Net charge offs to average loans:
 <S>                               <C>         <C>           <C>
        Quarter to date                0.44%       0.23%       0.22%
        Year-to-date                   0.34        0.23        0.22
Allowance for loan losses to:
        Total loans                    1.49        1.53        1.57
        Non-performing loans         339.26      372.18      432.09
        Non-performing assets        317.99      360.42      384.17
-----------------------------------------------------------------------------
</TABLE>

As a result of charge  offs of several  large  credits,  net charge offs for the
quarter amounted to $23.1 million,  and increase of $12.6 million over the prior
year.

<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Average Balance Sheets with Resultant Interest and Rates
Unaudited
(Tax-equivalent basis, dollars in thousands)


                                            Three Months Ended
                                            ----------------------------------------------------------------------------------------
                                            June 30, 1999                                   June 30, 1998
                                            ----------------------------------------        ----------------------------------------
                                             Average                    Average           Average                       Average
                                             Balance     Interest         Rate            Balance        Interest         Rate
<S>                                           <C>         <C>            <C>               <C>            <C>            <C>
                                            ---------   -----------    -----------       -----------    -----------    ---------
ASSETS
Interest-earning assets:
 Federal funds sold and securities
  purchased under agreements to resell   $     29,167   $     350           4.81 %    $     15,035   $        236           6.30 %
 Interest-bearing deposits with banks          23,716         262           4.43            24,770            375           6.07
 Securities:
  Trading account securities                   11,222         183           6.54            22,661            360           6.37
  Securities available for sale             3,988,952      60,357           6.05         4,816,731         76,938           6.39
  Securities held to maturity               6,551,577     101,871           6.22         4,402,545         70,391           6.40
                                          -----------   ---------    -----------       -----------    -----------    -----------
   Total securities                        10,551,751     162,411           6.16         9,241,937        147,689           6.39
                                          -----------   ---------    -----------       -----------    -----------    -----------
 Loans, net of unearned discount:
  Commercial                                7,377,701     141,791           7.71         6,528,314        137,113           8.42
  Commercial mortgage                       2,895,640      58,054           8.02         2,833,291         59,696           8.43
  Residential mortgage                      5,536,378      98,631           7.13         5,721,791        104,842           7.33
  Consumer                                  5,458,995     109,760           8.06         4,359,659         91,587           8.43
                                          -----------   ---------    -----------       -----------    -----------    -----------
   Total loans                             21,268,714     408,236           7.70        19,443,055        393,238           8.11
                                          -----------   ---------    -----------       -----------    -----------    -----------
   Total interest-earning assets           31,873,348     571,259           7.19        28,724,797        541,538           7.56
                                          -----------   ---------    -----------       -----------    -----------    -----------
Non-interest earning assets:
 Cash and due from banks                      958,692                                       1,005,805
 Allowance for loan losses                   (330,913)                                       (305,566)
 Other assets                               1,175,609                                         965,884
                                          -----------                                     -----------
   Total non-interest earning assets        1,803,388                                       1,666,123
                                          -----------                                     -----------
Total Assets                             $ 33,676,736                                    $ 30,390,920
                                         ============                                    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
 Savings deposits                        $ 10,760,700      71,216           2.65 %    $  9,419,197         60,329           2.57 %
 Time deposits                              6,948,494      86,131           4.97         7,071,065         93,377           5.30
 Commercial certificates of
  deposit $100,000 and over                   797,238       9,460           4.76           906,884         12,302           5.44
                                          -----------   ---------    -----------       -----------    -----------    -----------
   Total interest-bearing deposits         18,506,432     166,807           3.62        17,397,146        166,008           3.83
                                          -----------   ---------    -----------       -----------    -----------    -----------
Other borrowed funds                        3,259,556      38,642           4.76         3,690,155         50,105           5.45
Long-term debt                              3,975,757      54,671           5.50         1,742,456         27,382           6.29
                                          -----------   ---------    -----------       -----------    -----------    -----------
   Total interest-bearing liabilities      25,741,745     260,120           4.05        22,829,757        243,495           4.28
                                          -----------   ---------    -----------       -----------    -----------    -----------
Non-interest bearing liabilities:
 Demand deposits                            4,781,326                                       4,510,854
 Other liabilities                            518,481                                         389,433
                                          -----------                                     -----------
   Total non-interest bearing liabilities   5,299,807                                       4,900,287
 Shareholders' equity                       2,635,184                                       2,660,876
                                          -----------                                     -----------
Total Liabilities and
   Shareholders' Equity                  $ 33,676,736                                    $ 30,390,920
                                         ============                                    ============

Net interest spread                                       311,139           3.14 %                        298,043           3.28 %
                                                                        ========                                         =======
Tax-equivalent basis adjustment                            (2,548)                                         (3,150)
                                                       -----------                                     -----------
Net interest income                                   $    308,591                                    $    294,893
                                                      ============                                    ============
Net interest margin                                                         3.92 %                                          4.16 %
                                                                        ========                                         =======

</TABLE>


<TABLE>
Summit Bancorp and Subsidiaries
Consolidated Average Balance Sheets with Resultant Interest and Rates
Unaudited
(Tax-equivalent basis, dollars in thousands)

                                                                                     Year to Date
                                             ------------------------------------------------------------------------------------
                                             June 30, 1999                                   June 30, 1998
                                             -----------------------------------------       --------------------------------------
                                               Average                    Average           Average                       Average
                                               Balance     Interest         Rate            Balance        Interest         Rate
<S>                                           <C>         <C>            <C>               <C>            <C>            <C>
                                              ----------  -----------    -----------       -----------    -----------    -----------
ASSETS
Interest-earning assets:
 Federal funds sold and securities
  purchased under agreements to resell      $     19,959   $     495           5.00 %    $     22,072   $        643           5.87%
 Interest-bearing deposits with banks             28,699         712           5.00            25,911            806           6.27
 Securities:
  Trading account securities                      10,599         286           5.44            27,863            942           6.82
  Securities available for sale                3,973,019     120,308           6.06         5,089,824        162,581           6.39
  Securities held to maturity                  6,389,949     199,458           6.24         4,187,363        134,302           6.41
                                             -----------  ----------    -----------       -----------    -----------    -----------
   Total securities                           10,373,567     320,052           6.17         9,305,050        297,825           6.40
                                             -----------  ----------    -----------       -----------    -----------    -----------
Loans, net of unearned discount:
 Commercial                                    7,268,132     277,402           7.70         6,363,227        265,659           8.42
 Commercial mortgage                           2,885,058     115,852           8.03         2,801,791        118,832           8.48
 Residential mortgage                          5,626,686     201,645           7.17         5,722,116        209,628           7.33
 Consumer                                      5,438,268     218,432           8.10         4,314,428        180,654           8.44
                                             -----------    --------    -----------       -----------    -----------    -----------
  Total loans                                 21,218,144     813,331           7.73        19,201,562        774,773           8.14
                                             -----------    --------    -----------       -----------    -----------    -----------
  Total interest-earning assets               31,640,369   1,134,590           7.23        28,554,595      1,074,047           7.59
                                             -----------   ---------    -----------       -----------    -----------    -----------
Non-interest earning assets:
 Cash and due from banks                         956,857                                       1,017,587
 Allowance for loan losses                      (328,133)                                       (303,828)
 Other assets                                  1,149,459                                         956,368
                                             -----------                                     -----------
   Total non-interest earning assets           1,778,183                                       1,670,127
                                             -----------                                     -----------
Total Assets                                $ 33,418,552                                    $ 30,224,722
                                            ============                                    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
 Savings deposits                           $ 10,416,033   $ 133,105           2.58 %    $  9,478,456   $    121,881           2.59%
 Time deposits                                 7,035,370     175,644           5.03         7,163,649        188,693           5.31
 Commercial certificates of
  deposit $100,000 and over                      885,793      21,035           4.79           912,386         24,559           5.43
                                             -----------   ---------    -----------       -----------    -----------    -----------
   Total interest-bearing deposits            18,337,196     329,784           3.63        17,554,491        335,133           3.85
                                             -----------   ---------    -----------       -----------    -----------    -----------
Other borrowed funds                           3,335,296      80,129           4.84         3,588,557         96,893           5.44
Long-term debt                                 3,831,036     105,308           5.50         1,630,478         51,640           6.33
                                             -----------   ---------    -----------       -----------    -----------    -----------
   Total interest-bearing liabilities         25,503,528     515,221           4.07        22,773,526        483,666           4.28
                                             -----------   ---------    -----------       -----------    -----------    -----------
Non-interest bearing liabilities:
 Demand deposits                               4,733,528                                       4,402,440
 Other liabilities                               498,354                                         381,470
                                             -----------                                     -----------
   Total non-interest bearing liabilities      5,231,882                                       4,783,910
 Shareholders' equity                          2,683,142                                       2,667,286
                                             -----------                                     -----------
Total Liabilities and Shareholders' Equity  $ 33,418,552                                    $ 30,224,722
                                            ============                                    ============

Net interest spread                                          619,369           3.16 %                        590,381           3.31%
                                                                              =====                                          ======
Tax-equivalent basis adjustment                               (5,434)                                         (6,330)
                                                         -----------                                     -----------
Net interest income                                     $    613,935                                    $    584,051
                                                        ============                                    ============
Net interest margin                                                            3.95 %                                          4.17%
                                                                              ======                                          =====

</TABLE>
RESULTS OF OPERATIONS


Net income for the quarter ended June 30, 1999, was $120.3 million,  or $.71 per
basic share, compared to $118.5 million, or $.67 per basic share, for the second
quarter of 1998.  On a diluted per share basis,  net income for the three months
ended June 30, 1999,  was $.70 per diluted  share  compared to $.66 for the same
period in 1998.

For the six months ended June 30, 1999,  net income was $239.1  million or $1.39
per basic  share  compared  to $230.9  million  or $1.31 per basic  share.  On a
diluted basis, net income for the six months ended, was $1.38 per diluted share,
compared to $1.29 for the six months ended June 30, 1998.

The following are key performance indicators for the three and six month periods
ended June 30, 1999 and 1998. The  cash-based  financial data excludes the after
tax impact of amortization of goodwill and other intangibles.

-----------------------------------------------------------------------------
                                  Three months ended      Six months ended
                                        June 30,                June 30,
                                     1999      1998          1999       1998
-----------------------------------------------------------------------------
FINANCIAL DATA:
  Net income                     $120,337  $118,477      $239,078   $230,894
     Per share diluted               0.70      0.66          1.38       1.29
     Return on average assets        1.43%     1.56%         1.44%      1.54%
     Return on average equity       18.32     17.86         17.97      17.46
     Efficiency ratio               51.20     49.81         50.88      50.83
-----------------------------------------------------------------------------
CASH BASED FINANCIAL DATA*:
  Net income                     $126,597   $122,709      $251,000   $239,390
     Per share-diluted               0.73      0.69          1.44       1.34
     Return on average
       tangible assets               1.52      1.63          1.53       1.61
     Return on average
      tangible equity               21.87     19.78         21.24      19.37
     Efficiency Ratio               49.61     48.59         49.36      49.59
-----------------------------------------------------------------------------
*
Cash-based  financial  data  excludes  the after tax impact of  amortization  of
goodwill and other intangibles.

Net Interest Income

Interest  income on a  tax-equivalent  basis was $1.1 billion for the six months
ended June 30, 1999, an increase of $60.5 million, or 5.6 percent, compared to a
year ago.  Interest-earning  assets averaged $31.6 billion,  an increase of $3.1
billion,  or 10.8  percent,  compared to the prior year period.  The increase in
interest-earning   assets   contributed   $116.1  million  to  the  increase  in
tax-equivalent  interest income,  partially offset by a decline of $55.6 million
due to the reduction in the yield.  The rate earned on  interest-earning  assets
decreased 36 basis  points to 7.23 percent in the 1999 period.  The decrease was
generally the result of a lower  interest rate  environment  as compared to last
year.

Interest  expense  increased $31.6 million,  or 6.5 percent,  for the six months
ended June 30,  1999,  compared  to the same  period in 1998.  The $2.7  billion
growth in the average balance of  interest-bearing  liabilities to $25.5 billion
in the 1999  period  contributed  $62.5  million  to the  increase  in  interest
expense.  This increase was  partially  offset by a decrease of $31.0 million in
interest  expense  resulting  from a decline in rates  paid on  interest-bearing
liabilities.  The rate paid on interest-bearing  liabilities  decreased 21 basis
points to 4.07 percent in the 1999 period.

Net interest  income on a  tax-equivalent  basis was $619.4  million for the six
months  ended June 30,  1999,  an increase  of $29.0  million,  or 4.9  percent,
compared to the same period in 1998.  The net interest  spread  percentage  on a
tax-equivalent  basis  (the  difference  between  the  rate  earned  on  average
interest-earning   assets  and  the  rate  paid  on   average   interest-bearing
liabilities)  was 3.16 percent for the six months ended June 30, 1999,  compared
to  3.31  percent  for  the  prior  year  period.   Net  interest  income  on  a
tax-equivalent basis as a percentage of average interest-earning assets was 3.95
percent for the six months ended June 1999,  compared to 4.17 percent during the
same  period in 1998.  The  decline in net  interest  margin  can be  attributed
primarily to narrower spreads in a lower interest rate  environment,  the change
in deposit mix, and the purchase of treasury stock.


The  rate/volume  table  below  presents  an  analysis of the impact on interest
income and expense  resulting from changes in average volumes and rates over the
periods.  Changes  that  are  not due to  volume  or rate  variances  have  been
allocated proportionally to both, based on their relative absolute values.

<TABLE>
Rate/VolumeTable
                              Three Months ended June 30,  Six months ended June 30,
                                  1999 versus 1998           1999 versus 1998
                              ---------------------------  -------------------------
                              Due to change in:            Due to change in:
(In millions)                 -----------------            -----------------
(Tax-equivilent basis)        Volume   Rate   Total        Volume   Rate   Total
------------------------------------------------------------------------------------
<S>                              <C>     <C>     <C>          <C>      <C>     <C>
Interest Income
 Loans
  Commercial                 $  16.9 $(12.2)  $ 4.7        $ 35.7  $(24.0)  $11.7
  Commercial mortgage            1.3   (2.9)   (1.6)          3.5    (6.5)   (3.0)
  Residential mortgage          (3.4)  (2.8)   (6.2)         (2.3)   (5.6)   (7.9)
  Consumer                      22.2   (4.1)   18.1          45.1    (7.3)   37.8
------------------------------------------------------------------------------------
   Total Loans                  37.0  (22.0)   15.0          82.0   (43.4)   38.6
  Securities HTM                33.5   (2.0)   31.5          68.8    (3.7)   65.1
  Securities AFS               (12.7)  (3.9)  (16.6)        (34.2)   (8.1)  (42.3)
  Other interest-earning assets   -    (0.2)   (0.2)         (0.5)   (0.4)   (0.9)
------------------------------------------------------------------------------------
   Total Interest Earning
     Assets                     57.8  (28.1)    29.7        116.1   (55.6)   60.5
------------------------------------------------------------------------------------
Interest  Expense
 Deposits
  Savings Deposits               8.9    2.0     10.9         11.7    (0.5)   11.2
  Time deposits                 (1.6)  (5.7)    (7.3)        (3.3)   (9.7)  (13.0)
  Commercial CD's>$100M         (1.4)  (1.4)    (2.8)        (0.7)   (2.8)   (3.5)
----------------------------------------------------------------------------------
     Total Time Deposits         5.9   (5.1)     0.8          7.7   (13.0)   (5.3)
  Other borrowed funds          (5.5)  (6.0)   (11.5)        (6.5)  (10.4)  (16.9)
  Long-term debt                31.1   (3.8)    27.3         61.3    (7.6)   53.7
----------------------------------------------------------------------------------
   Total Interest Expense       31.5  (14.9)    16.6         62.5   (31.0)   31.5
----------------------------------------------------------------------------------
Net interest income-FTE      $  26.3 $(13.2)   $13.1        $53.6  $(24.6)  $29.0
----------------------------------------------------------------------------------
  Decrease in tax-equivalent adjustment          0.6                          0.9
                                              ------                        -----
  Increase in Net Interest Income             $ 13.7                        $29.9
                                              ======                        =====
</TABLE>



Non-Interest Income

Non-interest  income  categories  for the three and six month periods ended June
30, 1999 and 1998 are shown in the following table:

<TABLE>
-----------------------------------------------------------------------------

(in millions)          Three months ended June 30,  Six months ended June 30,

                                          Percent                    Percent
                            1999   1998   Change     1999   1998     Change
-----------------------------------------------------------------------------

<S>                         <C>    <C>    <C>        <C>    <C>      <C>
Service charges on
 deposit accounts           $29.6  $31.7   (6.6)%   $59.6   $61.9    (3.7)%
Service and loan fee income  16.0   15.2    5.3      31.6    28.1     12.5
Trust income                 12.8   10.9   18.4      24.8    21.1     17.5
Retail investment and
 insurance fees              19.0   13.2   44.3      37.0    24.8     49.1
Other                        16.4   16.1    1.3      38.8    29.3     32.5
-----------------------------------------------------------------------------
 Total non-interest
  operating income           93.8   87.1    7.8     191.8   165.2     16.1
Securities gains              2.1    3.0  (31.8)      2.3     4.5    (48.6)
-----------------------------------------------------------------------------
Total non-interest income   $95.9  $90.1    6.4%    $194.1 $169.7     14.4%
=============================================================================
</TABLE>
Service charges on deposit accounts  decreased $2.1 million,  or 6.6 percent for
the quarter ended June 30, 1999, compared with 1998, and decreased $2.3 million,
or 3.7 percent,  for the six months ended,  compared with the same period a year
ago. The decrease was primarily the result of lower minimum balance requirements
on retail deposits resulting in lower monthly maintenance fees.

Service and loan fee income  increased  $0.8  million,  or 5.3 percent,  for the
quarter  ended June 30, 1999,  compared  with 1998,  and $3.5  million,  or 12.5
percent for the six months  ended June 30,  1999,  compared to the same period a
year ago. The increase in service and loan fee income for the three months ended
June 30, 1999, was primarily due to increased  merchant credit card activity and
mortgage servicing income.

Trust income increased $1.9 million, or 18.4 percent, for the quarter ended June
30, 1999,  compared  with 1998,  and $3.7  million,  or 17.5 percent for the six
months ended June 30, 1999, compared to the same period a year ago. The increase
in trust income for the three months ended June 30, 1999,  was  generally due to
increases in asset management  advisory fees, personal trust fees, and fees from
sales of proprietary and third party mutual funds.

Retail  investment and insurance  fees increased $5.8 million,  or 44.3 percent,
for the quarter  ended June 30, 1999,  compared with 1998,  and increased  $12.2
million or 49.1 percent, for the six months ended, compared with the same period
a year ago. The increase in retail  investment  and insurance fees for the three
and six months ended June 30, 1999,  was primarily due to increased  annuity fee
and insurance  service fees,  resulting from the acquired  insurance  companies,
W.M. Ross and Company,  August 31, 1998, and Madison  Consulting Group,  October
30, 1998.

Other income increased $0.3 million, or 1.3 percent,  for the quarter ended June
30, 1999,  compared with 1998,  and $9.5 million,  or 32.5 percent,  for the six
month period  ended June 30,  1999,  compared to the same period a year ago. The
increase in other  non-interest  income for the six months  ended June 30, 1999,
was  generally  attributable  to a net gain of $5.9  million  on the sale of the
$33.0 million credit card portfolio, which occurred in the first quarter.


<TABLE>
Non-Interest Expense

Non-interest  expense  categories for the three and six month periods ended June
30, 1999, and 1998, are shown in the following table:

-----------------------------------------------------------------------------
(in millions)          Three months ended June 30,     Six months ended June 30,
------------------------------------------------------------------------------
                                            Percent                      Percent
                            1999    1998    Change       1999     1998   Change
--------------------------------------------------------------------------------
<S>                         <C>     <C>      <C>        <C>     <C>       <C>
Salaries                    $82.6   $74.4    11.0%      $162.9  $150.9    8.0%
Pension and other
  employee benefits          29.1    27.2     7.1         59.1    53.8    9.9
Furniture and equipment      22.5    20.8     8.2         45.0    41.2    9.2
Occupancy, net               19.3    17.6     9.4         39.1    36.1    8.3
Communications                9.7     9.0     7.2         19.3    18.6    4.0
Advertising and
  public relations            5.9     6.4    (6.7)        11.5    12.3   (6.7)
Amortization of goodwill
  and other intangibles       6.5     4.7    37.9         12.4     9.4   31.1
Other                        31.6    31.8    (0.6)        63.4    61.3    3.4
------------------------------------------------------------------------------
Total non-interest expense $207.2  $191.9     8.0%      $412.7  $383.6    7.6%
==============================================================================
</TABLE>
Salaries increased $8.2 million, or 11.0 percent, for the quarter ended June 30,
1999,  compared to the same quarter in 1998, and $12.0 million,  or 8.0 percent,
for the six months ended June 30, 1999,  compared to the same period a year ago.
In addition to annual merit increases,  salaries rose approximately $3.2 million
and $5.7 million from  acquisitions,  for the three and six month periods ended,
respectively.  There were 8,658 full-time equivalent employees at June 30, 1999,
compared to 8,350 the same period a year ago.

Pension and employee benefits  increased $1.9 million,  or 7.1 percent,  for the
three months  ended June 30, 1999  compared  with the same quarter in 1998,  and
$5.3 million, or 9.9 percent for the six months ended,June 30, 1999, compared to
the same period a year ago. The increases were  attributable  to increased taxes
and pension and incentive  compensation expense related to higher levels of core
salaries.

Furniture and equipment expenses increased $1.7 million, or 8.2 percent, for the
quarter ended June 30, 1999,  compared  with the same quarter in 1998,  and $3.8
million or 9.2 percent,  for the six months ended June 30, 1999, compared to the
same period a year ago. This  increase was due to the recent bank  acquisitions,
equipment  maintenance,  bankcard service fees and increases in leasing expenses
associated with computer  equipment  installed at branches to support teller and
on-line operations.

Amortization  of goodwill and other  intangibles  increased $1.8 million or 37.9
percent,  for the three months ended June 30, 1999,  and $2.9  million,  or 31.1
percent,  for the six months ended June 30, 1999,  compared to the same period a
year ago. The increase was due to the purchase  acquisitions of NSS Bancorp, New
Canaan Bank and Trust Company, W.M.
Ross and Company and Madison Consulting Group.

Included  in other  expenses,  which did not vary  significantly  from period to
period, were legal and professional fees of $7.0 million and $14.9 million,  for
the three and six month periods, respectively.

The  effective  income tax rate was 33.4 percent for the three months ended June
30, 1999,  compared with 32.3 percent for the comparable 1998 period.  The lower
effective income tax rate for 1998 was the result of benefits  received from the
implementation  of  business  strategies  in the 1998  period  that  will not be
realized in 1999.



LINES OF BUSINESS

For management purposes, Summit Bancorp is segmented into the following lines of
business:  Retail  Banking,  Commercial  Banking,  and  Investment  Services and
Private Banking.  The investment  portfolio and activities not included in these
lines are  reflected  in Corporate  and Other.  Summit  Bancorp's  profitability
measurement  system uses  internal  management  accounting  policies that ensure
business line results  reflect the  underlying  economics of each business unit,
and the results are not necessarily  comparable with similar information for any
other financial institution.

Net income includes revenues and expenses directly  associated with each line in
addition to allocations of revenue earned and expenses incurred by support units
such as operations and technology.  Centrally  provided  corporate  services and
general  overhead are allocated on a per-unit cost basis or in proportion to the
balances of assets,  liabilities  and  operating  expenses  associated  with the
particular  business line. A matched maturity funds transfer pricing methodology
is employed to assign a cost of funds to the assets of each  business  line,  as
well as to  assign  a value  of  funds to the  liabilities  and  equity  of each
business line.  The provision for loan losses is based on the historical  credit
losses for each line of business. The anticipated  consolidated effective income
tax rate is applied to each line of business, after consideration of earnings of
tax-advantaged assets within the lines of business.

In 1999, Summit Bancorp  implemented a new business unit  profitability  system,
which  prospectively  provides  enhanced  management  reporting,   including  an
enhanced  methodology  with respect to the allocation of the provisions for loan
losses.  Certain  prior period  information  has been restated to conform to the
1999  presentation  with respect to the allocation of funds transfer  charges or
credits for assigned assets, liabilities and equity.


<TABLE>
<S>                            <C>        <C>        <C>       <C>      <C>      <C>       <C>       <C>      <C>       <C>
Result of operations                                               Investment Servs/
Quarter Ended June 30,          Retail Banking  Commercial Banking  Private Banking   Corporate and Other    Consolidated
-----------------------------------------------------------------------------------------------------------------------------
(in millions)                   1999       1998      1999      1998     1999     1998      1999      1998      1999      1998
-----------------------------------------------------------------------------------------------------------------------------
Net interest income            202.9      189.6      68.2      66.2     14.3     13.5      23.2      25.6     308.6     294.9
Provision for loan loss          9.3        8.9       6.7       8.6      0.5      0.5         -         -      16.5      18.0

Net interest income after
 provision  for loan losses    193.6      180.7      61.5      57.6     13.8     13.0      23.2      25.6     292.1     276.9
Non-interest income             49.5       50.3      11.6      10.3     32.3     26.2       2.5       3.3      95.9      90.1
Non-interest expense           135.0      130.7      31.1      27.2     33.2     27.4       7.9       6.6     207.2     191.9
-----------------------------------------------------------------------------------------------------------------------------
Income before taxes            108.1      100.3      42.0      40.7     12.9     11.8      17.8      22.3     180.8     175.1
Federal and state income tax    36.1       33.1      13.0      13.0      4.3      3.9       7.1       6.6      60.5      56.6
-----------------------------------------------------------------------------------------------------------------------------
Net income                      72.0       67.2      29.0      27.7      8.6      7.9      10.7      15.7     120.3     118.5
=============================================================================================================================
</TABLE>
<TABLE>
Selectd Average Balances
------------------------
<S>                         <C>        <C>        <C>       <C>      <C>      <C>      <C>       <C>       <C>       <C>
Securities                      55.0       41.0         -         -     11.4     22.6  10,485.4   9,178.3  10,551.8   9,241.9
Loans                       11,595.9   10,960.7   8,383.9   7,432.4  1,272.4  1,046.4      16.5       3.6  21,268.7  19,443.1
Assets                      11,962.6   11,362.3   8,361.9   7,508.5  1,364.1  1,111.8  11,988.1  10,408.3  33,676.7  30,390.9
Deposits                    20,667.9   19,075.4   1,006.6     961.1    770.4    733.5     842.9   1,138.0  23,287.8  21,908.0

</TABLE>

<TABLE>
Result of operations                                               Investment Servs/
Six months Ended June 30        Retail Banking  Commercial Banking  Private Banking   Corporate and Other     Consolidated

<S>                             <C>       <C>     <C>       <C>      <C>      <C>       <C>       <C>       <C>       <C>
(in millions)                   1999      1998    1999      1998     1999     1998      1999      1998      1999      1998
--------------------------------------------------------------------------------------------------------------------------
Net interest income            402.0     377.9   135.1     129.1     28.0     26.3      48.8      50.8     613.9     584.1
Provision for loan loss         19.1      16.0    13.1      16.0      0.8      1.0         -         -      33.0      33.0
--------------------------------------------------------------------------------------------------------------------------
Net interest income after
 provision  for loan losses    382.9     361.9   122.0     113.1     27.2     25.3      48.8      50.8     580.9     551.1
Non-interest income            104.5      95.9    24.0      20.3     62.4     47.0       3.2       6.5     194.1     169.7
Non-interest expense           267.1     262.9    62.1      54.8     64.6     50.0      18.9      16.0     412.7     383.7
--------------------------------------------------------------------------------------------------------------------------
Income before taxes            220.3     194.9    83.9      78.6     25.0     22.3      33.1      41.3     362.3     337.1
Federal and state income tax    75.2      62.7    26.6      24.4      8.5      7.2      12.9      11.9     123.2     106.2
--------------------------------------------------------------------------------------------------------------------------
Net income                     145.1     132.2    57.3      54.2     16.5     15.1      20.2      29.4     239.1     230.9
==========================================================================================================================



Selectd Average Balances
------------------------
Securities                      55.0      40.9        -        -     10.6     27.8  10,308.0   9,236.4  10,373.6   9,305.1
Loans                       11,708.0  10,907.8  8,245.5  7,275.2  1,253.2  1,016.3      11.4       2.3  21,218.1  19,201.6
Assets                      12,075.5  11,379.7  8,227.0  7,350.8  1,343.4  1,088.7  11,772.7  10,405.5  33,418.6  30,224.7
Deposits                    20,330.9  19,152.6  1,005.1    936.1    753.1    700.2     981.6   1,168.0  23,070.7  21,956.9

</TABLE>




Retail Banking

Retail  Banking  meets the banking  needs of  individuals  and small  businesses
through   traditional   and   supermarket   branches  in  New  Jersey,   eastern
Pennsylvania,  and  southern  Connecticut.  Summit also offers its  customers an
expanding array of 24-hour banking services  through  automated teller machines,
telephone  banking  centers,  its Personal  Computer  Banking  network,  and the
internet.  Mortgage  loans,  home equity  loans and lines of credit,  direct and
indirect consumer loans and small business  commercial loans are offered through
Summit Bancorp's broad network of branches.

Average loans for the quarter ended June 30, 1999,  increased  $635.2 million or
5.8  percent to $11.6  billion  from the same period in 1998,  primarily  in the
consumer  lending area.  Total average  deposits for the second  quarter of 1999
increased to $20.7  billion,  up $1.6 billion from a year ago. This increase was
attributable  to the growth in the Summit  Navigator  product  introduced in the
fourth  quarter of 1998.  Net interest  income for the quarter  increased  $13.3
million or 7.0 percent over last year. Interest income increased $5.4 million or
2.5 percent over the second quarter of 1998, resulting from the increase in loan
balances.  Interest expense increased $4.7 million or 3.2 percent resulting from
the increased  deposit  balances.  The increase in non-interest  expense of $4.3
million is due to increases in salary and communication expenses.

Commercial Banking

Commercial  Banking is focused on meeting the banking  requirements of large and
middle-market  businesses.  Asset based lending,  international  trade services,
equipment  leasing,   real  estate  financing,   private  placement,   mezzanine
financing,  aircraft lending,  correspondent banking, treasury services, limited
partnership investments,  and structured finance services are actively solicited
through a network of relationship managers.  Demand and interest-bearing deposit
accounts and services are provided through the branch network.

Total average loans for the quarter ended June 30, 1999,  were $8.4 billion,  an
increase  of  $951.5  million  or 12.8  percent  over  the same  period  in 1998
primarily in  asset-based  lending and commercial  media  lending.  Net interest
income for the second quarter of 1999 increased $2.0 million or 3.0 percent from
1998,  driven by the  increase  in average  loans.  Higher  loan  fees,  account
analysis service charges,  advisory fees and limited  partnership gains provided
for the  increase  over  prior  year in  non-interest  income  of $1.3  million.
Non-interest expense increased $3.9 million over the prior year to $31.1 million
due to higher salaries and indirect expenses.




Investment Services and Private Banking

Investment  Services  provides  a  full  range  of  trust,  administrative,  and
custodial  services to individuals and  institutions,  in addition to investment
products  and  discount  brokerage.  The line  also  markets a wide  variety  of
insurance products for the personal and corporate marketplace. This segment also
includes Private Banking,  which provides  personal credit services for lawyers,
accountants and their firms, and business loans and lines of credit.

The  increase in net  interest  income of $0.8  million or 5.9 percent is due to
higher loan volumes in 1999. The major portion of the increases in  non-interest
income and expense over the prior period reflects the  acquisitions of W.M. Ross
& Company and Madison  Consulting  Group,  two  insurance  subsidiaries,  in the
second half of 1998. Also contributing to the increase in non-interest income is
higher fee income in trust, mutual funds and annuities.

Corporate and Other

Corporate and Other is primarily  comprised of the treasury  function,  which is
responsible for managing  interest-rate risk and the investment  portfolios.  In
addition,  certain  revenues and expenses not considered  allocable to a line of
business are reflected in this area.

Net interest  income  declined $2.4 million or 9.4 percent from 1998,  primarily
due to  higher  equity  allocations  made to  business  lines  in  1999,  offset
partially by growth in the securities portfolio.  Asset growth was primarily due
to an increase in the  securities  portfolios,  which averaged $10.5 billion for
the second quarter of 1999, up $1.3 billion or 14.2 percent from the prior year.
The decrease in non-interest income in 1999 is primarily  attributed to gains on
security transactions in the prior period.



Year 2000 Readiness Disclosure

Issues  surrounding  the Year 2000  arise  out of the fact  that  many  existing
computer programs use only two digits to identify a year in the date field. With
the approach of the Year 2000,  computer hardware and software that are not made
Year 2000 ready might  interpret  "00" as year 1900  rather than year 2000.  The
Year 2000  problem  is not just a  technology  issue;  it also  involves  Summit
Bancorp's assessment of building equipment,  environmental  systems,  customers,
suppliers and third parties.

Risks of Year 2000 Issues:

Management  believes  that the Year 2000  project  is on  schedule  and that its
efforts  are  adequate  to  address  Year  2000  issues.  However,   failure  to
successfully  resolve  critical  issues  could have a material  impact on Summit
Bancorp's  operations.  The primary risks  associated  with the Year 2000 are as
follows:

The first is the risk that Summit Bancorp's  systems are not ready for operation
by January 1, 2000. These systems must be remediated, tested, and made ready for
the Year 2000 in a timely manner.

The second is the risk of operational  disruption due to operational failures of
third parties. Failure of one or more third parties to modify their systems in a
timely  manner  may have a  material  and  adverse  effect on  Summit  Bancorp's
operations.  This risk is viewed  as the one that is most  reasonably  likely to
occur, therefore appropriate contingency plans are being prepared.

The third is the risk of business interruption among customers such that funding
and repayment do not take place in a timely  manner.  As a result,  there may be
increases in problem loans and credit losses in future years.

State of Readiness:
Summit  Bancorp  has  been  working  since  1995 to  remediate  its  information
technology  ("IT") and non-IT systems for the Year 2000. All of the 330 software
systems being tracked by Summit Bancorp, and the computer equipment they run on,
have completed Summit Bancorp's seven-phase Year 2000 project program,  which is
as follows:  Developing a Strategic Approach, Creating Organizational Awareness,
Assessing  Actions and  Developing  Detailed  Plans,  Renovating  (remediating),
Validating  (testing),  Implementing  (remediated  code  into  production),  and
Implementing (totally future-date certified).  Additionally,  Summit Bancorp has
completed  the  above  project  program  for  certain  noncritical,  stand-alone
personal computer (PC)-based software applications.

Testing  of  automated   interfaces  with  third  parties  including   principal
settlement  methods  associated with major payment systems  involving systems of
other financial  institutions and governmental  agencies has been completed.  In
addition,  Summit Bancorp has set up a test capability for its customers to test
their  automated  interfaces  with Summit Bancorp at the customer's  convenience
between May and September of 1999.

Non-IT systems with embedded chip  technology  for all building,  environmental,
and security  systems have been remediated,  tested,  and confirmed as Year 2000
ready. Telecommunications software and equipment, both voice and data, have been
fully  remediated,  tested,  and  confirmed as Year 2000 ready.  The banking and
telecommunications industries completed multiple joint end to end tests of major
carriers  and bank  networks  in the second  quarter of 1999 with no Y2K related
problems.  Although  Summit  Bancorp was not one of the banks  participating  in
these tests,  review of the methodology and results support Summit Bancorp's own
assessment of the Y2K readiness of the  telecommunications  services on which it
relies.

Communication  with third  parties  that may have a material  relationship  with
Summit  Bancorp has been  initiated to determine  whether they have  appropriate
plans  to be Year  2000  ready.  An  inventory  of  important  vendors  has been
completed  and  Summit   Bancorp's   vendor  risk  assessment  and  preparedness
evaluation   activities  are  ongoing.   Summit   Bancorp's  plans  to  minimize
third-party  risk include  contingency  planning for important  vendors.  All of
Summit Bancorp's  significant  vendors have responded to the Year 2000 inquiries
made by Summit Bancorp,  with  approximately 87 percent claiming to be currently
Year 2000  compliant.  Vendor  responses  were  reviewed  for  completeness  and
incomplete responses were followed up with additional correspondence,  telephone
calls or both. In some cases, Year 2000 readiness  information was obtained from
publicly available sources, including vendor or third party websites. Confidence
levels were developed  based on the quality of the vendor's  responses to Summit
Bancorp's written  inquiries,  use of publicly  available  information,  and the
vendor's prior track record in meeting its commitments to Summit  Bancorp.  With
limited  exception  Summit  Bancorp's  suppliers  have  been  found to be making
satisfactory  progress toward achieving Y2K readiness.  Summit Bancorp will have
appropriate  contingency  plans in place for those whose  progress was not rated
satisfactory  as  of  June  30,  1999.  Summit  Bancorp  has  not  assessed  the
enforceability  of any  representations  by these  vendors as to their Year 2000
compliance  status,  preferring  to focus its Year 2000  resources on developing
appropriate  contingency plans where it does not have sufficient confidence in a
vendor's Year 2000 status. These  representations may or may not be enforceable,
depending on the facts and circumstances of particular vendor relationships, but
Summit Bancorp has not relied on the  enforceability of such  representations in
its Year 2000 readiness efforts.

To minimize the impact from those  customers who may  experience a disruption in
their operations because they have not adequately considered Year 2000 issues, a
program has been  implemented  for monitoring  and measuring  customer Year 2000
readiness.  Customers  with  borrowing  commitments  of $1 million or more,  and
customers  monitored by the internal  risk rating system with  outstanding  loan
balances of $500 thousand or more,  have been reviewed for Year 2000  readiness,
and will  continue  to be reviewed on a quarterly  basis  during  1999.  Certain
customers  have been  identified  as having  additional  credit risk as a direct
result of the Year 2000.  Those risks have been  considered and  incorporated in
the analysis of the adequacy of the loan loss allowance.  All new loan customers
and renewals of existing loans are assessed as part of the underwriting process.

Costs to Address Year 2000 Issues:

The  estimated  cost of the Year 2000  project is $23  million.  The  project is
staffed  with both  external  contract  and internal  personnel.  This  estimate
includes the cost of retention programs for key systems personnel,  a portion of
which will be paid beyond January 1, 2000. To date,  incremental  internal costs
totaling $6.1 million have been incurred.  These costs include  compensation and
benefits for internal personnel assigned full-time to the project, the retention
program,  and other  ancillary  costs.  In addition,  $12.0  million of external
costs, including external contract personnel and payments to third parties, have
been incurred to date. The total cost incurred to date is $18.1 million.

Contingency Plans:

Summit  Bancorp  has  created  certain   remediation  and  business   resumption
contingency  plans  specific to the Year 2000 project.  Remediation  contingency
plans  address  the  actions to be taken if  remediation  of a  mission-critical
system falls behind  schedule.  Remediation for all mission critical systems has
been  completed.  None of the  three  remediation  contingency  plans  that were
prepared for mission-critical  systems had to be triggered.  Business resumption
contingency  plans  address the actions that will be taken if critical  business
functions  cannot  be  carried  out in  the  normal  manner  due  to  system  or
third-party  failures.  These plans supplement  existing disaster recovery plans
and are being updated to include potential Year 2000 related failures.  Business
resumption  plans  will be  maintained  current  and will be tested  during  the
remainder of 1999.




LIQUIDITY

Liquidity  is the ability to meet the  borrowing  needs and  deposit  withdrawal
requirements  of  customers  and  support  asset  growth.  Principal  sources of
liquidity are deposit  generation,  access to purchased  funds,  maturities  and
repayments of loans and investment securities and interest and fee income.

The  consolidated  statements  of cash flows  present the change in cash and due
from banks from operating,  investing and financing activities. During the first
six months of 1999,  net cash provided by operating  activities  totaled  $227.9
million.  Contributing  to net cash  provided by operating  activities  were the
results of  operations,  plus noncash  expenses,  and proceeds from the sales of
mortgages held for sale.  Partially  offsetting the  contributions  to operating
cash were  funds used to  originate  mortgage  loans  held for sale and  noncash
revenues.

Net cash used in investing  activities totaled $1.1 billion.  For the six months
ended June 30, 1999,  net cash used in  transactions  involving  the  investment
portfolios totaled $793.5 million, while the loan portfolio used $330.5 million.

Scheduled  maturities  and  anticipated  principal  repayments  of the  held  to
maturity portfolio will approximate $1.3 billion throughout the balance of 1999.
In addition, the securities available for sale portfolio provides another source
of  liquidity.  These  sources can also be used to meet the funding needs during
periods of loan growth.

Net cash provided by financing  activities  totaled $780.8  million.  During the
first six months of 1999,  other  borrowed  funds and long-term  debt  increased
$973.8  million.  This increase was  partially  offset by the purchase of common
stock of $239.8 million, and the payment of common stock dividends.

Liquidity is also available  through  additional lines of credit and the ability
to incur additional  debt. The banking  subsidiaries  have established  lines of
credit with the Federal  Reserve Bank and the Federal Home Loan Bank of New York
and other correspondent  banks, which further support and enhance liquidity.  In
addition, in November 1998 two of Summit Bancorp's banking subsidiaries,  Summit
Bank (New  Jersey)  and Summit  Bank  (Pennsylvania),  executed  a  distribution
agreement providing for the possible issuance,  from time to time, of senior and
subordinated  notes to a maximum of $3.75 billion on an  underwritten  or agency
basis.

Liquidity is also  important at the Parent Company in order to provide funds for
operations   and  to  pay  dividends  to   shareholders.   Parent  Company  cash
requirements  are met primarily  through  management fees and dividends from its
subsidiaries, the issuance of short and long-term debt and the exercise of stock
options.  The amount of dividends that can be assessed to the bank  subsidiaries
is subject to certain regulatory restrictions.

LOOKING AHEAD

This report contains  certain  forward-looking  statements,  either expressed or
implied,  which are  provided  to assist  the reader to  understand  anticipated
future financial performance.  These forward- looking statements involve certain
risks, uncertainties, estimates and assumptions made by management.

Factors that may cause actual results to differ from those results  expressed or
implied  include,  but are not limited to, the interest rate environment and the
overall  economy,  the  ability of  customers  to repay their  obligations,  the
adequacy of the  allowance  for loan  losses,  including  realizable  collateral
valuations,  charge offs and  recoveries,  the progress of integrating  acquired
financial  institutions,  competition and technological  changes,  including the
Year 2000 issue.  Although  management  has taken  certain steps to mitigate the
negative effect of the above mentioned items,  significant  unfavorable  changes
could  severely  impact  the  assumptions  used and have an  adverse  affect  on
profitability.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Due to the nature of Summit  Bancorp's  business,  market risk is primarily  its
exposure to interest rate risk. Interest rate risk is the impact that changes in
interest  rates have on future  earnings.  The  principal  objective in managing
interest  rate risk is to maximize net  interest  income  within the  acceptable
levels of risk that have been previously established by policy. This risk can be
reduced by various strategies,  including the administration of liability costs,
the reinvestment of asset maturities and the use of off-balance  sheet financial
instruments.   Summit  Bancorp  has  limited  risks   associated   with  foreign
currencies.

Interest  rate  risk  is  monitored  through  the  use  of  simulation  modeling
techniques which apply alternative interest rate scenarios to periodic forecasts
of future  business  activity,  projecting  the related  impact to net  interest
income.  The use of simulation  modeling  assists  management in its  continuing
efforts to achieve earnings growth in varying interest rate environments.

Key assumptions in the model include anticipated prepayments on mortgage-related
instruments,  contractual cash flows and maturities of all financial instruments
including derivatives, anticipated future business activity, deposit sensitivity
and changes in market conditions.  Selected core deposit rates are held constant
based on the results of analysis of historical rate movements.

These assumptions are inherently uncertain, and as a result, these models cannot
precisely  estimate the impact that higher or lower rate  environments will have
on net interest income. Actual results will differ from simulated results due to
timing,  magnitude and  frequency of interest  rate  changes,  changes in market
condition, as well as changes in management's strategies.

Based on the results of the interest  simulation  model as of June 30, 1999,  if
interest  rates  increase or decrease 100 basis points from current  rates in an
immediate and parallel  shock over a twelve month period,  Summit  Bancorp would
expect a decrease  of $23.0  million in net  interest  income and an increase of
$21.0 million in net interest income, respectively.  The results of the interest
simulation  model as of June 30, 1999, do not  represent a material  change from
the amounts previously reported as of December 31, 1998. The interest simulation
model does not include asset and liability  strategies that could be deployed to
mitigate the impact of changes in the interest rate environment.

Interest rate risk management efforts also involve the use of certain derivative
financial  instruments  for the purpose of stabilizing  net interest income in a
changing  interest  rate  environment.   The  derivative  financial  instruments
portfolio  consists  principally  of interest rate swaps.  At June 30, 1999, the
notional  values of these  instruments  were $272.0 million.  These  derivatives
resulted in a reduction in net interest income of $1.0 million for the first six
months of 1999. The cost to terminate  these  contracts at June 30, 1999,  would
have been $103.5 thousand.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Based upon advice of Summit  Bancorp's  legal  department,  management  does not
believe that the ultimate  disposition  of the litigation  discussed  below will
have a  material  adverse  effect  on the  financial  position  and  results  of
operation of Summit Bancorp and its subsidiaries, taken as a whole.

1.  Annette  Loatman on behalf of herself and all others  similarly  situated v.
United Jersey Bank,  U.S.  District Court for the District of New Jersey,  Civil
Action No. 95-5258 (JBS),  filed on October 4, 1995,  Robert M. Gundle,  III, on
behalf of himself and all others similarly situated v. Summit Bank, successor in
interest to United  Jersey  Bank,  U.S.  District  Court for the District of New
Jersey,  Civil Action No. 96- 4477 (JBS), filed on October 14, 1996, and Annette
Loatman, on behalf of herself and all others similarly situated v. United Jersey
Bank,  Superior Court of New Jersey,  Camden County,  Docket No. L-3527-96 ("the
State Action"),  filed April 24, 1996,  dismissed  without prejudice pending the
outcome of the federal  actions on December 9, 1996, and reinstated  October 15,
1997 with Robert M. Gundle, III as an additional named plaintiff.

Reported on Form 10-K for the period  ended  December  31, 1998 and on Form 10-Q
for the period  ended March 31,  1999.  On March 30,  1999,  plaintiffs  filed a
motion for partial summary judgment as to liability on their New Jersey Consumer
Fraud Act claim.  The Bank  opposed  this  motion and filed a  cross-motion  for
dismissal of plaintiffs'  Consumer Fraud Act claim.  On July 23, 1999, the Court
entered an order denying the plaintiffs' motion for partial summary judgment and
granting the Bank's  cross-motion  for partial summary  judgment  dismissing the
plaintiffs' New Jersey Consumer Fraud Act claim.


2. In re  Payroll  Express  Corporation  et al - John S.  Pereira  as Chapter 11
Trustee of the Estate of Payroll  Express  Corporation  et al v.  United  Jersey
Bank,  United States District Court for the Southern District of New York, Civil
Action No. 94-1565 (LAP) ("the Preference Action"),  filed December 29, 1993; In
re Payroll  Express  Corporation  of New York and Payroll  Express  Corporation,
United States  Bankruptcy Court for the Southern District of New York. Case Nos.
92-B-43 149 (CB) and 92-B-43 150 (CB), Adversary Proceeding No. 94-8297A,  filed
April 22, 1994 ("the Fraudulent Conveyance Action"); Beth Israel Medical Center,
et al V. United  Jersey Bank and National  Westminster  Bank New Jersey,  United
States  District Court for the Southern  District of New York,  Civil Action No.
94-8256  (LAP),  filed  September 28, 1993;  Frederick  Goldman,  Inc. V. United
Jersey Bank and National  Westminster  Bank New Jersey,  United States  District
Court for the Southern  District of New York,  Civil Action No,  94-8256  (LAP),
filed March 21, 1994; Towers Financial Corporation v. United Jersey Bank, United
States  District Court for the District of New Jersey,  Civil Action  No.92-3175
(WGB),  filed June 2, 1992, removed to federal court September 2, 1992; New York
City Transit  Authority V. United Jersey Bank and National  Westminster Bank New
Jersey,  United  States  District  Court for the Southern  District of New York,
Civil Action No.95-3685 (LAP), filed May 19, 1995; and Copytone,  Inc. on behalf
of itself  and  others  similarly  situated  v.  United  Jersey  Bank,  National
Westminster  Bank New Jersey and John Does I through 20, United States  District
Court for the Southern  District of New York,  Civil Action No.  95-8217  (LAP),
filed November 1995.

Reported on Form 10-K for the period  ended  December  31, 1998 and on Form 10-Q
for the period  ended March 31, 1999.  In the  Preference  Action,  all fact and
expert  discovery  has been  concluded.  Summit Bank and NatWest Bank have filed
motions for summary  judgment and the court has  scheduled  oral argument on the
motions for August 20, 1999.  The court has also set  September  13, 1999 as the
trial date for the Preference Action if the summary judgment motions are denied.
All other pending cases are inactive.

3. Daniel  Iverson,  Lawrence Cohen and Terri Cohen, on behalf of themselves and
all others similarly situated v. Collective Bank, a federally  chartered savings
bank organized under the laws of the United States of America  (improperly named
as Collective Bancorp,  Inc., a Delaware  corporation),  on behalf of itself and
all others similarly  situated.  Superior Court of New Jersey,  Atlantic County,
Docket No. ATL- L-2578-95, filed on July 26, 1995.

Reported on Form 10-K for the period  ended  December  31, 1998 and on Form 10-Q
for the period ended March 31, 1999. On January 27, 1999, the New Jersey Supreme
Court entered an order  granting  Collective's  motion for leave to cross appeal
the Appellate Division's ruling concerning federal preemption. The Supreme Court
has not yet scheduled a date to hear the parties' appeals.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits

          (3)  A. #Restated Certificate of Incorporation of Summit
               Bancorp., as restated August 16, 1999.

          (4)  A. #Rights  Agreement,  dated as of June 16, 1999, by and between
               Summit  Bancorp and First  Chicago  Trust Company of New York, as
               Rights agent (incorporated by reference to Exhibit
               4.1 on Form 8-K dated June 16, 1999).

          (10) HH. (i) Summit Bancorp. Executive Severance Plan
               Participation Letter, for James J. Lynch and (ii) Termination
               Agreement between Summit Bancorp. and James J. Lynch

          (27) Summit Bancorp. Financial Data Schedule - June 30, 1999.

  (b)   Reports on Form 8-K

         In a current  report on Form 8-K dated June 16,  1999,  the  Registrant
         under Item 5, Other  Events,  reported  the  declaration  of a dividend
         distribution of one Preferred Stock Purchase Right for each outstanding
         Common  Share of the  Corporation,  payable  as of August  16,  1999 to
         shareholders of record on that date. Each Right entitles the registered
         holder to purchase from the Corporation one one-hundredth  (1/100) of a
         preferred  share of the  Corporation,  designated as Series S Preferred
         Shares,  upon the  occurrence of certain events set forth in the Rights
         Agreement  dated as of June 16, 1999 between  Summit  Bancorp and First
         Chicago Trust Company of New York, as Rights Agent.


                                SIGNATURE



  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.




                                    SUMMIT BANCORP
                                       Registrant



  DATE: August 16, 1999 BY:                /s/Paul V. Stahlin
                                        --------------------------
                                           Paul V. Stahlin
                                     Senior Vice President, Comptroller
                                   and Principal Accounting Officer
                                         (Duly Authorized Officer)

                          EXHIBIT INDEX


  Exhibit No.                   Description

  (3)     A. #Restated Certificate of Incorporation of Summit
             Bancorp., as restated August 16, 1999.

  (4)        A. #Rights  Agreement,  dated as of June 16,  1999,  by and between
             Summit  Bancorp and First  Chicago  Trust  Company of New York,  as
             Rights agent  (incorporated by reference to Exhibit 4.1 on Form 8-K
             dated June 16, 1999).

  (10)    HH. (i) Summit Bancorp. Executive Severance Plan Participation
               Letter for James J. Lynch and (ii) Termination Agreement
               between Summit Bancorp. and James J. Lynch

  (27)    Summit Bancorp. Financial Data Schedule - June 30, 1999.