SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1997

                          Commission File No. 333-19201

                          THE COMMERCIAL BANCORP, INC.
                 (Name of small business issuer in its charter)

       A Florida Corporation (IRS Employer Identification No. 59-3396236)
                                258 N. Nova Road
                           Ormond Beach, Florida 32174
                                 (904) 672-3003

                 Securities Registered Pursuant to Section 12(b)
                    of the Securities Exchange Act of 1934:

                                      NONE

                 Securities Registered Pursuant to Section 12(g)
                    of the Securities Exchange Act of 1934:

                                      NONE

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. Yes X No

Check if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-B
is not  contained  in this  form,  and  will  not be  contained,  to the best of
Registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Revenues for the  fiscal  year  ended  December  31,  1997:  $ 114,344

The  aggregate  market  value  of the  common  stock of the  Registrant  held by
nonaffiliates  of the  Registrant  (338,176  shares) on  February  28,  1998 was
approximately  $3,381,760.  As of such date, no organized trading market existed
for the common stock of the Registrant.  The aggregate market value was computed
by reference to recent trading activity of the common stock of the registrant at
$10.00 per share.  For the purposes of this  response,  directors,  officers and
holders  of 5% or more of the  Registrant's  common  stock  are  considered  the
affiliates of the Registrant at that date.

The  number  of shares  outstanding  of the  Registrant's  Common  Stock,  as of
February 28, 1998: 464,791 shares of $0.01 par value common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------


         1.       Portions of the Annual Report to Shareholders for the Fiscal 
                  Year ended December 31, 1997.
                  (Part II)

         2.       Portions of Proxy Statement for the 1998 Annual Meeting of 
                  Shareholders.  (Part III)

                                        1

<PAGE>



                                TABLE OF CONTENTS

Consolidated--The Commercial Bancorp,  Inc. and Affiliates

         NOTE:  Certain  information  required by Form 10-KSB is incorporated by
reference from the 1997 Annual Report and 1998 Annual Meeting Proxy Statement as
indicated below.  Only that information  expressly  incorporated by reference is
deemed filed with the Commission.

  PART I                                                            Page Number
                                                                     -----------
  Item 1   Business.........................................................3
  Item 2   Properties.......................................................8
  Item 3   Legal Proceedings................................................9
  Item 4   Submission of Matters to a Vote of Security Holders -............9


  PART II
  Item 5  Market for Common Equity and Related Stockholder Matters..........9
  Item 6  Management's Discussion and Analysis of Financial Condition
          and Results of Operations.........................................6(1)
  Item 7  Financial Statements and Supplementary Data......................14(1)
  Item 8  Changes in and disagreements with Accountants on
          Accounting and Financial Disclosure..............................10


  PART III
  Item 9  Directors and Executive Officers of the Registrant:...............3(2)
  Item 10 Executive Compensation............................................5(2)
  Item 11 Security Ownership of Certain Beneficial Owners and Management....2(2)
  Item 12 Certain Relationships and Related Transactions....................5(2)
  Item 13 Exhibits, Financial Statement Schedules, and Reports on Form 8-K.11

--------------------------------------------------------------

   (1)      These items are incorporated by reference from the Company's 1997 
            Annual Report pursuant to instruction E 2. of Form 10-KSB.

   (2)      The material required by Items 9 through 11 is hereby incorporated 
            by reference from the Company's definitive proxy statement pursuant 
            to Instruction E 3. of Form 10-KSB.

                                        2

<PAGE>



                                     PART I

ITEM 1. - BUSINESS

Description

General

The  Commercial  Bancorp,  Inc.  (the  "Company")  is a registered  bank holding
company under the federal Bank Holding Company Act of 1956, as amended, and owns
100% of the  issued  and  outstanding  common  stock of The  Commercial  Bank of
Volusia County, Ormond Beach, Florida (the "Bank"). The Company was incorporated
under the laws of the State of Florida on August 15, 1996 to acquire 100 percent
of the shares to be issued by the Bank  during its  organizational  stage and to
enhance  the  Bank's  ability to serve its future  customers'  requirements  for
financial  services.  The Company  provides  flexibility  for  expansion  of the
Company's banking business through  acquisition of other financial  institutions
and  provision of  additional  banking-related  services  which the  traditional
commercial bank may not provide under present laws.

The Bank is a  state-chartered  commercial  bank,  which  opened for business on
October  14,  1997.  The  Bank  offers  a wide  range  of  interest-bearing  and
noninterest-bearing accounts, including commercial and retail checking accounts,
negotiable  order  of  withdrawal  ("NOW")  accounts,   money  market  accounts,
individual  retirement  accounts,  regular  interest-bearing  statement  savings
accounts,  certificates of deposit,  commercial  loans,  real estate loans, home
equity loans and consumer/installment loans. In addition, the Bank provides such
consumer services as U.S. Savings Bonds,  travelers checks,  safe deposit boxes,
bank by mail services and direct deposit services.

Market Area

The primary  service  area for the Bank  includes  the city of Ormond  Beach and
Ormond by the Sea,  along with  portion of the city of Holly  Hill.  Competition
among financial  institutions  in this area is intense.  There are 20 commercial
banking  offices and 3 savings and loan offices within the primary  service area
of the Bank. Most of these offices are branches of or are, affiliated with major
bank holding companies.

The Bank is in competition with existing area financial  institutions other than
commercial  banks  and  savings  and  loan  associations,   including  insurance
companies, consumer finance companies, brokerage houses, credit unions and other
business entities which have over the years,  engaged more and more in providing
services which have historically been traditional  banking services.  Due to the
growth of the Volusia County area in general and the Bank's primary service area
in particular,  it is anticipated  that competition will increase because of new
entrants to the market.

Investments

As of December 31, 1997, federal funds sold and comprised approximately 19.8% of
the Company's  assets.  The Company enters into Federal Funds  transactions with
its principal correspondent banks, and acts as a seller of such funds. Net loans
comprised approximately 52.9% of the Company's assets at December 31, 1997.

Loan Portfolio

The  Bank  engages  in  a  wide  range  of  lending  activities,  including  the
originating and purchasing of commercial,  consumer/installment  and real estate
loans.


                                        3

<PAGE>



Commercial  lending is directed  principally toward businesses whose demands for
funds fall  within  the  Bank's  legal  lending  limits and which are  potential
deposit  customers of the bank.  This category of loans  includes  loans made to
individual,  partnership or corporate  borrowers,  and obtained for a variety of
business  purposes.  Particular  emphasis  is  placed  on  loans  to  small  and
medium-sized businesses. The Bank's real estate loans consist of residential and
commercial first and second mortgage loans.

The Bank's consumer loans consist  primarily of installment loans to individuals
for  personal,  family and household  purposes,  including  automobile  loans to
individuals  and  pre-approved  lines of  credit.  This  category  of loans also
includes term loans secured by second  mortgages on the  residences of borrowers
for a variety of  purposes  including  home  improvements,  education  and other
personal expenditures.

The Bank's general  policy is not to accrue  interest on loans  delinquent  over
ninety days unless fully secured and in the process of collection. The policy is
that the accrued and unpaid  interest is  reversed  against  current  income and
thereafter interest is recognized only to the extent payments are received.  The
policy is that non-accrual loans are restored to accrual basis when interest and
principal  payments  are current and  prospects  for  recovery  are no longer in
doubt.

As of December  31,  1997,  there were no loans where  known  information  about
possible credit problems of borrowers  causes  management to have serious doubts
as to the ability of such  borrowers to comply with the present  loan  repayment
terms.

The  majority  of the  Company's  loans are  secured  by real  estate in Volusia
County,  Florida,  where  the  Bank  is  located.   Accordingly,   the  ultimate
collectibility of a substantial  portion of the loan portfolio is susceptible to
changes in market conditions in this County.


Loan Loss Reserves

In  considering  the  adequacy  of the  Company's  allowance  for  loan  losses,
management  has  considered  that as of December 31, 1997,  81.5% of outstanding
loans are in the commercial loan category, including loans secured by commercial
real estate.  Commercial loans are generally  considered by management as having
greater risk than other  categories  of loans in the Company's  loan  portfolio.
However,  the majority of these  commercial loans at December 31, 1997 were made
on a  secured  basis,  with  collateral  consisting  primarily  of real  estate,
accounts   receivable,   inventory,   assignment  of  mortgages  and  equipment.
Management  believes that the secured  condition of the preponderant  portion of
its commercial  loan portfolio  reduces any risk of loss  inherently  present in
commercial loans.

The Company's  consumer loan portfolio at December 31, 1997 consisted  primarily
of lines of credit and installment loans secured by automobiles, boats and other
consumer goods. Management believes that the risk associated with these types of
loans has been adequately provided for in the loan loss reserve.

Residential real estate mortgage loans constitute 11.4% of outstanding  loans at
December 31, 1997.  Management considers these loans to have minimal risk due to
the fact  that  these  loans  represent  conventional  residential  real  estate
mortgages  where the  amount of the  original  loan does not  exceed  80% of the
appraisal  value of the collateral.

The Company's Board of Directors monitors the loan portfolio monthly in order to
enable it to evaluate the adequacy of the allowance for loan losses. In addition
to  reviews  by  regulatory   agencies  and  the  Company's   certified   public
accountants,  the services of outside consultants have been engaged to assist in
the evaluation of credit quality and loan  administration.  These  professionals
compliment  the system  implemented  by the Company which  identifies  potential
problem  credits as early as  possible,  categorizes  the credits as to risk and
includes a reporting process to monitor the progress of the credits.


                                        4

<PAGE>



The  allowance  for loan  losses  represents  the  cumulative  total of  monthly
provisions for loan losses. The allowance for loan losses is established through
a provision  for loan losses  charged to expense.  Loans are charged off against
the  allowance  when  management  believes  the  collectibility  of principal is
unlikely.  The  monthly  provision  for loan  losses  is  based on  management's
judgment, after considering known and inherent risks in the portfolio, past loss
experience of the Company,  adverse  situations  that may affect the  borrower's
ability to repay,  assumed  values of the  underlying  collateral  securing  the
loans, the current and prospective financial condition of the borrower,  and the
prevailing and anticipated economic condition of the local market.

The Company  maintains the  allowance  for loan losses at a level  sufficient to
absorb all estimated losses in the loan portfolio. The allowance for loan losses
is made up of two primary  components:  (i) amounts  allocated to loans based on
collateral  type and (ii) amounts  allocated for loans reviewed on an individual
basis in accordance with a credit risk grading system.

Deposits

The  Bank  offers  a wide  range  of  interest-bearing  and  noninterest-bearing
accounts, including commercial and retail checking accounts, negotiable order of
withdrawal  ("NOW")  accounts,  money  market  accounts,  individual  retirement
accounts,  regular interest-bearing  statement savings accounts and certificates
of deposit with fixed rates and a range of maturity date options. The sources of
deposits are residents, businesses and employees of businesses within the Bank's
market area,  obtained through the personal  solicitation of the Bank's officers
and directors,  direct mail  solicitation  and  advertisements  published in the
local  media.  The Bank  pays  competitive  interest  rates on time and  savings
deposits up to the maximum permitted by law or regulation. In addition, the Bank
has implemented a service charge fee schedule  competitive  with other financial
institutions  in the Bank's market area,  covering  such matters as  maintenance
fees on checking accounts,  per item processing fees, returned check charges and
the like.

Correspondent Banking

The Bank purchases  correspondent  services  offered by larger banks,  including
check  collections,  purchase or sale of Federal  Funds,  security  safekeeping,
investment  services,  coin and currency  supplies,  overline and liquidity loan
participations and sales of loans to or participations with correspondent banks.

The Bank sells loan  participations to correspondent banks with respect to loans
which  exceed the Bank's  lending  limit of  approximately  $1,000,000.  For the
fiscal  year  ended   December  31,  1997,  the  bank  had  not  sold  any  loan
participations.

Data Processing

The Bank has a data processing  servicing agreement with Citrus & Chemical Bank,
Bartow,  Florida.  This servicing  agreement  provides for the Bank to receive a
full range of data processing  services  including an automated  general ledger,
deposit  accounting,  commercial,  real  estate  and  installment  lending  data
processing,  central  information  file  ("CIF")  and ATM  processing.  The data
processing  servicing agreement provides for the Bank to pay a monthly fee based
on the type, kind and volume of data processing  services provided,  priced at a
stipulated rate schedule.

Employees

The Bank  currently  employs 9 full time persons,  including 5 officers,  and no
part time persons. The Bank will hire additional persons as needed.


                                        5

<PAGE>



Monetary Policies

The results of  operations  of the  Company and the Bank are  affected by credit
policies of monetary  authorities,  particularly  the Federal Reserve Board. The
instruments  of monetary  policy  employed by the Federal  Reserve Board include
open market operations in U.S.  Government  securities,  changes in the discount
rate on member bank borrowings,  changes in reserve  requirements against member
bank deposits and  limitations  on interest  rates which member banks may pay on
time and  savings  deposits.  In view of  changing  conditions  in the  national
economy and in the money market, as well as the effect of action by monetary and
fiscal  authorities,  including the Federal  Reserve Board, no prediction can be
made as to possible  future  changes in interest  rates,  deposit  levels,  loan
demand, or the business and earnings of the Bank.

Supervision and Regulation

The Company and the Bank operate in a highly  regulated  environment,  and their
business  activities  are  governed by statute,  regulation  and  administrative
policies.  The business activities of the Company and the Bank are supervised by
a number of federal  regulatory  agencies,  including the Federal Reserve Board,
the Florida  Department  of Banking and Finance  ("Department")  and the Federal
Deposit Insurance Corporation ("FDIC").

The Company is  regulated  by the Federal  Reserve  Board under the federal Bank
Holding  Company Act, which  requires  every bank holding  company to obtain the
prior approval of the Federal Reserve Board before acquiring more than 5% of the
voting shares of any bank or all or  substantially  all of the assets of a bank,
and before  merging or  consolidating  with another bank  holding  company.  The
Federal Reserve Board (pursuant to regulation and published  policy  statements)
has maintained  that a bank holding  company must serve as a source of financial
strength to its  subsidiary  banks.  In adhering  to the Federal  Reserve  Board
Policy,  the  Company  may  be  required  to  provide  financial  support  for a
subsidiary bank at a time when,  absent such Federal  Reserve Board policy,  the
Company may not deem it advisable to provide such assistance.

A bank holding  company is generally  prohibited  from acquiring  control of any
company  which is not a bank and from  engaging in any  business  other than the
business  of banking or  managing  and  controlling  banks.  However,  there are
certain activities which have been identified by the Federal Reserve Board to be
so  closely  related  to banking  as to be a proper  incident  thereto  and thus
permissible for bank holding companies.

As a state bank, the Bank is subject to the supervision of the  Department,  the
FDIC and the Federal  Reserve  Board.  With respect to  expansion,  the Bank may
establish branch offices anywhere within the State of Florida.  The Bank is also
subject to the Florida banking and usury laws restricting the amount of interest
which it may charge in making loans or other extensions of credit.  In addition,
the bank,  as a subsidiary  of the  Company,  is subject to  restrictions  under
federal  law in dealing  with the Company and other  affiliates,  if any.  These
restrictions  apply to extensions of credit to an affiliate,  investments in the
securities of an affiliate and the purchase of assets from an affiliate.

Loans and  extensions  of credit by state  banks are  subject  to legal  lending
limitations.  Under  state  law,  a state  bank may  grant  unsecured  loans and
extensions  of  credit  in an amount  up to 15% of its  unimpaired  capital  and
surplus to any person. In addition,  a state bank may grant additional loans and
extensions of credit to the same person up to 10% of its unimpaired  capital and
surplus,  provided that the transactions are fully secured.  This 10% limitation
is separate from,  and in addition to, the 15%  limitation for unsecured  loans.
Loans and  extensions  of credit may exceed the  general  lending  limit if they
qualify under one of several exceptions.

Both the  Company and the Bank are subject to  regulatory  capital  requirements
imposed by the Federal  Reserve  Board,  the FDIC and the  Department.  Both the
Federal  Reserve  Board  and  the  FDIC  have  established   risk-based  capital
guidelines for bank holding  companies and banks which make  regulatory  capital
requirements  more sensitive to differences in risk profiles of various  banking
organizations.  The capital  adequacy  guidelines  issued by the Federal Reserve
Board are applied to bank  holding  companies on a  consolidated  basis with the
banks owned by the holding  company.  The FDIC's risk capital  guidelines  apply
directly to state banks  regardless  of whether they are a subsidiary  of a bank
holding company. Both agencies'  requirements (which are substantially  similar)
provide that banking

                                        6

<PAGE>



organizations  must have capital  equivalent to 8% of weighted risk assets.  The
risk weights  assigned to assets are based primarily on credit risks.  Depending
upon the riskiness of a particular asset, it is assigned to a risk category. For
example,  securities  with  an  unconditional  guarantee  by the  United  States
government  are  assigned to the lowest risk  category.  A risk weight of 50% is
assigned  to loans  secured by  owner-occupied  one to four  family  residential
mortgages.  The  aggregate  amount of assets  assigned to each risk  category is
multiplied  by the risk  weight  assigned  to that  category  to  determine  the
weighted  values,  which are added  together to  determine  total  risk-weighted
assets. At December 31, 1997, the Company's total risk-based  capital and Tier 1
ratio were 92.7% and 88.4%, respectively. Both the Federal Reserve Board and the
FDIC have also  implemented  new minimum  capital  leverage ratios to be used in
tandem with the risk-based  guidelines in assessing the overall capital adequacy
of bank and bank holding companies.  Under these rules, banking institutions are
required  to  maintain a ratio of 3% "Tier 1" capital  to total  assets  (net of
goodwill).  Tier 1 capital includes common  stockholders  equity,  noncumulative
perpetual  preferred  stock and  minority  interests  in the equity  accounts of
consolidated subsidiaries.

Both the  risk-based  capital  guidelines  and the  leverage  ratio are  minimum
requirements,  applicable only to top-rated banking  institutions.  Institutions
operating at or near these levels are  expected to have  well-diversified  risk,
excellent asset quality,  high liquidity,  good earnings and in general, have to
be considered strong banking  organizations,  rated composite 1 under the CAMELS
rating system for banks or the BOPEC rating  system for bank holding  companies.
Institutions  with lower  ratings and  institutions  with high levels of risk or
experiencing  or anticipating  significant  growth would be expected to maintain
ratios 100 to 200 basis points above the stated minimums.

The Federal Deposit Insurance  Corporation  Improvement Act of 1991 (or FDICIA),
created five "capital categories" ("well capitalized," "adequately capitalized,"
"undercapitalized,"    "significantly    undercapitalized"    and    "critically
undercapitalized")  which are defined in the Act and which are used to determine
the severity of  corrective  action the  appropriate  regulator  may take in the
event an institution reaches a given level of undercapitalization.  For example,
an  institution   which  becomes   "undercapitalized"   must  submit  a  capital
restoration plan to the appropriate  regulator  outlining the steps it will take
to become  adequately  capitalized.  Upon approving the plan, the regulator will
monitor the institution's compliance.  Before a capital restoration plan will be
approved, any entity controlling a bank (i.e., holding companies) must guarantee
compliance with the plan until the  institution has been adequately  capitalized
for four consecutive calendar quarters.  The liability of the holding company is
limited to the lesser of five percent of the  institution's  total assets or the
amount which is  necessary to bring the  institution  into  compliance  with all
capital  standards.  In  addition,   "undercapitalized"   institutions  will  be
restricted   from  paying   management   fees,   dividends   and  other  capital
distributions,  will be subject to certain asset growth restrictions and will be
required to obtain prior  approval  from the  appropriate  regulator to open new
branches or expand into new lines of business.  As an institution drops to lower
capital levels,  the extent of action to be taken by the  appropriate  regulator
increases,  restricting  the types of  transactions in which the institution may
engage and  ultimately  providing for the  appointment of a receiver for certain
institutions deemed to be critically undercapitalized.

The FDICIA  required  each federal  banking  agency to prescribe for all insured
depository  institutions  and their  holding  companies  standards  relating  to
internal controls,  information  systems and audit systems,  loan documentation,
credit   underwriting,   interest  rate  risk   exposure,   asset  growth,   and
compensation,  fees and  benefits  and such  other  operational  and  managerial
standards as the agency deems  appropriate.  In  addition,  the federal  banking
regulatory   agencies  were  required  to  prescribe  by  regulation   standards
specifying:  (i)  maximum  classified  assets to capital  ratios;  (ii)  minimum
earnings  sufficient to absorb losses without  impairing  capital;  (iii) to the
extent  feasible,  a minimum  ratio of market  value to book value for  publicly
traded shares of depository  institutions or the depository  institution holding
companies; and (iv) such other standards relating to asset quality, earnings and
valuation as the agency deems appropriate.  Finally, each federal banking agency
was  required  to  prescribe  standards  for  employment   contracts  and  other
compensation  arrangements  of  executive  officers,  employees,  directors  and
principal  stockholders of insured  depository  institutions that would prohibit
compensation  and benefits  and other  arrangements  that are  excessive or that
could  lead to a  material  financial  loss for the  institution.  If an insured
depository institution or its holding company fails to meet any of its standards
described  above,  it will be  required  to  submit to the  appropriate  federal
banking  agency  a plan  specifying  the  steps  that  will be taken to cure the
deficiency.  If an  institution  fails to submit an acceptable  plan or fails to
implement the plan,  the  appropriate  federal  banking  agency will require the
institution or holding  company,  to correct the deficiency and until corrected,
may impose  restrictions on the institution or the holding company including any
of the restrictions  applicable under the prompt corrective action provisions of
the FDICIA.

                                        7

<PAGE>



In response to the directive  issued under the Act, the regulators  have adopted
regulations which, among other things, prescribe the capital thresholds for each
of the five  capital  categories  established  by the Act. The  following  table
reflects the capital thresholds:
                                  Total Risk -     Tier 1 Risk -     Tier 1
                                 Based Capital     Based Capital    Leverage
                                     Ratio             Ratio         Ratio
Well capitalized (1)                  10%                6%            5%
Adequately capitalized (1)             8%                4%            4%(2)
Undercapitalized (3)              less than 8%       less than 4%  less than 3%
Critically Undercapitalized            -                 -         less than 2%

(1)  An institution must meet all three minimums.
(2)  3% for composite 1-rated institutions, subject to appropriate federal
     banking agency guidelines.
(3)  An institution falls into this category if it is below the specified 
     capital level for any of the three capital measures.

The Act also  provided  that banks  must have to meet new  safety and  soundness
standards.  In order to comply with the Act, the Federal Reserve Board,  and the
FDIC, adopted a final Rule which institutes  guidelines defining operational and
managerial standards relating to internal controls,  loan documentation,  credit
underwriting,  interest  rate  exposure,  asset  growth,  director  and  officer
compensation,  asset  quality,  earnings and stock  valuation.  Both the capital
standards and the safety and soundness standards which the Act to implement were
designed to bolster and protect the deposit insurance fund.

As a  state  bank,  the  bank  is  subject  to  examination  and  review  by the
Department.  The Bank submits to the Department  quarterly reports of condition,
as well as such additional reports as may be required by the state banking laws.

Under the Riegle-Neal  Interstate Banking and Branching  Efficiency Act of 1994,
existing  restrictions  on  interstate  acquisitions  of banks  by bank  holding
companies  were  repealed on September  29, 1995,  such that the Company and any
other bank  holding  company  located in  Florida  would be able to acquire  any
Florida-based   bank,   subject  to  certain   deposit   percentage   and  other
restrictions.  The legislation  also provides that,  unless an individual  state
elects  beforehand  either  (i) to  accelerate  the  effective  date  or (ii) to
prohibit  out-of-state  banks  from  operating  interstate  branches  within its
territory,  on or after June 1, 1997,  adequately  capitalized  and managed bank
holding  companies  will  be  able  to  consolidate.  De  novo  branching  by an
out-of-state  bank would be permitted  only if it is expressly  permitted by the
laws of the  host  state.  The  authority  of a bank to  establish  and  operate
branches  within  a state  will  continue  to be  subject  to  applicable  state
branching  laws.  During its 1996  Legislative  Session the Florida  Legislature
adopted Legislation which permits interstate branching by acquisition but not by
de novo branching.

As a bank  holding  company,  the  Company is  required to file with the Federal
Reserve Board an annual report of its  operations at the end of each fiscal year
and such  additional  information  as the  Federal  Reserve  Board  may  require
pursuant to the Act. The Federal Reserve Board may also make examinations of the
Company and each of its subsidiaries.

The scope of regulation and  permissible  activities of the Company and the Bank
is subject to change by future federal and state legislation.


ITEM 2. - DESCRIPTION OF PROPERTY

     The Bank  commenced  business  operations  on October  14, 1997 in a leased
     shopping center unit located in the Trails Shopping Center in Ormond Beach,
     Florida. The Company's  headquarters are also located in this facility. The
     facility is a 3,380 square foot unit consisting of a customer lobby, with 3
     teller stations, customer lounge, 3 executive officers, operation area, and
     an employee lounge.



                                        8

<PAGE>



ITEM 3. - LEGAL PROCEEDINGS

     There are no material pending legal proceedings to which the Company or the
     Bank is a party or of which any of their  properties  are subject;  nor are
     there material  proceedings  known to the Company to be contemplated by any
     governmental  authority;  nor are there material  proceedings  known to the
     Company, pending or contemplated, in which any director, officer, affiliate
     or any principal security holder of the Company, or any associate of any of
     the  foregoing is a party or has an interest  adverse to the Company or the
     Bank.


ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None


                                     PART II

ITEM 5. - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

     During the period  covered  by this  report and to date,  there has been no
     established public trading market for the Company's Common Stock.

     As of February 28, 1998, the approximate number of holders of record of the
     Company's Common Stock was 327.

     To date, the Company has not paid any dividends on its Common Stock.  It is
     the  present  policy of the Board of  Directors  of the Company to reinvest
     earnings  for such period of time as is  necessary to ensure the success of
     the  operations of the Company and of the Bank.  There are no current plans
     to initiate  payment of cash  dividends,  and future  dividend  policy will
     depend on the Bank's earnings,  capital  requirements,  financial condition
     and other  factors  considered  relevant by the Board of  Directors  of the
     Company.

     The Bank is  restricted  in its  ability  to pay  dividends  under  Florida
     banking  laws  and  by  regulations  of  the  Federal   Deposit   Insurance
     Corporation. Pursuant to Section 658.37, Florida Statutes, a state bank may
     not pay dividends  from its capital.  All dividends must be paid out of net
     profits then on hand, after charging off bad debts, depreciation, and other
     worthless  assets.  Payment  of  dividends  out of net  profits  is further
     limited by Federal  regulation  which prohibits the payment of dividends if
     such payment would bring the Bank's capital below required levels.

     The Company  commenced its initial public offering of common stock on April
     28, 1997 which was the effective date of the  Securities  Act  registration
     statement, File No. 333-19201,  filed in connection therewith. The offering
     is a continuous offering made under Rule 415 whereby the Company offered up
     to 750,000  shares of common  stock for an  aggregate  of  $7,500,000.  The
     minimum  offering of 450,000 shares was completed on September 19, 1997 and
     a closing was held at that time which  resulted  in the  Company  obtaining
     $4,500,000 in total offering  proceeds from the Escrow Agent.  The offering
     was still open as of December 31, 1997 and an additional 14,791 shares were
     sold between  September  20 and December 31, 1997  resulting in the Company
     obtaining  $147,910 in additional  offering proceeds from the Escrow Agent.
     As of December 31, 1997,  the Company had sold a total of 464,791 shares of
     common  stock at $10.00  per share for a total of  $4,647,910  in  offering
     proceeds.

     From the Effective Date of Registration to and including  December 31, 1997
     the Company had incurred $14,720 in expenses  associated with the offering,
     issuance and  distribution  of the common  stock sold through  December 31,
     1997. No such expenses were paid to directors, officers or 10% shareholders
     of the Company, or their affiliates. All such payments were made to others.
     After deducting the above expenses,  the Company received $4,633,190 in net
     proceeds.  Of this  amount,  the Company  purchased  100% of the issued and
     outstanding  shares of The Commercial Bank of Volusia County for $4,250,000
     and retained $383,190 for working capital.



                                        9

<PAGE>



ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS & FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     The  Company  hereby   incorporates  by  reference  the  section   entitled
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations" on pages 6 through 12 of the 1997 Annual Report to Shareholders
     for the year ended  December  31,  1997  filed as an Exhibit  under Item 13
     herein.


ITEM 7. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company hereby  incorporates by reference the Report of the Independent
     Auditors and the Consolidated  Financial  Statements  contained in the 1997
     Annual Report to Shareholders for the year ended December 31, 1997 filed as
     an Exhibit under Item 13 herein.


ITEM 8. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
          FINANCIAL DISCLOSURE MATTERS - None


                                    PART III

ITEM 9. - DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     The  Company  hereby   incorporates  by  reference  the  sections  entitled
     "Election of Directors" and "Board of Directors Meeting" contained at pages
     3 and 4 of the Proxy Statement filed as an Exhibit under Item 13 herein.


ITEM 10. - EXECUTIVE COMPENSATION

     The  Company  hereby   incorporates  by  reference  the  section   entitled
     "Executive  Compensation"  contained at page 5 of the Proxy Statement filed
     as an Exhibit under Item 13 herein.


ITEM 11. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)        Security Ownership of Certain Beneficial Owners

The Company hereby  incorporates by reference the sections entitled "Election of
Directors" and "Certain Shareholders" contained at page 2 of the Proxy Statement
filed as an Exhibit under Item 13 herein.

(b)        Security Ownership of Management

The Company hereby  incorporates by reference the section entitled  "Election of
Directors"  contained  at pages 2 through 3 of the Proxy  Statement  filed as an
Exhibit under Item 13 herein.

(c)        Changes in Control

The Company is not aware of any arrangements, including any pledge by any person
of  securities of the Company,  the operation of which may at a subsequent  date
result in a change of control of the Company.



                                       10

<PAGE>



ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company hereby  incorporates  by reference the section titled  "Certain
     Relationships  and Related  Transactions"  contained at page 5 through 6 of
     the Proxy Statement filed as an exhibit under Item 13 herein.


ITEM 13. - EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Exhibits.  The  following  exhibits are filed with or  incorporated  by
     reference  into this  report.  The  exhibits  which are  denominated  by an
     asterisk  (*)  were  previously   filed  as  a  part  of,  and  are  hereby
     incorporated by reference from the Company's Registration Statement on Form
     -SB-2 under the Securities  Act of 1933 for the Company,  as effective with
     the  Securities and Exchange  Commission on December 7, 1995,  Registration
     No. 33-98090 (referred to as "Registration Statement"). The exhibit numbers
     correspond to the exhibit numbers in the referenced documents.


Exhibit No.                          Description of Exhibit
-----------            -----------------------------------------

   *3.1   Amended and Restated Articles of Incorporation of the Company
          (Registration Statement)

   *3.2   By-laws of the Company (Registration Statement)

   *4.1   Specimen Common Stock Certificate (Registration Statement)

   *4.2   Specimen Warrant Certificate (Registration Statement)

   *4.4   Company's Warrant Plan (Registration Statement)

   22.1   The Company's 1998 Annual Meeting Proxy Statement.

   22.2   The Company's 1997 Annual Report for the year ended December 31, 1997.


(b)  Reports on Form 8-K.     The Company did not file any reports on Form 8-K 
     -------------------      during the last quarter of 1997.



                                       11

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 15(d) 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.

                                       The Commercial Bancorp,  Inc.


Dated:  March 19, 1998                 By:     /s/ Gary G. Campbell
                                       ---------------------------------------
                                       Gary G. Campbell
                                       President & CEO



Dated:  March 19, 1998                 By:     /s/ Harvey E. Buckmaster
                                       ---------------------------------------
                                       Harvey E. Buckmaster
                                       Chief Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated:


  /s/ Gary G. Campbell                                          March 19, 1998
-----------------------------------------
GARY G. CAMPBELL
President & CEO


  /s/ James R. Peacock                                          March 23, 1998
-----------------------------------------
JAMES R. PEACOCK
Director, Vice Chairman


  /s/ Larry A. Kent                                             March 19, 1998
-----------------------------------------
LARRY A. KENT
Director, Chairman


  /s/ Christopher K. Likes                                      March 19, 1998
-----------------------------------------
CHRISTOPHER K. LIKES
Director


  /s/ Kirk T. Bauer                                             March 24, 1998
-----------------------------------------
KIRK T. BAUER
Director


         SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
         SECTION  15(d) OF THE ACT BY  REGISTRANTS  WHICH  HAVE  NOT  REGISTERED
         SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

 The Company's  Proxy  Statement and 1997 Annual Report are included as Exhibits
22.1 and 22.2 of this filing.


                                       12