Exhibit 22.2
                        The Company's 1997 Annual Report

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                          THE COMMERCIAL BANCORP, INC.

                               1997 ANNUAL REPORT


<PAGE>






                               1997 ANNUAL REPORT




Contents                                                                    Page

Corporate Profile and General Information.....................................1

Common Stock Prices and Dividends.............................................1

Consolidated Financial Highlights.............................................2

Message from the Chairman and President.....................................3-4

Selected Financial Data.......................................................5

Management's Discussion and Analysis of Financial Condition
         and Results of Operations.........................................6-13

Consolidated Financial Statements.........................................16-28

Independent Auditors' Report.................................................15

Officers and Directors.......................................................29












<PAGE>



                                CORPORATE PROFILE


The Commercial Bancorp,  Inc. (the "Holding Company") was incorporated on August
15, 1996. The Holding Company owns 100% of the  outstanding  common stock of The
Commercial Bank of Volusia County (the "Bank") (collectively the "Company"). The
Holding Company was organized simultaneously with the Bank and its only business
is  the  ownership   and   operation  of  the  Bank.   The  Bank  is  a  Florida
state-chartered  commercial  bank and its  deposits  are  insured by the Federal
Deposit Insurance Corporation. The Bank opened for business on October 14, 1997,
and provides community banking services to businesses and individuals in Volusia
County,  Florida.  At December 31, 1997, the Company operated one retail banking
office in Ormond  Beach,  Florida and had total assets of $7.1 million and total
stockholders' equity of $4.3 million.


                               GENERAL INFORMATION


Corporate
Headquarters                258 North Nova Road
                            Ormond Beach, Florida 32174
                            (904) 672-3003

Annual Meeting              The Annual Meeting of the Stockholders  will be held
                            at  the  Trails  Homeowners   Association  Community
                            Center,  201 Main Trail,  Ormond  Beach,  Florida at
                            2:00 P.M., Tuesday, April 21, 1998.

Transfer Agent and
Registrar                   The Commercial Bancorp, Inc.
                            258 North Nova Road
                            Ormond Beach, Florida  32174

Form 10-KSB                 A  copy  of the  Form  10-KSB,  as  filed  with  the
                            Securities and Exchange Commission,  may be obtained
                            by stockholders  without charge upon written request
                            to Mr. Harvey E. Buckmaster, Senior Vice President -
                            Chief Financial Officer and Cashier,  The Commercial
                            Bancorp,  Inc.,  258 North Nova Road,  Ormond Beach,
                            Florida 32174.

Corporate Counsel           Igler & Dougherty, P.A.
                            1501 Park Avenue East
                            Tallahassee, Florida  32301

Independent
Auditors                    Hacker, Johnson, Cohen & Grieb PA
                            Certified Public Accountants
                            500 North Westshore Boulevard
                            Tampa, Florida  33609

                        COMMON STOCK PRICES AND DIVIDENDS

The Company's common stock is not actively traded. The common stock was recently
sold in a public offering in which the Company sold "units" including one common
share and a warrant entitling the holder to purchase an additional common share.
The units were sold for $10 each.  The  Company  has never paid cash  dividends.
Future dividends, if any, will be determined by the Board of Directors.

As of February 28, 1998, the Company had 327 holders of record of common stock.



                                        1

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                        CONSOLIDATED FINANCIAL HIGHLIGHTS

                 At December 31, 1997 or For the Year Then Ended
                (Dollars in thousands, except per share figures)


At Year End:

         Assets.......................................................$  7,078
         Loans, net...................................................$  3,746
         Deposits.....................................................$  2,678
         Stockholders' equity.........................................$  4,334
         Book value per share.........................................$   9.32
         Shares outstanding........................................... 464,791
         Warrants to purchase one share of common stock outstanding... 464,791
         Equity-to-assets ratio.......................................   61.23%
         Nonperforming assets-to-total assets ratio...................     NIL

For The Year:

         Interest income..............................................    112
         Net loss.....................................................   (262)
         Return on average assets.....................................  (9.18)%
         Return on average equity..................................... (11.91)%
         Average equity-to-average assets ratio.......................   77.02%
         Noninterest expenses to average assets.......................   16.85


                                                                  Average Yield
                                                                     or Rate
                                                                    During the
                                                                    Year Ended
                                                                   December 31,
                                                                      1997
                                                                      ----
Yields and Rates:

         Loan portfolio...............................................    8.88%
         Other interest-earnings assets...............................    4.88%
         All interest-earnings assets.................................    5.38%
         Deposits.....................................................    3.95%
         Other borrowed funds.........................................    9.50%
         Net interest margin (1)......................................    3.28%

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

(1)      Net interest income divided by average interest-earning assets.
(2)      Information for 1996 is not presented because the Company was in its 
         organization stage and it is not meaningful in
         relation to the 1997 information.


                                        2

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                           MESSAGE FROM THE PRESIDENT


         We are very proud to present our Company's  First Annual Report for the
year ended  December 31, 1997.  Of course most of you are aware that,  while our
Holding Company was active throughout the year in the approval process, the Bank
opened for business on October 14, 1997 and has shown remarkable  progress since
that time. The  accompanying  report and highlights of our year  demonstrate the
dramatic difference made when the Bank opened for business.

         First,  let us thank  each and  every  one of you  personally  for your
confidence in our organization and the commitment you made with your purchase of
stock.  Our goals for your investment are: First,  and foremost,  to provide you
with a  competitive  return  on your  funds.  Second,  to  provide  you  with an
organization of which you can be proud.  And, of course,  to plan for the future
growth of our organization in our own County and throughout the State.

         In fact,  our  plans for  growth  are  already  having an affect on our
Company. After beginning talks in October of last year, another organizing group
from Sebring,  Florida (in Highlands  County),  signed an Organizer's  Agreement
documenting  their  intent  to apply  for a State  Charter  for a bank that will
become a wholly-owned  subsidiary of The Commercial  Bancorp,  Inc. We view this
opportunity to become a multi-bank  holding  company as one of the most exciting
possibilities we could have anticipated.

         Within  our first  Bank,  the  financial  statements  will show you the
significant  amount of loan and deposit  growth we  experienced  in our first 75
days.  As expected,  many  customers  who had banked with the former First State
Bank of Florida in our existing  location  wanted to return to banking here with
our new bank. That allowed for us to bring loans and deposits into the Bank much
more rapidly than many new ventures might have  expected.  By the year end, loan
outstandings were in excess of $3.7 Million.  Deposits were slightly behind that
at almost $2.7 Million.  This surplus of loans over deposits left little for our
Bank to invest, and it was all placed in liquid funds.

         Of course,  because we were only open for 75 days in the final quarter,
but had to recognize most of our organizational  costs as expenses for the first
year, our company showed an operating loss. Our goal for the coming year will be
to turn the  operations  profitable  and begin to recover the initial  losses as
soon as possible. With continued growth in loans, that goal should be realized.

         There is an anomaly in the  highlights  section of our reports that may
give rise to questions we would like to address.  This  aberration is the result
of the Company having issued a minor amount of stock to the original  Organizers
($65,000 worth) and having operated throughout the year even though the Bank was
open for only part of the final  quarter.  You may notice the "Basic and diluted
loss per share"  being  shown as  $2.00/share.  Still,  the actual book value of
shares is currently  $9.32/share.  The  difference  is that losses per share are
reported  based on the average  outstanding  shares,  which  increased  from the
original  6,500  shares of the company to the  464,791  shares at the end of the
year.  That  average is a much lower  number and, in our  opinion,  distorts the
actual losses for each shareholder.

         Our Bank and Company have just entered the most exciting  times for any
venture: our first days of operations.  Coupled with the opportunity we now have
in  another  community  for a second  bank,  you can see why we are so proud and
excited  to be a part of the  financial  community  in our  State  and feel that
opportunities  abound for a Florida-based  company.  So many of the Banks in our
State are owned by  out-of-state  companies  and we don't believe they can be as
effective,  or interested,  in our  communities as the people who live here. For
that reason we are  confident of our future and the  potential for our Banks and
Company.  We look  forward  to  fulfilling  our  goals as well as your,  and our
customers, expectations.


                                        3

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         Once again,  thank you for your  support and please  don't  hesitate to
call on us if we can provide you with any further  information  or be of service
to you in the Bank.

Sincerely,

THE COMMERCIAL BANCORP, INC.


/s/ Gary G. Campbell

Gary G. Campbell
President

March 31, 1998






                                        4

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                             SELECTED FINANCIAL DATA

                 At December 31, 1997 or for the Year then Ended
                (Dollars in thousands, except per share figures)




At Year End:

Cash and cash equivalents......................................     $   2,466
Loans, net.....................................................         3,746
All other assets...............................................           866
                                                                     --------

     Total assets..............................................     $   7,078
                                                                      =======

Deposit accounts...............................................         2,678
All other liabilities..........................................            66
Stockholders' equity...........................................         4,334
                                                                      -------

     Total liabilities and stockholders' equity................     $   7,078
                                                                      =======

For the Year:

Total interest income..........................................           113
Total interest expense.........................................            44
                                                                    ---------

Net interest income............................................            69
Provision for loan losses......................................            35
                                                                    ---------

Net interest income after provision for loan losses............            34
                                                                    ---------

Noninterest income.............................................             2
Noninterest expenses...........................................           481
                                                                     --------

Loss before income tax credit..................................          (445)

Income tax credit..............................................          (183)
                                                                      --------

Net loss.......................................................    $     (262)
                                                                      ========

Basic and diluted loss per share (1)...........................    $    (2.00)
                                                                      ========

Weighted-average number of shares outstanding for basic and diluted... 130,682
                                                                       =======


Ratios and Other Data:

Return on average assets.......................................         (9.18)%
Return on average equity.......................................        (11.91)%
Average equity to average assets...............................          77.02%
Net interest margin............................................           3.28%
Noninterest expenses to average assets.........................          16.85%
Ratio of average interest-earning assets to average
     interest-bearing liabilities..............................           3.84
Nonperforming loans and foreclosed real estate as a percentage
     of total assets at end of year............................            NIL
Allowance for loan losses as a percentage
     of total loans at end of year..............................           .93%
Total number of banking offices.................................             1
Total shares outstanding at end of year.........................       464,791
Book value per share at end of year.............................        $ 9.32
Dividends pay-out ratio.........................................           -

(1)  Based on weighted-average number of shares outstanding during the year.
(2)  Information  for  1996 is not  presented  because  the  Company  was in its
     organization  stage  and it is  not  meaningful  in  relation  to the  1997
     information.



                                        5

<PAGE>



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                          Year Ended December 31, 1997

                                     General

The Commercial Bancorp,  Inc. (the "Holding Company") was incorporated on August
15, 1996. The Holding Company owns 100% of the  outstanding  common stock of The
Commercial Bank of Volusia County (the "Bank") (collectively the "Company"). The
Holding Company was organized simultaneously with the Bank and its only business
is  the  ownership   and   operation  of  the  Bank.   The  Bank  is  a  Florida
state-chartered  commercial bank and is insured by the Federal Deposit Insurance
Corporation.  The Bank opened for  business on October 14,  1997,  and  provides
community  banking  services to businesses and  individuals  in Volusia  County,
Florida.

                                New Bank Charter

Management  intends to organize and open a new state-charter  commercial bank in
Sebring,  Highlands  County,  Florida.  The  Bank  will  become  a  wholly-owned
subsidiary of the Company.

                           Regulation and Legislation

As  a  state-chartered  commercial  bank,  the  Bank  is  subject  to  extensive
regulation by the Florida  Department of Banking and Finance ("Florida DBF") and
the Federal Deposit Insurance Corporation ("FDIC").  The Bank files reports with
the Florida DBF and the FDIC concerning its activities and financial  condition,
in addition to obtaining  regulatory  approvals  prior to entering  into certain
transactions   such  as  mergers  with  or   acquisitions   of  other  financial
institutions.  Periodic  examinations  are  performed by the Florida DBF and the
FDIC to monitor the Bank's compliance with the various regulatory  requirements.
The Holding  Company and the Bank are also subject to regulation and examination
by the Federal Reserve Board of Governors.

                              Year 2000 Compliance

Management has an ongoing  program  designed to ensure that its  operational and
financial systems will not be adversely affected by year 2000 software failures,
due to processing  errors  arising from  calculations  using the year 2000 date.
Based on current estimates the Bank expects to incur $50,000 over the next three
years on its program to redevelop,  replace, or repair its computer applications
to make them  "year  2000  compliant."  While  management  believes  it is doing
everything  technologically  possible to assure year 2000  compliance,  it is to
some extent  dependent  upon vendor  cooperation.  Management  is requiring  its
computer  system and software  vendors to represent  that the products  provided
are, or will be, year 2000  compliant,  and has planned a program of testing for
compliance. It is recognized that any year 2000 compliance failures could result
in additional expense to the Bank.

                         Liquidity and Capital Resources

The Company's primary source of cash during the year ended December 31, 1997 was
the  proceeds  from the sale of common  stock of $4.6  million  and net  deposit
inflows of $2.7  million.  Cash was used  primarily  to  originate  loans and to
purchase  premises and  equipment.  At December 31, 1997,  the Bank exceeded its
regulatory liquidity requirements.

                                   Credit Risk

The Company's primary business is making  commercial,  business,  consumer,  and
real estate loans. That activity entails potential loan losses, the magnitude of
which  depend on a variety of economic  factors  affecting  borrowers  which are
beyond the control of the Company. While the Company has instituted underwriting
guidelines  and credit review  procedures to protect the Company from  avoidable
credit  losses,   some  losses  will  inevitably   occur.  The  Company  had  no
nonperforming assets at December 31, 1997, and has no charge-off experience.

                                        6

<PAGE>









The following table presents information regarding the Company's total allowance
for losses as well as the  allocation of such amounts to the various  categories
of loans (dollars in thousands):

                                                            At December 31, 1997
                                                                           Loans
                                                                             to
                                                                           Total
                                                            Amount         Loans
                                                            ------         -----
               Commercial loans.......................      $  29          81.5%
               Real estate loans......................          4          11.4
               Consumer loans.........................          2           7.1
                                                               --        ------

               Total allowance for loan losses........       $ 35         100.0%
                                                               ==         =====

The allowance for credit losses  represented .93% of the total loans outstanding
at December 31, 1997.

The following  table sets forth the  composition of the Company's loan portfolio
at December 31, 1997:

                                                                            % of
                                                          Amount           Total
                                                                  (in thousands)

               Commercial.............................     $ 3,073        81.5%
               Real estate............................         429        11.4
               Consumer and home-equity loans.........         268         7.1
                                                            ------       ------

                                                             3,770       100.0%
                                                                         =====

               Add (subtract):
                 Allowance for loan losses............         (35)
                 Net loan deferred costs..............          11
                                                             -----

               Loans, net.............................     $ 3,746
                                                             =====





                                        7

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                         Regulatory Capital Requirements

The  Holding  Company  and the Bank are  subject to various  regulatory  capital
requirements  administered by various  regulatory  banking agencies.  Failure to
meet minimum capital  requirements can initiate  certain  mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have a
direct  material  effect on the Company's  financial  statements.  Under capital
adequacy  guidelines and the regulatory  framework for prompt corrective action,
the Bank  must  meet  specific  capital  guidelines  that  involve  quantitative
measures of the Bank's assets, liabilities,  and certain off-balance-sheet items
as calculated under regulatory accounting practices.  The Bank's capital amounts
and classification are also subject to qualitative  judgements by the regulators
about components, risk weightings, and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1997, that the Bank
meets all capital adequacy requirements to which it is subject.
<TABLE>
<CAPTION>
                                                                                                            To Be Well
                                                                                 Minimum                 Capitalized Under
                                                                               For Capital               Prompt Corrective
                                                     Actual                 Adequacy Purposes:           Action Provisions
                                      ---------------------------------------------------------         -------------------
                                       Amount            %          Amount           %          Amount            %
                                      -------          ----        -------         ----        -------           ----
                                                            (dollars in thousands)
<S>                                  <C>                 <C>         <C>             <C>          <C>            <C>
     As of December 31, 1997:
         Total capital (to Risk
         Weighted Assets).........   $  3,950            92.7%       $ 341           8.0%         $ 426          10.0%
         Tier I Capital (to Risk
         Weighted Assets).........      3,767            88.4          171           4.0            256           6.0
         Tier I Capital
         (to Average Assets)......      3,767            69.2          218           4.0            272           5.0
</TABLE>

                                   Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from  interest-rate  risk inherent in
its lending and deposit  taking  activities.  To that end,  management  actively
monitors and manages its interest-rate risk exposure.  The measurement of market
risk associated  with financial  instruments is meaningful only when all related
and offsetting on- and off-balance- sheet  transactions are aggregated,  and the
resulting  net  positions are  identified.  Disclosures  about the fair value of
financial instruments,  which reflect changes in market prices and rates, can be
found in Note 5 of Notes to Consolidated Financial Statements.

The Company's  primary objective in managing  interest-rate  risk is to minimize
the  adverse  impact of changes  in  interest  rates on the Bank's net  interest
income and capital, while adjusting the Company's  asset-liability  structure to
obtain the maximum  yield-cost  spread on that  structure.  The  Company  relies
primarily  on its  asset-liability  structure  to  control  interest-rate  risk.
However,  a sudden and  substantial  increase  in interest  rates may  adversely
impact the Company's  earnings,  to the extent that the interest  rates borne by
assets and liabilities do not change at the same speed,  to the same extent,  or
on the same basis. The Company does not engage in trading activities.

                           Asset - Liability Structure

As part of its  asset and  liability  management,  the  Company  has  emphasized
establishing and implementing internal  asset-liability  decision processes,  as
well as communications  and control  procedures to aid in managing the Company's
earnings.  Management  believes that these processes and procedures  provide the
Company  with  better  capital   planning,   asset  mix  and  volume   controls,
loan-pricing  guidelines,  and deposit  interest-rate  guidelines  which  should
result in tighter controls and less exposure to interest-rate risk.

The matching of assets and  liabilities  may be analyzed by examining the extent
to which such  assets and  liabilities  are  "interest  rate  sensitive"  and by
monitoring an institution's interest rate sensitivity "gap." An

                                        8

<PAGE>



asset or liability is said to be interest rate sensitive  within a specific time
period if it will mature or reprice within that time period.  The  interest-rate
sensitivity gap is defined as the difference between interest-earning assets and
interest-bearing  liabilities  maturing or repricing within a given time period.
The gap ratio is computed as rate sensitive assets/rate sensitive liabilities. A
gap ratio of 1.0% represents perfect matching. A gap is considered positive when
the amount of  interest-rate  sensitive assets exceeds  interest-rate  sensitive
liabilities.  A gap is  considered  negative  when the  amount of  interest-rate
sensitive liabilities exceeds interest-rate sensitive assets. During a period of
rising  interest  rates,  a negative  gap would  adversely  affect net  interest
income, while a positive gap would result in an increase in net interest income.
During a period of falling  interest  rates,  a negative  gap would result in an
increase in net interest income, while a positive gap would adversely affect net
interest income.

In order to minimize the potential for adverse effects of material and prolonged
increases  in  interest  rates  on the  results  of  operations,  the  Company's
management  continues  to monitor  asset and  liability  management  policies to
better match the maturities and repricing terms of its  interest-earning  assets
and interest-bearing liabilities. Such policies have consisted primarily of: (i)
emphasizing the origination of adjustable-rate  loans; (ii) maintaining a stable
core deposit base; and (iii) maintaining a significant  portion of liquid assets
(cash and short-term securities).

The  following  table sets forth certain  information  relating to the Company's
interest-earning  assets and  interest-bearing  liabilities at December 31, 1997
that are estimated to mature or are scheduled to reprice within the period shown
(dollars in thousands):
<TABLE>
<CAPTION>

                                                                More           More
                                                     One      than One       than Five
                                                     Year     Year and       Years and          Over
                                                      or      Less than      Less than          Ten
                                                     Less    Five Years      Ten Years          Years           Total
                                                    ------   ----------      ---------          -----           ----
<S>                                               <C>                <C>           <C>            <C>           <C>
Loans (1):
    Commercial loans..........................     $ 3,053            20            -              -            3,073
    Real estate loans.........................         348            -             35             46             429
    Consumer loans............................           5           223            -              -              228
    Credit lines..............................          36             4            -              -               40
                                                   -------      --------       -------       --------         -------

         Total loans..........................       3,442           247            35             46           3,770

Federal funds sold............................       1,400            -             -              -            1,400
                                                     -----     ---------       -------       --------           -----

         Total rate-sensitive assets..........       4,842           247            35             46           5,170
                                                     -----       -------        ------         ------           -----

Deposit accounts (2):
    Money-market deposits.....................          66            -            -              -                66
    NOW deposits..............................         948            -            -              -               948
    Savings deposits..........................          93            -            -              -                93
    Certificates of deposit...................         514           225           -              -               739
                                                   -------       -------      --------       --------          ------

         Total rate-sensitive liabilities.....       1,621           225           -              -             1,846
                                                     -----       -------      --------       --------           -----

GAP (repricing differences)...................     $ 3,221            22            35             46           3,324
                                                     =====       =======       =======         ======           =====

Cumulative GAP................................     $ 3,221         3,243         3,278          3,324
                                                     =====         =====         =====          =====

Cumulative GAP/total assets...................        45.5%         45.8%         46.3%          47.0%
                                                      ====          ====          ====           ====
</TABLE>

(1) In  preparing  the table  above,  adjustable-rate  loans are included in the
    period in which the interest  rates are next scheduled to adjust rather than
    in the period in which the loans  mature.  Fixed-rate  loans are  scheduled,
    including repayment, according to their maturities.
(2) Money market, NOW, and savings deposits are regarded as readily accessible 
    withdrawable accounts.  All other time deposits are scheduled through the
    maturity dates.

                                        9

<PAGE>




The following table reflects the contractual  principal  repayments by period of
the Company's loan portfolio at December 31, 1997 (in thousands):

<TABLE>
<CAPTION>

                                                                   Real                         Credit
         Years Ending                                        Commercial         Estate        Consumer           Lines
         December 31,                                             Loans          Loans           Loans          Funded
         ------------                                         ---------          -----         -------          ------       
    Total
    -----
<S>                                               <C>               <C>             <C>            <C>          <C>
           1998.............................      $ 2,336            29             33              3           2,401
           1999.............................           43             5             30              4              82
           2000-2001........................          288            11             47              7             353
           2002-2003........................          406            12             32              7             457
           2004 & beyond....................          -             372             86             19             477
                                                 --------           ---            ---             --          ------

           Total............................      $ 3,073           429            228             40           3,770
                                                    =====           ===            ===             ==           =====
</TABLE>

Of the $1.4 million of loans at December  31, 1997 due after one year,  20.1% of
such loans have fixed interest rates and 79.9% have adjustable interest rates.

The following table sets forth total loans originated and repaid during 1997:

                                                                   Year Ended
                                                                  December 31,
                                                                       1997
                                                                 (in thousands)
                                                                 --------------
         Originations:
                  Commercial loans..............................      $ 3,290
                  Real estate loans.............................          430
                  Consumer loans................................          231
                  Credit lines .................................           40
                                                                       ------

                           Total loans originated...............        3,991

                  Principal reductions..........................        (210)
                                                                      -------

                  Increase in total loans.......................      $ 3,781
                                                                        =====


                                       10

<PAGE>



The following  table shows the  distribution  of, and certain other  information
relating to, the Company's deposit accounts by type (dollars in thousands):

                                                           At December 31, 1997
                                                           --------------------
                                                                         % of
                                                               Amount  Deposits
                                                              -------  --------
         Demand deposits...................................   $   832     31.0%
         NOW deposits......................................       948     35.4
         Money market deposits.............................        66      2.5
         Savings deposits..................................        93      3.5
                                                               ------   ------

                  Subtotal.................................     1,939     72.4

         Certificate of deposits:
                  5.00% - 5.99%............................       514     19.2
                  6.00% - 6.99%............................       225      8.4
                                                               ------   ------

         Total certificates of deposit.....................       739     27.6
                                                               ------    -----

         Total deposits....................................   $ 2,678    100.0%
                                                                =====    =====

The following table presents by various  interest rate categories the amounts of
certificates  of deposit at December  31, 1997 which  mature  during the periods
indicated (in thousands):


                                                     Year Ending December 31,
                                                     ------------------------
                                                  1998         2000       Total
                                                  ----         ----       ----

     5.00% - 5.99%..........................     $ 514          -           514
     6.00% - 6.99%..........................        -           225         225
                                                 -----          ---         ---

     Total certificates of deposit..........     $ 514          225         739
                                                   ===          ===         ===

Jumbo certificates ($100,000 and over) mature as follows (in thousands):

                                                                   December 31,
                                                                       1997
                                                                       ----

     Due over three months to six months...........................   $ 100
     Due over one year.............................................     200
                                                                        ---

                                                                      $ 300
                                                                      -----


                                       11

<PAGE>



                              Results of Operations

The  operating  results of the  Company  depend  primarily  on its net  interest
income,  which is the difference  between  interest  income on  interest-earning
assets  and  interest  expense  on  interest-bearing   liabilities,   consisting
primarily  of deposits.  Net interest  income is  determined  by the  difference
between   yields   earned  on   interest-earning   assets   and  rates  paid  on
interest-bearing  liabilities  ("interest-rate spread") and the relative amounts
of  interest-earning  assets and  interest-bearing  liabilities.  The  Company's
interest-rate  spread is  affected  by  regulatory,  economic,  and  competitive
factors that  influence  interest  rates,  loan demand,  and deposit  flows.  In
addition,  the  Company's  net  earnings  are  also  affected  by the  level  of
nonperforming  loans and  foreclosed  real  estate,  as well as the level of its
noninterest income, and its noninterest expenses,  such as salaries and employee
benefits, occupancy and equipment costs and income taxes.

The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend  income of the Company from
interest-earning  assets and the resultant  average yield; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average costs; (iii) net  interest/dividend  income;  (iv) interest rate spread;
(v) net interest margin. Average balances are based on average daily balances.
<TABLE>
<CAPTION>

                                                             Year Ended December 31, 1997
                                                             ----------------------------
                                                                       Interest       Average
                                                        Average          and           Yield/
                                                        Balance       Dividends        Rate
                                                        -------       ---------       -------
                                                                  ($ in thousands)
Interest-earning assets:
<S>                                                     <C>             <C>          <C>  
     Loans............................................. $  259           23             8.88%
     Other interest-earning assets (1).................  1,842           90             4.88
                                                         -----          ---

         Total interest-earning assets.................  2,101          113             5.38

Noninterest-earning assets.............................    754
                                                        ------

         Total assets.................................. $2,855
                                                         =====

Interest-bearing liabilities:
     Demand, money market, savings and NOW deposits....    179            6             3.20
     Certificates of deposit...........................     74            4             5.76
     Other (2).........................................    359           34             9.50
                                                        ------          ---

         Total interest-bearing liabilities............    612           44             7.19

Noninterest-bearing liabilities........................    44
Stockholders' equity...................................  2,199
                                                         -----

         Total liabilities and stockholders' equity....$ 2,855
                                                         =====

Net interest/dividend income...........................               $  69
                                                                        ===

Interest-rate spread...................................                              (1.81%)
                                                                                       ====

Net interest margin....................................                                3.28%
                                                                                       ====

Ratio of average interest-earning assets to average
     interest-bearing liabilities......................   3.84
                                                          ====
</TABLE>

(1)  Other interest-earning assets include federal funds sold and interest-
     earning deposits.
(2)  Borrowings during organization phase of bank.

                                       12

<PAGE>



Year Ended December 31, 1997

General. Net loss for the year ended December 31, 1997 was $261,698 or $2.00 per
basic and diluted  share.  During the year ended  December 31, 1997 the Bank had
not achieved the asset size necessary to operate profitably.

Interest Income and Expense. Interest income totaled $112,458 for the year ended
December 31, 1997. Interest income earned on loans was $22,789. The average loan
portfolio  balance for the year ended  December  31, 1997 was  $259,000  and the
weighted average yield was 8.88%.

Interest on federal  funds sold and  deposits  in banks  totalled  $89,669.  The
average  balance of these assets was $1.8 million with a weighted  average yield
of 4.88%.

Interest  expense on deposit  accounts  amounted  to $10,007  for the year ended
December 31, 1997.  The  weighted-average  cost of deposits was 3.95%.  Interest
expense on other borrowed funds used primarily during the organization  phase of
the Bank  amounted  to  $33,515  for the  year  ended  December  31,  1997.  The
weighted-average  balance  outstanding  and cost of  other  borrowed  funds  was
$359,000 and 9.50%, respectively.

Provision for Loan Losses.  The provision for loan losses is charged to earnings
to bring the total allowance to a level deemed  appropriate by management and is
based upon the volume and type of lending  conducted  by the  Company,  industry
standards,  the amount of nonperforming  loans and general economic  conditions,
particularly  as they relate to the Company's  market  areas,  and other factors
related to the collectibility of the Company's loan portfolio. The provision for
the year ended December 31, 1997 was $35,000.

Other Expense.  Other expense totalled  $480,681 for the year ended December 31,
1997. Salaries and employee benefits was the largest, amounting to $245,302.

Income  Taxes.  The Company  recognized  a credit for income  taxes as well as a
deferred tax asset  because  management  believes its likely the Company will be
able to generate taxable income in the future to offset these amounts.

                     Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with GAAP,  which requires the measurement of financial  position and
operating results in terms of historical dollars, without considering changes in
the relative  purchasing power of money over time due to inflation.  Unlike most
industrial  companies,  substantially  all of the assets and  liabilities of the
Company  are  monetary  in  nature.  As a  result,  interest  rates  have a more
significant  impact on the Bank's performance than the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or in
the same  magnitude as the prices of goods and  services,  since such prices are
affected by inflation to a larger extent than interest rates.

                         Future Accounting Requirements

Financial Accounting Standards 130 - Reporting  Comprehensive Income establishes
standards for reporting comprehensive income. The Standard defines comprehensive
income as the change in equity of an  enterprise  except  those  resulting  from
stockholder transactions. All components of comprehensive income are required to
be reported in a new financial statement that is displayed with equal prominence
as existing  financial  statements.  The Company  will be required to adopt this
Standard  effective  January 1, 1998. As the Statement  addresses  reporting and
presentation  issues only, there will be no impact on operating results from the
adoption of this Standard.

Financial Accounting Standards 131 - Disclosures about Segments of an Enterprise
and Related  Information  establishes  standards for related  disclosures  about
products and services,  geographic areas, and major customers.  The Company will
be required to adopt this  Standard  effective  January 1, 1998. As the Standard
addresses  reporting  and  disclosure  issues  only,  there will be no impact on
operating results from adoption of this Standard.

                                       13

<PAGE>
























                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
                              Ormond Beach, Florida


                   Audited Consolidated Financial Statements
              At December 31, 1997 and 1996 and For the Year Ended
           December 31, 1997 and for the Period from August 15, 1996
                      (Incorporation) to December 31, 1996

                  (Together with Independent Auditors' Report)

























                                       14

<PAGE>
















                          Independent Auditors' Report



Board of Directors
The Commercial Bancorp, Inc.
Ormond Beach, Florida:

We have audited the accompanying  consolidated  balance sheets of The Commercial
Bancorp,  Inc. and Subsidiary (the "Company") at December 31, 1997 and 1996, and
the related statements of operations,  stockholders'  equity, and cash flows for
the year ended  December  31,  1997 and for the  period  from  August  15,  1996
(incorporation)  to  December  31,  1996.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of the Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the year ended  December  31,  1997 and for the period  from August 15, 1996
(incorporation)  to December 31, 1996, in  conformity  with  generally  accepted
accounting principles.




/s/ Hacker, Johnson, Cohen & Grieb, PA
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
February 13, 1998









                                       15

<PAGE>




                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                           Consolidated Balance Sheets


                                                                At December 31,
                                                                ---------------
                                                                 1997     1996
                                                                 ----     ----
    Assets

Cash and due from banks.................................... $ 1,065,817   11,959
Federal funds sold.........................................   1,400,000     -
                                                              ---------   ------

              Total cash and cash equivalents..............   2,465,817   11,959

Loans, net of allowance for loan losses of $35,000.........   3,745,577     -
Premises and equipment, net................................     462,784     -
Accrued interest receivable and other assets...............     220,588  149,538
Deferred income taxes......................................     183,161     -
                                                             ----------  -------

              Total assets..................................$ 7,077,927  161,497
                                                              =========  =======

    Liabilities and Stockholders' Equity

Liabilities:
    Demand deposits.........................................    832,396     -
    Savings and NOW deposits................................  1,040,454     -
    Money-market deposits...................................     65,777     -
    Time deposits...........................................    739,433     -
                                                             ----------  -------

              Total deposits................................  2,678,060     -

    Official checks..........................................    54,138     -
    Due to organizers........................................        -   134,204
    Accrued interest payable and other liabilities...........    11,944     -
                                                             ----------  -------

              Total liabilities.............................. 2,744,142  134,204
                                                              ---------  -------

Commitments (Note 5)

Stockholders' Equity:
    Common stock, $.01 par value 10,000,000 shares authorized,
         464,791 and 6,500 shares issued and outstanding....      4,648       65
    Additional paid-in capital..............................  4,628,542   64,935
    Accumulated deficit.....................................  (299,405) (37,707)
                                                              ---------  -------

              Total stockholders' equity....................  4,333,785   27,293
                                                              ---------  -------

              Total liabilities and stockholders' equity... $ 7,077,927  161,497
                                                              =========  =======





See Accompanying Notes to Consolidated Financial Statements.

                                       16

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>

                                                                               Period From
                                                                             August 15, 1996
                                                                             (Incorporation)
                                                              Year Ended            to
                                                             December 31,      December 31,
                                                                 1997              1996
                                                                 ----              ----
<S>                                                         <C>                 <C>    
Interest income:
    Loans...................................................$   22,789              -
    Federal funds sold......................................    45,967              -
    Deposits in banks.......................................    43,702              -
                                                               -------            -----

         Total interest income..............................   112,458              -
                                                               -------            -----

Interest expense:
    Deposits................................................    10,007              -
    Other...................................................    33,515            2,123
                                                              --------           ------

         Total interest expense.............................    43,522            2,123
                                                              --------           ------

         Net interest income (expense)......................    68,936           (2,123)

Provision for loan losses...................................    35,000              -
                                                              --------            -----

         Net interest income (expense) after provision......    33,936           (2,123)
         for loan losses                                      --------           ------

Noninterest income-
    Other service charges and fees..........................     1,886              -
                                                              --------            -----

Noninterest expense:
    Salaries and employee benefits..........................   245,302              -
    Occupancy expense.......................................    91,720              -
    Advertising.............................................    15,842              -
    Professional fees.......................................    11,269              -
    Office supplies.........................................    40,610              -
    Telephone...............................................    20,557              -
    Data processing.........................................     2,631              -
    Other...................................................    52,750           35,584
                                                              --------           ------

         Total noninterest expense..........................   480,681           35,584
                                                               -------           ------

Loss before income tax benefit..............................  (444,859)         (37,707)

         Income tax benefit.................................  (183,161)             -
                                                              --------          -------

Net loss                                                     $(261,698)         (37,707)
                                                              ========          =======

Loss per share:

    Basic................................................... $   (2.00)           (5.80)
                                                             =========          =======

    Diluted................................................. $   (2.00)           (5.80)
                                                             =========          =======

Weighted-average shares outstanding for basic and diluted...   130,682            6,500
                                                              ========           ======
</TABLE>



See Accompanying Notes to Consolidated Financial Statements.

                                       17

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                 Consolidated Statements of Stockholders' Equity



<TABLE>
<CAPTION>

                                                                                 Additional                           Total
                                                                   Common          Paid-In        Accumulated     Stockholders'
                                                                   Stock           Capital         Deficit             Equity
<S>                                                              <C>               <C>             <C>                <C>
Balance at August 15, 1996.................................      $   -                 -               -                  -

Issuance of 6,500 shares of common stock...................            65             64,935           -                 65,000

         Net loss..........................................          -                 -            (37,707)            (37,707)
                                                                ---------      -------------        -------         -----------

Balance at December 31, 1996...............................            65             64,935         37,707              27,293

Retire 6,500 shares of common stock........................           (65)           (64,935)          -                (65,000)

Issuance of 464,791 shares of common stock net of
         $14,720 of offering costs.........................         4,648          4,628,542           -              4,633,190

         Net loss..........................................          -                 -           (261,698)           (261,698)
                                                                 --------      -------------        -------          ----------

Balance at December 31, 1997...............................       $ 4,648          4,628,542       (299,405)          4,333,785
                                                                    =====          =========        =======           =========
</TABLE>


































See Accompanying Notes to Consolidated Financial Statements.

                                       18

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                                         Period From
                                                                                                      August 15, 1996
                                                                                                      (Incorporation)
                                                                                        Year Ended        to
                                                                                       December 31,      December 31,
                                                                                         1997               1996
                                                                                         ----               ----
<S>                                                                                   <C>                 <C>
Cash flows from operating activities:
    Net loss  ....................................................................... $  (261,698)          (37,707)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
         Depreciation................................................................      16,579              -
         Provision for loan losses...................................................      35,000              -
         Credit for deferred income taxes............................................    (183,161)             -
         Increase in accrued interest receivable and other assets....................     (71,050)         (149,538)
         Increase in accrued interest payable and other liabilities..................      11,944              -
                                                                                       ----------           -------

              Net cash used in operating activities..................................    (452,386)         (187,245)
                                                                                        ---------           -------

Cash flows from investing activities:
    Net increase in loans............................................................  (3,780,577)             -
    Purchase of premises and equipment...............................................    (479,363)             -
                                                                                        ---------          --------

              Net cash used in investing activities..................................  (4,259,940)             -
                                                                                        ---------          --------

Cash flows from financing activities:
    Net increase in noninterest-bearing demand, savings,
         money-market and NOW deposits...............................................   1,938,627              -
    Net increase in time deposits....................................................     739,433              -
    Net increase in official checks..................................................      54,138              -
    Advances from organizers.........................................................       -               134,204
    Net repayment of advances from organizers........................................    (134,204)             -
    Retire common stock..............................................................     (65,000)             -
    Sale of common stock.............................................................   4,633,190            65,000
                                                                                        ---------           -------

              Net cash provided by financing activities..............................   7,166,184           199,204
                                                                                        ---------           -------

Net increase in cash and cash equivalents............................................   2,453,858            11,959

Cash and cash equivalents at beginning of period.....................................      11,959              -
                                                                                       ----------           -------

Cash and cash equivalents at end of period........................................... $ 2,465,817            11,959
                                                                                        =========          ========

Supplemental disclosure of cash flow information: Cash paid during the year for:
         Interest....................................................................$     43,229              -
                                                                                       ==========           =======

         Income taxes................................................................$        -                -
                                                                                       ==========           =======
</TABLE>










See Accompanying Notes to Consolidated Financial Statements.

                                       19

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

               For the Year Ended December 31, 1997 and the Period
            from August 15, 1996 (incorporation) to December 31, 1996


(1)  Summary of Significant Accounting Policies
    Organization.  The  Commercial  Bancorp,  Inc. (the  "Holding  Company") was
         incorporated  on August 15, 1996. The Holding  Company owns 100% of the
         outstanding  common stock of The Commercial Bank of Volusia County (the
         "Bank") (collectively the "Company"). The Holding Company was organized
         simultaneously with the Bank and its only business is the ownership and
         operation of the Bank. The Bank is a Florida state-chartered commercial
         bank and is insured by the Federal Deposit Insurance  Corporation.  The
         Bank opened for  business on October  14, 1997 and  provides  community
         banking  services to  businesses  and  individuals  in Volusia  County,
         Florida.

    Basis of Presentation. The accompanying consolidated financial statements of
         the Company  include the accounts of the Holding  Company and the Bank.
         All  significant  intercompany  accounts  and  transactions  have  been
         eliminated in consolidation.  The accounting and reporting practices of
         the Company conform to generally accepted accounting  principles and to
         general practices within the banking industry.

    Estimates.  The  preparation  of financial  statements  in  conformity  with
         generally accepted  accounting  principles  requires management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities and disclosure of contingent  assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

    Loans Receivable. Loans  receivable  that  management  has  the  intent  and
         ability to hold for the foreseeable future or until maturity or pay-off
         are  reported  at  their   outstanding   principal   adjusted  for  any
         charge-offs,  the allowance  for loan losses,  and any deferred fees or
         costs on originated loans.

         Loan  origination  fees  and  certain  direct   origination  costs  are
         capitalized and recognized as an adjustment of the yield of the related
         loan.

         The  accrual of interest on impaired  loans is  discontinued  when,  in
         management's  opinion,  the borrower may be unable to meet  payments as
         they become due.  When  interest  accrual is  discontinued,  all unpaid
         accrued   interest  is  reversed.   Interest   income  is  subsequently
         recognized only to the extent cash payments are received.

         The  allowance  for loan losses is  increased  by charges to income and
         decreased by charge-offs  (net of  recoveries).  Management's  periodic
         evaluation  of the adequacy of the  allowance is based on the Company's
         past loan loss  experience,  known and inherent risks in the portfolio,
         adverse situations that may affect the borrower's ability to repay, the
         estimated  value of any  underlying  collateral,  and current  economic
         conditions.

    Income Taxes. Deferred tax assets and liabilities are reflected at currently
         enacted income tax rates applicable to the period in which the deferred
         tax assets or  liabilities  are expected to be realized or settled.  As
         changes  in tax laws or rates are  enacted,  deferred  tax  assets  and
         liabilities are adjusted through the provision for income taxes.

    Premises and  Equipment.  Premises  and  equipment  are  stated at cost less
         accumulated  depreciation.  Depreciation  expense  is  computed  on the
         straight-line  basis  over the  estimated  useful  life of each type of
         asset.

    Advances  from  Organizers.   Certain  of  the  Company's   organizers  made
         interest-bearing advances totaling $738,882 during 1996 and 1997 to the
         Company. These amounts were used to fund organizational and other costs
         incurred by the Holding  Company and the Bank. The advances were repaid
         to the  organizers  on  September  15,  1997 from the  proceeds  of the
         Company's common stock offering.

                                                                     (continued)

                                       20

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(1) Summary of Significant Accounting Policies, Continued
    Off-Balance-Sheet  Instruments.  In the  ordinary  course  of  business  the
         Company  has  entered  into  off-balance-sheet   financial  instruments
         consisting of commitments to extend credit. Such financial  instruments
         are recorded in the financial statements when they are funded.

    Advertising.  The Company expenses all media advertising as incurred.

    Fair Values of Financial Instruments.  The following methods and assumptions
         were  used by the  Company  in  estimating  fair  values  of  financial
         instruments disclosed herein:

         Cash  and  Cash  Equivalents. The  carrying  amounts of cash  and  cash
         equivalents approximate their fair value.

         Loans.  For  variable-rate  loans that reprice  frequently  and have no
         significant  change in credit  risk,  fair values are based on carrying
         values. Fair values for certain fixed-rate  mortgage (e.g.  one-to-four
         family  residential),  commercial real estate and commercial  loans are
         estimated  using  discounted  cash flow analyses,  using interest rates
         currently  being  offered for loans with similar  terms to borrowers of
         similar credit quality.

         Deposit  Liabilities.  The  fair  values  disclosed  for  demand,  NOW,
         money-market  and savings  deposits  are, by  definition,  equal to the
         amount payable on demand at the reporting date (that is, their carrying
         amounts).  Fair  values for  fixed-rate  certificates  of  deposit  are
         estimated  using  a  discounted  cash  flow  calculation  that  applies
         interest rates currently being offered on certificates to a schedule of
         aggregated expected monthly maturities on time deposits.

         Accrued  Interest. The carrying amounts of accrued interest approximate
         their fair values.

         Off-Balance-Sheet   Instruments.   Fair  values  for  off-balance-sheet
         lending  commitments are based on fees currently  charged to enter into
         similar  agreements,  taking into  account the  remaining  terms of the
         agreements and the counterparties' credit standing.

    Loss Per Share.  Loss per share ("EPS") of common stock has been computed on
         the basis of the  weighted-average  number  of  shares of common  stock
         outstanding.  For purposes of calculating diluted EPS, because there is
         no active  trading market for the Company's  common stock,  the average
         book value per share was used. For 1997,  outstanding warrants were not
         dilutive.

    Future  Accounting  Requirements.   Financial  Accounting  Standards  130  -
         Reporting  Comprehensive  Income  establishes  standards  for reporting
         comprehensive  income. The Standard defines comprehensive income as the
         change  in  equity  of  an  enterprise   except  those  resulting  from
         stockholder  transactions.  All components of comprehensive  income are
         required to be reported in a new financial  statement that is displayed
         with equal  prominence as existing  financial  statements.  The Company
         will be required to adopt this Standard  effective  January 1, 1998. As
         the Statement  addresses  reporting and presentation issues only, there
         will be no  impact  on  operating  results  from the  adoption  of this
         Standard.

         Financial  Accounting  Standards 131 - Disclosures about Segments of an
         Enterprise and Related  Information  establishes  standards for related
         disclosures  about products and services,  geographic  areas, and major
         customers.  The  Company  will  be  required  to  adopt  this  Standard
         effective  January 1, 1998.  As the Standard  addresses  reporting  and
         disclosure  issues only,  there will be no impact on operating  results
         from adoption of this Standard.

                                                                     (continued)



                                       21

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(2)  Loans
    The components of loans are as follows:

                                                                 At December 31,
                                                                        1997

              Commercial..........................................  $ 3,072,663
              Real estate.........................................      429,364
              Consumer............................................      228,179
              Lines of credit.....................................       40,118
                                                                    -----------

                                                                      3,770,324
              Add (subtract):
                Allowance for loan losses........................       (35,000)
                Net deferred costs...............................        10,253
                                                                    -----------

              Loans, net.........................................   $ 3,745,577
                                                                      =========

    An analysis of the change in the allowance for loan losses follows:

                                                                      Year Ended
                                                                    December 31,
                                                                            1997

              Beginning balance..................................   $       -
              Provision for loan losses..........................        35,000
                                                                         ------

              Ending balance.....................................   $    35,000
                                                                         ======

    The Company had no impaired loans in 1997.

(3) Premises and Equipment
    A summary of premises and equipment follows:

                                                                 At December 31,
                                                                            1997

              Bank premises......................................   $    96,080
              Furniture, fixtures and equipment..................       383,283
                                                                        -------

                  Total, at cost.................................       479,363

                  Less accumulated depreciation..................       (16,579)
                                                                       -------

                  Premises and equipment, net....................   $  462,784
                                                                       =======

                                                                    (continued)



                                       22

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued

(3) Premises and Equipment, Continued
    The  Company leases its office facility under an operating  lease. The lease
         contains  an  escalation  clause of 4% yearly and  provides  for annual
         adjustments for the Company's prorata share of operating expenses. Rent
         expense under operating  leases during the year ended December 31, 1997
         was $38,858. Estimated future rentals over the remaining noncancellable
         lease terms are as follows:

                                                                 Operating
                  Year Ending                                      Lease
                  December 31,                                     Amount
                  ------------                                     ------

                      1998......................................$  47,798
                      1999......................................   49,249
                      2000......................................   50,757
                      2001......................................   52,325
                                                                  -------

                      Total minimum lease payments..............$ 200,129
                                                                  =======

(4)  Deposits
    Time deposits included the following amounts:

                                                               At December 31,
                                                                    1997
                                                                    ----

              Certificates of Deposit $100,000 and over.........$  300,452
              Certificates of Deposit under $100,000............   438,981
                                                                   -------

                                                                 $ 739,433
                                                                 =========

    A schedule of maturities of certificates of deposit follows:

              Year Ending
              December 31,                                          Amount
              ------------                                          ------

                  1998.......................................... $ 514,431
                  2000..........................................   225,002
                                                                   -------

                                                                 $ 739,433
                                                                 =========

(5) Financial Instruments
    The  Company is a party to financial instruments with off-balance-sheet risk
         in the normal  course of  business to meet the  financing  needs of its
         customers.  These financial  instruments are unused lines of credit and
         may involve,  to varying degrees,  elements of credit and interest-rate
         risk in excess of the  amount  recognized  in the  balance  sheet.  The
         contract amounts of these instruments reflect the extent of involvement
         the Company has in these financial instruments.

    The Company's  exposure to credit loss in the event of nonperformance by the
    other party to the financial  instrument for commitments to extend credit is
    represented by the contractual amount of those instruments. The Company uses
    the  same   credit   policies   in  making   commitments   as  it  does  for
    on-balance-sheet instruments.

                                                                     (continued)


                                       23

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(5) Financial Instruments, Continued
    The estimated  fair values of the Company's  financial  instruments  were as
follows (in thousands):

                                                            At December 31, 1997
                                                            --------------------
                                                              Carrying     Fair
                                                               Amount      Value
                                                               ------      -----
         Financial assets:
              Cash and cash equivalents................      $  2,466      2,466

              Loans receivable.........................         3,746      3,703

              Accrued interest receivable..............            16         16

         Financial liabilities:

              Deposit liabilities......................         2,678      2,692

              Accrued interest payable.................             2          2
                                                              =======    =======

    A    summary of the notional amounts of the Company's financial  instruments
         which  approximates fair value, with off balance sheet risk at December
         31, 1997 follows:

              Unused lines of credit.............................        $ 639
                                                                           ===
              Commitments to extend credit.......................        $  -
                                                                           ===

(6) Related Party Transactions
    In   the ordinary  course of  business,  the Company has made loans at terms
         and rates  prevailing  at the time to  officers  and  directors  of the
         Company.   The   aggregate   dollar   amount  of  these  loans  totaled
         approximately  $727,225 at  December  31,  1997.  As of the same dates,
         these  individuals and entities had  approximately  $71,773 of funds on
         deposit in the Company.

(7)  Credit Risk
    The  Company  grants  the  majority  of its  loans to  borrowers  throughout
         Volusia County,  Florida.  Although the Company has a diversified  loan
         portfolio,  a significant  portion of its  borrowers'  ability to honor
         their  contracts  is  dependent  upon the  economy in  Volusia  County,
         Florida.

                                                                     (continued)



                                       24

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(8)  Income Taxes
    The income tax benefit consisted of the following:

                                                                    Year Ended
                                                                   December 31,
                                                                      1997
              Deferred:
                  Federal.....................................       $(156,000)
                  State.......................................         (27,161)
                                                                       -------

                     Total deferred benefit...................       $(183,161)
                                                                       =======

    The  income tax benefit is  different  than that  computed  by applying  the
         Federal statutory rate of 34%, as indicated in the following analysis:

                                                                      1997
                                                                      ----
                                                                          % of
                                                                         Pretax
                                                                Amount    Loss
                                                                ------    ----
              Income tax benefit at statutory Federal
                  income tax rate............................$(151,000)  (34.0)%
              Decreases resulting from
                  State taxes, net of federal tax benefit....  (18,000)   (3.7)
                  Other......................................  (14,161)    (.3)
                                                               -------     ----

                                                             $(183,161)  (38.0)%
                                                             =========   =====  

    The tax  effects  of  temporary  differences  that give rise to  significant
    portions  of the  deferred  tax  assets and  deferred  tax  liabilities  are
    presented below.

                                                                 At December 31,
                                                                            1997
              Deferred tax asset:
                  Organization and startup costs....................   $ 114,000
                  Net operating loss................................      88,000
                  Other.............................................         161
                                                                       ---------

                    Gross deferred tax asset........................     202,161
                                                                         -------

              Deferred tax liabilities:
                  Accrued income net of accrued expenses............      16,000
                  Premises and equipment............................       3,000
                                                                         -------

                    Gross deferred tax liability....................      19,000
                                                                         -------

                    Net deferred tax asset..........................   $ 183,161
                                                                         =======

                                                                     (continued)



                                       25

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(8)  Income Taxes, Continued
    At   December 31, 1997, the Company had net operating loss carryforwards for
         federal and state income tax purposes as follows:

              Year Expires

                  2011.............................................   $   4,000
                  2012.............................................     229,000
                                                                        -------

                                                                      $ 233,000
                                                                      =========

(9) Regulatory Matters
    The  Holding Company and the Bank are subject to various  regulatory capital
         requirements  administered  by  various  regulatory  banking  agencies.
         Failure to meet  minimum  capital  requirements  can  initiate  certain
         mandatory and possibly additional  discretionary  actions by regulators
         that,  if  undertaken,  could  have a  direct  material  effect  on the
         Company's financial  statements.  Under capital adequacy guidelines and
         the regulatory  framework for prompt corrective  action,  the Bank must
         meet specific capital guidelines that involve quantitative  measures of
         the Bank's assets, liabilities,  and certain off-balance-sheet items as
         calculated under regulatory  accounting  practices.  The Bank's capital
         amounts and classification  are also subject to qualitative  judgements
         by the regulators about components, risk weightings, and other factors.

    Quantitative  measures  established by regulation to ensure capital adequacy
         require the Bank to maintain  minimum  amounts and ratios (set forth in
         the  table  below)  of total  and Tier I  capital  (as  defined  in the
         regulations)  to risk-  weighted  assets  (as  defined),  and of Tier I
         capital  (as  defined)  to  average  assets  (as  defined).  Management
         believes,  as of December 31, 1997,  that the Company meets all capital
         adequacy requirements to which it is subject.

    As of December 31, 1997,  the most recent  notification  from the regulatory
    authorities  categorized the Bank as well  capitalized  under the regulatory
    framework  for  prompt   corrective   action.  To  be  categorized  as  well
    capitalized  the  Bank  must  maintain  minimum  total  risk-based,  Tier  I
    risk-based,  and Tier I leverage ratios as set forth in the table. There are
    no conditions or events since that  notification  that  management  believes
    have changed the Bank's  category.  The Bank's  actual  capital  amounts and
    ratios are also presented in the table (dollars in thousands).
<TABLE>
<CAPTION>

                                                                                                      To Be Well
                                                                          Minimum                  Capitalized Under
                                                                          For Capital              Prompt Corrective
                                               Actual               Adequacy Purposes:             Action Provision:
                                               ------               ------------------             -----------------
                                       Amount            %          Amount           %          Amount            %
                                       ------            -          ------           -          ------            -
<S>                                  <C>                <C>        <C>             <C>        <C>               <C>
     As of December 31, 1997:
         Total capital (to Risk
         Weighted Assets)..........  $  3,950           92.7%      $ 341           8.0%       $  426            10.0%
         Tier I Capital (to Risk
         Weighted Assets)..........     3,767           88.4         171           4.0           256             6.0
         Tier I Capital
         (to Average Assets).......     3,767           69.2         218           4.0           272             5.0
</TABLE>

                                                                     (continued)



                                       26

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(10)  Stockholders' Equity
     The Bank is subject to certain restrictions on the amount of dividends that
         it may declare without prior regulatory approval. At December 31, 1997,
         the Bank had no amounts available for dividends.

     As of December  31,  1997,  the Company has sold  464,791  shares of common
     stock for an  aggregate  of  $4,647,910.  The Company  incurred  $14,720 in
     offering expenses relating to their public offering of the Company's common
     stock and  warrants.  Offering  expenses  were  deducted  from the proceeds
     received from the sale of common stock and warrants.

     During the initial offering period shares were offered in units with a unit
         consisting  of one share of common stock and one warrant.  Each warrant
         entitles the holder thereof to purchase one additional  share of common
         stock for $10.00 per share during the 36 month period  ending April 28,
         2001.  There were 450,000  warrants  issued and as of December 31, 1997
         they were all warrants outstanding.

(11)  Parent Company Only Financial Information
     The Holding Company's  financial  information is as follows at December 31,
     1997 and 1996 and for the year ended  December  31, 1997 and for the period
     from August 15, 1996 (incorporation) to December 31, 1996:

                                               Condensed Balance Sheets

                                                              At December 31,
                                                              ---------------
                                                            1997          1996
                                                            ----          ----
                  Assets

              Cash................................... $    371,769       11,959
              Investment in subsidiary...............    3,950,016        -
              Other assets...........................       12,000      149,538
                                                        ----------      -------

                  Total assets.......................  $ 4,333,785      161,497
                                                         =========      =======

                  Liabilities and Stockholders' Equity

              Advances from organizers...............         -         134,204
              Stockholders' equity...................    4,333,785       27,293
                                                         ---------      -------

                  Total liabilities and 
                  stockholders' equity...............  $ 4,333,785      161,497
                                                         =========      =======

                       Condensed Statements of Operations
                                                             1997         1996
                                                             ----         ----

              Revenues................................ $    43,702         -
              Expenses................................       5,416       37,707
                                                           -------       ------

                  Earnings (loss) before loss of 
                  subsidiary...........................     38,286      (37,707)
                  Loss of subsidiary...................   (299,984)        -
                                                           -------        -----

                  Net loss.............................  $(261,698)     (37,707)
                                                           =======       ======

                                                                     (continued)



                                       27

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

              Notes to Consolidated Financial Statements, Continued


(11)  Parent Company Only Financial Information, Continued


                       Condensed Statements of Cash Flows
<TABLE>
<CAPTION>


                                                                                                  1997         1996
                                                                                                  ----         ----
<S>                                                                                          <C>              <C>
         Cash flows from operating activities:
              Net loss....................................................................   $   (261,698)      37,707
              Adjustments to reconcile net loss to net cash provided by
                (used in) operating activities:
                  Equity in undistributed loss of subsidiaries............................        299,984         -
                  Net decrease (increase) in other assets.................................        137,538     (149,538)
                                                                                                ---------      -------

                  Net cash provided by (used in) operating activities.....................        175,824     (187,245)
                                                                                                ---------      -------

         Cash flows from financing activities:
              Net proceeds from issuance of common stock..................................      4,633,190       65,000
              Retire common shares........................................................        (65,000)        -
              Advances from organizers....................................................           -          134,204
              Net repayment of advances from organizers...................................       (134,204)        -
              Investment in subsidiary....................................................     (4,250,000)        -
                                                                                                ---------       ------

                  Net cash provided by financing activities...............................        183,986      199,204
                                                                                                ---------      -------

         Net increase in cash and cash equivalents........................................        359,810       11,959

         Cash and cash equivalents at beginning of the period.............................         11,959         -
                                                                                               ----------       ------

         Cash and cash equivalents at end of period.......................................    $   371,769       11,959
                                                                                                =========      =======
</TABLE>



                                       28

<PAGE>









                             DIRECTORS AND OFFICERS

                          THE COMMERCIAL BANCORP, INC.

OFFICERS

Gary G. Campbell
President and Chief Executive Officer

Harvey E. Buckmaster
Chief Financial Officer


DIRECTORS

Gary G. Campbell
President and Chief Executive Officer

James R. Peacock
Vice Chairman - Real Estate Developer

Larry Kent
Chairman of the Board - Real Estate Developer

Christopher Likes
Practicing Certified Public Accountant
Christopher K. Likes, CPA

Kirk Bauer
Practicing Attorney
Biernacki & Bauer, P.A.


                                       29
<PAGE>


                     THE COMMERCIAL BANK OF VOLUSIA COUNTY

OFFICERS

Gary G. Campbell
President and Chief Executive Officer

Harvey E. Buckmaster
Senior Vice President - Chief Financial Officer and Cashier

Barbara A. Cloyd
Assistant Vice President

Josephine A. Bryan
Assistant Vice President - Loan Administration

Sandy Bowe
Branch Manager - Loan Officer


DIRECTORS

Gary G. Campbell
President and Chief Executive Officer

James R. Peacock
Chairman - Real Estate Developer

Larry Kent
Vice Chairman of the Board - Real Estate Developer

Christopher Likes
Certified Public Accountant

Stanley S. Bronski
Retired

Richard R. Dwyer
Retired Stockbroker

Thomas R. Horton
Trustee/Stetson University

Susan A. Nicholson
Interior Designer

Clarence Singletary
Developer


                                       30