U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

 X   Quarterly report under Section 13 or 15(d) of the
     Securities Exchange Act of 1934

For the quarterly period ended June 30, 1999

___  Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from to

Commission file number 333-19201

                          THE COMMERCIAL BANCORP, INC.
                          ----------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

        Florida                                              59-3396236
        -------                                              ----------
(State or Other Jurisdiction                             (I.R.S. Employer
of Incorporation or Organization)                       Identification No.)

                               258 North Nova Road
                           Ormond Beach, Florida 32174
                           ---------------------------
                    (Address of Principal Executive Offices)

                                 (904) 672-3003
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


         ---------------------------------------------------------------
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

Check whether the issuer:  (1) filed all reports required to be filed by Section
12, 13 or 15(d) of the  Exchange  Act  during  the past 12  months  (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days:

YES  X    NO

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date;

                     Common stock, par value $.01 per share
                     --------------------------------------
                                     (class)


                  474,941 shares outstanding at June 30, 1999
                  -------------------------------------------


<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                                      INDEX


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements                                               Page

Condensed Consolidated Balance Sheets At June 30, 1999 (unaudited) and
      At December 31, 1998.................................................2

Condensed  Consolidated  Statements of Operations Three and Six Months
      ended June 30, 1999 and 1998 (unaudited).............................3

Condensed Consolidated  Statement of Stockholders' Equity - Six Months
      ended June 30, 1999 (unaudited)......................................4

Condensed Consolidated  Statements of Cash Flows Six Months ended June
      30, 1999 and 1998 (unaudited)........................................5

Notes to Condensed Consolidated Financial Statements (unaudited).........6-8

Item  2. Management's  Discussion and Analysis of Financial  Condition
      and Results of Operations...........................................13

Item  3. Quantitative and Qualitative Disclosures About Market Risk.......14

PART II. OTHER INFORMATION

Item  1. Legal Proceedings................................................14

Item  2. Changes in Securities and Use of Proceeds........................14

Item  4. Submission of Matters to a Vote of Security Holders...........14-15

Item  6. Exhibits and Reports on Form 8-K ................................15

SIGNATURES................................................................16

                                  1

<PAGE>
<TABLE>
<CAPTION>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets

                                                                              At
                                                                 ----------------------------
                                                                  June 30,      December 31,
                                                                  --------      ------------
          Assets                                                    1999            1998
          ------                                                    ----            ----
                                                                (unaudited)

<S>                                                           <C>               <C>
Cash and due from banks ...................................   $    519,974         689,903
Federal funds sold ........................................      1,495,663       4,258,602
                                                              ------------      ----------

Total cash and cash equivalents ...........................      2,015,637       4,948,505

Securities available for sale .............................      3,714,490       3,302,486
Loans, net of allowance for loan losses of $556,458
in 1999 and $760,000 in 1998 ..............................     12,806,814      11,563,373
Premises and equipment, net ...............................        524,823         838,931
Accrued interest receivable ...............................        106,335          89,527
Restricted security, Federal Home Loan Bank stock, at cost          64,500          50,000
Deferred tax asset ........................................        857,211         824,981
Other assets ..............................................         51,382          58,003
                                                              ------------      ----------

Total assets ..............................................   $ 20,141,192      21,675,806
                                                              ============      ==========

Liabilities and Stockholders' Equity

Liabilities:
Demand deposits ...........................................        801,244         904,585
Savings and NOW deposits ..................................      4,013,551       5,068,758
Money-market deposits .....................................        364,076         329,293
Time deposits .............................................     10,406,787      10,482,545
                                                              ------------      ----------

Total deposits ............................................     15,585,658      16,785,181

Advance from Federal Home Loan Bank .......................      1,000,000       1,000,000
Other borrowings ..........................................           --           364,749
Official checks ...........................................        169,474         127,342
Other liabilities .........................................         81,135         141,642
                                                              ------------      ----------

Total liabilities .........................................     16,836,267      18,418,914
                                                              ------------      ----------

Stockholders' equity:
Common stock, $.01 par value; 10,000,000 shares authorized,
474,941 and 464,791 shares issued and outstanding .........          4,749           4,648
Additional paid-in capital ................................      4,729,941       4,628,542
Accumulated deficit .......................................     (1,415,195)     (1,370,803)
Accumulated other comprehensive income ....................        (14,570)         (5,495)
                                                              ------------      ----------

Total stockholders' equity ................................      3,304,925       3,256,892
                                                              ------------      ----------

Total liabilities and stockholders' equity ................   $ 20,141,192      21,675,806
                                                              ============      ==========
</TABLE>


See Accompanying Notes to Condensed Consolidated Financial Statements.

                                       2

<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>

                 Condensed Consolidated Statements of Operations

                                                    Three Months Ended        Six Months Ended
                                                         June 30,                 June 30,
                                                    ------------------        ----------------
                                                    1999         1998         1999        1998
                                                    ----         ----         ----        ----
                                                       (unaudited)              (unaudited)
Interest income:
<S>                                             <C>            <C>          <C>          <C>
Loans .......................................   $ 260,934      164,782      503,152      287,439
Securities available for sale ...............      36,385       31,480       67,805       31,480
Other interest-earning assets ...............      30,114       60,705       73,291      106,999
                                                ---------      -------      -------      -------

Total interest income .......................     327,433      256,967      644,248      425,918
                                                ---------      -------      -------      -------

Interest expense:
Deposits ....................................     171,385      154,288      350,311      235,130
Other .......................................      18,772        1,792       37,826        1,792
                                                ---------      -------      -------      -------

Total interest expense ......................     190,157      156,080      388,137      236,922
                                                ---------      -------      -------      -------

Net interest income .........................     137,276      100,887      256,111      188,996

(Credit) provision for loan losses ..........    (158,000)      26,000     (131,000)      55,000
                                                ---------      -------      -------      -------

Net interest income after
  (credit) provision for loan losses ........     295,276       74,887      387,111      133,996
                                                ---------      -------      -------      -------

Noninterest income:
Service charges and fees ....................      12,005        9,257       23,346       18,771
Recovery of organizational expenses .........     109,609         --        109,609         --
                                                ---------      -------      -------      -------

Total noninterest income ....................     121,614        9,257      132,955       18,771
                                                ---------      -------      -------      -------

Noninterest expense:
Salaries and employee benefits ..............     144,336      115,724      310,052      213,046
Occupancy expense ...........................      58,177       46,759      113,372       88,431
Professional fees ...........................      25,320       16,196       54,501       28,005
Advertising .................................       6,867       20,761        8,378       49,200
Other .......................................      50,835       49,218      104,855       98,217
                                                ---------      -------      -------      -------

Total noninterest expense ...................     285,535      248,658      591,158      476,899
                                                ---------      -------      -------      -------

Earnings (loss) before income taxes
(benefit) ...................................     131,355      (164,514)    (71,092)    (324,132)

Income taxes (benefit) ......................      49,500      (53,500)     (26,700)    (103,200)
                                                ---------      -------      -------      -------

Net earnings (loss) .........................   $  81,855     (111,014)     (44,392)    (220,932)
                                                =========      =======      =======      =======

Earnings (loss) per share, basic and diluted    $     .17         (.24)        (.09)        (.48)
                                                =========      =======      =======      =======

Weighted-average number of shares outstanding
for basic and diluted .......................     471,822      464,791      468,369      464,791
                                                =========      =======      =======      =======

Dividends per share .........................   $    --           --           --           --
                                                =========      =======      =======      =======

</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements.

                                       3

<PAGE>
<TABLE>
<CAPTION>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

            Condensed Consolidated Statement of Stockholders' Equity

                    Six Months Ended June 30, 1999


                                                                                Accumulated
                                                                                   Other
                                                     Additional                   Compre-       Total
                                           Common     Paid-In    Accumulated      hensive    Stockholders'
                                           Stock      Capital      Deficit         Income       Equity
                                           -----      -------      -------         ------       ------

<S>                                    <C>           <C>         <C>              <C>         <C>
Balance at December 31, 1998 .......   $    4,648    4,628,542   (1,370,803)       (5,495)    3,256,892

Comprehensive income:
Net loss (unaudited) ...............         --           --        (44,392)         --         (44,392)

Net change in unrealized loss on
securities available for sale,
net of tax of $5,530
(unaudited) ........................         --           --           --          (9,075)       (9,075)
                                                                 ----------        ------     ---------

Comprehensive income (unaudited) ...         --           --        (44,392)       (9,075)      (53,467)

Issuance of 10,150 shares of common
stock upon exercise of 10,150
warrants (unaudited) ...............          101      101,399         --            --         101,500
                                       ----------    ---------   ----------        ------     ---------

Balance at June 30, 1999 (unaudited)   $    4,749    4,729,941   (1,415,195)      (14,570)    3,304,925
                                       ==========    =========   ==========       =======     =========
</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>

                                       4

<TABLE>
<CAPTION>

              THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

            Condensed Consolidated Statements of Cash Flows

                                                                        Six Months Ended
                                                                            June 30,
                                                                        ----------------
                                                                       1999          1998
                                                                       ----          ----
                                                                          (unaudited)
<S>                                                              <C>               <C>
Cash flows from operating activities:
Net loss .....................................................   $   (44,392)      (220,932)
Adjustments to reconcile net loss to net cash
  used in operating activities:
Depreciation .................................................        44,229         38,418
(Credit) provision for loan losses ...........................      (131,000)        55,000
Credit for deferred income taxes .............................       (26,700)      (103,200)
Net amortization of fees, costs, premiums and discounts ......        35,686         15,932
Increase in accrued interest receivable and other assets .....       (10,187)      (115,138)
(Decrease) increase in other liabilities .....................       (60,507)       158,758
                                                                  ----------     ----------

Net cash used in operating activities ........................      (192,871)      (171,162)
                                                                  ----------     ----------

Cash flows from investing activities:
Purchases of securities available for sale ...................    (1,518,438)    (5,162,377)
Principal repayments on securities available for sale ........     1,066,638        193,942
Net increase in loans ........................................    (1,122,936)    (5,063,869)
Purchases of premises and equipment ..........................       (23,505)      (345,065)
Purchase of Federal Home Loan Bank stock .....................       (14,500)          --
Proceeds from sale of premises and equipment .................       293,384           --
                                                                  ----------     ----------

Net cash used in investing activities ........................    (1,319,357)   (10,377,369)
                                                                  ----------     ----------

Cash flows from financing activities:
Net (decrease) increase in demand, savings, NOW and
money-market deposits ........................................    (1,123,765)     1,970,637
Net (decrease) increase in time deposits .....................       (75,758)     8,884,655
Net decrease in other borrowings .............................      (364,749)          --
Net increase in official checks ..............................        42,132          9,337
Proceeds from issuance of common stock upon exercise
of warrants ..................................................       101,500           --
                                                                  ----------     ----------

Net cash (used in) provided by financing activities ..........    (1,420,640)    10,864,629
                                                                  ----------     ----------

Net (decrease) increase in cash and cash equivalents .........    (2,932,868)       316,098

Cash and cash equivalents at beginning of period .............     4,948,505      2,465,817
                                                                  ----------     ----------

Cash and cash equivalents at end of period ...................   $ 2,015,637      2,781,915
                                                                 ===========      =========

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest .....................................................   $   392,445        212,571
                                                                 ===========      =========

Income taxes .................................................   $      --             --
                                                                 ===========      =========

Noncash transactions-
Accumulated other comprehensive income, net change in
  unrealized loss on securities available for sale, net of tax   $    (9,075)        (7,277)
                                                                 ===========      =========

</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements.

                                        5

<PAGE>

              THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

   Notes to Condensed Consolidated Financial Statements (unaudited)


(1) General Description and Basis of Presentation.  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")  (together,  "TCB"). 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.

         In the opinion of the  management  of TCB, the  accompanying  condensed
         consolidated  financial statements contain all adjustments  (consisting
         of normal recurring accruals) necessary to present fairly the financial
         position at June 30, 1999 and the results of  operations  for the three
         and six months  ended June 30, 1999 and 1998 and cash flows for the six
         months  ended June 30,  1999 and 1998.  The results of  operations  and
         other data for the three and six months  ended June 30,  1999,  are not
         necessarily  indicative  of results  that may be expected  for the year
         ending December 31, 1999.

         The condensed consolidated financial statements include the accounts of
         the Holding Company and the Bank. All significant intercompany accounts
         and transactions have been eliminated in consolidation.

(2) Loan  Impairment  and Loan Losses.  The following  summarizes the collateral
         dependent amounts of impaired loans:
<TABLE>
<CAPTION>

                                                                                                At
                                                                                     -------------------------
                                                                                     June 30,     December 31,
                                                                                     --------     ------------
                                                                                       1999          1998
                                                                                       ----          ----

<S>                                                                                <C>              <C>
Loans identified as impaired:
Gross loans with no related allowance for loan losses ..........................   $     --            --
Gross loans with related allowance for loan losses recorded ....................      597,275     1,199,025
Less: Allowances on these loans ................................................     (298,637)     (599,512)
                                                                                   -----------    ----------

Net investment in impaired loans ...............................................   $  298,638       599,513
                                                                                   ==========     =========

The average net investment in impaired loans and interest income  recognized and
received on impaired loans is as follows:

                                                                                        Six Months Ended
                                                                                             June 30,
                                                                                        ----------------
                                                                                       1999          1998
                                                                                       ----          ----

Average net investment in impaired loans .......................................   $  549,367          --
                                                                                   ==========     =========

Interest income recognized on impaired loans ...................................   $     --            --
                                                                                   ==========     =========

Interest income received on impaired loans .....................................   $     --            --
                                                                                   ==========     =========
</TABLE>

                                                                     (continued)

                                       6

<PAGE>



                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

   Notes to Condensed Consolidated Financial Statements (unaudited), Continued


(2) Loan  Impairment and Loan Losses,  Continued.  The activity in the allowance
         for loan losses was as follows:

<TABLE>
<CAPTION>

                                        Three Months Ended      Six Months Ended
                                              June 30,               June 30,
                                        1999          1998        1999        1998
                                        ----          ----        ----        ----
<S>                                  <C>             <C>        <C>           <C>
Balance at beginning of period ...   $ 787,000       64,000     760,000       35,000
(Credit) provision for loan losses    (158,000)      26,000    (131,000)      55,000
Loan charge-offs .................     (72,542)        --       (72,542)        --
                                     ---------       ------     -------       ------

Balance at end of period .........   $ 556,458       90,000     556,458       90,000
                                     =========       ======     =======       ======
</TABLE>

(3) Earnings Per Share ("EPS").  Basic EPS has been computed on the basis of the
         weighted-average  number of shares of common stock  outstanding.  TCB's
         common stock equivalents are not dilutive.

(4) 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 TCB'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, at June 30, 1999, that the Company meets all capital adequacy
         requirements to which it is subject.

                                                                     (continued)
                                       7
<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

   Notes to Condensed Consolidated Financial Statements (unaudited), Continued


(4)  Regulatory  Matters,  Continued.  As of June  30,  1999,  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).

                                                                 To Be Well
                                               Minimum        Capitalized Under
                                              For Capital     Prompt Corrective
                             Actual        Adequacy Purposes: Action Provisions:
                          -------------    ----------------- -------------------
                           Amount       %   Amount      %    Amount      %
                           ------       -   ------      -    ------      -
At June 30, 1999:
Total capital (to Risk-
  Weighted Assets) .....   $2,626     19.3% $1,091     8.0% $1,364     10.0%
Tier I Capital (to Risk-
  Weighted Assets) .....    2,451     18.0     546     4.0     818      6.0
Tier I Capital
  (to Average Assets) ..    2,451     12.9     761     4.0     951      5.0

                                       8
<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

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

          Comparison of June 30, 1999 (Unaudited) and December 31, 1998

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")
         (together,  "TCB").  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
         TCB along  with a group of local  organizers  made  application  to the
         State of Florida  for a bank  charter  in  Highlands  County,  Florida.
         Management  planned to raise the capital for the new bank from a public
         offering of TCB's common stock.  In early 1999,  TCB and the organizers
         withdrew their application and management terminated its planned public
         offering.  The  application  was  assumed by the local  organizers  and
         others, as a result TCB was able to recover some of the  organizational
         expenses  which had been  previously  expensed.  In addition,  TCB sold
         property  and  equipment  which  had been  purchased  for the  proposed
         Highlands County Bank, to the local organizers.

Liquidity and Capital Resources
         TCB's primary  source of cash during the six months ended June 30, 1999
         was from principal  repayments on securities  available for sale.  Cash
         was used primarily to fund loan  originations  and net deposit outflows
         and to purchase  securities  available for sale. At June 30, 1999,  TCB
         had  unfunded  lines  of  credit  of  approximately  $1.0  million  and
         approximately  $7.5  million in time  deposits  maturing in one year or
         less.  At June 30, 1999,  the Bank  exceeded its  regulatory  liquidity
         requirements.

         The following  table shows selected  ratios for the periods ended or at
         the dates indicated:
<TABLE>
<CAPTION>

                                             Six Months                Six Months
                                                  Ended    Year Ended  Ended
                                                June 30,  December 31, June 30,
                                                    1999     1998      1998
                                                    ----     ----      ----
Average equity as a percentage
<S>                                                <C>       <C>       <C>
of average assets ...........................      15.70%    22.51%    30.05%

Total equity to total assets at end of period      16.41%    15.03%    22.97%

Return on average assets (1) ................       (.43)%   (6.35)%   (3.15)%

Return on average equity (1) ................      (2.75)%  (28.23)%  (10.49)%

Noninterest expense to average assets (1) ...       5.75%     7.32%     6.81%

Nonperforming loans and foreclosed
real estate as a percentage of total assets
at end of period ............................       3.32%     5.53%      NIL

Allowance for loan losses as a percentage of
total loans at end of period ................       4.16%     6.17%     1.03%
</TABLE>

--------------------------
(1)     Annualized for the six months ended June 30, 1999 and 1998.

                                       9

<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

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


Changes in Financial Condition

         Total assets  decreased $1.6 million from $21.7 million at December 31,
         1998 to  $20.1  million  at June 30,  1999,  primarily  as a result  of
         decreases  in cash  and cash  equivalents  of $2.9  million,  partially
         offset by an increase in loans of $1.2 million. Deposits decreased $1.2
         million  from $16.8  million at December  31, 1998 to $15.6  million at
         June  30,  1999.  Management  expects  the  growth  of the Bank and the
         Company to resume during the balance of 1999.

Results of Operations

       Comparison of the Three-Month Periods Ended June 30, 1999 and 1998

General.  Net earnings for the three months ended June 30, 1999 was $81,855,  or
     $.17 per  basic  and  diluted  share  compared  to a net loss for the three
     months ended June 30, 1998 of  ($111,014),  or $(.24) per basic and diluted
     share.  Net  earnings for the 1999 period  included a $109,609  recovery of
     previously  expensed  organizational  costs related to the Highlands County
     Bank charter  application  and a $158,000 credit for loan losses due to the
     settlement  of two  impaired  loans to a  single  borrower.  Without  these
     recoveries  the Company would have reported a loss for the period.  At June
     30,  1999 or 1998,  the Bank had not  achieved  the asset  size to  operate
     profitably from operations.

Interest Income.  Interest income increased $70,466 or 27.4% to $327,433 for the
     three months  ended June 30, 1999 from  $256,967 for the three months ended
     June 30, 1998.  Interest income earned on loans increased  $96,152 or 58.4%
     from  $164,782 for the three months ended June 30, 1998 to $260,934  during
     the three months  ended June 30, 1999.  The increase was due to an increase
     in the average loan portfolio of $6.2 million or 80.9% for the three months
     ended June 30, 1999 compared to the same period in 1998,  partially  offset
     by a decrease  in the average  yield  earned from 8.66% in 1998 to 7.57% in
     1999.

Interest  Expense.  Interest expense  increased $34,077 or 21.8% to $190,157 for
     the three  months  ended June 30, 1999 from  $156,080  for the three months
     ended  June 30,  1998.  This  increase  was due to an  increase  in average
     interest-bearing  liabilities  outstanding  of $3.8 million or 31.3% during
     the three  months  ended June 30, 1999 when  compared to the same period in
     1998, partially offset by a decrease in the average rate paid from 5.10% in
     1998 to 4.80% in 1999.

(Credit)  Provision for Loan Losses.  The (credit)  provision for loan losses is
     (credited)  charged to earnings to (decrease)  increase the total allowance
     to a level deemed  appropriate  by management  and is based upon the volume
     and type of lending  conducted by TCB,  industry  standards,  the amount of
     nonperforming loans and general economic  conditions,  particularly as they
     relate  to  TCB's  market  areas,   and  other   factors   related  to  the
     collectibility of TCB's loan portfolio.  The credit for loan losses for the
     three months ended June 30, 1999 was  $158,000 and the  allowance  for loan
     losses was $556,458 at June 30, 1999.  The credit for loan losses  resulted
     from a  settlement  of two impaired  loans,  for less than the full amount,
     from a single  borrower.  This  resulted  in the partial  recapture  of the
     specific  allowance  against  these loans and a charge-off of the remaining
     uncollected loan balance.  Management believes the allowance is adequate at
     June 30, 1999.

                                       10
<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

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


Results of Operations, Continued

Noninterest  Income.  Noninterest  income  increased  $112,357  during the three
     months  ended  June 30,  1999  compared  to the same  period in 1998.  This
     increase  was  primarily   due  to  a  recovery  of   previously   expensed
     organizational   costs  related  to  the  Highlands   County  Bank  charter
     application of $109,609.  TCB and the organizers withdrew their application
     for the new bank in early 1999 but recovered  certain  previously  expensed
     organizational  costs from local  organizers  who assumed the  application.
     Service  charges and fees  increased  to $12,005 in 1999 from $9,257 or 30%
     due primarily to increased deposits during the 1999 period.

Noninterest Expense.  Noninterest expense increased $36,877 or 14.8% to $285,535
     for the three months ended June 30, 1999 from $248,658 for the three months
     ended June 30, 1998. Salaries and occupancy expenses increased in 1999 as a
     result of additional personnel and additional office facilities.

Income Tax  Provision  (Benefit).  The income tax provision for the three months
     ended June 30, 1999 was $49,500 (an effective rate of 37.7%) compared to an
     income tax  benefit of $53,500 (an  effective  rate of 32.5%) for the three
     months ended June 30, 1998.

        Comparison of the Six-Month Periods Ended June 30, 1999 and 1998

General.  Net loss for the six months ended June 30, 1999 was  $44,392,  or $.09
     per basic and diluted share compared to a net loss for the six months ended
     June 30, 1998 of $220,932 or $.48 per basic and diluted share. Net loss for
     the 1999  period  included  a  $109,609  recovery  of  previously  expensed
     organizational  costs and a  $131,000  credit  for loan  losses  due to the
     settlement of two impaired loans to a single borrower.  At June 30, 1999 or
     1998, the Bank had not achieved the asset size to operate  profitably  from
     operations.

Interest Income. Interest income increased $218,330 or 51.3% to $644,248 for the
     six months ended June 30, 1999 from  $425,918 for the six months ended June
     30, 1998.  Interest income earned on loans increased $215,713 or 75.0% from
     $287,439 for the six months ended June 30, 1998 to $503,152  during the six
     months  ended June 30,  1999.  The  increase  was due to an increase in the
     average  loan  portfolio  of $6.3 million or 94.0% for the six months ended
     June 30, 1999  compared to the same period in 1998,  partially  offset by a
     decrease in the average yield earned from 8.60% in 1998 to 7.77% in 1999.

Interest Expense.  Interest expense increased  $151,215 or 63.8% to $388,137 for
     the six months  ended June 30, 1999 from  $236,922 for the six months ended
     June  30,  1998.   This   increase  was  due  to  an  increase  in  average
     interest-bearing  liabilities  outstanding  of $7.0 million or 75.2% during
     the six months  ended June 30,  1999 when  compared  to the same  period in
     1998, partially offset by a decrease in the average rate paid from 5.10% in
     1998 to 4.77% in 1999.


                                       11

<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

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


Results of Operations, Continued

(Credit)  Provision for Loan Losses.  The (credit)  provision for loan losses is
     (credited)  charged to earnings to (decrease)  increase the total allowance
     to a level deemed  appropriate  by management  and is based upon the volume
     and type of lending  conducted by TCB,  industry  standards,  the amount of
     nonperforming loans and general economic  conditions,  particularly as they
     relate  to  TCB's  market  areas,   and  other   factors   related  to  the
     collectibility of TCB's loan portfolio.  The credit for loan losses for the
     six months  ended June 30, 1999 was  $131,000  and the  allowance  for loan
     losses was $556,458 at June 30, 1999.  The credit for loan losses  resulted
     from a settlement of two impaired loans for less than the full amount. This
     resulted in the partial  recapture of the allowance against these loans and
     a  charge-off  of the  remaining  loan  balance.  Management  believes  the
     allowance is adequate at June 30, 1999.

Noninterest Income.  Noninterest income increased $114,184 during the six months
     ended June 30, 1999 compared to the same period in 1998.  This increase was
     primarily due to a recovery of  previously  expensed  organizational  costs
     related to the Highlands County Bank charter  application of $109,609.  TCB
     and the  organizers  withdrew their  application  for the new bank in early
     1999 but recovered certain previously  expensed  organizational  costs from
     local  organizers  who assumed the  application.  Service  charges and fees
     increased to $23,346 from $18,771 in the 1998 period.  The increase was due
     primarily to increased deposits during the 1999 period compared to the 1998
     period.

Noninterest Expense. Noninterest expense increased $114,259 or 24.0% to $591,158
     for the six months  ended June 30,  1999 from  $476,899  for the six months
     ended June 30, 1998. Salaries and occupancy expenses increased in 1999 as a
     result of additional personnel and additional office facilities.

Income Tax  Benefit.  The income tax benefit  for the six months  ended June 30,
     1999 was  $26,700 (an  effective  rate of 37.6%)  compared to $103,200  (an
     effective rate of 31.8%) for the six months ended June 30, 1998.

                                       12
<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                                    Year 2000

TCB is acutely aware of the many areas affected by the Year 2000 computer issue,
including  those  addressed by the Federal  Financial  Institutions  Examination
Council  ("FFIEC") in its  interagency  statement  which provided an outline for
institutions to effectively  manage the Year 2000  challenges.  A Year 2000 plan
has been  approved by the Board of Directors  which  includes  multiple  phases,
tasks to be completed, and target dates for completion. Issues addressed therein
include awareness, assessment, renovation, validation,  implementation,  testing
and contingency planning.

TCB has formed a Year 2000  committee  that is  charged  with the  oversight  of
completing  the Year 2000  project  on a timely  basis.  TCB has  completed  its
awareness,  assessment,  renovation,  validation and implemention phases. At the
present  time,  TCB has  substantially  completed  its testing  phase.  Since it
routinely upgrades and purchases  technologically advanced software and hardware
on a continual bases, TCB has determined that the costs of making  modifications
to correct any Year 2000 issues will not materially affect reported results from
operations.

TCB's vendors and suppliers  have been  contacted  for written  confirmation  of
their product's readiness for the Year 2000 compliance.  All significant vendors
of TCB have provided confirmation that they are Year 2000 compliant.  TCB's main
service  provider  has  completed  testing of its mission  critical  application
software; the test results, which have been documented and validated, are deemed
to be Year 2000  compliant.  FFIEC  guidance on testing Year 2000  compliance of
service  providers states that proxy tests are acceptable  compliance  tests. In
proxy  testing,  the  service  provider  tests with a  representative  sample of
financial  institutions that use a particular service,  with the results of such
testing shared with all similarly situated clients of the service provider.  TCB
has  authorized  the acceptance of proxy testing since the proxy tests have been
conducted with financial institutions that are similar in type and complexity to
its own,  using  the same  version  of Year  2000  ready  software  and the same
hardware and operating  systems.  TCB personnel  have also  performed  Year 2000
testing on their  computer  databases and software  applications  and have found
them to be Year 2000 ready.

TCB also recognizes the importance of determining  that its borrowers are facing
the Year 2000  problem  in a timely  manner to avoid  deterioration  of the loan
portfolio  solely  due to this  issue.  All  material  relationships  have  been
identified and questionnaires  have been completed to assess the inherent risks.
Deposit customers have received statement  stuffers and information  material in
this regard.  TCB plans to work on a one-on-one  basis with any borrower who has
been identified as having high Year 2000 risk exposure.

Accordingly,  management  does not believe  that TCB has  incurred or will incur
material  costs  associated  with the Year  2000  issue.  Yet,  there  can be no
assurances  that all hardware  and software  that TCB will use will be Year 2000
compliant. Management cannot predict the amount of financial difficulties it may
incur due to  customers  and vendors  inability  to perform  according  to their
agreements  with TCB or the  effects  that other  third  parties  may cause as a
result of this issue.  Therefore,  there can be no assurance that the failure or
delay of others to address the issue or that the costs  involved in such process
will not have a material adverse effect on TCB's business,  financial condition,
and results of operations.

TCB's contingency plans relative to Year 2000 issues have been finalized.  Based
on testing results to date (as noted above), TCB's mission critical systems have
been deemed to be Year 2000 compliant and,  therefore a contingency plan has not
been developed with respect to those systems. A Business Resumption  Contingency
Plan (the "BRCP") has been developed and approved by the Board of Directors. The
BRCP assumes power outages and  telephone  disruptions.  TCB is currently in the
process of testing and validating the BRCP. It is anticipated that TCB's deposit
customers  will have  increased  demands for cash in the latter part of 1999 and
correspondingly TCB will maintain higher liquidity levels.

                                       13

<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
TCB's  market risk arises  primarily  from  interest  rate risk  inherent in its
lending  and deposit  taking  activities.  TCB has little or no risk  related to
trading accounts, commodities or foreign exchange.

Management  actively  monitors and manages its interest rate risk exposure.  The
primary objective in managing interest-rate risk is to limit, within established
guidelines,  the  adverse  impact  of  changes  in  interest  rates on TCB's net
interest income and capital, while adjusting TCB's asset-liability  structure to
obtain  the  maximum  yield-cost  spread on that  structure.  Management  relies
primarily  on its  asset-liability  structure  to  control  interest  rate risk.
However,  a sudden and  substantial  increase in interest rates could  adversely
impact TCB'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.  There have been no  significant  changes in TCB's  market risk  exposure
since December 31, 1998.

                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

There are no material pending legal proceedings to which The Commercial Bancorp,
Inc. or its subsidiary is a party or to which any of their property is subject.

Item 2. Changes in Securities and Use of Proceeds

During the quarter  ended June 30, 1999,  7,900 shares were issued to holders of
warrants at a purchase price of $10.00 per share.

Proceeds were used for general corporate purposes.

Item 4. Submission of Matters to a Vote of Security Holders

The Annual  Meeting of  Shareholders  (the "Annual  Meeting") of The  Commercial
Bancorp,  Inc.  was held on April 20,  1999,  to consider  the election of three
directors each for a term of three years and the ratification of the appointment
of TCB's  independent  auditors for the year ending  December  31, 1999.  At the
Annual Meeting,  incumbent  Directors Gary G. Campbell and Richard R. Dwyer were
reelected along with new Director  Clarence W.  Singletary.  Mr.  Singletary has
been a director of the Bank since 1997. The terms of Directors James R. Peacock,
James F.  McCollum,  Larry A. Kent and H. Fredrick  Keiber  continued  after the
Annual Meeting.

                                       14


<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY


Item 4. Submission of Matters to a Vote of Security Holders, Continued

At the Annual  Meeting,  278,878 shares were present in person or by proxy.  The
following is a summary and tabulation of the matters that were voted upon at the
Annual Meeting:

Proposal I.

The election of three directors, each for a term of three years:

                           For          Withheld        Against
                           ---          --------        -------

Gary G. Campbell         269,708           -             9,170
                         =======        ========         =====

Richard R. Dwyer         276,528           -             2,350
                         =======        ========         =====

Clarence W. Singletary   273,278           -             5,600
                         =======        ========         =====

Proposal II:

To ratify the  appointment  of TCB's  independent  auditors  for the year ending
December 31, 1999.

                           For          Withheld        Against
                           ---          --------        -------

                         273,227          4,301          1,350
                         =======        ========         =====

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. The following exhibits are filed with or incorporated by reference
     into this report.  The exhibits  which are  denominated  by an asterisk (*)
     were  previously  filed  as a part  of,  and  are  hereby  incorporated  by
     reference  from  TCB's  Registration  Statement  on  Form  SB-2  under  the
     Securities  Act of 1933 for TCB,  as  effective  with  the  Securities  and
     Exchange Commission on April 28, 1997, Registration No. 333-19201 (referred
     to as  "Registration  Statement").  The exhibits which are denominated by a
     double  asterisk (**) where filed with TCB's 1998 Form 10-KSB.  The exhibit
     numbers correspond to the exhibit numbers in the referenced documents.

Exhibit Number  Description of Exhibit

*3.1            Amended and Restated Articles of Incorporation of TCB
*3.2            By-laws of TCB (Registration Statement)
*4.1            Specimen Common Stock Certificate (Registration Statement)
*4.2            Specimen Warrant Certificate (Registration Statement)
*4.4            Company's Warrant Plan (Registration Statement)
**22.1          TCB's 1999 Annual Meeting Proxy Statement
**22.2          TCB's 1998 Annual Report
27              Financial Data Schedule (for SEC use only)


(b)  Reports on Form 8-K.  There were no reports on Form 8-K filed for the three
     months ended June 30, 1999.

                                       15
<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                           PART II. OTHER INFORMATION


                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                                    THE COMMERCIAL BANCORP, INC.
                                                    (Registrant)





Date:          , 1999                   By:      /s/Gary G. Campbell
---------------------                            -------------------------------
                                                    Gary G. Campbell, President
                                                    and
                                                    Chief Executive Officer




Date:          , 1999                   By:      /s/Harvey E. Buckmaster
---------------------                            -------------------------------
                                                    Harvey E. Buckmaster,
                                                    Chief Financial Officer

                                       16