--------------------------------------------------------------------------------
                     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 September 30, 1998

     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          464,791 shares outstanding
--------------------------------------          --------------------------
                 (class)                           at October 29, 1998



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

<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                                      INDEX


Part I. Financial Information

  Item 1. Financial Statements                                              Page

   Condensed Consolidated Balance Sheets -
    At September 30, 1998 (unaudited) and At December 31, 1997 . . . . . . . . 2

   Condensed Consolidated Statements of Operations -
    Three and Nine Months ended September 30, 1998 and 1997 (unaudited). . . . 3

   Condensed Consolidated Statement of Stockholders' Equity -
    Nine Months ended September 30, 1998 (unaudited) . . . . . . . . . . . . . 4

   Condensed Consolidated Statements of Cash Flows -
    Nine months ended September 30, 1998 and 1997 (unaudited). . . . . . . . . 5

   Notes to Condensed Consolidated Financial Statements (unaudited). . . . ..6-7

  Item 2. Management's Discussion and Analysis of Financial Condition
   and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . .8-11

Part II. Other Information

  Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . .12

  Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . .12

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13


<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                                    At
                                                                      -----------------------------
                                                                      September 30,    December 31,
                                                                      -------------    ------------
 Assets                                                                   1998            1997
 ------                                                                   ----            ----
                                                                       (unaudited)

<S>                                                                  <C>                <C>      
Cash and due from banks ..........................................   $    774,841       1,065,817
Federal funds sold ...............................................      2,326,260       1,400,000
                                                                       ----------       ---------

      Total cash and cash equivalents ............................      3,101,101       2,465,817

Securities available for sale ....................................      4,553,178            --
Loans receivable, net of allowance for loan losses of
 $280,000 in 1998 and $35,000 in 1997  ...........................      9,626,118       3,745,577
Premises and equipment, net ......................................        806,987         462,784
Accrued interest receivable and other assets .....................        394,306         220,588
Deferred income taxes ............................................        414,894         183,161
                                                                       ----------       ---------

      Total assets ...............................................   $ 18,896,584       7,077,927
                                                                     ============       =========


 Liabilities and Stockholders' Equity


Liabilities:
 Demand deposits .................................................        522,620         832,396
 Savings and NOW deposits ........................................      3,900,484       1,040,454
 Money-market deposits ...........................................        252,963          65,777
 Time deposits ...................................................      9,911,024         739,433
                                                                       ----------       ---------

      Total deposits .............................................     14,587,091       2,678,060

 Official checks .................................................        173,473          54,138
 Accrued interest payable and other liabilities ..................        270,713          11,944
                                                                       ----------       ---------

      Total liabilities ..........................................     15,031,277       2,744,142
                                                                       ----------       ---------

Stockholders' equity:
 Common stock, $.01 par value, 10,000,000 shares authorized,
   464,791 shares issued and outstanding .........................          4,648           4,648
 Additional paid-in capital ......................................      4,628,542       4,628,542
 Accumulated deficit .............................................       (778,271)       (299,405)
 Accumulated other comprehensive income ..........................         10,388            --
                                                                       ----------       ---------

      Total stockholders' equity .................................      3,865,307       4,333,785
                                                                       ----------       ---------

      Total liabilities and stockholders' equity .................   $ 18,896,584       7,077,927
                                                                     ============       =========
</TABLE>

     See Accompanying Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>

                                                        Three Months Ended         Nine Months Ended
                                                          September 30,              September 30,
                                                          -------------              -------------
                                                         1998         1997        1998          1997
                                                         ----         ----        ----          ----
                                                             (unaudited)              (unaudited)
<S>                                                  <C>                         <C>               
Interest income:
 Loans ...........................................   $ 211,856         --        499,295         --
 Securities available for sale ...................      51,158         --         82,638         --
 Other interest-earning assets ...................      24,842       37,139      131,841       37,139
                                                     ---------      -------     --------     -------- 

      Total interest income ......................     287,856       37,139      713,774       37,139
                                                     ---------      -------     --------     -------- 

Interest expense:
 Deposits ........................................     180,280         --        415,410         --
 Other ...........................................       7,566       18,901        9,358       33,515
                                                     ---------      -------     --------     -------- 

      Total interest expense .....................     187,846       18,901      424,768       33,515
                                                     ---------      -------     --------     -------- 

      Net interest income ........................     100,010       18,238      289,006        3,624

Provision for loan losses ........................     190,000         --        245,000         --
                                                     ---------      -------     --------     -------- 

      Net interest (expense) income after
        provision for loan losses ................     (89,990)      18,238       44,006        3,624
                                                     ---------      -------     --------     -------- 

Noninterest income-
 Service charges and fees ........................      17,407         --         36,178         --
                                                     ---------      -------     --------     -------- 

Noninterest expense:
 Salaries and employee benefits ..................     154,141       81,699      367,187      169,577
 Occupancy expense ...............................      65,356       28,682      153,787       41,969
 Advertising .....................................      17,498         --         66,698         --
 Other ...........................................      83,256       65,526      209,478      107,255
                                                     ---------      -------     --------     -------- 

      Total noninterest expense ..................     320,251      175,907      797,150      318,801
                                                     ---------      -------     --------     -------- 

Loss before income tax benefit ...................    (392,834)    (157,669)    (716,966)    (315,177)

      Income tax benefit .........................    (134,900)     (60,461)    (238,100)    (120,361)
                                                     ---------      -------     --------     -------- 

Net loss .........................................   $(257,934)     (97,208)    (478,866)    (194,816)
                                                     =========      =======     ========     ======== 

Loss per share, basic ............................   $    (.55)       (5.84)       (1.03)      (20.11)
                                                     =========      =======     ========     ======== 

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

Weighted-average number of shares outstanding
 for basic .......................................     464,791       16,652*     464,791        9,884*
                                                     =========      =======     ========     ======== 
</TABLE>

* Represents shares issued to organizers during development stage.


     See Accompanying Notes to Condensed Consolidated Financial Statements.
                                       3


<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

            Condensed Consolidated Statement of Stockholders' Equity

                   Nine Months Ended September 30, 1998

<TABLE>
<CAPTION>

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

<S>                                                          <C>           <C>            <C>                       <C>      
Balance at December 31, 1997 .............................   $    4,648    4,628,542      (299,405)         --      4,333,785
                                                                                                                    ---------
Comprehensive income:
  Net loss (unaudited) ...................................         --           --        (478,866)         --       (478,866)

  Net change in unrealized gain on
    securities available for sale,
    net of tax benefit of $ 6,367
    (unaudited)  .........................................         --           --            --          10,388       10,388
                                                                                                                    ---------

Comprehensive income (unaudited) .........................         --           --            --            --       (468,478)
                                                             ----------    ---------     --------        ------     ---------

Balance at September 30, 1998 (unaudited).................   $    4,648    4,628,542     (778,271)       10,388     3,865,307
                                                             ==========    =========     ========        ======     =========

</TABLE>




     See Accompanying Notes to Condensed Consolidated Financial Statements.

                                       4

<PAGE>

                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                 Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                           Nine Months Ended
                                                                             September 30,
                                                                           -----------------
                                                                          1998            1997
                                                                          ----            ----
                                                                               (unaudited)
Cash flows from operating activities:
<S>                                                                 <C>                 <C>      
       Net loss .................................................   $   (478,866)       (194,816)
       Adjustments to reconcile net loss to net cash
         used in operating activities:
         Depreciation ...........................................         38,737            --
         Provision for loan losses ..............................        245,000            --
         Credit for deferred income taxes .......................       (238,100)       (120,361)
         Increase in accrued interest receivable and other assets       (173,718)        (59,869)
         Increase in accrued interest payable and
           other liabilities ....................................        258,769            --
                                                                    ------------       ---------

         Net cash used in operating activities ..................       (348,178)       (375,046)
                                                                    ------------       ---------

Cash flows from investing activities:
       Net increase in loans ....................................     (6,125,541)           --
       Purchases of securities available for sale ...............     (6,187,015)           --
       Principal repayments on securities available for sale ....      1,650,592            --
       Purchases of premises and equipment ......................       (382,940)       (331,524)
                                                                    ------------       ---------

         Net cash used in investing activities ..................    (11,044,904)       (331,524)
                                                                    ------------       ---------

Cash flows from financing activities:
       Net increase in demand, savings, money-market and
         NOW deposits ...........................................      2,737,440            --
       Net increase in time deposits ............................      9,171,591            --
       Net increase in official checks ..........................        119,335            --
       Net repayment of advances from organizers ................           --          (134,204)
       Retire common stock ......................................           --           (65,000)
       Sale of common stock .....................................           --         4,633,190
                                                                    ------------       ---------

         Net cash provided by financing activities ..............     12,028,366       4,433,986
                                                                    ------------       ---------

Net increase in cash and cash equivalents .......................        635,284       3,727,416

Cash and cash equivalents at beginning of period ................      2,465,817          11,959
                                                                    ------------       ---------

Cash and cash equivalents at end of period ......................   $  3,101,101       3,739,375
                                                                    ============       =========

Supplemental  disclosure of cash flow  information:
   Cash paid during the period for:
         Interest ...............................................   $    399,329          33,515
                                                                    ============       =========

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

       Noncash transactions-
         Accumulated other comprehensive income, change in
           unrealized gain on securities available for sale .....   $     10,388            --
                                                                    ============       =========
</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)      Basis  of  Presentation.  In  the  opinion  of  the  management  of The
         Commercial  Bancorp,  Inc.,  the  accompanying  condensed  consolidated
         financial  statements  contain all  adjustments  (consisting  of normal
         recurring  accruals) necessary to present fairly the financial position
         at September 30, 1998 and the results of operations  for the three- and
         nine-month periods ended September 30, 1998 and cash flows for the nine
         months ended September 30, 1998 and 1997. The results of operations and
         other data for the three- and  nine-month  periods ended  September 30,
         1998,  are not  necessarily  indicative of results that may be expected
         for the year ending December 31, 1998.

         The condensed consolidated financial statements include the accounts of
         The  Commercial   Bancorp,   Inc.  (the  "Holding   Company")  and  its
         wholly-owned  subsidiary,  The  Commercial  Bank of Volusia County (the
         "Bank")  (together,   the  "Company").   All  significant  intercompany
         accounts and transactions have been eliminated in consolidation.

(2)      Loan Impairment and Loan Losses. The average net investment in impaired
         loans and interest income  recognized and received on impaired loans is
         as follows:
<TABLE>
<CAPTION>

                                                                        Three Months Ended     Nine Months Ended
                                                                           September 30,         September 30,
                                                                        ------------------     -----------------
                                                                        1998           1997    1998        1997
                                                                        ----           ----    ----        ----

<S>                                                                   <C>               <C>   <C>            <C>  
Average investment in impaired loans ..............................   $597,275          --    199,092        --
Interest income recognized on impaired loans ......................   $ 14,185          --     44,366        --
Interest income received on impaired loans ........................   $   --            --     21,689        --
</TABLE>

         The activity in the allowance for loan losses was as follows:
<TABLE>
<CAPTION>

                                                                        Three Months Ended     Nine Months Ended
                                                                           September 30,         September 30,
                                                                        ------------------     -----------------
                                                                        1998           1997    1998        1997
                                                                        ----           ----    ----        ----

<S>                                                                   <C>                      <C>             
Balance at beginning of period ....................................   $ 90,000          --     35,000        --
Provision for loan losses .........................................    190,000          --    245,000        --
                                                                      --------      -------   -------    -------

Balance at end of period ..........................................   $280,000          --    280,000        --
                                                                      ========      =======   =======    =======
</TABLE>

(3)      Loss Per Share.  Basic loss per share  ("EPS") of common stock has been
         computed  on the  basis of the  weighted-average  number  of  shares of
         common  stock  outstanding.  Diluted EPS is not computed due to the net
         losses  incurred by the Company  during the three and nine months ended
         September 30, 1998 or 1997.  

                                                                     (continued)

                                       6
<PAGE>

                  THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (unaudited), Continued


(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 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,  at September  30, 1998,  that the Company  meets all capital
         adequacy requirements to which it is subject.

         As of  September  30,  1998,  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 Provisions:
                                 ---------------------               ------------------          ------------------
                                 Amount             %              Amount              %         Amount         %
                                 ------            ---             ------             ---        ------        ---
<S>                              <C>              <C>             <C>                <C>        <C>           <C>  
At September 30, 1998:
Total capital (to Risk-
Weighted Assets) .............   $3,376           30.8%           $  876             8.0%       $1,096        10.0%
Tier I Capital (to Risk-
Weighted Assets) .............    3,237           29.5               438             4.0           657         6.0
Tier I Capital
(to Average Assets)  .........    3,237           18.2               711             4.0           889         5.0
</TABLE>

                                       7
<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

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

       Comparison of September 30, 1998 (Unaudited) and 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-chartered  commercial bank
  in Sebring, Highlands County, Florida. The new Bank will become a wholly-owned
  subsidiary of the Holding  Company.  Management  expects to raise the required
  capital for the new bank from a public offering of the Company's common stock.

Liquidity and Capital Resources
  The Company's  primary  source of cash during the nine months ended  September
  30,  1998  was from  net  deposit  inflows  of  $11.9  million.  Cash was used
  primarily  for loan  originations  net of  repayments  of $6.1  million and to
  purchase securities available for sale of $6.2 million. At September 30, 1998,
  the  Company  had  unfunded  lines of credit  of  approximately  $517,000.  At
  September 30, 1998, the Bank exceeded its regulatory liquidity requirements.

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

                                                                     Nine Months
                                                                        Ended         Year Ended
                                                                     September 30,    December 31,
                                                                         1998             1997
                                                                     -------------    ------------
<S>                                                                     <C>              <C>   
Average equity as a percentage
   of average assets .............................................      26.46%           77.02%

Total equity to total assets at end of period ....................      20.46%           61.23%

Return on average assets (1)  ....................................      (4.12%)          (9.18%)

Return on average equity (1)  ....................................     (15.57%)         (11.91%)

Noninterest expense to average assets (1) ........................       6.86%           16.85%

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

Allowance for loan losses as a percentage of
   total loans at end of period ..................................       2.79%             .93%

</TABLE>

----------------------------------
(1) Annualized for the nine months ended September 30, 1998.

                                       8
<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 increased $11.8 million from $7.1 million at December 31, 1997 to
    $18.9 million at September  30, 1998,  primarily as a result of increases in
    securities  available for sale of $4.6 million and loans  receivable of $5.9
    million.  Deposits increased $11.9 million from $2.7 million at December 31,
    1997 to $14.6 million at September 30, 1998.

Results of Operations

Comparison of the Three-Month Periods Ended September 30, 1998 and 1997

    General.  Net  loss  for the  three  months  ended  September  30,  1998 was
         $257,934,  or $.55 per basic share compared to a net loss for the three
         months ended September 30, 1997 of $97,208.  At September 30, 1997, the
         Bank had not commenced  operations  and at September 30, 1998, the Bank
         had not achieved the asset size to operate profitably.

    Interest Income and Expense.  Interest income totaled $287,856 for the three
         months ended  September 30, 1998.  Interest  income earned on loans was
         $211,856. The average loan portfolio balance for the three months ended
         September  30, 1998 was $9.3 million with a  weighted-average  yield of
         9.08%. Interest on securities was $51,158. The average balance of these
         securities  was $5.3 million and the weighted  average  yield was 3.86%
         for the three  months  ended  September  30,  1998.  Interest  on other
         interest-earning  assets totaled $24,842.  The average balance of these
         assets for the three months ended  September  30, 1998 was $1.7 million
         with a weighted-average yield of 5.74%.

         Interest expense on deposits  amounted to $180,280 for the three months
         ended  September  30, 1998.  The average  balance for  interest-bearing
         deposits  for the  three  months  ended  September  30,  1998 was $13.8
         million and the weighted-average rate was 5.06%.

    Provision for Loan  Losses.  The  provision  for loan  losses is  charged to
         earnings to increase 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
         loan losses for the three months ended  September 30, 1998 was $190,000
         and the  allowance  for loan losses was $280,000 at September 30, 1998.
         The  provision  and  the  allowance  increased  primarily  due  to  the
         classification   of  two  commercial  loans  during  the  1998  period.
         Management has identified  certain  weaknesses in these borrowers,  but
         believes  with  this  addition,  that  the  allowance  is  adequate  at
         September 30, 1998.

    Noninterest  Expense.  Noninterest  expense  totaled  $320,251 for the three
         months  ended  September  30, 1998  compared to $175,907  for the three
         months ended September 30, 1997. Salaries and employee and benefits was
         the largest noninterest expense during 1998, amounting to $154,141. The
         Bank  had not  commenced  operations  during  the  three  months  ended
         September 30, 1997.

    Income Tax  Benefit.  The  income tax  benefit  for the three  months  ended
         September 30, 1998 was $134,900 (an effective  rate of 34.3%)  compared
         to $60,461  (an  effective  rate of 38.3%) for the three  months  ended
         September 30, 1997.

                                       9

<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

     Comparison of the Nine-Month Periods Ended September 30, 1998 and 1997

    General. Net loss for the nine months ended September 30, 1998 was $478,866,
         or $1.03 per basic  share  compared  to a net loss for the nine  months
         ended  September 30, 1997 of $194,816.  At September 30, 1997, the Bank
         had not commenced  operations  and at September 30, 1998,  the Bank had
         not achieved the asset size to operate profitably.

    Interest Income and Expense.  Interest income totaled  $713,774 for the nine
         months ended  September 30, 1998.  Interest  income earned on loans was
         $499,295.  The average loan portfolio balance for the nine months ended
         September  30, 1998 was $7.6 million with a  weighted-average  yield of
         8.80%.  Interest on  securities  was $82,638 for the nine months  ended
         September 30, 1998. The average  balance of securities was $2.7 million
         and the yield was 4.16% for the nine months ended  September  30, 1998.
         Interest on other interest-earning assets totaled $131,841. The average
         balance of these  assets for the nine months ended  September  30, 1998
         was $3.2 million with a weighted-average yield of 5.55%.

         Interest  expense on deposits  amounted to $415,410 for the nine months
         ended  September  30, 1998.  The average  balance for  interest-bearing
         deposits for the nine months ended September 30, 1998 was $10.8 million
         and the weighted-average rate was 5.15%.

    Provision for Loan  Losses.  The  provision  for loan  losses is  charged to
         earnings to increase 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
         loan losses for the nine months ended  September  30, 1998 was $245,000
         and the  allowance  for loan losses was $280,000 at September 30, 1998.
         The  provision  and  the  allowance  increased  primarily  due  to  the
         classification   of  two  commercial  loans  during  the  1998  period.
         Management has identified  certain  weaknesses in these borrowers,  but
         believes  with  this  addition,  that  the  allowance  is  adequate  at
         September 30, 1998.

    Noninterest  Expense.  Noninterest  expense  totaled  $797,150  for the nine
         months  ended  September  30, 1998  compared  to $318,801  for the nine
         months ended September 30, 1997. Salaries and employee and benefits was
         the largest noninterest expense during 1998, amounting to $367,187. The
         Bank  had  not  commenced  operations  during  the  nine  months  ended
         September 30, 1997.

    Income Tax  Benefit.  The  income  tax  benefit  for the nine  months  ended
         September 30, 1998 was $238,100 (an effective  rate of 33.2%)  compared
         to $120,361  (an  effective  rate of 38.2%) for the nine  months  ended
         September 30, 1997.

                                       10

<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

Year 2000

The  Company  is  acutely  aware of the many  areas  affected  by the Year  2000
computer issue as 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.

The Bank has formed a Year 2000  committee that is charged with the oversight of
completing the project on a timely basis.  The Bank has completed its awareness,
assessment  and  renovation  phases and is actively  involved in validating  and
implementing  its plan. At the present  time,  the Bank is well into its testing
phase and  anticipates  that  this  phase  will be  substantially  completed  by
December 31, 1998.  Since it routinely  upgrades and  purchases  technologically
advanced  software and hardware on a continual bases, the Company has determined
that the costs of making  modifications to correct any Year 2000 issues will not
materially affect reported results from operation.

The Company's vendors and suppliers have been contacted for written confirmation
of their product's readiness for the Year 2000 compliance. Negative or deficient
responses are analyzed and  periodically  reviewed to prescribe  timely  actions
with the Company's contingency planning. The Company'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.  The Company 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.

The Company 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.
The Company  plans to work on a one-on-one  basis with any borrower who has been
identified as having high Year 2000 risk exposure.

Although management believes that the Bank's system will be Year 2000 compliant,
a written  contingency plan has been developed to address problems that might be
caused from Year 2000 system failures.

                                       11

<PAGE>


                   THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY

                           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 6.  Exhibits and Reports on Form 8-K

(a) Exhibits.

    Exhibit Number     Description of Exhibit
    --------------     ----------------------

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

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

         4.1*          Specimen   Common   Stock    Certificate    (Registration
                       Statement)

         4.2*          Specimen Warrant Certificate (Registration Statement)

         4.4*          Company's Warrant Plan (Registration Statement)

         10.1**        1997 Employee Stock Option and Limited Rights Plan

         27            Financial Data Schedule (for SEC use only)

*   Incorporated  by reference to the exhibits  included in the  Company's  Form
    SB-2  Registration  Statement,  as filed with the  Securities  and  Exchange
    Commission on April 28, 1997 (Registration Number: 333-19201).

**  Incorporated  by reference to the exhibits  included in the  Company's  Form
    10-QSB for the quarter ended June 30, 1998, as filed with the Securities and
    Exchange Commission on August 4, 1998.

(b) Reports  on Form 8-K.  There were no reports on Form 8-K filed for the three
    months ended September 30, 1998.

                                       12

<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:          , 1998                     By:       /s/Gary G. Campbell
    -----------------                               ---------------------------
                                                    Gary G. Campbell, President
                                                    and Chief Executive Officer




Date:          , 1998                     By:       /s/Harvey E. Buckmaster
    -----------------                               ---------------------------
                                                    Harvey E. Buckmaster, 
                                                    Chief Financial Officer


                                       13