<PAGE>   1
                                                      Exhibit Index on
                                                              Page__
                                                              Page 1 of __ pages

                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1997

                         Commission file number 0-18209
                            CITIZENS BANCSHARES,INC.
                            ------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                     <C>       
                         Ohio                                                   34-1372535
           ---------------------------                                   -----------------------
           (State or other jurisdiction of                               (I.R.S. Employer
           incorporation or organization)                                 Identification No.)

           10 East Main Street, Salineville, Ohio                        43945
           --------------------------------------                        ------------------
           (Address of principal executive offices)

           Registrant's telephone number,                                 330-679-2328
           including area code                                            ------------

           Securities registered pursuant to Section 12(b) of the Act:  None
                                                                        ----
           Securities registered pursuant to Section 12(g) of the Act:
</TABLE>

                         Common Stock, Without Par Value
                 ----------------------------------------------
                                (Title of class)

         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
                                             ---  ---

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X]

         On February 23, 1998, there were 5,897,540 shares of Common Stock,
without par value, of Citizens Bancshares, Inc., outstanding. As of the same
date, the aggregate market value (based on the average of bid and asked prices)
of Citizens Bancshares, Inc.'s Common Stock held by non-affiliates was
$415,248,300.

                       Documents Incorporated by Reference
                       -----------------------------------

         Portions of Annual Report to Shareholders for the Year ended December
         31, 1997 (incorporated into Parts I, II and IV of this Form 10-K).

         Portions of Citizens Bancshares, Inc.'s Proxy Statement to be filed on
         or before April 30, 1998 (incorporated into Parts II and III of this
         Form 10-K).


<PAGE>   2



Item 1.  BUSINESS
-------  --------

(a)      General Development of Business
         -------------------------------

Citizens Bancshares, Inc. ("the Corporation") is a bank holding company
organized in 1982 under the laws of the State of Ohio and registered with the
Board of Governors of the Federal Reserve Board pursuant to the Bank Holding
Company Act of 1956, as amended. The Corporation has two wholly-owned subsidiary
banks, a wholly-owned reinsurance company subsidiary and a wholly-owned courier
company subsidiary.

THE CITIZENS BANKING COMPANY ("Citizens"), owned by the Corporation since 1982,
was organized and chartered under the laws of the State of Ohio in 1902.
Citizens is an insured bank under the Federal Deposit Insurance Act. Citizens
acquired ValueNet, an internet service provider, during 1997. Citizens accounts
for approximately 96% of the Corporation's consolidated assets.

FIRST NATIONAL BANK OF CHESTER ("FNB"), owned by the Corporation since January
1, 1990, was organized and chartered as a national banking association under the
laws of the United States on December 29, 1969 and formally opened for business
on January 2, 1970. FNB is an insured bank under the Federal Deposit Insurance
Act. This subsidiary accounts for approximately 4% of the Corporation's
consolidated assets.

FREEDOM FINANCIAL LIFE INSURANCE COMPANY ("Freedom"), owned by the Corporation
since August 1985, was organized and chartered under the laws of the State of
Arizona in 1985. Freedom is a reinsurance company providing credit life and
accident and health insurance coverage to Citizens' and FNB's loan customers.
This subsidiary accounts for less than 1% of the Corporation's consolidated
assets.

FREEDOM EXPRESS, INC. ("Express"), owned by the Corporation since 1994, was
chartered under the laws of the State of Ohio in 1984. Express is a courier
company formed to transport papers and documents between and among the states of
Ohio, Pennsylvania and West Virginia. This subsidiary accounts for less than 1%
of the Corporation's consolidated assets.

(b)      Industry Segment Information
         ----------------------------

The Corporation is a bank holding company engaged in the business of commercial
and retail banking, which accounts for substantially all of its revenue,
operating income and assets. Reference is made to the statistical information
regarding the Corporation included elsewhere herein and to Item 8 of this Form
10-K for financial information about the Corporation's banking business.

(c)      Business
         --------

The Corporation's business is primarily incident to its two subsidiary banks.
Its principal products and services involve collecting customer deposits, making
loans and purchasing investments.

Interest and fees on loans accounted for 66.9% of total revenue in 1997, 72.0%
in 1996 and 70.6% in 1995. Interest on securities is also a significant source
of revenue, accounting for 25.0% of revenues in 1997, 21.4% in 1996 and 22.6% in
1995. Total cash and cash equivalents of $32,162,000 at year-end 1997 and
increased $4,795,000 from year-end 1996. Citizens' loan portfolio does not
include any foreign-based loans, loans to lesser developed countries, or loans
to the corporation or its other subsidiaries.



                                        2

<PAGE>   3




The Corporation's business is not seasonal nor is it dependent upon a single or
small group of customers. In the opinion of management, the Corporation does not
have exposure to material costs associated with environmental hazardous waste
clean-up.

Competition-

The primary market area for Citizens is eastern Ohio and consists of all of
Columbiana County, all of Carroll County, portions of Stark, Mahoning and
Belmont counties and the northern 75% of Jefferson County. A secondary market
area is the southern portion of Jefferson County, the panhandle of West Virginia
north of Follansbee, and a small portion of Pennsylvania south of Beaver and
west of Darlington to the Ohio border.

FNB's primary market area is Hancock County, West Virginia, with overlap into
the East Liverpool, Ohio market.

Citizens competes not only with other locally owned commercial banks and savings
institutions, but with larger regional financial institutions in offering
consumer and commercial financial service products.

FNB primarily competes with locally owned commercial banks, credit unions and
savings institutions.

Employees-

The Corporation has no employees; however, Citizens, FNB and Express employ
approximately 375 full-time equivalents. The Corporation and its subsidiary
banks are not parties to any collective bargaining agreements.
Management considers its relationship with its employees to be good.

Financial Information about Foreign and Domestic Operations and Export Sales-

The Corporation and its subsidiaries do not have any banking offices located in
a foreign country and with the exception of a $5,000 State of Israel bond, has
no foreign assets, liabilities or related income and expense for the years
presented in the financial statements incorporated by reference herein.

Supervision and Regulation-

Management is not aware of any current recommendations by regulatory authorities
which, if they were to be implemented, would have a material effect on the
Corporation.

The Corporation is a bank holding company under the Bank Holding Company Act of
1956, as amended, which restricts the activities of the Corporation and the
acquisition by the Corporation of voting stock or assets of any bank, savings
association or other company. The Corporation is also subject to the reporting
requirements of, and examination and regulation by, the Board of Governors of
the Federal Reserve Bank on transactions with affiliates, including any loans or
extensions of credit to the bank holding company or any of its subsidiaries,
investments in the stock or other securities thereof and the taking of such
stock or securities as collateral for loans to any borrower; the issuance of
guarantees, acceptances or letters of credit on behalf of the bank holding
company and its subsidiaries; purchases or sales of securities or other assets;
and the payment of money or furnishing of services to the bank holding company
and other subsidiaries. Banks and bank holding companies are prohibited from
engaging in certain tie-in arrangements in connection with extensions of credit
or provision of property or services.



                                        3

<PAGE>   4



Bank holding companies are also restricted in acquiring shares or substantially
all of the assets of any bank located outside the state in which the operations
of the holding company's banking subsidiaries are principally conducted. Such an
acquisition must be specifically authorized by statute of the state of the bank
whose shares or assets are to be acquired. Ohio laws permit interstate banking
on a reciprocal basis. Bank holding companies and banks located in Ohio may
acquire or organize bank holding companies and banks in other states;
conversely, bank holding companies and banks in such states may acquire or
organize bank holding companies or acquire or charter banks in Ohio if the other
state enacts effective reciprocal legislation granting Ohio bank holding
companies and banks the same or greater authority.

Banks-

As an Ohio chartered bank, Citizens is supervised and regulated by the Ohio
Division of Financial Institutions. Citizens is also a member of the Federal
Reserve and is subject to their supervision and regulation. As a national bank,
FNB is supervised and regulated by the Comptroller of the Currency. The deposits
of Citizens and FNB are insured primarily by the Bank Insurance Fund ("BIF") of
the Federal Deposit Insurance Corporation ("FDIC") and both entities are subject
to the applicable provisions of the Federal Deposit Insurance Act. Approximately
$107 million of Citizens' deposits are insured by the Savings Association
Insurance Fund of the FDIC. A subsidiary of a bank holding company can be liable
for reimbursing the FDIC if the FDIC incurs or anticipates a loss because of a
default of another FDIC insured subsidiary of the bank holding company or FDIC
assistance provided to such subsidiary is in danger of default.

Various requirements and restrictions under the laws of the United States and
the State of Ohio affect the operations of Citizens and FNB, including
requirements to maintain reserves against deposits, restrictions on the nature
and amount of loans which may be made and the interest rate which may be charged
thereon, restrictions relating to investments and other activities, limitations
based on capital and surplus, limitations on payment of dividends and
limitations on branching.

The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies and for state member banks. The risk-based capital guidelines
include both a definition of capital and a framework for calculating risk
weighted assets by assigning assets and off-balance sheet items to broad risk
categories. FNB is subject to similar capital requirements adopted by the
Comptroller of the Currency, and Citizens is subject to similar capital
requirements adopted by the FDIC and the Ohio Division of Financial
Institutions.

The Corporation and its subsidiaries currently satisfy all regulatory capital
requirements. Failure to meet the capital guidelines could subject a banking
institution to a variety of enforcement remedies available to federal regulatory
authorities, including the termination of deposit insurance by the FDIC.


            CERTAIN STATISTICAL INFORMATION REGARDING THE CORPORATION
            ---------------------------------------------------------

         The following schedules present, for the periods indicated, certain
financial and statistical information relative to the Corporation as required
under the Securities and Exchange Commission's Industry Guide 3, "Statistical
Disclosure By Bank Holding Companies," or a specific reference as to the
location of the required disclosures in the Corporation's 1997 Annual Report to
Shareholders (Exhibit 13), portions of which are incorporated in this Form 10-K
by reference.




                                        4

<PAGE>   5



I. A. and B.  AVERAGE BALANCE SHEET AND RELATED ANALYSIS OF NET INTEREST 
              ----------------------------------------------------------
              EARNINGS:
              --------

         The information set forth under the heading "Financial Review --
Average Balance Sheets and Related Yields and Rates" on page 22 of the
Corporation's 1997 Annual Report to Shareholders is incorporated herein by
reference.

C.       INTEREST RATES AND INTEREST DIFFERENTIAL RATE VOLUME ANALYSIS OF 
         ----------------------------------------------------------------
         CHANGES IN INTEREST INCOME AND INTEREST EXPENSE:
         -----------------------------------------------

         The information set forth on page 23 of the Corporation's 1997 Annual
Report to Shareholders is incorporated herein by reference.



                                        5

<PAGE>   6





II.      INVESTMENT PORTFOLIO
         --------------------

A. The amortized costs, unrealized gains and losses and estimated fair values
are as follows at December 31:

<TABLE>
<CAPTION>
                                                                           1997
                                                     ----------------------------------------------
                                                                    GROSS        GROSS    ESTIMATED
(dollars in thousands)                              AMORTIZED  UNREALIZED   UNREALIZED         FAIR
                                                         COST       GAINS       LOSSES        VALUE

                                                     --------    --------     --------     --------
<S>                                                  <C>         <C>          <C>          <C>     
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury securities                             $  6,006    $     50     $     (2)    $  6,054
U.S. Government agencies and corporations              55,993         935           (6)      56,922
Obligations of states and political subdivisions          100                                   100
Corporate and other securities                          5,000         185                     5,185
Mortgage-backed securities
   GNMA, FHLMC and FNMA certificates                  221,447       1,045         (413)     222,079
   Agency collateralized mortgage obligations          16,980          37         (157)      16,860
   Other                                                4,832          26                     4,858
                                                     --------    --------     --------     --------
     Total debt securities available for sale         310,358       2,278         (578)     312,058
Marketable equity securities                           16,274       3,397                    19,671
                                                     --------    --------     --------     --------
     Total securities available for sale             $326,632    $  5,675     $   (578)    $331,729
                                                     ========    ========     ========     ========


SECURITIES HELD TO MATURITY:
U.S. Treasury securities                             $ 35,624    $    138     $     (3)    $ 35,759
U.S. Government agencies and corporations                 100                       (2)          98
Obligations of states and political  subdivisions      21,669         417                    22,086
Other                                                       5                                     5
                                                     --------    --------     --------     --------
    Total securities held to maturity                $ 57,398    $    555     $     (5)    $ 57,948
                                                     ========    ========     ========     ========
</TABLE>



                                        6

<PAGE>   7



II.    INVESTMENT PORTFOLIO (Continued)
       --------------------------------


<TABLE>
<CAPTION>

                                                                                1996
                                                       ----------------------------------------------------
                                                                        GROSS          GROSS      ESTIMATED
(dollars in thousands)                                AMORTIZED    UNREALIZED     UNREALIZED           FAIR
                                                           COST         GAINS         LOSSES          VALUE
                                                       --------      --------       --------       --------
<S>                                                    <C>           <C>            <C>            <C>     
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury securities                               $ 11,001      $     80       $     (9)      $ 11,072
U.S. Government agencies and corporations                27,279           379            (77)        27,581
Obligations of states and political subdivisions            100                                         100
Corporate and other securities                               14                                          14
Mortgage-backed securities
   GNMA, FHLMC and FNMA certificates                    164,027           838           (641)       164,224
   Agency collateralized mortgage obligations            19,200                         (269)        18,931
   Other                                                  6,076             7             (7)         6,076
                                                       --------      --------       --------       --------
     Total debt securities available for sale           227,697         1,304         (1,003)       227,998
Marketable equity securities                             11,452           943            (18)        12,377
                                                       --------      --------       --------       --------
     Total securities available for sale               $239,149      $  2,247       $ (1,021)      $240,375
                                                       ========      ========       ========       ========


SECURITIES HELD TO MATURITY:
U.S. Treasury securities                               $ 42,342      $    132       $    (13)      $ 42,461
U.S. Government agencies and corporations                   100                           (2)            98
Obligations of states and political  subdivisions        22,783           189            (82)        22,890
Other                                                         5                                           5
                                                       --------      --------       --------       --------
    Total securities held to maturity                  $ 65,230      $    321       $    (97)      $ 65,454
                                                       ========      ========       ========       ========
</TABLE>








                                        7

<PAGE>   8



II.    INVESTMENT PORTFOLIO (Continued)
       --------------------------------
                                        
<TABLE>
<CAPTION>

                                                                               1995
                                                      ----------------------------------------------------
                                                                       GROSS          GROSS      ESTIMATED
(dollars in thousands)                               AMORTIZED    UNREALIZED     UNREALIZED           FAIR
                                                          COST         GAINS         LOSSES          VALUE
                                                      --------      --------       --------       --------

<S>                                                   <C>           <C>            <C>            <C>     
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury securities                              $  8,902      $     72       $     (1)      $  8,973
U.S. Government agencies and corporations               30,657           202            (73)        30,786
Corporate and other securities                             444                           (7)           437
Obligations of states and political subdivisions         5,931           148            (60)         6,019
Mortgage-backed securities
   GNMA, FHLMC and FNMA certificates                   135,323         1,031           (319)       136,035
   Agency collateralized mortgage obligations           10,463             9           (166)        10,306
   Other                                                 7,605             8            (10)         7,603
                                                      --------      --------       --------       --------
     Total debt securities available for sale          199,325         1,470           (636)       200,159
Marketable equity securities                             6,209           620                         6,829
                                                      --------      --------       --------       --------
     Total securities available for sale              $205,534      $  2,090       $   (636)      $206,988
                                                      ========      ========       ========       ========


SECURITIES HELD TO MATURITY:
U.S. Treasury securities                              $ 35,300      $    422       $     (1)      $ 35,721
U.S. Government agencies and corporations                  100                           (2)            98
Obligations of states and political subdivisions        17,779           183           (102)        17,860
Other                                                      527            32                           559
                                                      --------      --------       --------       --------
     Total securities held to maturity                $ 53,706      $    637       $   (105)      $ 54,238
                                                      ========      ========       ========       ========
</TABLE>



                                        8

<PAGE>   9



II.  INVESTMENT PORTFOLIO (Continued)
     --------------------------------
(dollars in thousands)


B.       The following is a schedule of maturities or next rate adjustment date
         of securities available for sale and the related weighted average yield
         as of December 31, 1997. This schedule is prepared using estimated fair
         value except for the yields which are calculated using the amortized
         cost of the related securities. Equity securities of $19,671 have been
         excluded from this schedule.


MATURITY OR NEXT RATE ADJUSTMENT DATE

<TABLE>
<CAPTION>
                                   0-3 MONTHS         3 MOS -1 YR          1-5 YRS             5-10 YRS           OVER 10 YRS
                                AMOUNT    YIELD   AMOUNT      YIELD   AMOUNT      YIELD   AMOUNT       YIELD    AMOUNT     IELD
                                ------    -----   ------      -----   ------      -----   ------       -----    ------     ----
<S>                           <C>         <C>     <C>         <C>     <C>         <C>     <C>          <C>     <C>         <C>  
U.S. Treasury                 $    750    5.63%   $  2,745    5.55%   $  2,559    6.79%
U.S. Government agencies
 and corporations                                      499    5.26       4,272    6.62    $ 52,151     7.33%
Obligations of states and                                                                      100     7.00
  political subdivisions
Other securities                                                                                               $  5,185    9.87%
                              --------            --------            --------            --------             --------
Total investment securities        750               3,244               6,831              52,251                5,185
Mortgage-backed securities       7,177    6.43      69,521    7.09      32,993    6.62      50,872     6.82      83,234    7.19
                              --------            --------            --------            --------             --------

Total debt securities
  available for sale          $  7,927    6.36%   $ 72,765    7.02%   $ 39,824    6.63%   $103,123     7.08%   $ 88,419    7.34%
                              ========            ========            ========            ========             ========
</TABLE>


The following is a schedule of maturities or next rate adjustment date of each
category of securities held to maturity and the related weighted average yield
as of December 31, 1997. This schedule is prepared with the amortized cost of a
security maturing or being placed within the time bracket at the next interest
rate adjustment without regard to principal repayment.


MATURITY OR NEXT RATE ADJUSTMENT DATE

<TABLE>
<CAPTION>
                                   0-3 MONTHS          3 MOS -1 YR            1-5 YRS             5-10 YRS          OVER 10 YRS
                                AMOUNT     YIELD    AMOUNT      YIELD    AMOUNT      YIELD   AMOUNT    YIELD     AMOUNT     YIELD
                                ------     -----    ------      -----    ------      -----   ------    -----     ------     -----
<S>                           <C>          <C>     <C>          <C>     <C>         <C>     <C>          <C>     <C>          <C>  
U.S. Treasury                 $  3,391     6.72%   $  8.503     6.07%   $ 23,730    5.96%
U.S. Government agencies
  and corporations                                                           100    6.60
Obligations of states and
  political subdivisions           915     9.69         983     8.86      15,025    7.35    $  4,395     7.77%   $    351     8.70%
Other securities                                                               5    5.50
                              --------             --------             --------            --------             --------

Total investment securities   $  4,306     7.35%   $  9,486     6.36%   $ 38,860    6.50%   $  4,395     7.77%   $    351     8.70%
                              ========             ========             ========            ========             ========
</TABLE>





                                        9

<PAGE>   10



II.  INVESTMENT PORTFOLIO (Continued)
     --------------------------------

         The weighted average yield is based on the effective yield for all
         bonds. The yields on the tax exempt portfolio have been adjusted for a
         tax equivalency rate of 35%. Mortgage-backed securities have been
         classified at their final stated maturity date, except for variable
         rate securities which are classified at their next rate adjustment
         date.

C.       Excluding those holdings of the investment portfolio in U.S. Treasury
         securities and other agencies and corporations of the U.S. Government,
         there were no investments in securities of any one issuer which
         exceeded 10% of consolidated shareholders' equity of the Corporation at
         December 31, 1997.


III. LOAN PORTFOLIO
     --------------

A.       TYPES OF LOANS - Total loans on the consolidated balance sheets are 
         comprised of the following classifications at December 31.

(dollars in thousands)

<TABLE>
<CAPTION>

                                   1997         1996         1995         1994         1993
                               --------     --------     --------     --------     --------
<S>                            <C>          <C>          <C>          <C>          <C>     
Commercial, financial
     and agricultural          $285,940     $254,304     $232,506     $193,310     $159,347
Real estate mortgage            297,603      280,779      281,060      280,278      274,210
Construction                      5,329        4,704        6,202        6,494        7,160
Consumer                         57,084       48,269       51,098       50,414       53,267
Real estate mortgage loans
      held for sale               6,335        7,191        3,908          584        9,154
                               --------     --------     --------     --------     --------

      Total Loans              $652,291     $595,247     $574,774     $531,080     $503,138
                               ========     ========     ========     ========     ========
</TABLE>

B.   Maturities and Sensitivities of Loans to Changes in Interest Rates - The
     following is a schedule of maturities by fixed and variable rates as of
     December 31, 1997:


<TABLE>
<CAPTION>
                                                 DUE IN                    DUE IN                 DUE AFTER
                                                 1 YEAR              1 YR - 5 YRS                   5 YEARS                 TOTAL
                                                 ------              ------------                   -------                 -----
<S>                                            <C>                      <C>                       <C>                   <C>      
Fixed rate commercial,
 financial and agricultural                    $  3,375                 $  12,189                 $  16,354             $  31,918
Fixed rate construction                           1,760                         1                     3,568                 5,329
                                               ---------                ---------                 ---------             ---------
     Total                                     $  5,135                 $  12,190                 $  19,922             $  37,247
                                               ========                 =========                 =========             =========


Variable rate commercial,
 financial and agricultural                     $27,511                  $110,798                  $115,713              $254,022
Variable rate construction
                                                -------                  --------                  --------              --------
     Total                                      $27,511                  $110,798                  $115,713              $254,022
                                                =======                  ========                  ========              ========
</TABLE>


                                       10

<PAGE>   11



III.     LOAN PORTFOLIO (Continued)
         --------------------------

C.       Risk Elements
         -------------

         1) Nonaccrual, Past Due and Restructured Loans at December 31.


<TABLE>
<CAPTION>
(dollars in thousands)                       1997       1996      1995       1994       1993
                                           ------     ------     ------     ------     ------

<S>                                        <C>        <C>        <C>        <C>        <C>   
(a)      Loans accounted for on
         a nonaccrual basis                $1,197     $1,158     $2,593     $2,992     $3,152

(b)      Accruing loans which are
         contractually past due 90
         days or more as to interest
         or principal payments              1,333        674        549      2,152      1,298

(C)      Loans which are "troubled
         debt restructurings" as
         defined in Statement of
         Financial Accounting
         Standards No. 15 (exclusive
         of loans in (a) or (b) above)        211        418        825                   317
                                           ------     ------     ------     ------     ------
         Total                             $2,741     $2,250     $3,967     $5,144     $4,767
                                           ======     ======     ======     ======     ======
</TABLE>


<TABLE>
<CAPTION>

                                                                         1997
                                                                         ----
<S>                                                                     <C>
Gross interest income that would have been 
recorded on nonaccrual loans in the period 
if the loans had been current, in accordance 
with their original terms and had been 
outstanding throughout the period or since
 origination, if held for part of the period                             $148

Less:

Interest income actually recorded on nonaccrual
loans and included in interest income for the period                       31
                                                                         ----

Interest income not recognized during the period                         $117
                                                                         ====
</TABLE>



                                       11

<PAGE>   12



III.     LOAN PORTFOLIO (Continued)
         ---------------------------
(dollars in thousands)
Information regarding impaired loans at December 31:
<TABLE>
<CAPTION>

                                                     1997          1996           1995
                                                    -------       -------       --------
<S>                                   <C>           <C>           <C>           <C>    
Balance of impaired loans at December 31,           $ 2,287       $ 3,116       $ 4,610
Less portion for which no allowance for loan
  losses is allocated                                  (799)         (386)       (1,608)
                                                    -------       -------       -------
Portion of impaired loan balance for which an
  allowance for credit losses is allocated          $ 1,488       $ 2,730       $ 3,002
                                                    =======       =======       =======
Portion of allowance for loan losses allocated
  to the impaired loan balance at December 31,      $   189       $   416       $   864
                                                    =======       =======       =======

Average investment in impaired loans during
  the year                                          $ 2,602       $ 3,801       $ 4,532
                                                    =======       =======       =======

Interest income recognized on impaired loans
  including interest income recognized on cash
  basis during the year                             $   203       $   327       $   258
                                                    =======       =======       =======

Interest income recognized on impaired loan on
  cash basis during the year                        $   194       $   239       $   241
                                                    =======       =======       =======
<FN>
---------------------

  1)     The policy for placing loans on nonaccrual status is to cease accruing
         interest on loans when management believes that the collection of
         interest is doubtful, or when loans are past due as to principal and
         interest ninety days or more, except that in certain circumstances
         interest accruals are continued on loans deemed by management to be
         fully collectible. In such cases, the loans are individually evaluated
         in order to determine whether to continue income recognition after
         ninety days beyond the due dates. When loans are charged-off, any
         interest accrued in the current fiscal year is charged against interest
         income.

  2)     Potential Problem Loans - As of December 31, 1997, there were
         approximately $1,612,000 of loans representing the remaining balances
         of loans classified as substandard for regulatory purposes that have
         not been disclosed in Item III C. These loans and their potential loss
         exposure have been considered in management's analysis of the adequacy
         of the allowance for loan losses. These loans do not represent trends
         or uncertainties which management reasonably expects will materially
         impact future operating results, liquidity, or capital resources.

  3)     Foreign Outstandings - There were no foreign outstandings for any year 
         presented.

  4)     Loan Concentrations - As of December 31, 1997, there were no
         concentrations of loans greater than 10% of total loans which were not
         otherwise disclosed as a category of loans pursuant to Item III.A.
         above. Also refer to Note 1 to the Consolidated Financial Statements
         regarding concentration of credit risk on page 15 of the 1997 Annual
         Report to Shareholders incorporated herein by reference. Citizens
         provides financing to a group of related enterprises involved in
         purchasing pools of one-to-four family residential, home equity and
         other consumer loans. Such loans totaled approximately $73,543,000 at
         December 31, 1997. The source of repayment for these loans is the
         underlying pools of residential mortgage and consumer debt which
         represent diverse loan types and geographic distribution.
</TABLE>




                                       12

<PAGE>   13



III.     LOAN PORTFOLIO (Continued)
         --------------------------

 5)      No material amount of loans classified during Citizens' and FNB's most
         recent regulatory examinations as loss, substandard, doubtful or
         special mention have been excluded from the amounts discussed as
         nonaccrual, past due ninety days or more, restructured or potential
         problem loans.

D.       Other Interest Bearing Assets - As of December 31, 1997, there were no
         other interest bearing assets that would be required to be disclosed
         under Item III.C.1. or 2. if such assets were loans.

IV.      SUMMARY OF LOAN LOSS EXPERIENCE
         -------------------------------

A.       The following schedule presents an analysis of the allowance for loan
         losses, average loan data and related ratios for the years ended
         December 31:

(dollars in thousands)
<TABLE>
<CAPTION>
                                            1997             1996             1995              1994              1993
                                         ---------        ---------        ---------        ---------        ---------
<S>            <C>                       <C>              <C>              <C>              <C>              <C>      
LOANS
-----
Average loans outstanding
 during period (1)                       $ 620,363        $ 580,616        $ 543,285        $ 510,219        $ 487,152
                                         =========        =========        =========        =========        =========

ALLOWANCE FOR LOAN LOSSES
-------------------------
Balance at the beginning of
 the period                              $  11,350        $  10,895        $  10,393        $   9,728        $   7,889

Loans charged-off:
 Commercial and
  agricultural loans                          (746)            (588)          (1,325)          (1,609)          (2,134)
 Real estate mortgage loans                   (172)            (668)            (549)            (346)            (197)
 Consumer loans                             (1,035)          (1,188)            (878)            (966)            (647)
                                         ---------        ---------        ---------        ---------        ---------
     Total loans charged-off                (1,953)          (2,444)          (2,752)          (2,921)          (2,978)
                                         ---------        ---------        ---------        ---------        ---------

Recoveries:
 Commercial and agricultural
   loans                                       648              866              706              829              856
 Real estate-mortgage loans                    133               70              214              101               62
 Consumer loans                                364              349              310              291              298
 Loans secured by leases                                                                                            28
                                         ---------        ---------        ---------        ---------        ---------
     Total loan recoveries                   1,145            1,285            1,230            1,221            1,244
                                         ---------        ---------        ---------        ---------        ---------
 Net loans charged-off                        (808)          (1,159)          (1,522)          (1,700)          (1,734)
 Provision charged to
  operating expense                          1,646            1,614            2,024            2,365            3,573
                                         ---------        ---------        ---------        ---------        ---------
Balance at the end of
 the period                              $  12,188        $  11,350        $  10,895        $  10,393        $   9,728
                                         =========        =========        =========        =========        =========

Ratio of net charge-offs to average
 loans outstanding for the period              .13%             .20%             .28%             .33%             .36%

<FN>
----------------------------
(1) Net of unearned income.
</TABLE>


                                       13

<PAGE>   14



IV.      SUMMARY OF LOAN LOSS EXPERIENCE (Continued)
         -------------------------------------------

         The allowance for loan losses balance and the provision charged to
         expense are determined by management based upon periodic reviews of the
         loan portfolio, prior loan loss experience, economic conditions and
         various other circumstances which are subject to change over time. In
         making this judgment, management reviews selected large loans,
         delinquent loans, nonaccrual loans and problem loans. The
         collectibility of these loans is evaluated after considering the
         current financial position of the borrower, the estimated market value
         of the collateral and guarantees, and the priority of the Corporation's
         lien position. Subjective judgments as to the probability of loss and
         the amount of such loss are formed on these loans, as well as other
         loans in the aggregate.

B.       The following schedule is a breakdown of the allowance for loan losses
         allocated by type of loan and related percentages.

<TABLE>
<CAPTION>

                                                                      Percentage of
                                                                      Loans in Each
                                                         Allowance      Category to
                                                           Amount       Total Loans
                                                          -------     -------------
(dollars in thousands)
<S>                                                       <C>              <C>  
December 31, 1997
 Commercial, financial and agricultural                   $   898          43.8%
 Real estate mortgage                                         489          45.6
 Real estate construction                                                    .8
 Consumer                                                     974           8.8
 Unallocated                                                9,827
 Real estate mortgage loans
  held for sale                                                             1.0
                                                          -------         -----
     Total                                                $12,188         100.0%
                                                          =======         =====

December 31, 1996
 Commercial, financial and agricultural                   $ 1,119          42.7%
 Real estate mortgage                                         789          47.2
 Real estate construction                                                    .8
 Consumer                                                     636           8.1
 Unallocated                                                8,806
 Real estate mortgage loans
  held for sale                                                             1.2
                                                          -------         -----
     Total                                                $11,350         100.0%
                                                          =======         =====

December 31, 1995
 Commercial, financial and agricultural                   $ 2,088          40.5%
 Real estate mortgage                                         546          48.9
 Real estate construction                                                   1.0
 Consumer                                                     669           8.9
 Unallocated                                                7,592
 Real estate mortgage loans
  held for sale                                                              .7
                                                          -------         -----
     Total                                                $10,895         100.0%
                                                          =======         =====
</TABLE>


                                       14

<PAGE>   15




IV.      SUMMARY OF LOAN LOSS EXPERIENCE (Continued)
         -------------------------------------------
(dollars in thousands)                                             
<TABLE>
<CAPTION>
                                                                     Percentage of
                                                                     Loans in Each
                                                         Allowance     Category to
                                                          Amount       Total Loans
                                                          -------         -----
<S>                                                       <C>              <C>  
December 31, 1994
 Commercial, financial and agricultural                   $ 2,926          36.4%
 Real estate mortgage                                         908          52.8
 Real estate construction                                      58           1.2
 Consumer                                                     589           9.5
 Unallocated                                                5,912
 Real estate mortgage loans
  held for sale                                                              .1
                                                          -------         -----
     Total                                                $10,393         100.0%
                                                          =======         =====


December 31, 1993
 Commercial, financial and agricultural                   $ 3,812          31.7%
 Real estate mortgage                                         937          54.5
 Real estate construction                                                   1.4
 Consumer                                                     893          10.6
 Unallocated                                                4,086
 Real estate mortgage loans
  held for sale                                                             1.8
                                                          -------         -----
     Total                                                $ 9,728         100.0%
                                                          =======         =====
</TABLE>

While management's periodic analysis of the adequacy of the allowance for loan
losses may allocate portions of the allowance for specific problem loan
situations, the entire allowance is available for any loan charge-offs that
occur.

V.   DEPOSITS
     --------

The following is a schedule of average deposit amounts and average rates paid on
each category for the period indicated:
<TABLE>
<CAPTION>

                            AVERAGE AMOUNTS OUTSTANDING                AVERAGE RATE PAID
                               YEAR ENDED DECEMBER 31,             YEAR ENDED DECEMBER 31,
                         -------------------------------------    ------------------------------
                           1997          1996          1995        1997        1996       1995
                         --------      --------      --------     -------     ------     -------
<S>                        <C>           <C>           <C>         <C>        <C>        <C>  
Noninterest-bearing
 demand deposits         $ 65,603      $ 63,951      $ 61,487
Interest-bearing
 demand deposits           85,223        88,963        92,377      2.31%      2.23%      2.27%
Savings deposits          229,457       243,635       254,011      3.08       3.17       3.42
Time deposits             347,999       310,252       274,138      5.60       5.51       5.37
                         --------      --------      --------
     Total               $728,282      $706,801      $682,013
                         ========      ========      ========
</TABLE>


                                       15

<PAGE>   16




V.   DEPOSITS  (Continued)
     ---------------------
(dollars in thousands)

 The following is a schedule of maturities of time deposits in amounts of
$100,000 or more as of December 31, 1997:
<TABLE>
<CAPTION>

                                                             DECEMBER 31, 1997
                                                             -----------------
<S>                                                               <C>    
Three months or less                                              $43,155
Three through six months                                            6,713
Six through twelve months                                           5,553
Over twelve months                                                 17,796
                                                                  -------
  Total                                                           $73,217
                                                                  =======
</TABLE>

VI.           RETURN ON EQUITY AND ASSETS
              ---------------------------
              The information required by this section is set forth under the
              heading "Selected Financial Data" on page 20 of the Corporation's
              1997 Annual Report to Shareholders and is incorporated herein by
              reference.

VII.          SHORT-TERM BORROWINGS
              ---------------------
              The following table sets forth certain information relative to the
              securities sold under agreements to repurchase and Federal funds
              purchased. Generally, repurchase agreements are sold to local
              government entities and businesses and have maturity terms of
              overnight to 30 days. Federal funds purchased generally have
              overnight terms.

<TABLE>
<CAPTION>
                                                      DECEMBER 31,
                                                      ------------
                                          1997            1996           1995
                                         --------       --------       --------
Total securities sold under agree-
 ment to repurchase and Federal
<S>                                      <C>            <C>            <C>     
 funds purchased at period-end           $ 74,664       $ 87,939       $ 20,536

Weighted average interest
 rate at period-end                          5.76%          6.08%          5.12%

Maximum outstanding at any
 month-end during the year               $140,857       $ 87,939       $ 39,526

Average amount outstanding                102,861         43,952         31,254

Weighted average rates during
 the year                                    5.47%          5.22%          5.52%
</TABLE>






                                       16

<PAGE>   17



Item 2.       PROPERTIES

The Corporation does not own any properties. Citizens owns the properties listed
below. All properties owned by Citizens are free from any major encumbrances.

     Location                                               Principal Use
     --------                                               -------------

     Salineville Office                                      Branch Office
     50 East Main Street
     Salineville, Ohio

     Richmond Office                                         Branch Office
     Main Street
     Richmond, Ohio

     Bergholz Office                                         Branch Office
     256 Second Street
     Bergholz, Ohio

     Island Creek Office                                     Branch Office
     State Route 213
     Steubenville, Ohio

     Wellsville Downtown Office                              Branch Office
     1210 Main Street
     Wellsville, Ohio

     Carrollton Downtown Office                              Branch Office
     111 Second Street, S.W.
     Carrollton, Ohio

     Carrollton Trump Office                                 Branch Office
     1045 Trump Road
     Carrollton, Ohio

     East Palestine Office                                   Branch Office
     187 North Market Street
     East Palestine, Ohio

     East Palestine Office                                   Branch Office
     76 East Main Street
     East Palestine, Ohio





                                       17

<PAGE>   18



     Location                                       Principal Use
     --------                                       -------------

     Washingtonville Office                         Branch Office
     795 West Main Street
     Washingtonville, Ohio

     Salem West Office                              Branch Office
     193 South Lincoln Avenue
     Salem, Ohio

     Salem East Office                              Branch Office
     2525 Southeast Boulevard
     Salem, Ohio

     Steubenville Office                            Branch Office
     127 South Fourth Street
     Steubenville, Ohio

     Lisbon North Office                            Branch Office
     7470 SR 45
     Lisbon, Ohio

     Lisbon Firestone Office                        Branch Office
     24 North Park Avenue
     Lisbon, Ohio

     Kaiser Building                                Storage Facility
     10 East Main Street
     Salineville, Ohio

     Central Office                                 Data Processing
     70 East Main Street
     Salineville, Ohio

     Baker Building                                 Legal Department
     66 East Main Street
     Salineville, Ohio

     Rawlings Building                              Commercial Loan Department
     110 East Main Street
     Salineville, Ohio

     Thompson Building                              Programming and Audit
     60 East Main Street                             Department Offices
     Salineville, Ohio


                                       18

<PAGE>   19



     Location                                              Principal Use
     --------                                              -------------
     
     Johnson Building                                      Administrative
     10 East Main Street
     Salineville, Ohio

     Hart Building                                         Storage Facility
     23 East Main Street
     Salineville, Ohio

     Leetonia Office                                        Branch Office
     243 Main Street
     Leetonia, Ohio

     Alliance Office (Downtown)                             Branch Office
     101 East Main Street
     Alliance, Ohio

     Minerva Office                                         Branch Office
     622 East Lincolnway
     Minerva, Ohio

     Alliance (Carnation Mall) Office                       ATM Office
     2490 West State Street
     Alliance, Ohio

     Sebring Office                                         Branch Office
     146 East Ohio Avenue
     Sebring, Ohio

     Columbiana Office                                      Branch Office
     104 South Main Street
     Columbiana, Ohio

     New Garden Office                                      Branch Office
     7346 State Route  9
     Hanoverton, Ohio

     New Waterford Office                                   Branch Office
     3761 Silliman Street
     New Waterford, Ohio





                                       19

<PAGE>   20



     Location                                               Principal Use
     --------                                               -------------

     Boardman Office                                        Branch Office
     80 Boardman-Poland Road
     Boardman, Ohio

     Lowellville Office                                     Branch Office
     102 East Water Street
     Lowellville, Ohio

     Navarre Office                                         Branch Office
     15 North Main Street
     Navarre, Ohio

     Plains Office                                          Branch Office
     5150 Erie Avenue , SW
     Navarre, Ohio

     Brewster Office                                        Branch Office
     301 Wabash Avenue
     Brewster, Ohio

     Richville Office                                       Branch Office
     6248 Navarre Road, SW
     Canton, Ohio

     Barnsville Office                                      Branch Office
     124 East Main Street
     Barnsville, Ohio 43713

     Martins Ferry Office                                   Branch Office
     22 South Fourth Street
     Martins Ferry, Ohio 43935

     St. Clairsville Office                                 Branch Office
     142 West Main Street
     St. Clairsville, Ohio 43950


Citizens also leases six offices located in Alliance, Canton, Wintersville, East
Liverpool, Boardman (2) and Struthers, Ohio.

FNB owns its one branch located at 253 Carolina Avenue, Chester, West Virginia.
In the opinion of management, the properties owned or leased by Citizens and FNB
are suitable and adequate for the continuing operations of the Corporation and
its subsidiaries.

                                       20

<PAGE>   21



Item 3. LEGAL PROCEEDINGS. 
        ------------------

There is no pending litigation, other than routine litigation incidental to the
business of the Corporation and its affiliates, or of a material nature
involving or naming the Corporation or any of its affiliates as a defendant.
Further, there are no material legal proceedings in which any director,
executive officer, principal shareholder or affiliate of the Corporation is a
party or has a material interest which is adverse to the Corporation or any of
its affiliates. None of the routine litigation in which the Corporation or any
of its affiliates are involved is expected to have a material adverse impact
upon the financial position or results of operations of the Corporation or any
of its affiliates.

Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY-HOLDERS.
        ---------------------------------------------------

No matters were submitted to a vote of the Corporation's security- holders
during the fourth quarter of 1997.


                                     PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
        ----------------------------------------------------------------------

The information set forth under the heading "Common Stock" on page 27 of the
Corporation's 1997 Annual Report to Shareholders is incorporated herein by
reference (Exhibit 13).

Item 6. SELECTED FINANCIAL DATA.
        ------------------------

The information set forth under the heading "Selected Financial Data" on page 20
of the Corporation's 1997 Annual Report to Shareholders is incorporated herein
by reference (Exhibit 13).

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATION.
        -------------

The information set forth under the heading "Financial Review" on pages 21
through 27 of the Corporation's 1997 Annual Report to Shareholders is
incorporated herein by reference (Exhibit 13). Management is not aware of any
known trends, events or uncertainties that will have or that are reasonably
likely to have a material effect on the liquidity, capital resources or
operations of the Corporation. Management is not aware of any current
recommendations by the Corporation's, Citizens' or FNB's regulatory authorities
which, if they were to be implemented, would have such an effect.

Any loans classified for regulatory purposes as loss, doubtful, substandard or
special mention and not disclosed under Item III of Industry Guide 3 on pages
10, 11 and 12 of this Form 10-K do not represent or result from trends or
uncertainties which management reasonably expects will materially impact future
operating results, liquidity or capital resources. Any such loans also do not
represent material credits about which management is aware of any information
which causes management to have serious doubts as to the ability of such
borrowers to comply with the loan repayment terms.




                                       21

<PAGE>   22




Item 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          ----------------------------------------------------------

ASSET LIABILITY MANAGEMENT

     Consistent with its definition of interest-rate risk, the Corporation
measures interest-rate risk from the perspectives of earnings at risk and value
at risk. The appropriate use of these measures to manage interest-rate risk must
take into consideration the purposes of the loan and investment portfolios, the
history of interest-rate risk measurement, and the strengths and weaknesses of
each measure.

     The primary purpose of both the loan and investment portfolios is the
generation of income, but if credit risk is the principal focus of risk analysis
in the loan portfolio, interest-rate risk is the principal focus in the
investment portfolio. This is so for two reasons. First, credit risk can be
minimized more effectively in the investment portfolio. Second, because of the
greater liquidity of the investment portfolio, it is the vehicle of choice for
managing interest-rate risk in the entire balance sheet. The Corporation is not
subject to any significant degree to foreign currency exchange or commodity
price risk.

     The management of the interest-rate-risk position of the Corporation begins
with a thorough evaluation of the balance sheet using simulation analysis of net
interest income and net income over a two-year period. The Corporation also
calculates the effect of an instantaneous change in market interest rates on the
economic value of equity or net portfolio value. Once these analysis are
complete, management reviews the results, with an emphasis on the income-
simulation results for purposes of managing interest-rate risk.

     Measurement and identification of current and potential interest-rate-risk
exposures is conducted quarterly, with reporting and monitoring also occurring
quarterly.

     The Corporation's ALCO committee is comprised of the Chief Executive 
Officer, Chief Financial Officer, Chief Lending Officer, Chief Retail Funds
Acquisition Officer and Chief Accounting Officer. The Chief Executive Officer
serves as chairman of the ALCO, which meets quarterly.

     In addition to developing the balance-sheet management policy for adoption
by the Board of Directors and keeping it current through recommending to the
Board any revisions that may be necessary, the committee is responsible for
adopting procedures necessary for or helpful to the prudent achievement of the
purposes of this policy, for formulating specific strategies in compliance with
this policy, and for monitoring the performance of the corporation in managing
interest-rate and liquidity risk.

     The ALCO reviews interest-rate scenarios quarterly and revises them as
necessary in order to stress test earning and the economic value of equity
appropriately, given the current rate environment. Consistent with supervisory
guidance, except in low or high-rate environments declining and rising rate
scenarios of at least 200 basis points will be used in addition to a
floating-rate scenario for purposes of simulating the income statement and
assessing the effect of an interest- rate shock on the economic value of equity
or net portfolio value. For purposes of the Corporation's policy, low-and
high-rate environments exist when the 30-year treasury bond is below 7.0% or
above 9.0% and federal funds are below 4.0% or above 7.0%, respectively.




                                       22

<PAGE>   23



Item 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - continued
          ----------------------------------------------------------------------

     Rate scenarios could involve parallel or nonparallel shifts in the yield
curve, depending on historical, current and expected conditions, as well as the
need to capture any material effects of explicit or embedded options.

     In simulating net interest income and net income, rate changes are modeled
to occur in even monthly increments over 12 months, and then held constant for
an additional 12 months. The volatility of net interest income and net income is
measured over a 24-month period by reference to the levels of such income in the
flat-rate scenario.

     In shocking the balance sheet to estimate the effect of rate changes on the
market value of equity, changes in interest rates are instantaneous and
sustained.

     In general, the Corporation attempts to maintain a balance sheet that
provides the best return possible consistent with acceptable exposure to credit
and interest-rate risk and substantial enough cash flows and reinvestment
opportunities to enable the corporation to remain profitable in all rate
environments.

     There are various strategies the Corporation pursues in the management of
its interest-rate risk throughout a rate cycle. The ALCO is generally authorized
to manage interest-rate risk through the implementation of 'natural' hedging
strategies through the management of cash flows and maturities of assets and
liabilities.

     When confronted with the risk of rising interest rates, the Corporation
will typically (1) shorten investment maturities, (2) lengthen funds maturities,
(3) restrict fixed-rate lending and (4) limit credit lines. When confronted with
the risk of falling rates, appropriate strategies include (1) replenished credit
lines, (2) shortened funds maturities, (3) lengthened investment maturities, (4)
expanded fixed-rate lending and (5) investment purchases.

     Interest-rate swaps, caps and floors may be employed, only if authorized by
the Board of Directors in an addendum to its existing policy. If so authorized,
they may be implemented by the Chief Investment Officer, but only at the
direction of the ALCO and only when more cost-effective than balance-sheet
strategies. There were no interest-rate swaps, caps or floors in effect at
December 31, 1997 or any period presented.

     Net portfolio value represents the market value of portfolio equity and is
equal to the market value of assets minus the market value of liabilities. This
analysis assesses the risk of loss in market risk sensitive instruments in the
event of a sudden and sustained 2% increases and decreases in market interest
rates. The calculation of net portfolio value is a static snapshot at a point in
time, and therefore does not consider factors such as management intervention or
circumstances such as shifts in the yield curve during an interest-rate cycle.
Value at risk analysis is most relevant and useful in assessing the exposure of
the FDIC to banks with minimal or negative capital and earnings.










                                       23

<PAGE>   24



Item 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - continued
          ----------------------------------------------------------------------
(dollars in thousands)

TABLE 1.  PROJECTED CHANGE IN NET PORTFOLIO VALUE
<TABLE>
<CAPTION>
CHANGE
IN RATES                          $ AMOUNT          $ CHANGE            % CHANGE
--------                         --------            --------            --------
<S>                              <C>                 <C>                  <C>    
+200 BP                          $ 87,499            $(13,745)            (13.6)%

   BASE                           101,244                 ---              ---

-200 BP                            92,353              (8,891)            (8.8)%
</TABLE>

         The projected volatility in net portfolio value falls well within the
Board of Directors guidelines for + or - 30%.


TABLE 2.  PROJECTED  NET INTEREST INCOME VOLATILITY
<TABLE>
<CAPTION>

CHANGE                NET INTEREST
IN RATES                    INCOME           $ CHANGE         % CHANGE
--------                    ------           --------         --------
1998
----
<S>                        <C>                 <C>                  <C>  
-200 BP                    $44,657             $1,166               2.68%

FLAT                        43,491                ---                ---

+200 BP                     42.369             (1,122)             (2.58)%

1999
----
-200 BP                     45,178              1.056               2.39%

FLAT                        44,122               ---                 ---

+200 BP                     42,038             (2,084)             (4.72)%
</TABLE>

         The projected volatility in net interest income falls well within the
Board of Directors guidelines for + or - 10% change within a 24 month guideline.


Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
        ---------------------------------------------

The information set forth under the headings listed below on pages 2 through 19
of the Corporation's 1997 Annual Report to Shareholders is incorporated herein
by reference (Exhibit 13).

Consolidated Balance Sheets - December 31, 1997 and 1996
Consolidated Statements of Income - Years Ended December 31, 1997, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity - Years Ended 
  December 31, 1997
Consolidated Statements of Cash Flows - Years Ended December 31, 1997, 1996 and
   1995

                                       24

<PAGE>   25



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - continued
        -------------------------------------------------------

         Notes to the Consolidated Financial Statements
         Report of Independent Auditors

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        ----------------------------------------------------------------
        FINANCIAL DISCLOSURE.
        ---------------------

There has been no change in accountants for the applicable reporting period and
there were no disagreements with accountants on accounting and financial
disclosure.


                                    PART III

Information relating to the following items is included in the Corporation's
definitive Proxy Statement for its Annual Meeting of Shareholders, which will be
filed with the Commission on or before April 30, 1998, the following portions of
which are incorporated herein by reference:

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
         ---------------------------------------------------

Set forth under the headings "Election of Directors", "Identification of
Executive Officers", of the Corporation's Proxy Statement to be filed on or 
before April 30, 1998.

Item 11. EXECUTIVE COMPENSATION.
         -----------------------

Set forth under the headings "Bancshares Personnel and Compensation Committee
and Citizens Personnel and Compensation Committee Report on Executive
Compensation", "Summary Compensation Table", "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements", "Compensation
Pursuant to Plans", "Pension Plan Table", "Option/SAR Grants in 1996",
"Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end
Option/SAR Values" and "Performance Graph" of the Corporation's Proxy Statement
to be filed on or before April 30, 1998.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
         ----------------------------------------------------------------

Set forth under the heading "Security Ownership of Directors, Executive Officers
and Certain Beneficial Owners" of the Corporation's Proxy Statement to be filed
on or before April 30, 1998.


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         -----------------------------------------------

Set forth under the heading "Transactions with Bancshares" of the Corporation's
Proxy Statement to be filed on or before April 30, 1998.







                                       25

<PAGE>   26



                                     PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 10-K.
         -------------------------------------------------------------------

(a)      The following documents are filed as part of this report:

1.       Financial Statements - The following consolidated financial statements
         of the Corporation contained on pages 2 through 5 of the Corporation's
         1997 Annual Report to Shareholders (Exhibit 13) are incorporated herein
         by reference under Item 8 of this Form 10-K:

         Consolidated Balance Sheets - December 31, 1997 and 1996
         Consolidated Statements of Income - Years Ended December 31, 1997, 1996
           and 1995 
         Consolidated Statements of Changes of Shareholders' Equity - Years 
           Ended December 31, 1997 
         Consolidated Statements of Cash Flows - Years Ended December 31, 
           1997, 1996 and 1995 
         Notes to the Consolidated Financial Statements 
         Report of Independent Auditors

2.       Financial Statement Schedules are omitted as they are not required or
         not applicable, or the required information is included in the
         Financial Statements.

3.       Exhibits -- Reference is made to the Exhibit Index which is found on 
         page 28 of this Form 10-K.

         No reports on Form 8-K were filed during the quarter ended December 31,
         1997.












                                       26

<PAGE>   27



                                   SIGNATURES


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

By:       /s/ Marty E. Adams
   -------------------------------------------------
          Marty E. Adams
          President and Chief Executive Officer

And By:  /s/ William L. White III
   -------------------------------------------------
          William L. White III
          Senior Vice President, Chief Financial Officer

And By:  /s/ Paula Meiler
   -------------------------------------------------
         Paula Meiler, Vice President, Comptroller

Date:

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report on Form 10-K has been signed below by the following persons on behalf of
the Registrant and in their indicated capacities and as of this 23rd day of 
February, 1998.



/s/ James C. McBane
----------------------------------------
James C. McBane, Chairman

/s/ Marty E, Adams
----------------------------------------
Marty E. Adams, Vice Chairman
President, Chief Executive Officer

/s/ Keith Burgett
----------------------------------------
Keith Burgett, Director

/s/ Willard L. Davis
----------------------------------------
Willard L. Davis, Director
<TABLE>
<S>                                                 <C>
-----------------------------------------           /s/ Elden L. Surbey
Fred H. Johnson, Director                           ---------------------------------
                                                    Elden L. Surbey, Director

/s/ Fred H. Johnson III                              /s/ Kenneth E. McConnell
----------------------------------------            ----------------------------------
Fred H. Johnson, III, Director                      Kenneth E. McConnell, Director

/s/ Glenn F. Thorne                                  /s/ Gerald P. Mastroianni
----------------------------------------            -----------------------------------
Glenn F. Thorne, Director                           Gerard P. Mastroianni, Director
</TABLE>



                                       27

<PAGE>   28



EXHIBIT INDEX
--------------

The following Exhibits are included in this Form 10-K or are incorporated by
reference as noted in the following table:

EXHIBIT 3 Articles of Incorporation and by-laws

          (1)  Registrant's Fourth Amended Articles of Incorporation,
               (incorporated by reference in Exhibit 3 (1) to the Form 10K of
               Citizens Bancshares, Inc. for the year ended December 31, 1996).

          (2)  Registrant's Regulations, as amended (incorporated by reference
               in Exhibit 3 (2) to the Form S-4 Registration Statement No.
               0-18209 of Citizens Bancshares, Inc.).

EXHIBIT 10 Material Contracts

          (1)  The Citizens Bancshares, Inc. Profit-Sharing Plan and Trust
               (formerly known as the CBC Salineville Profit Sharing Plan and
               Trust) (incorporated by reference in Exhibit 10(2) to the Form
               S-4 Registration Statement No. 0-18209 of Citizens Bancshares,
               Inc.).

          (2)  Citizens Bancshares, Inc. Employee Stock Ownership Plan
               (incorporated by reference in Exhibit 10(3) to the Form S-4
               Registration Statement No. 0-18209 of Citizens Bancshares, Inc.).

          (3)  Form of Indemnification Agreement between Citizens Bancshares,
               Inc. and Individual Directors, Officers or Representatives
               (incorporated by reference in Exhibit 10(4) to the Form 10-K of
               Citizens Bancshares, Inc. for the fiscal year ended December 31,
               1989).

          (4)  Employment Agreement by and among Citizens Bancshares, Inc., The
               Citizens Banking Company and Marty E. Adams (incorporated by
               reference in Exhibit 10(5) to the Form 10-K of Citizens
               Bancshares, Inc. for the fiscal year ended December 31 1992).

          (5)  Amendment to Executive Employment Agreement by and among Citizens
               Bancshares, Inc., The Citizens Banking Company and Marty E. Adams
               (incorporated by reference in Exhibit 10(8) to the Form 10-K of
               Citizens Bancshares, Inc. for the fiscal year ended December 31,
               1993).

          (6)  Agreement by and among Citizens Bancshares, Inc., The Citizens
               Banking Company and Frank J. Koch (incorporated by reference in
               Exhibit 10(9) to the Form 10-K of Citizens Bancshares, Inc. for
               the fiscal year ended December 31, 1993).

          (7)  Citizens Bancshares, Inc. Non-Statutory Stock Option and Stock
               Appreciation Rights Plan. (incorporated by reference in Exhibit
               10 (11) to the Form 10-Q of Citizens Bancshares, Inc. for the
               quarter ended June 30, 1995).

                                       28

<PAGE>   29



EXHIBIT INDEX - Continued
-------------------------

          (8)  The Employee Retirement Plan for Citizens Bancshares, Inc.
               (incorporated by reference in Exhibit 10 (12) to the Form 10-Q of
               Citizens Bancshares, Inc. for the quarter ended June 30, 1995).

          (9)  Affiliation Agreement by and among Citizens Bancshares, Inc., The
               Citizens Banking Company, Western Reserve Bank of Ohio
               (incorporated by reference in Exhibit 2 (1) to the Form S-4
               Registration Statement No.33-99036 of Citizens Bancshares, Inc.).

          (10) Agreement of Merger by and among Citizens Bancshares, Inc., The
               Citizens Banking Company and Western Reserve Bank of Ohio
               (incorporated by reference in Exhibit 10 (12) to the Form 10-K of
               Citizens Bancshares, Inc. for the fiscal year ended December 31,
               1995).

          (11) Plan and Agreement of Merger by and among Citizens Bancshares,
               Inc., The Citizens Banking Company and The Navarre Deposit Bank
               Company (incorporated by reference in Exhibit 10 (13) to the Form
               10-Q of Citizens Bancshares, Inc. for the quarter ended March 31,
               1996).

          (12) Purchase and Assumption Agreement between The Metropolitan
               Savings Bank of Ohio and The Citizens Banking Company
               (incorporated by reference in Exhibit 10 (12) to the Form 10-Q of
               Citizens Bancshares, Inc. for the quarter ended June 30, 1997).

          (13) Affiliation Agreement by and among Citizens Bancshares, Inc., The
               Citizens Banking Company and UniBank (incorporated by reference
               in Exhibit 10 (13) to the Form 10-Q of Citizens Bancshares, Inc.
               for the quarter ended September 30, 1997).

          (14) Purchase Agreement between The Citizens Banking Company and
               ValueNet, Inc. (Incorporated by reference in Exhibit 10 (14) to
               the Form 10-Q of Citizens Bancshares, Inc. for the quarter ended
               September 30, 1997).

          (15) Affiliation Agreement by and among Citizens Bancshares, Inc., The
               Citizens Banking Company and UniBank (incorporated by reference
               in Exhibit 2 (1) to the Form S-4 Registration Statement No.
               333-42911 of Citizens Bancshares, Inc.).

          (16) Stock Option Agreement by and between Citizens Bancshares, Inc.
               and Century Financial Corporation (incorporated by reference in
               Exhibit (a) to the schedule 13D of Citizens Bancshares, Inc.
               filed with the Commission on November 26, 1997).





                                       29

<PAGE>   30




EXHIBIT INDEX  - Continued
--------------------------

          (17) Agreement and Plan of Merger by and between Citizens Bancshares,
               Inc. and Century Financial Corporation (incorporated by reference
               in Exhibit 2 to the Form 8-K of Citizens Bancshares, Inc. filed
               with the Commission on January 2, 1998).


EXHIBIT 11 Statement regarding Computation of Per Share Earnings
           (Included in Note 1 to the Consolidated Financial Statements).

EXHIBIT 13 The Corporation's Annual Report to Shareholders for the Fiscal Year 
           Ended December 31, 1997.

EXHIBIT 21 Subsidiaries of the Registrant

EXHIBIT 23 Consents of Experts and Counsel

EXHIBIT 27 Financial Data Schedule



                                       30