UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                                   FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

(Mark One)
    X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
    _   EXCHANGE ACT OF 1934

            For the quarterly period ended   December 31, 1998
                                             -----------------
        OR

    _  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
       THE SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number: 333-04304

                           FIRST CITIZENS CORPORATION
                   -----------------------------------------
             (Exact name of registrant as specified in its charter)

Georgia                                     58 - 2232785  
-------                                 --------------------
(State or other jurisdiction of         (I.R.S. Employment
Incorporation or organization)          Identification Number)

19 Jefferson Street
Newnan, Georgia                                            30263     
------------------                                        --------
(Address of principal                                    (Zip Code)
 executive office)

Registrant's telephone number, including area code:  (770) 253-5017
                                                     ---------------

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 the number of shares outstanding of each of the issuer's classes of 
common stock, as of February 1, 1999:   2,816,506

Transitional Small Business Disclosure Format (check one)   Yes _____  No __X__

<PAGE>


                                     INDEX
<TABLE>
<CAPTION>
<S>                                                                           <C>    

                                                                              Page
Part I. Financial Information

Item 1. Condensed Consolidated Financial Statements (unaudited)

                      Condensed Consolidated Balance Sheets
                          as of December 31, 1998 and March 31, 1998.......    3
                      Condensed Consolidated Statements of Income and
                          Comprehensive Income for the Three Months Ended
                          December 31, 1998 and 1997 and Nine Months Ended
                          December 31, 1998 and 1997.......................    4

                        Condensed Consolidated Statements of Cash Flows 
                          for the Nine Months Ended December 31, 1998 
                          and 1997.........................................  6 - 7

                        Notes to Condensed Consolidated Financial 
                          Statements.......................................  8 - 11

Item 2. Management's Discussion and Analysis of Results of
                Operations and Financial Condition........................  12 - 18

Item 3. Quantitative and Qualitative Disclosures about Market Risk........     19


Part II  Other Information

Item 6. Exhibits and Reports on Form 8-K..................................     20

Signatures................................................................     21

</TABLE>
                                       
<PAGE>





                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

                          Consolidated Balance Sheets
                      December 31, 1998 and March 31, 1998
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                           December 31                March 31
                                                          -------------              ----------
<S>                                                            <C>                      <C>    
                   ASSETS                                  
Cash and due from banks                                  $  41,668,397                   $  13,057,128 
Interest-bearing deposits in banks                           8,103,922                      18,603,707 
Federal funds sold                                          12,441,058                      13,840,000 
Securities available-for-sale                               37,733,942                      36,380,214 
Securities held-to-maturity at amortized cost,                                  
   fair value of $688,801 and $1,881,250, respectively         681,559                       1,879,748 
Loans held for sale                                         11,320,000                       7,473,800 
Loans receivable, net                                      287,144,827                     256,310,581 
Real estate held for development and sale                    2,320,521                       2,320,521 
Premises and equipment                                       8,726,921                       7,371,409 
Goodwill and other intangibles                               6,796,110                       7,009,308 
Other assets                                                 3,212,490                       3,565,672 
                                                        --------------                  -------------- 
          Total assets                                  $  420,149,747                   $ 367,812,088 
                                                        ==============                  ==============                      
      LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts                                        $  364,497,721                   $ 318,382,055 
Other borrowings                                            12,338,204                       9,602,365 
Accrued expenses and other liabilities                       3,137,707                       3,067,797       
                                                        --------------                  -------------- 
          Total liabilities                                379,973,632                     331,052,217 
                                                        --------------                  -------------- 
Stockholders' equity                                     
   Preferred stock, no par value, 8,000,000 shares
      authorized; none issued                                        -                               -  
   Common stock, $1 par value, 8,000,000 shares
      authorized, 2,811,556                                          -                               -  
      and 2,835,897 issued, respectively                     2,811,556                       2,835,897
   Additional paid-in capital                               12,639,401                      12,914,173 
   Retained earnings                                        24,508,589                      21,287,420 
   Accumulated other comprehensive income                      216,569                         155,502
                                                        --------------                  --------------  
                                                            40,176,115                      37,192,992
   Less cost of 41,028 shares of treasury stock                      -                        (433,121)
                                                        --------------                  --------------
          Total stockholders' equity                        40,176,115                      36,759,871
                                                        --------------                  -------------- 
          Total liabilities and stockholders' equity    $  420,149,747                  $  367,812,088
                                                        ==============                  ============== 

</TABLE>
The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

           Consolidated Statements of Income and Comprehensive Income
           For the Three Months Ended December 31, 1998 and 1997 and
                  Nine Months Ended December 31, 1998 and 1997
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                     Three Months Ended                  Nine Months Ended    
                                                         December 31                          December 31                           
                                               -------------------------------        ----------------------------
                                                  1998               1997                 1998             1997    
                                               ------------       ------------        -------------   ------------
<S>                                                 <C>                 <C>                   <C>              <C>
Interest income                                                                                 
    Loans                                   $   7,066,253        $   6,444,005       $   20,753,317   $  18,507,456
    Taxable securities                            503,297              534,057            1,539,326       1,568,851
    Federal funds sold                            179,993              113,186              538,458         380,574
    Deposits in banks                             300,115               74,689            1,027,082         127,758
                                            --------------      ---------------      ---------------  --------------
       Total interest income                    8,049,658            7,165,937           23,858,183      20,584,639
                                            --------------      ---------------      ---------------  --------------
Interest expense                                                                              
    Deposits                                    3,518,333            3,082,454           10,686,003       8,533,241
    Other borrowings                              136,542              268,969              445,220         906,049
                                            --------------      ---------------      ---------------  --------------
      Total interest expense                    3,654,875            3,351,423           11,131,223       9,439,290
                                            --------------      ---------------      ---------------  --------------

     Net interest income                        4,394,783            3,814,514           12,726,960      11,145,349
Provision for loan losses                         105,000               80,000              245,000         190,000
                                            --------------      ---------------      ---------------  --------------
      Net interest income after                                                                            
       provision for loan losses                4,289,783            3,734,514           12,481,960      10,955,349
                                            --------------      ---------------      ---------------  --------------
Other income                                                                                    
    Loan servicing and other loan fees             61,784               86,053              194,987         280,320
    Deposit and other service charges             463,384              414,547            1,268,522       1,176,950
    Gain on sale of securities                     58,518                2,430              281,569           1,308
    Gain on sale of loans                         300,752              216,780              808,881         741,816
    Gain on sale of real estate held for                                                                                        
       development and sale                             -               99,518                    -       3,476,944
    Other operating income                         93,451              118,814              292,160         310,010
                                            --------------      ---------------      ---------------  --------------
                                                  977,889              938,142            2,846,119       5,987,348
                                            --------------      ---------------      ---------------  --------------
Other expenses                                                                                  
    Salaries and employee benefits              1,569,692            1,341,963            4,669,458       4,144,704
    Occupancy and equipment expenses              387,524              359,292            1,203,895       1,126,876
    Data processing costs                         375,130              143,693            1,003,282         411,315
    Goodwill amortization                          98,980              109,196              296,941         330,121
    Other operating expenses                      794,250              727,862            2,290,950       1,916,691
                                            --------------      ---------------      ---------------  --------------
                                                3,225,576            2,682,006            9,464,526       7,929,707
                                            --------------      ---------------      ---------------  --------------
      Income before income taxes                2,042,096            1,990,650            5,863,553       9,012,990

Income tax expense                                672,326              629,950            1,885,029       3,115,159
                                            --------------      ---------------      ---------------  --------------
      Net income                                1,369,770            1,360,700            3,978,524       5,897,831
                                            --------------      ---------------      ---------------  --------------
</TABLE>


                                        4
<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

           Consolidated Statements of Income and Comprehensive Income
           For the Three Months Ended December 31, 1998 and 1997 and
                  Nine Months Ended December 31, 1998 and 1997
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended                     Nine Months Ended                        
                                                       December 31                            December 31   
                                                --------------------------          -----------------------------                   
                                                  1998              1997                1998              1997    
                                                ----------      ----------          -----------        -----------    
<S>                                                    <C>            <C>                <C>                  <C>
Other comprehensive income:                                                                                     
    Unrealized gains on securities                                                                                      
      available-for-sale arising during                                                                                 
      period, net of tax                          75,071          57,335              238,979            133,778 
    Less: reclassification adjustment                                                                                   
      for gains included in net                                                                                 
      income, net of tax                         (30,446)         (1,604)            (177,660)              (863)
                                            --------------   ------------        ------------         -----------
Total other comprehensive income                  44,625          55,731                61,319            132,915 
                                            --------------   ------------        ------------         -----------
              Comprehensive income          $  1,414,395    $  1,416,431         $   4,039,843       $  6,030,746 
                                            ==============  ============         =============       ============
Basic earnings per common share             $       0.49    $       0.49         $        1.42       $       2.15 
                                            ==============  ============         =============       ============
Diluted earnings per common share           $       0.45    $       0.45         $        1.31       $       1.97 
                                            ==============  ============         =============       ============
Cash dividends per                                                                                      
   share of common stock                    $       0.10    $       0.08         $        0.27       $       0.23 
                                            ==============  ============         =============       ============

</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       5

<PAGE>


                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

                Condensed Consolidated Statements of Cash Flows
              For the Nine Months Ended December 31, 1998 and 1997
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                              1998                1997
                                                                            --------            -------
         <S>                                                                    <C>                   <C>  
Operating Activities                                    
Net income                                                             $   3,978,523        $   5,897,831 
Adjustments to reconcile net income to net cash provided by                                     
   (used in) operating activities:                                      
   Provision for loan losses                                                 245,000              190,000 
   Depreciation and amortization                                             830,293              451,042 
   Gain on sale of securities available-for-sale                            (281,569)              (1,308)
   Net increase in loans held for sale                                    (3,846,200)          (2,112,329)
   Gain on sale of real estate held for development and sale                       -           (3,476,944)
   Other operating activities                                                423,092           (1,499,756)
                                                                      ---------------       --------------
          Net cash provided by (used in) operating activities              1,349,139             (551,464)
                                                                      ---------------       --------------
Investing Activities                                                     
Proceeds from maturities of securities available-for-sale                 15,200,000            7,615,719 
Proceeds from maturities of securities held to maturity                    1,198,189            3,626,341 
Purchases of securities available-for-sale                               (26,095,873)         (15,269,486)
Proceeds from sales of securities available-for-sale                       9,884,781            7,715,226 
Net (increase) decrease in interest-bearing deposits in banks             10,499,785           (7,283,666)
Net decrease (increase) in Federal funds sold                              1,398,942           (7,410,000)
Net increase in loans                                                    (31,079,246)         (17,012,352)
Proceeds from sales of real estate held for development and sale                   -            4,437,950 
Proceeds from sale of other real estate owned                                      -              383,926 
Purchase of premises and equipment                                        (1,972,607)            (263,349)
                                                                      ---------------       --------------
          Net cash used in investing activities                       $  (20,966,029)       $ (23,459,691)
                                                                      ---------------       --------------
</TABLE>


                                       6
<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows
              For the Nine Months Ended December 31, 1998 and 1997
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                1998                     1997
                                                                           ------------              -----------  
<S>                                                                             <C>                       <C>                      
Financing Activities
Net increase in deposit accounts                                         $  46,115,666              $ 34,148,627 
Net increase (decrease) in other borrowings                                  2,735,839               (12,589,131)
Purchase of treasury stock                                                           -                  (126,684)
Dividends paid                                                                (757,354)                 (623,483)
Proceeds from stock options exercised                                          134,008                   453,199 
                                                                         --------------            --------------
   Net cash provided by financing activities                                48,228,159                21,262,528 
                                                                         --------------            --------------
   Net increase (decrease) in cash and due from banks                       28,611,269                (2,748,627)
Cash and due from banks at beginning of period                              13,057,128                13,866,250 
                                                                         --------------            --------------
Cash and due from banks at end of period                                 $  41,668,397              $ 11,117,623 
                                                                         ==============            ==============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      
                                        7


<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1. BASIS OF PRESENTATION

       The consolidated financial information included herein is
       unaudited; however, such information reflects all adjustments (consisting
       solely of normal recurring adjustments) which are, in the opinion of
       management, necessary for a fair statement of results for the interim 
       periods.

       The results of operations for the three and nine month periods ended
       December 31, 1998 are not necessarily indicative of the results to be
       expected for the full year.


NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS

        In 1998, the Company adopted Statement of Financial Standards No. 130
        ("SFAS No. 130"), "Reporting Comprehensive Income". This statement
        establishes standards for reporting and display of comprehensive income
        and its components in the financial statements. This statement requires
        that all items that are required to be recognized under accounting
        standards as components of comprehensive income be reported in a
        financial statement that is displayed in equal prominence with the other
        financi statements. The Company has elected to report comprehensive
        income in the statements of income for the interim periods. SFAS No. 130
        describes comprehensive income as the total of all components of
        comprehensive income including net income. This statement uses other
        comprehensive income to refer to revenues, expenses, gains and losses
        that under generally accepted accounting principles are included in
        comprehensive income but excluded from net income. Currently, the
        Company's other comprehensive income consists of items previously
        reported directly in equity under SFAS No. 115, "Accounting for Certain
        Investments in Debt and Equity Securities". As required by SFAS No. 130,
        the financial statements for the prior periods have been reclassified to
        reflect application of the provisions of this statement. The adoption of
        this statement did not affect the Company's financial position, results
        of operations or cash flows.


                                       8

<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS (Continued)

        In June 1998, Financial Accounting Standards Board issued Statement of
        Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for
        Derivative Instruments and Hedging Activities". This statement is
        required to be adopted for fiscal years beginning after June15, 1999.
        However, the statement permits early adoption as of the beginning of any
        fiscal quarter after its issuance. The Company expects to adopt this
        statement effective January 1, 2000. SFAS No. 133 requires the Compan to
        recognize all derivatives as either assets or liabilities in the balance
        sheet at fair value. For derivatives that are not designated as hedges,
        the gain or loss must be recognized in earnings in the period of change.
        For derivatives that are designated as hedges, changes in the fair value
        of the hedged assets, liabilities, or firm commitments must be
        recognized in earnings or recognized in other comprehensive income until
        the hedged item is recognized in earnings, depending on the nature of
        the hedge. The ineffective portion of a derivative's change in fair
        value must be recognized in earnings immediately.

        Management has not yet determined what effect the adoption of SFAS 
        No. 133 will have on the Company's earnings or financial position.

        There are no other recent accounting pronouncements that have had, or 
        are expected to have, a material effect on the Company's financial
        statements.

                                       9
<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



NOTE 3. EARNINGS PER COMMON SHARE

        The following is a reconciliation of net income and weighted-average
        shares outstanding used in determining basic and diluted earnings per
        common share (EPS):
<TABLE>
<CAPTION>
                                                  Three Months Ended December 31, 1998
                                       -----------------------------------------------------                                        
                                             Net         Weighted-Average        Per share       
                                           Income            Shares               Amount  
                                       -------------      ----------------     -------------
            <S>                              <C>                   <C>                  <C>
        Basic EPS                      $  1,369,770            2,808,143       $       0.49
                                                                               =============
        Effect of Dilutive Securities                                                           
           Stock options                          -              223,848 
                                       -------------      --------------                 
        Diluted EPS                    $  1,369,770            3,031,991       $       0.45 
                                       =============      ==============       =============


                                                  Three Months Ended December 31, 1997
                                       -----------------------------------------------------                                        
                                             Net         Weighted-Average        Per share       
                                           Income            Shares               Amount  
                                       -------------      ----------------     -------------
               
        Basic EPS                     $  1,360,700            2,754,840        $       0.49
                                                                               =============
        Effect of Dilutive Securities                                                           
           Stock options                         -              260,062 
                                      -------------      --------------                        
        Diluted EPS                   $  1,360,700            3,014,902        $       0.45 
                                      =============      ==============        =============

</TABLE>



                                       10

<PAGE>

                  FIRST CITIZENS CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



NOTE 3. EARNINGS PER COMMON SHARE (Continued)

<TABLE>
<CAPTION>
                                                 Nine Months Ended December 31, 1998
                                       -----------------------------------------------------                                        
                                             Net         Weighted-Average        Per share       
                                           Income            Shares               Amount  
                                       -------------      ----------------     -------------
 <S>                                         <C>                 <C>                  <C>
Basic EPS                            $    3,978,524              2,800,425     $       1.42
                                                                               ============
Effect of Dilutive Securities                                                           
   Stock options                                  -                228,966
                                     --------------       ----------------                         
Diluted EPS                          $    3,978,524              3,029,391     $       1.31
                                     ==============       ================     ============


                                                Nine Months Ended December 31, 1997
                                       -----------------------------------------------------                                        
                                             Net         Weighted-Average        Per share       
                                           Income            Shares               Amount  
                                       -------------      ----------------     -------------
       
Basic EPS                              $  5,897,831              2,748,881     $       2.15
                                                                               ============= 
Effect of Dilutive Securities                                                           
  Stock options                                   -                247,048 
                                       ------------        ----------------                        
 Diluted EPS                           $  5,897,831              2,995,929     $       1.97 
                                      ==============       ================    ============
</TABLE>

                                       11
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD LOOKING STATEMENTS

The following appears in accordance with the Securities Litigation Reform Act.
These financial statements and financial review include forward looking
statements that involve inherent risks and uncertainties. A number of important
factors could cause actual results to differ materially from those in the
forward looking statements. Those factors include fluctuations in interest
rates, inflation, government regulations, economic conditions, Year 2000 issues,
and competition in the geographic business areas in which the Company conducts
its operations.

The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed consolidated
financial statements.

FINANCIAL CONDITION

Total assets increased during the fourth calendar quarter of 1998 from $385.6
million to $420.1 million, or 8.9% for the quarter. The increase in total assets
for the three months ended December 31, 1998 is almost double the 4.5% growth
for the same period in 1997. The growth in both years was funded by increases in
total deposits of $29.9 million and $25.1 million, respectively. The increase in
total assets for the quarter ended December 31, 1998 consisted primarily of a
net increase of $8.6 million in cash and due from banks, Federal funds sold, and
interest-bearing deposits; an increase of $26.7 million in net loans; and an
increase of $1.9 million in securities.

Total assets increased for the nine month period ended December 31, 1998 by
$52.3 million or 14.2%. The increase for the same period in 1997 was $25.9
million or 7.9%. The significant increase in assets for the quarter and nine
months ended December 31, 1998 as compared to 1997 is attributable to the
acquisition of three Wal-Mart Super Store branches, with deposits of
approximately $28.9 million. There were no loans acquired in the acquisition.
The acquisition was consummated on December 31, 1998, which explains the
significant increase in cash and due from banks as of December 31, 1998. These
locations are generally deposit generating branches. The proceeds from the
acquisition will be used to fund future loan growth and reduce other borrowings.

The loan to deposit ratio at December 31, 1998 was 83% compared to 88% at
December 31, 1997. The decrease in the loan to deposit ratio is due primarily to
the acquisition of deposits as of December 31, 1998. The loan to deposit ratio
prior to the acquisition of the three branches was 90%.

LIQUIDITY

Liquidity management involves the matching of the cash flow requirements of
customer withdrawals of funds and the funding of loan originations, and the
ability of the Company's subsidiary banks to meet those requirements. Management
monitors and maintains appropriate levels of liquidity so that maturities of
assets and deposit growth



                                       12

<PAGE>


are such that adequate funds are provided to meet estimated customer withdrawals
and loan requests.

At December 31, 1998, all Bank subsidiaries exceeded their minimum target
liquidity ratio. At December 31, 1998, the Company had cash and due from banks
of $41.7 million, interest bearing deposits in banks of $8.1 million, and
Federal funds sold of $12.4 million. Additionally, the Company has $37.7 million
in securities available for sale which could be sold to meet any liquidity
needs. Two of the Bank subsidiaries are members of the Federal Home Loan Bank of
Atlanta and are able to obtain advances if needed. At December 31, 1998, the
Banks had, in addition to amounts already borrowed, a combined credit
availability of approximately $50 million.

REGULATORY CAPITAL REQUIREMENTS

Banking regulations require the Company and Banks to maintain minimum capital
levels in relation to assets. At December 31, 1998, the Company's capital ratios
were considered adequate based on regulatory minimum capital requirements. The
minimum capital requirements and the actual capital ratios for the Company at
December 31, 1998 are as follows:

                                                                  Regulatory
                                                  Actual          Requirement

                Leverage Capital Ratio            10.80%             4.00%
                Risk-Based Capital Ratios
                        Core Capital               8.68%             4.00%
                        Total Capital             12.05%             8.00%

Management is not aware of any other current recommendations by the regulatory
authorities, events or trends, which, if they were to be implemented, would have
a material effect on the Company's liquidity, capital resources, or operations.

RESULTS OF OPERATIONS

Net Interest Income. Net interest income increased by $580,000 for the quarter
ended December 31, 1998 compared to the same period in 1997, or by 15.2%. The
increase in 1997 as compared to the quarter ended December 31, 1996 was
$1,087,000. The increase in 1997 was due to the acquisition of the banking
subsidiaries that occurred during the fiscal year ended March 31, 1997. Those
acquisitions were accounted for as purchases, therefore, the results of
operations prior to the date of acquisition were not included in the results of
operations of the Company for the nine months ended December 31, 1996, and only
one of the acquisitions was included in the results of operations for the
quarter ended December 31, 1998. The increase in net interest income for the
quarter ended December 31, 1998 is attributable to an increase in earning assets
of $36.4 million compared to December 31, 1997. During this same period, total
deposits increased by $60.5 million. As mentioned earlier, approximately $28.8
million of the deposit growth occurred on December 31, 1998. The overall result
of an increase in net interest income is based on the spread between rates
earned on interest earning assets and rates paid on interest bearing
liabilities. The net interest margin increased to 4.91% at December 31, 1998 as
compared to 4.76% at



                                       13
<PAGE>

December 31, 1997.

Net interest income increased by $1,582,000 for the nine months ended December
31, 1998 as compared to the same period in 1997. The increase in net interest
income for the nine month period is consistent with the increase for the three
month period. The increase in deposits related to the acquisition of deposits is
not included in the increase in earning assets of $36.3 million. The majority of
the increase in earning assets, or $34.0 million, consisted of loan growth which
earns a greater spread than any other earning asset.

Provision for Loan Losses. The provision for loan losses is based on
management's evaluation of the economic environment, the history of charged off
loans, recoveries, size and composition of the loan portfolio, nonperforming and
past due loans, and other aspects of the loan portfolio. Management reviews the
allowance for loan loss on a quarterly basis and makes provisions as necessary.
A provision of $105,000 was made for the three month period ending December 31,
1998 based upon this evaluation. The allowance for loan loss as a percentage of
total loans was 1.27% at December 31, 1998 compared to 1.44% at March 31, 1998.
Nonperforming loans as a percentage of total loans was .81% at December 31, 1998
compared to 1.08% at March 31, 1998. Management believes the allowance for loan
loss at December 31, 1998 is adequate to meet any future losses in the loan
portfolio.

At December 31, 1998 and March 31, 1998, nonaccrual, past due, and restructured
loans were as follows:

                                                    December 31,    March 31,
                                                       1998            1998 
                                                    -----------    ----------   
                                                      (Dollars in thousands)

        Total nonaccruing loans                     $   2,455     $   2,886
        Loans contractually past due ninety days
          or more as to interest or principal
          payments and still accruing                      38           303
        Restructured loans                                100           894

The slight decrease in nonaccrual loans from March 31, 1998 to December 31, 1998
is a combination of improvement in various loans and the charge-off of other
loans previously classified as nonaccrual loans. The decrease was not
attributable to any one group or individually significant loans. Net charge-offs
for the nine months ended December 31, 1998 increased by $253,000 as compared to
the same period in 1997.

It is the policy of the Company to discontinue the accrual of interest income
when, in the opinion of management, collection of such interest becomes
doubtful. This status is accorded such interest when (1) there is a significant
deterioration in the financial condition of the borrower and full repayment of
principal and interest is not expected and (2) the principal or interest is more
than ninety days past due, unless the loan is both well-secured and in the
process of collection. Accrual of interest on such loans is resumed when, in
management's judgment, the collection of interest and principal becomes
probable.



                                       14
<PAGE>

Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity, or capital resources.
These classified loans 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.

Information regarding certain loans and allowance for loan loss data through
December 31, 1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                                                    Nine Months Ended 
                                                                                       December 31,   
                                                                               --------------------------                          
                                                                                  1998             1997 
                                                                             -----------       -----------
                                                                                 (Dollars in thousands)  
<S>                                                                              <C>                <C>
Average amount of loans outstanding                                          $   283,019       $   262,940 
                                                                             ============      ============
Balance of allowance for loan losses at beginning of period                  $     3,852       $     3,739 
Loans charged off                                       
   Commercial and financial                                                          192               124 
   Construction                                                                        9                 -  
   Real estate                                                                       126                27 
   Consumer                                                                          126                56 
                                                                              -----------       -----------
                                                                                     453               207
                                                                              -----------       ----------- 
Loans recovered                                 
   Commercial and financial                                                          167                63 
   Construction                                                                        6                 1 
   Real estate                                                                         4               120 
   Consumer                                                                           10                10 
                                                                               -----------       -----------
                                                                                     187               194 
                                                                               -----------       -----------
Net charge-offs                                                                     (266)              (13)
                                                                               -----------       -----------
Additions to allowance charged to operating expense during period                    245               190 
                                                                               -----------       -----------
Balance of allowance for loan losses at end of period                              3,831             3,916 
                                                                               ===========       ===========
Ratio of net loans charged-off during the                                       
   period to average loans outstanding                                              .09%               .00%
                                                                               ===========       ===========
</TABLE>

                                       15
<PAGE>

Other Income. Other income increased by $40,000 for the quarter ended December
31, 1998 compared to a decrease of $397,000 for the same period in 1997.
The single most significant difference in 1997 was the gain on sale of real
estate held for development and sale of $100,000 for the quarter ended December
31, 1997 compared to $428,000 for the quarter ended December 31, 1996. For the
quarter ended December 31, 1998, the Company did not have any gains on sale of
real estate; however, gains on sale of securities increased $56,000, gains on
sales of loans increased $84,000, and service charge income increased $49,000 as
compared to 1997. Other income for the nine months ended December 31, 1998
decreased by $3.1 million as compared to 1997. The significant difference is the
gains on sale of real estate held for development and sale in 1997 of $3.5
million. Significant increases for the nine month period included an increase of
$280,000 in gains on sale of securities, an increase of $92,000 in service
charge income, and an increase of $67,000 from gain on sale of loans. During the
nine months ended December 31, 1998, the Company began restructuring its
securities in anticipation of funding loan growth and future liquidity needs.
The gain on sale of real estate held for development and sale in 1997
represented the sale of approximately 400 acres of an agreement to sale 1,400
acres over an eight year period.

Other Expenses. Other expenses increased by $544,000, or 20.3% for the three
months ended December 31, 1998 as compared to the same period in 1997. The
increase in 1997 as compared to the same period in 1996 was $629,000. The
significant increase between 1997 and 1996 is once again due to the expenses
related to the two banks acquired after June 30, 1996 not included in 1996
operations. The two most significant increases in 1998 were increases of
$228,000 in salaries and employee benefits and an increase of $231,000 in data
processing costs. The increase in salaries and employee benefits represents
normal increases in salaries and costs incurred in adding additional banking
staff. The significant increase in data processing costs is related to the
conversion of all three banking subsidiaries' core data processing systems which
was completed during the nine month period. Included in this increase is a
one-time termination fee of $144,000 related to one bank subsidiary.

Other expenses increased for the nine month period ended December 31, 1998 by
$1,535,000 as compared to the same period in 1997. The comparable increase in
1997 as compared to 1996 was an increase of $2,372,000. The increase in 1997
again is primarily attributable to the acquisition and inclusion of the two bank
acquisitions consummated in the fiscal year ended March 31, 1997. The increases
for the nine month period are consistent with the three month period ended
December 31, 1998. For the nine month period, salaries and employee benefits
increased $525,000 or 12.7%, and data processing costs increased $592,000. Other
increases in other expenses represent normal increases and increases due to
volume of deposit and loan accounts.



                                       16
<PAGE>

Net Income. Net income increased by $9,000 for the three months ended
December31, 1998 as compared to the same period in 1997. The effective tax rate
for the three months ended December 31, 1998 and 1997 was 33% and 32%,
respectively. Net income for the nine months ended December 31, 1998 decreased
by $1,919,000 as compared to 1997. Excluding the gain on sale of real estate
held for development and sale, the Company's net income increased $1,558,000.
The Company does not anticipate significant gains from sale of real estate for
the year ending March 31, 1999. The effective tax rate for the nine month
periods ended December 31, 1998 and 1997 was 32% and 35%, respectively. The
difference in effective tax rates is directly related to the gains on sale of
real estate.

Capability of the Company's Data Processing Software to Accommodate the Year
2000

The Company heavily relies upon computers for the daily conduct of their
business and data processing generally. There is a concern among industry
experts that commencing on January 1, 2000, computers will be unable to "read"
the new year and there may be widespread computer malfunctions. This risk
encompasses hardware and software owned, leased, licensed or otherwise used by
the Company or mission-critical functions or by customers with which the Company
has a material relationship.

During 1997, the Company developed a three-phase program for the Year 2000
("Y2K") information systems compliance. Phase I is to identify those systems
with which the Company has exposure to Y2K issues. Phase II is the development
and implementation of action plans to be Y2K compliant in all areas by late
1998. Phase III, to be completed by mid-1999, is the final testing of each major
area of exposure to ensure compliance.

In the second quarter of 1998, the Company completed its core data processing
conversion. The conversion was part of management's plans for consolidating the
operations of its three banking subsidiaries, not because of Y2K concerns. This
conversion included the replacement of substantially all of the Company's
computer workstations with equipment that is certified to be Y2K compliant. The
cost of this equipment totaled approximately $1 million. In addition, one of the
banking subsidiaries was required to pay a fee of $144,000 to terminate its
contract with its former data processing provider.

A provision in the Company's contract with its new provider of the Company's
core data processing services stipulated that the provider would be Y2K
compliant. During the quarter ended December 31, 1998, testing on the system was
done by proxy. The testing included tests of the deposit, loan, and general
ledger applications, as well as the item processing and security modules of the
system. The Company's Y2K project committee reviewed the testing results, noting
no Y2K related failures. The sensitive date testing, connectivity testing, and
contingency plan for the Company's data processing provider were completed in
January 1999. The project committee is presently reviewing the results of these
testing procedures. The Company and its data processing provider will continue
to test the system for Y2K compliance throughout the remainder of 1998 and 1999.



                                       17
<PAGE>

The Company has also reviewed its non-information technology equipment (vaults,
alarms, elevators, etc.) and believe that the Y2K will not have a material
adverse impact on these items.

The Company has developed a written Y2K Testing Strategy and plans to test all
internal mission critical systems by December 31, 1998, with testing for systems
supplied by third party providers to be completed by March 31, 1999.

The Company has also developed a Business Resumption Contingency Plan in the
event that one or more systems fail on or following January 1, 2000. As a part
of this plan, the Company has compiled a list of worst case Y2K scenarios along
with the potential effects these failures could have on the Company's business
operations, and a general statement of the controls to minimize, eliminate, or
respond to each disruption. These potential situations range from the failure of
the core-processing provider to the failure of the Company's electrical and
telephone supply. At this time, management does not believe that the likelihood
of these failures is significant. As a part of its Business Resumption
Contingency Plan, management developed specific plans and procedures that would
be needed to implement any steps which may be necessary to continue business
operations if such events occur. The Company has not estimated its potential
costs associated with such matters.

Management is currently reviewing significant commercial loan relationships to
determine how much Y2K risk may exist in its customer base.

Other than costs identified above, the Company does not expect further Y2K
project costs to be material. Based on the review of computer and other
components, management does not believe the cost of remediation will be material
on the Company's financial statements, although there can be no assurances in
this regard.

The preceding discussion of the Year 2000 issue includes forward-looking
statements reflecting management's current assessments and estimates and which
involve risks and uncertainties. Various factors could cause actual results to
differ materially from those expected by such assessments and forward-looking
statements. Factors that might affect the timely and satisfactory completion of
the Year 2000 project include, but are not limited to, representations of third
party providers and timely correction of hardware or software problems, the
readiness of key utilities, suppliers and customers, and similar uncertainties.
The Company's Y2K project is an ongoing process involving continual evaluation.
Unanticipated problems could emerge and alternative solutions may be devised
that may be more costly than anticipated or more difficult to solve.


                                       18

<PAGE>




Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


The Company is exposed only to U.S. dollar interest rate changes and
accordingly, the Company manages exposure by considering the possible changes in
the net interest margin. The Company does not have any trading instruments nor
does it classify any portion of the securities portfolio as held for trading.
The Company does not engage in any hedging activities or enter into any
derivative instruments with a higher degree of risk than mortgage backed
securities which are commonly pass through securities. Finally, the Company has
no exposure to foreign currency exchange rate risk, commodity price risk, and
other market risks. Interest rates play a major part in the net interest income
of a financial institution. The sensitivity to rate changes is known as
"interest rate risk". The repricing of interest earning assets and
interest-bearing liabilities can influence the changes in net interest income.
As part of the Company's asset/liability management program, the timing of
repriced assets and liabilities is referred to as Gap management. It is the
policy of the Company to maintain Gap ratio in the one-year time horizon of .80
to 1.20. Gap management alone is not enough to properly manage interest rate
sensitivity, because interest rates do not respond at the same speed or at the
same level to market rate changes. For example, savings and money market rates
are more stable than loans tied to a Prime rate and thus respond with less
volatility to a market rate change. The Company uses a simulation model to
monitor changes in net interest income due to changes in market rates. The model
of rising, falling, and stable interest rate scenarios allows management to
monitor and adjust interest rate sensitivity to minimize the impact of market
rate swings. The analysis of impact on net interest margins as well as market
value of equity over a twelve month period is subjected to a 200 basis point
increase and decrease in rate.



                                       19
<PAGE>



                          PART II - Other Information



Item 5. Other Information.

        On January 26, 1999, First Citizens Corporation entered into an
        Agreement and Plan of Reorganization (the "Agreement") with BB&T
        Corporation ("BB&T"). Pursuant to the Agreement, the Company will merge
        with BB&T in a stock-for-stock exchange (the "Merger"). Under the terms
        of the Agreement, BB&T will exchange 1.0789 shares of its common stock
        for each share of the Company's common stock, subject to possible
        adjustment.

        The Merger is subject to approval of Company stockholders, federal and
        state bank regulatory authorities, and other customary closing
        conditions.


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

        (a)     Exhibits.

                27.     Financial Data Schedule.

        (b)     Reports on Form 8-K.

                None.



                                       20
<PAGE>




                                   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.




                                          FIRST CITIZENS CORPORATION
                                          ___________________________ 
                                               (Registrant)


Date: _________________                    /s/ Tom Moat
                                          ---------------------------           
                                          Tom Moat
                                          Chief Executive Officer




Date:_________________                     /s/ Douglas J. Hertha  
                                          ---------------------------           
                                          Douglas J. Hertha
                                          Vice President
                                          Chief Financial and Accounting Officer




                                       21