SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                   For the Fiscal Year Ended December 31, 1997
                          Commission File No. 000-22547

                        CITIZENS COMMUNITY BANCORP, INC.

       A Florida Corporation (IRS Employer Identification No. 65-0614044)
                             650 East Elkcam Circle
                           Marco Island, Florida 34145
                                 (941) 389-1800

                 Securities Registered Pursuant to Section 12(b)
                    of the Securities Exchange Act of 1934:

                                      NONE

                 Securities Registered Pursuant to Section 12(g)
                    of the Securities Exchange Act of 1934:

                                  COMMON STOCK

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

Check if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-B
is not  contained  in this  form,  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-KSB or any  amendment to
this Form 10-KSB. [ X ]

Revenues for the fiscal year ended December 31, 1997:  $2,795,879

The  aggregate  market  value  of the  common  stock of the  Registrant  held by
nonaffiliates  of the  Registrant  (954,394  shares) on  February  28,  1998 was
approximately  $8,589,546.  As of such date, no organized trading market existed
for the common stock of the Registrant.  The aggregate market value was computed
by reference to recent trading activity of the common stock of the Registrant at
$9.00 per share.  For the  purposes of this  response,  directors,  officers and
holders  of 5% or more of the  Registrant's  common  stock  are  considered  the
affiliates of the Registrant at that date.

The number of shares  outstanding of the Registrant's  Common Stock, as of March
13, 1998: 1,579,774 shares of $0.01 par value common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE


         1.       Portions of the Annual Report to  Shareholders  for the Fiscal
                  Year ended December 31, 1997. (Part II)

         2.       Portions of Proxy  Statement  for the 1998  Annual  Meeting of
                  Shareholders. (Part III)

                                        1

<PAGE>



                                TABLE OF CONTENTS

Consolidated--Citizens Community Bancorp,  Inc. and Affiliates

         NOTE:  Certain  information  required by Form 10-KSB is incorporated by
reference from the 1997 Annual Report and 1998 Annual Meeting Proxy Statement as
indicated below.  Only that information  expressly  incorporated by reference is
deemed filed with the Commission.
                                                                           Page
         PART I                                                           Number
                                                                          ------
         Item 1   Business................................................  3
         Item 2   Properties..............................................  8
         Item 3   Legal Proceedings.......................................  9
         Item 4   Submission of Matters to a Vote of Security Holders -...  9


         PART II
         Item 5   Market for Common Equity and Related Stockholder Matters  1(1)
         Item 6   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...............................  6(1)
         Item 7   Financial Statements and Supplementary Data............. 19(1)
         Item 8   Changes in and disagreements with Accountants on
                  Accounting and Financial Disclosure


         PART III
         Item 9   Directors and Executive Officers of the Registrant:.....  3(2)
         Item 10  Executive Compensation..................................  5(2)
         Item 11  Security Ownership of Certain
                  Beneficial Owners and Management........................  2(2)
         Item 12  Certain Relationships and Related Transactions.......... 11

         PART IV
         Item 13  Exhibits, Financial Statement Schedules, and
                  Reports on Form 8-K..................................... 14

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

         (1)      These items are  incorporated  by reference from the Company's
                  1997 Annual Report pursuant to Instruction E 2 of Form 10-KSB.

         (2)      The  material  required  by  Items  9  through  11  is  hereby
                  incorporated by reference from the Company's  definitive proxy
                  statement pursuant to Instruction E 3 of Form 10-KSB.

                                        2

<PAGE>



                                     PART I

ITEM 1. - BUSINESS

Description

General

Citizens  Community  Bancorp,  Inc. (the "Company") is a registered bank holding
company under the Federal Bank Holding Company Act of 1956, as amended, and owns
100% of the issued and  outstanding  common stock of Citizens  Community Bank of
Florida,  Marco Island, Florida (the "Bank"). The Company was incorporated under
the laws of the State of Florida on May 22,  1995 to acquire  100 percent of the
shares to be issued by the Bank during its  organizational  stage and to enhance
the Bank's  ability to serve its future  customers'  requirements  for financial
services.  The Company  provides  flexibility  for  expansion  of the  Company's
banking  business  through  acquisition  of  other  financial  institutions  and
provision  of  additional   banking-related   services  which  the   traditional
commercial bank may not provide under present laws.

The Bank is a  state-chartered  commercial  bank,  which  opened for business on
March  8,  1996.  The  Bank  offers  a  full  range  of   interest-bearing   and
noninterest-bearing accounts, including commercial and retail checking accounts,
negotiable  order  of  withdrawal  ("NOW")  accounts,   money  market  accounts,
individual  retirement  accounts,  regular  interest bearing  statement  savings
accounts,  certificates of deposit,  commercial  loans,  real estate loans, home
equity loans and consumer/installment loans. In addition, the Bank provides such
consumer services as U.S. Savings Bonds,  travelers checks,  safe deposit boxes,
bank by mail services,  direct deposit services,  automatic teller services, and
secondary mortgage loan origination services.

Market Area

The primary  service and assessment  areas for the Bank  encompasses  the entire
city of Marco Island, Isle of Capri,  Goodland as well as Naples and the rest of
Collier  County.  Competition  among  financial  institutions  in  this  area is
intense.  There are 6 commercial  banking  offices and 1 savings and loan office
within the primary  service area of the Bank. Most of these offices are branches
of or are  affiliated  with major bank holding  companies.  The Bank  operates a
branch  office at 5101  Tamiami  Trail East,  Naples,  Florida  which opened for
business in June, 1997.

The Bank is in competition with existing area financial  institutions other than
commercial  banks  and  savings  and  loan  associations,   including  insurance
companies, consumer finance companies, brokerage houses, credit unions and other
business entities which have over the years,  engaged more and more in providing
services which have historically been traditional  banking services.  Due to the
growth of the Collier County area in general and the Bank's primary service area
in partricular,  it is anticipated that competition will increase because of new
entrants to the market.

Investments

As of December 31, 1997,  investment securities and federal funds sold comprised
approximately   26.0%  of  the   Company's   assets  and  net  loans   comprised
approximately  59.5% of the Company's assets. The Company has invested primarily
in obligations  of the United States or  obligations  guaranteed as to principal
and interest by the United States. In addition,  the Company enters into Federal
Funds transactions with its principal  correspondent banks, and acts as a seller
of such funds.

Loan Portfolio

The  Bank  engages  in  a  wide  range  of  lending  activities,  including  the
origination  and purchase of  commercial,  consumer/installment  and real estate
loans.


                                        3

<PAGE>



Commercial  lending is directed  principally toward businesses whose demands for
funds fall  within  the  Bank's  legal  lending  limits and which are  potential
deposit  customers of the bank.  This category of loans  includes  loans made to
individual,  partnership or corporate  borrowers,  and obtained for a variety of
business  purposes.  Particular  emphasis  is  placed  on  loans  to  small  and
medium-sized businesses. The Bank's real estate loans consist of residential and
commercial first and second mortgage loans.

The Bank's consumer loans consist  primarily of installment loans to individuals
for  personal,  family and household  purposes,  including  automobile  loans to
individuals  and  pre-approved  lines of  credit.  This  category  of loans also
includes term loans secured by second  mortgages on the  residences of borrowers
for a variety of  purposes  including  home  improvements,  education  and other
personal expenditures.

The Bank's general  policy is not to accrue  interest on loans  delinquent  over
ninety days unless  fully  secured and in the process of  collection.  It is the
Bank's policy that the accrued and unpaid  interest is reversed  against current
income and  thereafter  interest is recognized  only to the extent  payments are
received. It is the Bank's policy that non-accrual loans are restored to accrual
basis when  interest  and  principal  payments  are  current and  prospects  for
recovery are no longer in doubt.

As of December  31,  1997,  there were no loans where  known  information  about
possible credit problems of borrowers  caused  management to have serious doubts
as to the ability of such  borrowers to comply with the present  loan  repayment
terms.

The  majority  of the  Company's  loans are  secured  by real  estate in Collier
County, Florida, where the Bank and its branch office are located.  Accordingly,
the ultimate  collectibility  of a substantial  portion of the loan portfolio is
susceptible to changes in market conditions in this County.

Loan Loss Reserves

In  considering  the  adequacy  of the  Company's  allowance  for  loan  losses,
management  has  considered  that as of December 31, 1997,  64.3% of outstanding
loans are in the commercial loan category, including loans secured by commercial
real estate.  Commercial loans are generally  considered by management as having
greater risk than other  categories  of loans in the Company's  loan  portfolio.
However,  the majority of these  commercial loans at December 31, 1997 were made
on a  secured  basis,  with  collate
ral  consisting  primarily  of real  estate,
accounts   receivable,   inventory,   assignment  of  mortgages  and  equipment.
Management  believes that the secured  condition of the preponderant  portion of
its commercial  loan portfolio  reduces any risk of loss  inherently  present in
commercial loans.

The Company's  consumer loan portfolio at December 31, 1997 consisted  primarily
of lines of credit and installment loans secured by automobiles, boats and other
consumer goods. Management believes that the risk associated with these types of
loans has been adequately provided for in the loan loss allowance.

Residential real estate mortgage loans constitute 27.2% of outstanding  loans at
December 31, 1997.  Management considers these loans to have minimal risk due to
the fact  that  these  loans  represent  conventional  residential  real  estate
mortgages  where the  amount of the  original  loan does not  exceed  80% of the
appraisal  value of the collateral or is otherwise  covered by private  mortgage
insurance.

The Company's Board of Directors monitors the loan portfolio monthly in order to
enable it to evaluate the adequacy of the allowance for loan losses. In addition
to reviews by regulatory agencies, the services of outside consultants have been
engaged to assist in the evaluation of credit  quality and loan  administration.
These  professionals  compliment  the system  implemented  by the Company  which
identifies  potential  problem  credits as early as  possible,  categorizes  the
credits as to risk and  includes a reporting  process to monitor the progress of
the credits.

The  allowance  for loan  losses  represents  the  cumulative  total of  monthly
provisions for loan losses. The allowance for loan losses is established through
a  provision  for loan  losses  charged to  expense.  Loans will be charged  off
against the allowance when management  believes the  collectibility of principal
is  unlikely.  The monthly  provision  for loan losses is based on  management's
judgment, after considering known and inherent risks in the portfolio, past loss
experience of the Company,  adverse  situations  that may affect the  borrower's
ability to repay,  assumed  values of the  underlying  collateral  securing  the
loans, the current and

                                        4

<PAGE>



prospective  financial  condition  of  the  borrower,  and  the  prevailing  and
anticipated  economic  condition of the local market. The Company did not charge
off any loans during the year ended December 31, 1997.

The Company  maintains the  allowance  for loan losses at a level  sufficient to
absorb all estimated losses in the loan portfolio. The allowance for loan losses
is made up of two primary  components:  (i) amounts  allocated to loans based on
collateral  type and (ii) amounts  allocated for loans reviewed on an individual
basis in accordance with a credit risk grading system.

Deposits

The  Bank  offers  a wide  range  of  interest-bearing  and  noninterest-bearing
accounts, including commercial and retail checking accounts, negotiable order of
withdrawal  ("NOW")  accounts,  money  market  accounts,  individual  retirement
accounts,  regular interest-bearing  statement savings accounts and certificates
of deposit with fixed rates and a range of maturity date options. The sources of
deposits are residents, businesses and employees of businesses within the Bank's
market area,  obtained through the personal  solicitation of the Bank's officers
and directors,  direct mail  solicitation  and  advertisements  published in the
local  media.  The Bank  pays  competitive  interest  rates on time and  savings
deposits up to the maximum permitted by law or regulation. In addition, the Bank
has implemented a service charge fee schedule  competitive  with other financial
institutions  in the Bank's market area,  covering  such matters as  maintenance
fees on checking accounts,  per item processing fees, returned check charges and
the like.

Correspondent Banking

The Bank purchases  correspondent  services  offered by larger banks,  including
check  collections,  purchase or sale of Federal  Funds,  security  safekeeping,
investment  services,  coin and currency  supplies,  overline and liquidity loan
participations and sales of loans to or participations with correspondent banks.
At December 31, 1997 the Company had sold $9,057,000 in Federal Funds.

The Bank sells loan  participations to correspondent banks with respect to loans
which exceed the Bank's  lending limit of  approximately  $1.1 million.  For the
fiscal  year ended  December  31,  1997,  the bank had sold loan  participations
totalling approximately $4.7 million.

Data Processing

The Bank has a data processing  servicing  agreement with First National Bank of
Omaha,  Nebraska.  This servicing  agreement  provides for the Bank to receive a
full range of data processing  services  including an automated  general ledger,
deposit  accounting,  commercial,  real  estate  and  installment  lending  data
processing,  central  information  file  ("CIF")  and ATM  processing.  The data
processing  servicing agreement provides for the Bank to pay a monthly fee based
on the type, kind and volume of data processing  services provided,  priced at a
stipulated rate schedule.

Employees

The Bank  currently  employs 23 full time and 5 part time  persons,  including 6
officers. The Bank will hire additional persons as needed.

Monetary Policies

The results of  operations  of the  Company and the Bank are  affected by credit
policies of monetary  authorities,  particularly  the Federal Reserve Board. The
instruments  of monetary  policy  employed by the Federal  Reserve Board include
open market operations in U.S.  Government  securities,  changes in the discount
rate on member bank borrowings,  changes in reserve  requirements against member
bank deposits and  limitations  on interest  rates which member banks may pay on
time and  savings  deposits.  In view of  changing  conditions  in the  national
economy and in the money market, as well as the effect of action by monetary and
fiscal  authorities,  including the Federal  Reserve Board, no prediction can be
made as to possible  future  changes in interest  rates,  deposit  levels,  loan
demand, or the business and earnings of the Bank.


                                        5

<PAGE>



Supervision and Regulation

The Company and the Bank operate in a highly  regulated  environment,  and their
business  activities  are  governed by statute,  regulation  and  administrative
policies.  The business activities of the Company and the Bank are supervised by
a number of federal  regulatory  agencies,  including the Federal Reserve Board,
the Florida  Department  of Banking and Finance  ("Department")  and the Federal
Deposit Insurance Corporation ("FDIC").

The Company is  regulated  by the Federal  Reserve  Board under the federal Bank
Holding  Company Act, which  requires  every bank holding  company to obtain the
prior approval of the Federal Reserve Board before acquiring more than 5% of the
voting shares of any bank or all or  substantially  all of the assets of a bank,
and before  merging or  consolidating  with another bank  holding  company.  The
Federal Reserve Board (pursuant to regulation and published  policy  statements)
has maintained  that a bank holding  company must serve as a source of financial
strength to its  subsidiary  banks.  In adhering  to the Federal  Reserve  Board
Policy,  the  Company  may  be  required  to  provide  financial  support  for a
subsidiary bank at a time when,  absent such Federal  Reserve Board policy,  the
Company may not deem it advisable to provide such assistance.

A bank holding  company is generally  prohibited  from acquiring  control of any
company  which is not a bank and from  engaging in any  business  other than the
business  of banking or  managing  and  controlling  banks.  However,  there are
certain activities which have been identified by the Federal Reserve Board to be
so  closely  related  to banking  as to be a proper  incident  thereto  and thus
permissible for bank holding companies.

As a state bank, the Bank is subject to the supervision of the  Department,  the
FDIC and the Federal  Reserve  Board.  With respect to  expansion,  the Bank may
establish branch offices anywhere within the State of Florida.  The Bank is also
subject to the Florida banking and usury laws restricting the amount of interest
which it may charge in making loans or other extensions of credit.  In addition,
the bank,  as a subsidiary  of the  Company,  is subject to  restrictions  under
federal  law in dealing  with the Company and other  affiliates,  if any.  These
restrictions  apply to extensions of credit to an affiliate,  investments in the
securities of an affiliate and the purchase of assets from an affiliate.

Loans and  extensions  of credit by state  banks are  subject  to legal  lending
limitations.  Under  state  law,  a state  bank may  grant  unsecured  loans and
extensions  of  credit  in an amount  up to 15% of its  unimpaired  capital  and
surplus to any person. In addition,  a state bank may grant additional loans and
extensions of credit to the same person up to 10% of its unimpaired  capital and
surplus,  provided that the transactions are fully secured.  This 10% limitation
is separate from,  and in addition to, the 15%  limitation for unsecured  loans.
Loans and  extensions  of credit may exceed the  general  lending  limit if they
qualify under one of several exceptions.

Both the  Company and the Bank are subject to  regulatory  capital  requirements
imposed by the Federal  Reserve  Board,  the FDIC and the  Department.  Both the
Federal  Reserve  Board  and  the  FDIC  have  established   risk-based  capital
guidelines for bank holding  companies and banks which make  regulatory  capital
requirements  more sensitive to differences in risk profiles of various  banking
organizations.  The capital  adequacy  guidelines  issued by the Federal Reserve
Board are applied to bank  holding  companies on a  consolidated  basis with the
banks owned by the holding  company.  The FDIC's risk capital  guidelines  apply
directly to state banks  regardless  of whether they are a subsidiary  of a bank
holding company. Both agencies'  requirements (which are substantially  similar)
provide  that  banking  organizations  must  have  capital  equivalent  to 8% of
weighted risk assets. The risk weights assigned to assets are based primarily on
credit risks. Depending upon the riskiness of a particular asset, it is assigned
to a risk category. For example,  securities with an unconditional  guarantee by
the United States  government are assigned to the lowest risk  category.  A risk
weight of 50% is assigned to loans secured by owner-occupied  one to four family
residential  mortgages.  The  aggregate  amount of assets  assigned to each risk
category is multiplied by the risk weight assigned to that category to determine
the weighted values,  which are added together to determine total  risk-weighted
assets. At December 31, 1997, the Company's total risk-based  capital and Tier 1
ratio were 17.67% and 16.57%,  respectively.  Both the Federal Reserve Board and
the FDIC have also  implemented  minimum  capital  leverage ratios to be used in
tandem with the risk-based  guidelines in assessing the overall capital adequacy
of bank and bank holding companies.  Under these rules, banking institutions are
required  to  maintain a ratio of 3% "Tier 1" capital  to total  assets  (net of
goodwill).  Tier 1 capital includes common  stockholders  equity,  noncumulative
perpetual  preferred  stock and  minority  interests  in the equity  accounts of
consolidated subsidiaries.


                                        6

<PAGE>



Both the  risk-based  capital  guidelines  and the  leverage  ratio are  minimum
requirements,  applicable only to top-rated banking  institutions.  Institutions
operating at or near these levels are  expected to have  well-diversified  risk,
excellent asset quality,  high liquidity,  good earnings and in general, have to
be considered strong banking  organizations,  rated composite 1 under the CAMELS
rating system for banks or the BOPEC rating  system for bank holding  companies.
Institutions  with lower  ratings and  institutions  with high levels of risk or
experiencing  or anticipating  significant  growth would be expected to maintain
ratios 100 to 200 basis points above the stated minimums.

The Federal Deposit Insurance  Corporation  Improvement Act of 1991 (or FDICIA),
created  five   "capital   categories"   ("well   capitalized,   "   "adequately
capitalized,"    "undercapitalized,"    "significantly   undercapitalized"   and
"critically  undercapitalized")  which are defined in the Act and which are used
to determine the severity of  corrective  action the  appropriate  regulator may
take in the event an institution  reaches a given level of  undercapitalization.
For example,  an  institution  which  becomes  "undercapitalized"  must submit a
capital  restoration  plan to the appropriate  regulator  outlining the steps it
will  take to become  adequately  capitalized.  Upon  approving  the  plan,  the
regulator  will  monitor  the   institution's   compliance.   Before  a  capital
restoration plan will be approved,  any entity controlling a bank (i.e., holding
companies)  must guarantee  compliance  with the plan until the  institution has
been  adequately   capitalized  for  four  consecutive  calendar  quarters.  The
liability of the holding company is limited to the lesser of five percent of the
institution's  total  assets  or the  amount  which is  necessary  to bring  the
institution   into   compliance  with  all  capital   standards.   In  addition,
"undercapitalized"  institutions will be restricted from paying management fees,
dividends  and other  capital  distributions,  will be subject to certain  asset
growth  restrictions  and will be required  to obtain  prior  approval  from the
appropriate regulator to open new branches or expand into new lines of business.
As an  institution  drops to lower  capital  levels,  the extent of action to be
taken  by  the  appropriate  regulator  increases,   restricting  the  types  of
transactions in which the  institution  may engage and ultimately  providing for
the appointment of a receiver for certain  institutions  deemed to be critically
undercapitalized.

The FDICIA  required  each federal  banking  agency to prescribe for all insured
depository  institutions  and their  holding  companies  standards  relating  to
internal controls,  information  systems and audit systems,  loan documentation,
credit   underwriting,   interest  rate  risk   exposure,   asset  growth,   and
compensation,  fees and  benefits  and such  other  operational  and  managerial
standards as the agency deems  appropriate.  In  addition,  the federal  banking
regulatory   agencies  were  required  to  prescribe  by  regulation   standards
specifying:  (i)  maximum  classified  assets to capital  ratios;  (ii)  minimum
earnings  sufficient to absorb losses without  impairing  capital;  (iii) to the
extent  feasible,  a minimum  ratio of market  value to book value for  publicly
traded shares of depository  institutions or the depository  institution holding
companies; and (iv) such other standards relating to asset quality, earnings and
valuation as the agency deems appropriate.  Finally, each federal banking agency
was  required  to  prescribe  standards  for  employment   contracts  and  other
compensation  arrangements  of  executive  officers,  employees,  directors  and
principal  stockholders of insured  depository  institutions that would prohibit
compensation  and benefits  and other  arrangements  that are  excessive or that
could  lead to a  material  financial  loss for the  institution.  If an insured
depository institution or its holding company fails to meet any of its standards
described  above,  it will be  required  to  submit to the  appropriate  federal
banking  agency  a plan  specifying  the  steps  that  will be taken to cure the
deficiency.  If an  institution  fails to submit an acceptable  plan or fails to
implement the plan,  the  appropriate  federal  banking  agency will require the
institution or holding  company,  to correct the deficiency and until corrected,
may impose  restrictions on the institution or the holding company including any
of the restrictions  applicable under the prompt corrective action provisions of
the FDICIA.  The Federal banking agencies final rule implementing the safety and
soundness provisions of the FDICIA was effective on August 9, 1995.

In response to the directive  issued under the Act, the regulators  have adopted
regulations which, among other things, prescribe the capital thresholds for each
of the five  capital  categories  established  by the Act. The  following  table
reflects the capital thresholds:

                            [TABLE FOLLOWS THIS PAGE]

                                        7

<PAGE>



<TABLE>
<CAPTION>

                                    Total Risk -            Tier 1 Risk -               Tier 1
                                   Based Capital            Based Capital              Leverage
                                       Ratio                    Ratio                    Ratio
                                   -------------            -------------              --------
<S>                                <C>                      <C>                      <C>
Well capitalized (1)                    10%                       6%                       5%
Adequately capitalized (1)               8%                       4%                       4%  (2)
Undercapitalized (3)               less than  8%            less than  4%            less than  4%
Significantly Undercapitalized (3) less than  6%            less than  3%            less than  3%
Critically Undercapitalized              -                        -                  less than  2%

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

(1)  An institution must meet all three minimums.
(2)  3% for  composite  1-rated  institutions,  subject to  appropriate  federal
     banking agency guidelines.
(3)  An  institution  falls  into this  category  if it is below  the  specified
     capital level for any of the three capital measures.

</TABLE>

The Act also provided  that banks must meet new safety and soundness  standards.
In order to  comply  with the Act,  the  Federal  Reserve  Board,  and the FDIC,
adopted a final  Rule  which  institutes  guidelines  defining  operational  and
managerial standards relating to internal controls,  loan documentation,  credit
underwriting,  interest  rate  exposure,  asset  growth,  director  and  officer
compensation,  asset  quality,  earnings and stock  valuation.  Both the capital
standards and the safety and soundness  standards  which the Act implements were
designed to bolster and protect the deposit insurance fund.

As a  state  bank,  the  bank  is  subject  to  examination  and  review  by the
Department.  The Bank submits to the Department  quarterly reports of condition,
as well as such additional reports as may be required by the state banking laws.

Under the Riegle-Neal  Interstate Banking and Branching  Efficiency Act of 1994,
existing  restrictions  on  interstate  acquisitions  of banks  by bank  holding
companies  were  repealed on September  29, 1995,  such that the Company and any
other bank  holding  company  located in  Florida  would be able to acquire  any
Florida-based   bank,   subject  to  certain   deposit   percentage   and  other
restrictions.  The legislation  also provides that,  unless an individual  state
elects  beforehand  either  (i) to  accelerate  the  effective  date  or (ii) to
prohibit  out-of-state  banks  from  operating  interstate  branches  within its
territory,  on or after June 1, 1997,  adequately  capitalized  and managed bank
holding  companies  will  be  able  to  consolidate.  De  novo  branching  by an
out-of-state  bank would be permitted  only if it is expressly  permitted by the
laws of the  host  state.  The  authority  of a bank to  establish  and  operate
branches  within  a state  will  continue  to be  subject  to  applicable  state
branching  laws.  During its 1996  Legislative  Session the Florida  Legislature
adopted Legislation which permits interstate  branching by acquisition,  but not
by de novo branching.

As a bank  holding  company,  the  Company is  required to file with the Federal
Reserve Board an annual report of its  operations at the end of each fiscal year
and such  additional  information  as the  Federal  Reserve  Board  may  require
pursuant to the Act. The Federal Reserve Board may also make examinations of the
Company and each of its subsidiaries.

The scope of regulation and  permissible  activities of the Company and the Bank
is subject to change by future federal and state legislation.


ITEM 2. - DESCRIPTION OF PROPERTY

     The Bank  commenced  business  operations  on March 8, 1996 in a  temporary
     facility located at 604 Elkcam Circle,  Marco Island,  Florida.  On January
     13, 1997 the Bank occupied its new permanent  facility  located at the same
     site. The Company's  headquarters was also relocated to this facility.  The
     facility is a one-story  modern bank  building  consisting  of 4,500 square
     feet. The Bank opened a branch office at 5101 East Tamiami  Trail,  Naples,
     Florida in June,  1997.  This facility is owned by the Company and consists
     of a 2 story mixed use office  facility.  The first  floor,  consisting  of
     3,900 square feet, is occupied by the Bank.



                                        8

<PAGE>



ITEM 3. - LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company or the Bank
is a party or of which  any of  their  properties  are  subject;  nor are  there
material proceedings known to the Company to be contemplated by any governmental
authority;  nor are there material proceedings known to the Company,  pending or
contemplated,  in  which  any  director,  officer,  affiliate  or any  principal
security  holder of the Company,  or any  associate of any of the foregoing is a
party or has an interest adverse to the Company or the Bank.


ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None


                                     PART II

ITEM 5. - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

During  the  period  covered  by this  report  and to  date,  there  has been no
established public trading market for the Company's Common Stock.

As of February  28,  1998,  the  approximate  number of holders of record of the
Company's Common Stock was 532.

To date,  the Company has not paid any dividends on its Common Stock.  It is the
present policy of the Board of Directors of the Company to reinvest earnings for
such period of time as is necessary to ensure the success of the  operations  of
the Company and of the Bank.  There are no current plans to initiate  payment of
cash dividends,  and future dividend policy will depend on the Bank's  earnings,
capital requirements,  financial condition and other factors considered relevant
by the Board of Directors of the Company.

The Bank is  restricted in its ability to pay  dividends  under Florida  banking
laws and by regulations of the Federal Deposit Insurance  Corporation.  Pursuant
to Section 658.37, Florida Statutes, a state bank may not pay dividends from its
capital.  All  dividends  must be paid out of net  profits  then on hand,  after
charging off bad debts,  depreciation,  and other worthless  assets.  Payment of
dividends  out of net  profits is further  limited by Federal  regulation  which
prohibits  the  payment of  dividends  if such  payment  would  bring the Bank's
capital below required levels.

The Company commenced its initial public offering of common stock on December 7,
1995 which was the effective date of the Securities Act registration  statement,
File No. 33-98090,  filed in connection therewith.  The offering is a continuous
offering made under Rule 415 whereby the Company offered up to 1,105,000  shares
of common  stock for an aggregate of  $9,945,000.  The Company was  committed to
issue up to 335,000  shares  pursuant  to  670,000  warrants  issued  during the
initial offering period. On December 15, 1997 the Company declared a two-for-one
stock split  resulting in the warrant  shares being  adjusted  upward to 670,000
shares.  The warrant  exercise period was still open as of December 31, 1997 and
an additional 169,140 shares adjusted for the stock split were sold resulting in
the Company obtaining $754,380 in additional  offering proceeds.  As of December
31, 1997,  the Company had sold a total of 1,571,624  adjusted  shares of common
stock at $4.50 per share for a total of $7,065,558 in offering proceeds.

From the Effective Date of Registration  to and including  December 31, 1997 the
Company had incurred $45,728 in expenses associated with the offering,  issuance
and  distribution  of the common stock sold through  December 31, 1997.  No such
expenses were paid to directors, officers or 10% shareholders of the Company, or
their  affiliates.  All such payments were made to others.  After  deducting the
above expenses,  the Company has received a total of $7,019,830 in net proceeds.
Of this amount,  the Company purchased 100% of the issued and outstanding shares
of Citizens Community Bank of Florida for $4,580,000 and has retained $2,446,230
for working capital.



                                        9

<PAGE>



ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS & FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

The Company hereby incorporates by reference the section entitled  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  on
pages 6 through 18 of the 1997 Annual Report to Shareholders  for the year ended
December 31, 1997 filed as an Exhibit under Item 13 herein.


ITEM 7. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company  hereby  incorporates  by  reference  the Report of the  Independent
Auditors and the Consolidated  Financial Statements contained in the 1997 Annual
Report to Shareholders  for the year ended December 31, 1997 filed as an Exhibit
under Item 13 herein.


ITEM 8. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE MATTERS - None


                                    PART III

ITEM 9. - DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

The Company hereby  incorporates by reference the sections entitled "Election of
Directors"  and "Board of Directors  Meeting"  contained at pages 2 and 5 of the
Proxy Statement filed as an Exhibit under Item 13 herein.


ITEM 10. - EXECUTIVE COMPENSATION

The Company hereby  incorporates  by reference the section  entitled  "Executive
Compensation"  contained  at pages 5 and 6 of the  Proxy  Statement  filed as an
Exhibit under Item 13 herein.


ITEM 11. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)        Security Ownership of Certain Beneficial Owners

The Company hereby  incorporates by reference the sections entitled "Election of
Directors" and "Certain Shareholders" contained at page 2 of the Proxy Statement
filed as an Exhibit under Item 13 herein.

(b)        Security Ownership of Management

The Company hereby  incorporates by reference the section entitled  "Election of
Directors"  contained  at pages 2 through 4 of the Proxy  Statement  filed as an
Exhibit under Item 13 herein.

(c)        Changes in Control

The Company is not aware of any arrangements, including any pledge by any person
of  securities of the Company,  the operation of which may at a subsequent  date
result in a change of control of the Company.



                                       10

<PAGE>



ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Neither the Bank nor the Company  has  engaged in any  reportable  transactions,
including loans, to the Bank's or the Company's  directors,  executive officers,
their  associates  and members of the immediate  families of such  directors and
executive officers.


ITEM 13. - EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits. The following exhibits are filed with or incorporated by reference
into this report.  The exhibits  which are  denominated  by an asterisk (*) were
previously filed as a part of, and are hereby incorporated by reference from the
Company's  Registration  Statement on Form SB-2 under the Securities Act of 1933
for the Company,  as effective with the  Securities  and Exchange  Commission on
December  7, 1995,  Registration  No.  33-98090  (referred  to as  "Registration
Statement").  The  exhibit  numbers  correspond  to the  exhibit  numbers in the
referenced documents.


Exhibit No.                             Description of Exhibit
-----------                             ----------------------

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

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

   *4.1                    Specimen  Common  Stock   Certificate   (Registration
                           Statement)

   *4.2                    Specimen Warrant Certificate (Registration Statement)

   *4.4                    Company's Warrant Plan (Registration Statement)

   22.1                    The Company's 1998 Annual Meeting Proxy Statement

   22.2                    The  Company's  1997 Annual Report for the year ended
                           December 31, 1997


(b)  Reports on Form 8-K.  The  Company  filed a Form 8-K on October 23, 1997 in
which it reported a two (2) for one (1) split of the Company's Common Stock.



                                       11

<PAGE>



                                                  SIGNATURES

Pursuant to the requirements of Section 15(d) 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.

                             Citizens Community Bancorp,  Inc.


Dated:  March 17, 1998       By:    /s/ Richard Storm, Jr.
                                    -----------------------
                                        Richard Storm, Jr.
                                        Chairman of the Board



Dated:  March 17, 1998      By:    /s/ Stephen A. McLaughlin
                                   --------------------------
                                       Stephen A. McLaughlin
                                       Vice President
                                       (Chief Financial and Accounting Officer)

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:



/s/ Diane M. Beyer                March 17, 1998
-----------------------
DIANE M. BEYER
Class I Director


/s/ Joel M. Cox, Sr.              March 17, 1998
-----------------------
JOEL M. COX, SR.
Class I Director


/s/ Thomas B. Garrison            March 17, 1998
-----------------------
THOMAS B. GARRISON
Class II Director


/s/ James S. Hagedorn             March 17, 1998
-----------------------
JAMES S. HAGEDORN
Class I Director


/s/ Dennis J. Lynch               March 17, 1998
-----------------------
DENNIS J. LYNCH
Class II Director

/s/ Stephen A. McLaughlin         March 17, 1998
-----------------------
STEPHEN A. MCLAUGHLIN
Class III Director


/s/ Louis J. Smith                March 17, 1998
-----------------------
LOUIS J. SMITH
Class II Director

                                       12

<PAGE>



/s/ Richard Storm, Jr.            March 17, 1998
-----------------------
RICHARD STORM, JR.
Class III Director


/s/ John J. Wolf                  March 17, 1998
-----------------------
JOHN J. WOLF
Class III Director



         SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
         SECTION  15(d) OF THE ACT BY  REGISTRANTS  WHICH  HAVE  NOT  REGISTERED
         SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

 The Company's  Proxy  Statement and 1997 Annual Report are included as Exhibits
22.1 and 22.2 of this filing.


                                       13

<PAGE>