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, 1998
                          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, 1998:  $4,470,458

The  aggregate  market  value  of the  common  stock of the  Registrant  held by
nonaffiliates  of the  Registrant  (2,508,742  shares) on February  28, 1999 was
approximately $25,087,420.  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
$10.00 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
5, 1999: 3,455,039 shares of $0.01 par value common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------


         1.       Portions of Citizens' Annual Report.  (Part II)

         2.       Portions of the Proxy Statement for the 1999 Annual Meeting of
                  Shareholders  filed  electronically  with the  Securities  and
                  Exchange Commission on March 25, 1999. (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 1998 Annual Report and 1999 Annual Meeting Proxy Statement as
indicated below.  Only that information  expressly  incorporated by reference is
deemed filed with the Securities and Exchange Commission.
<TABLE>
<CAPTION>

         PART I                                                                                             Page Number
                                                                                                            -----------
<S>               <C>                                                                                            <C>
         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.....................                 9(1)
         Item 6   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations....................................................                 9(1)
         Item 7   Financial Statements and Supplementary Data..................................                 9(1)
         Item 8   Changes in and disagreements with Accountants on
                  Accounting and Financial Disclosure..........................................                 10


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

         PART IV
         Item 13  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.............                 11
</TABLE>

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

         (1)      These items are  incorporated  by reference from the Company's
                  1998 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  "Citizens") is a bank holding  company
under the Federal Bank Holding  Company Act of 1956, and owns 100% of the issued
and  outstanding  common  stock of Citizens  Community  Bank of  Florida,  Marco
Island, Florida (the "Citizens Community").  Citizens 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 Citizens Community during its organizational stage and to
enhance Citizens Community's ability to serve its future customers' requirements
for financial  services.  Citizens  provides  flexibility  for expansion of its'
banking  business  through  acquisition  of  other  financial  institutions  and
provision of additional  banking-related services which a traditional commercial
bank may not provide under present laws.

Citizens  Community  is a  state-chartered  commercial  bank,  which  opened for
business  on  March  8,  1996.   Citizens  Community  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,
Citizens  Community  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 Citizens Community  encompasses the
entire city of Naples,  Marco Island, Isle of Capri, and Goodland as well as the
rest of Collier County. There is strong competition among financial institutions
in this  area.  There  are  eight  commercial  banks  and one  savings  and loan
headquartered  within the primary service area of Citizens Community.  There are
84 banking offices and 3 savings and loan offices, most of which are branches of
or are affiliated with major bank holding companies. Citizens Community operates
offices at 650 E. Elkcam Circle, Marco Island,  Florida,  ("Marco Office") which
opened for business in January, 1997; 5101 Tamiami Trail East, Naples,  Florida,
("East  Trail  Office")  which opened for  business in June,  1997;  and 2375 N.
Tamiami Trail, Naples, Florida, ("Moorings Office") which opened for business in
August,  1998. Citizens Community also operates a courier service throughout its
primary service area.

Citizens  Community 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 Citizens Community's
primary  service area in particular,  it is anticipated  that  competition  will
increase because of new entrants to the market.

Investments

As of December 31, 1998,  investment securities and federal funds sold comprised
approximately  33.7% of Citizens'  assets and net loans comprised  approximately
54.7%  of  Citizens'  assets.  Citizens  Community  has  invested  primarily  in
obligations  of Agencies of the United  States  Government.  Citizens  Community
enters into Federal Funds transactions with its principal  correspondent  banks,
and acts as a seller of such funds.

Loan Portfolio

Citizens  Community  engages in a wide range of  lending  activities,  primarily
focused on the  origination  of commercial and  residential  real estate secured
loans,  commercial  loans  secured by non-real  estate  collateral  and consumer
loans.


                                        3

<PAGE>



Commercial  lending is directed  principally toward businesses whose demands for
funds  fall  within  Citizens  Community'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.  Citizens Community's real estate loans consist of
commercial and residential first and second mortgage loans.

Citizens  Community's  consumer loans consist  primarily of installment loans to
individuals for personal,  family and household purposes,  including  automobile
and boat 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.

Citizens  Community'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  Citizens  Community'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 Citizens Community'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,  1998,  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 Citizens'  loans are secured by real estate in Collier  County,
Florida,   where  Citizens   Community  and  its  branch  offices  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 Citizens'  allowance for loan losses,  management
has considered  that as of December 31, 1998,  approximately  48% of outstanding
loans are in the  commercial  real estate loan  category.  Commercial  loans are
generally  considered by management as having greater risk than other categories
of  loans in our  loan  portfolio.  Management  believes  that  the real  estate
collateral  securing its commercial  real estate loan's reduces the risk of loss
inherently present in commercial loans.

Citizens'  consumer loan portfolio at December 31, 1998  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   approximately   32%  of
outstanding loans at December 31, 1998. 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.

Citizens'  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  Citizens  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  Citizens  Community,  adverse  situations  that may  affect  the
borrower's  ability  to  repay,  assumed  values  of the  underlying  collateral
securing  the loans,  the current and  prospective  financial  condition  of the
borrower,  and the prevailing and  anticipated  economic  condition of the local
market.  Citizens Community charged off one loan in the amount of $6,500 against
the allowance for loan losses during the year ended December 31, 1998.

                                        4

<PAGE>



Citizens Community maintains the allowance for loan losses at a level sufficient
to absorb all  potential  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

Citizens   Community   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  Citizens  Community's  market  area,  obtained  through  the
personal  solicitation of Citizens  Community's  officers and directors,  direct
mail  solicitation  and  advertisements  published in the local media.  Citizens
Community pays competitive interest rates on time and savings deposits up to the
maximum  permitted by law or  regulation.  In addition,  Citizens  Community has
implemented  a service  charge fee  schedule  competitive  with other  financial
institutions  in Citizens  Community's  market  area,  covering  such matters as
maintenance fees on checking accounts,  per item processing fees, returned check
charges and the like.

Correspondent Banking

Citizens  Community  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, 1998  Citizens had sold  $19,181,000  in
Federal Funds.

Citizens Community sells loan  participations  without recourse to correspondent
banks with  respect to loans which exceed  Citizens  Community's  legal  lending
limit which was  approximately  $1.6  million at  December  31,  1998.  Citizens
Community has  established  an internal  lending limit which was $1.2 million at
December 31, 1998.

Data Processing

Citizens Community has a data processing servicing agreement with First National
Bank  of  Omaha,  Nebraska.  This  servicing  agreement  provides  for  Citizens
Community  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  Citizens
Community  to pay a  monthly  fee  based on the  type,  kind and  volume of data
processing services provided, priced at a stipulated rate schedule.

Employees

Citizens  Community  currently  employs  33 full time and 8 part  time  persons,
including  13  officers.  Citizens  Community  will hire  additional  persons as
needed.

Monetary Policies

The results of  operations  of Citizens and Citizens  Community  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 Citizens Community.




                                        5

<PAGE>



Supervision and Regulation

Citizens and Citizens Community operate in a highly regulated  environment,  and
their business activities are governed by statute, regulation and administrative
policies.  The  business  activities  of Citizens  and  Citizens  Community  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").

Citizens 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,  Citizens may be required to provide  financial support for a subsidiary
bank at a time when, absent such Federal Reserve Board policy,  Citizens 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,  Citizens  Community  is  subject  to the  supervision  of the
Department,  the FDIC and the Federal Reserve Board.  With respect to expansion,
Citizens  Community may establish  branch offices  anywhere  within the State of
Florida.  Citizens  Community 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,  Citizens Community, as a subsidiary of
Citizens,  is subject to restrictions under federal law in dealing with Citizens
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  Citizens  and  Citizens   Community  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, 1998,  Citizens'  total  risk-based  capital and Tier 1
ratio were 15.34% and 14.36%,  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%
</TABLE>

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

(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.

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,  Citizens Community is subject to examination and review by the
Department.  Citizens  Community 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 Citizens 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. Florida permits interstate branching by acquisition,  but not by
de novo branching.

As a bank holding company, Citizens 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 Citizens and each
of its subsidiaries.

The scope of  regulation  and  permissible  activities  of Citizens and Citizens
Community is subject to change by future federal and state legislation.


ITEM 2. - DESCRIPTION OF PROPERTY

     The Marco  Island  facility,  which is owned by  Citizens  Community,  is a
     one-story modern bank building  consisting of 4,500 square feet.  Citizens'
     headquarters is also located in this facility.  The East Trail Office, also
     owned by  Citizens  Community,  consists  of a  2-story  mixed  use  office
     facility. The first floor,  consisting of 3,900 square feet, is occupied by
     Citizens  Community.  The  Moorings  Office  consists of 3,864  square feet
     located in a 3-story professional office condominium  building.  This space
     is also owned by Citizens Community.





                                        8

<PAGE>



ITEM 3. - LEGAL PROCEEDINGS

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


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 Citizens' Common Stock.

As of March 5, 1999,  the  approximate  number of holders of record of Citizens'
Common Stock was 722.

To date, Citizens has not paid any cash dividends on its Common Stock.  Citizens
paid an 8% stock dividend in January,  1999 to  stockholders  of record December
31,  1998.  It is the present  policy of the Board of  Directors  of Citizens to
reinvest  earnings for such period of time as is necessary to ensure the success
of the  operations of Citizens and of Citizens  Community.  There are no current
plans to initiate  payment of cash  dividends,  and future  dividend policy will
depend  on  Citizens  Community's  earnings,  capital  requirements,   financial
condition  and other  factors  considered  relevant by the Board of Directors of
Citizens.

Citizens  Community 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  Citizens
Community's capital below required levels.

During the third quarter of 1998, Citizens sold 1,000,000 shares of common stock
in a  registered  offering for an aggregate  of  $7,500,000.  Citizens  incurred
$76,744 of expenses as related to the sale of stock,  which were  deducted  from
the proceeds received.


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

Citizens  hereby  incorporates by reference the section  entitled  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  on
pages 7 through 19 of the 1998 Annual Report to Shareholders  for the year ended
December 31, 1998 filed as an Exhibit under Item 13 herein.


ITEM 7. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Citizens hereby incorporates by reference the Independent  Auditors' Reports and
the  Consolidated  Financial  Statements  contained in the 1998 Annual Report to
Shareholders filed as an Exhibit under Item 13 herein.





                                        9

<PAGE>



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

Citizens  hereby  incorporates by reference the sections  entitled  "Election of
Directors"  and "Board of Directors  Meeting"  contained at pages 2 through 7 of
the Proxy  Statement  filed  electronically  with the  Securities  and  Exchange
Commission on March 25, 1999.


ITEM 10. - EXECUTIVE COMPENSATION

Citizens  hereby  incorporates  by  reference  the section  entitled  "Executive
Compensation" contained at pages 7 through 10 of the Proxy Statement.


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

(a)        Security Ownership of Certain Beneficial Owners

Citizens   hereby   incorporates   by  reference  the  section  titled  "Certain
Shareholders" on page 2 of the Proxy Statement.

(b)        Security Ownership of Management

Citizens  hereby  incorporates  by reference the section  entitled  "Election of
Directors" contained at pages 2 through 7 of the Proxy Statement.

(c)        Changes in Control

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


ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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


                                       10

<PAGE>




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 marked by a single  asterisk (*) were
previously  filed as a part of, and are hereby  incorporated  by reference  from
Citizens'  Registration Statement on Form SB-2, as effective with the Securities
and Exchange  Commission on December 7, 1995,  Registration  No.  33-98090.  The
exhibits  which are marked by a double  asterisk (**) were  previously  filed as
part of, and are hereby  incorporated  by reference from Citizens'  Registration
Statement on Form SB-2 as filed with the Securities  and Exchange  Commission on
March 12, 1998,  Registration No. 333-47813.  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 Citizens

   *3.2   By-laws of Citizens

   *4.1   Specimen Common Stock Certificate

   *4.2   Specimen Warrant Certificate

   *4.4   Company's Warrant Plan

  **10.1  Incentive Stock Option Plan for Key Officers and Employees

  **10.2  1998 Directors Stock Option Plan

  **10.3  Employment Contract with Michael A. Micallef, Jr.

   22.1   Citizens' 1998 Annual Report



(b)  Reports on Form 8-K.           Citizens did not file a Form 8-K during the
     --------------------           last quarter of 1998.




                                       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 29, 1999             By: /s/Richard Storm, Jr.
        --------------             -------------------------
                                   Richard Storm, Jr.
                                   Chairman of the Board and Chief Executive
                                   Officer



Dated:  March 26, 1999             By: /s/Gregory E. Smith
        --------------             -----------------------
                                   Gregory E. Smith
                                   Sr. 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:


                                        March __, 1999
-------------------                     
DIANE M. BEYER
Class I Director


/s/JOEL M. COX, SR.                     March 29, 1999
-------------------                                        
JOEL M. COX, SR.
Class I Director


                                        March __, 1999
-------------------                     
THOMAS B. GARRISON
Class II Director


/s/JAMES S. HAGEDORN                    March 29, 1999
--------------------                
JAMES S. HAGEDORN
Class I Director


                                        March __, 1999
-------------------                     
DENNIS J. LYNCH
Class II Director

                                        March __, 1999
-------------------                     
STEPHEN A. MCLAUGHLIN
Class III Director





                                       12

<PAGE>

c

/s/LOUIS J. SMITH                       March 26, 1999
-----------------                                     
LOUIS J. SMITH
Class II Director


/s/RICHARD STORM, JR.                   March 27, 1999
---------------------     
RICHARD STORM, JR.
Class III Director


/s/JOHN G. WOLF                         March 26, 1999
---------------                       
JOHN G. 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.

         Citizens'  1998  Annual  Report is  included  as  Exhibit  22.1 of this
filing.


                                       13