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, 1996

                          Commission File No. 33-98090

                        CITIZENS COMMUNITY BANCORP, INC.

       A Florida Corporation (IRS Employer Identification No. 65-0614044)
                             650 East Elkcam Circle
                           Marco Island, Florida 34146
                                 (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:

                                      NONE

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. [ ]

Revenues for the  fiscal  year  ended  December  31,  1996:  $ 809,500

The  aggregate  market  value  of the  common  stock of the  Registrant  held by
nonaffiliates  of  the  Registrant  (487,585  shares)  on  March  14,  1997  was
approximately  $3,247,000.  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
14, 1997: 772,950 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, 1996.
                  (Part II)

         2.       Portions of Proxy  Statement  for the 1997  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 1996 Annual Report and 1997 Annual Meeting Proxy Statement as
indicated below.  Only that information  expressly  incorporated by reference is
deemed filed with the Commission.
<TABLE>
<CAPTION>

         PART I                                                                                             Page Number
                                                                                                            -----------
<S>      <C>      <C>                                                                                          <C>
         Item 1   Business.....................................................................                  3
         Item 2   Properties...................................................................                 11
         Item 3   Legal Proceedings............................................................                 11
         Item 4   Submission of Matters to a Vote of Security Holders -........................                 11


         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....................................................                 5 (1)
         Item 7   Financial Statements and Supplementary Data..................................                13( 1)
         Item 8   Changes in and disagreements with Accountants on
                  Accounting and Financial Disclosure -- None


         PART III
         Item 9   Directors and Executive Officers of the Registrant:..........................                 2(2)
         Item 10  Executive Compensation.......................................................                 6(2)
         Item 11  Security Ownership of Certain Beneficial Owners and Management...............                 2(2)
         Item 12  Certain Relationships and Related Transactions...............................                 12

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

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

         (1)      These items are  incorporated  by reference from the Company's
                  1996 Annual Report

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

                                        2

<PAGE>



                                     PART I

ITEM 1. - BUSINESS

Description

General

Citizens  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 full service  commercial  bank,  without  trust  powers.  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 area for the Bank encompasses  approximately 24 square miles
in the geographic center of Marco Island,  Collier County,  Florida and includes
the entire city of Marco Island,  Isle of Capri and Goodland.  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 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,  1996,  investment  securities,  federal  funds  sold  and
interest-earning  deposits in other banks comprised  approximately  41.1% of the
Company's  assets and net loans comprised  approximately  48.4% 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,
other taxable  securities and in time deposits and notes of commercial banks. 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 full  complement  of lending  activities,  including  the
originating and purchasing 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  practice is not to accrue interest on loans  delinquent over
ninety days unless fully secured and in the process of  collection.  The accrued
and unpaid interest is reversed  against current income and thereafter  interest
is recognized  only to the extent payments are received.  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,  1996,  there were no loans where  known  information  about
possible credit problems of borrowers  causes  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  is  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, 1996,  61.8% 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, 1996 were made
on a  secured  basis,  with  collateral  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, 1996 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 reserve.

Residential real estate mortgage loans constitute 35.8% of outstanding  loans at
December 31, 1996.  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  and  the  Company's   certified   public
accountants,  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 plus  recoveries of amounts  previously  charged off,
less net  charge-offs.  The allowance for loan losses is  established  through a


                                        4

<PAGE>



provision for loan losses charged to expense.  Loans are 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
prospective  financial  condition  of  the  borrower,  and  the  prevailing  and
anticipated economic condition of the local market.

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.  The above table presents
an  allocation  of the entire  allowance  for loan  losses  among  various  loan
classifications and sets forth the percentage of loans in each category to total
loans.

Management  does not anticipate  that the future new loan  charge-off  rates for
loans will be  materially  different  from the  historic  net  charge-off  rates
experienced by the Company.

Deposits

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 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

Correspondent  banking involves the providing of services by one bank to another
bank which cannot  provide that service for itself from an economic or practical
standpoint.  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.

The Bank sells loan  participations to correspondent banks with respect to loans
which exceed the Bank's lending limit of approximately  $891,000. For the fiscal
year ended  December 31, 1996, the bank had sold loan  participations  totalling
approximately $460,000.


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 10 full time and 3 part time  persons,  including 3
officers. The Bank will hire additional persons as needed.

                                        5

<PAGE>



Monetary Policies

The  results  of  operations  of 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.

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)


                                        6

<PAGE>



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, 1996, the Company's total risk-based  capital and Tier 1
ratio were 13.9% and 13.0%, respectively. Both the Federal Reserve Board and the
FDIC have also  implemented  new 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.

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 CAMEL
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.

On September 1, 1995 the, the Federal  Reserve  Board and the FDIC  proposed the
agencies  adopted an interest  rate risk  assessment  method for  determining  a
bank's capital needs using a model to be adopted by the agencies. The final rule
does not set a supervisory  threshold  which defines whether a bank has an above
normal level of interest-rate risk exposure.  Instead, the agencies published on
the same date a proposed Policy Statement which includes a supervisory model for
measuring and assessing  interest rate  exposure.  The agencies  indicated  that
prior to establishing an explicit  supervisory  threshold above which additional
capital  would be  required,  they  intend  first to collect  industry  data and
evaluate  the level of  interest  rate risk  exposure  existing  in the  banking
industry. Under the proposed Policy, small, well-managed banks are provided with
an  exemption  from the  provisions  of the Policy  statement.  Banks with total
assets of less than $300  million  and with a CAMEL  rating of either "1" or "2"
will be  exempt  from the  requirements  of the  Policy if the sum of 30% of the
bank's  fixed and  floating-rate  loans  and  securities  that have  contractual
maturity or repricing dates between 1 and 5 years, and 100% of the bank's fixed-
and  floating-rate  loans and  securities  that  have  contractual  maturity  or
repricing dates beyond 5 years, is less than or equal to 30% of the bank's total
assets.  No final  Policy has been  adopted by the  Agencies and until the final
Policy has been adopted by the  agencies,  no estimate of the proposed  Policy's
impact on the Company can be made.

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.


7

<PAGE>



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.

The FDICIA  also  required  each  appropriate  federal  banking  agency to adopt
uniform  regulations  prescribing  standards for extensions of credit secured by
real  estate  or  made  for  the  purpose  of  financing  the   construction  of
improvements  on real  estate.  In  prescribing  these  standards,  the  banking
agencies considered the risk posed to the deposit insurance funds by real estate
loans, the need for safe and sound operation of insured depository  institutions
and the availability of credit.  The FDIC and the other federal banking agencies
adopted uniform regulations implementing such standards, effective March, 1993.

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>
<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 be required to meet new safety and  soundness
standards.  In order to comply with the Act, the Federal Reserve Board,  and the
FDIC, adopted a final Rule effective, August 9, 1995 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
was to  implement  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.


                                        8

<PAGE>



     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 will permit
     interstate branching effective June 1, 1997.

     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 10, 1996 in a temporary
     facility located at 604 Elkham 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 has filed a branch  application to locate a branch office at
     5101 East Tamiami  Trail,  Naples,  Florida.  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, will be occupied by the Bank.


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 March 14, 1997,  the  approximate  number of holders of record of the
     Company's Common Stock was 620.


                                        9

<PAGE>



     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, 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.


ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF 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 5 through 12 of the 1996 Annual Report to Shareholders
     for the year ended  December  31,  1996  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 1996
     Annual Report to Shareholders for the year ended December 31, 1996 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 6 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 6 and 7 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.





                                       10

<PAGE>



(b)        Security Ownership of Management

     The Company hereby incorporates by reference the section entitled "Election
     of Directors"  contained at pages 2 through 6 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.


ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Bank has no  outstanding  loans to 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.


                                       11

<PAGE>




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 1997 Annual Meeting Proxy Statement.

   22.2                    The  Company's  1996 Annual Report for the year ended
                           December 31, 1996.


(b)  Reports on Form 8-K.     The Company did not file any reports
     --------------------     on Form 8-K during the last quarter of 1996.





                                       12

<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 25, 1997             By:    /s/ Richard Storm, Jr.
                                          -----------------------
                                          Richard Storm, Jr.
                                          Chairman of the Board



Dated:  March 25, 1997             By:    /s/ Stephen A. McLaughlin
                                          --------------------------
                                          Stephen A. McLaughlin
                                          Senior 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 25, 1997
--------------------
DIANE M. BEYER
Class I Director


/s/ Joel M. Cox, Sr.               March 25, 1997
--------------------
JOEL M. COX, SR.
Class I Director


/s/James S. Hagedorn               March 25, 1997
--------------------
JAMES S. HAGEDORN
Class I Director


/s/W. Terrell Upson                March 25, 1997
--------------------
W. TERRELL UPSON
Class I Director


/s/Thomas B. Garrison              March 25, 1997
--------------------
THOMAS B. GARRISON
Class II Director


                                   March 25, 1997
--------------------
PAUL F. JANSSENS-LENS
Class II Director


                                       13

<PAGE>



/s/ Dennis J. Lynch                March 25, 1997
--------------------
DENNIS J. LYNCH
Class II Director


/s/ Heidi J. Mayerhofer            March 25, 1997
--------------------
HEIDI J. MAYERHOFER
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 1996 Annual Report are included as Exhibits
22.1 and 22.2 of this filing.


                                       14

<PAGE>