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, 2000
                          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, 2000:  $12,309,000

The  aggregate  market  value  of the  common  stock of the  Registrant  held by
nonaffiliates  of the  Registrant  (2,442,887  shares) on February  28, 2001 was
approximately $29,314,644.  The aggregate market value was computed by reference
to the average bid and asking price of Registrant's common stock on February 28,
2001, which was $12.00 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
February 28, 2001: 3,392,371 shares of $0.01 par value common stock.

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

None.



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                                TABLE OF CONTENTS

Consolidated--Citizens Community Bancorp,  Inc. and subsidiaries ("Registrant").

                                                                     Page Number

        PART I

Item 1  Business............................................................  3
Item 2  Properties..........................................................  9
Item 3  Legal Proceedings...................................................  9
Item 4  Submission of Matters to a Vote of Security Holders................. 10


        PART II

Item 5  Market for Common Equity and Related Stockholder Matters............ 10
Item 6  Management's  Discussion and Analysis of Financial Condition
        and Results of Operations........................................... 11
        Independent Auditors' Report........................................ 27
Item 7  Financial Statements and Supplementary Data......................... 28
Item 8  Changes in and Disagreements with Accountants on  Accounting
        and Financial Disclosure............................................ 46


        PART III
Item 9  Directors and Executive Officers of the Registrant.................. 46
Item 10 Executive Compensation.............................................. 47
Item 11 Security Ownership of Certain Beneficial Owners and Management...... 49
Item 12 Certain Relationships and Related Transactions...................... 50

        PART IV
Item 13 Exhibits, Financial Statement Schedules, and Reports on Form 8-K.... 50








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                                     PART I



ITEM 1. - BUSINESS

Description

General

Citizens  Community  Bancorp,  Inc.  ("Citizens") is a one-bank  holding company
under the Bank  Holding  Company  Act of 1956,  owning  100% of the  issued  and
outstanding  common stock of Citizens  Community Bank of Florida,  Marco Island,
Florida  ("CCB").  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 CCB
during its organizational stage and to enhance CCB's ability to serve its future
customers'  requirements for financial services.  Citizens provides  flexibility
for  expansion of its banking  business  through its capital  resources  and the
acquisition  of  other  financial   institutions  and  provision  of  additional
banking-related  services  which a traditional  commercial  bank may not provide
under present laws.

Subsidiaries

As of December 31, 2000, Citizens had three wholly-owned  subsidiaries,  CCB and
two  non-bank  subsidiaries,  Citizens  Financial  Corporation  ("CFC")  and CCB
Mortgage Corporation ("CCB Mortgage").

CCB is a state-chartered  commercial bank, which opened for business on March 8,
1996.  CCB  offers a full  range  of  interest-bearing  and  noninterest-bearing
deposit 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, CCB provides consumer services such
as U.S.  Savings  Bonds,  travelers  checks,  safe deposit  boxes,  bank by mail
services, direct deposit services, and automatic teller services.

CFC is a  commercial  loan  brokerage  company,  specializing  in  construction,
mini-perm and permanent  loans. CFC also offers conduit  non-recourse  loans for
properties  with  stable and  proven  cash  flows.  CFC is also a source of loan
referrals to both CCB and CCB Mortgage.

CCB Mortgage commenced activities in the fourth quarter of 1999. CCB Mortgage is
a licensed  residential  mortgage brokerage business.  CCB Mortgage originates a
variety of mortgage loans for sale in the secondary market or to CCB.

Market Area

The primary service and assessment  area for Citizens  encompasses the cities 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, as evidenced by the ten commercial banks headquartered  within our primary
service area. There are  approximately 102 banking offices and three savings and
loan association  offices,  most of which are branches of or are affiliated with
major  regional bank holding  companies.  CCB 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; 2375 N. Tamiami Trail, Naples, Florida,
("Moorings Office") which opened for business in August,  1998; and 7925 Airport
Road North,  Naples,  Florida ("Fountain Park Office") which opened for business
in August,  2000.  CCB also  operates a courier  service in its primary  service
area.

Citizens  is  in  competition  with  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 that have  historically been traditional  banking services.  Due to the
growth of the Collier County area in general, it is anticipated that competition
will increase because of new entrants to the market.




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Investments

As of December  31,  2000,  investment  securities,  interest-bearing  deposits,
federal funds, and securities  purchased under  agreements to resell,  comprised
approximately 12.5% of Citizens'  consolidated total assets. Net loans comprised
approximately 79.7% of Citizens' total assets.  Citizens'  investment  portfolio
includes primarily obligations of Agencies of the United States Government. On a
daily  basis,  CCB enters into Federal  Funds  transactions  with its  principal
correspondent bank, primarily with the sale of such funds.

Loan Portfolio

Through  its  subsidiaries,   Citizens  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.

Real  estate  loans  consist  of  commercial  and  residential  first and second
mortgage loans. All of these loans are located in Florida, the majority of which
are in our primary  service and assessment  area.  These loans also include home
equity term loans secured by second mortgages on the residences of borrowers for
a variety of purposes,  including home  improvements,  investment  purchases and
other personal expenditures.

Commercial  lending is directed  principally toward businesses whose demands for
funds fall  within our legal  lending  limits  and which are  potential  deposit
customers of CCB. These loans also include 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.

Consumer  loans  consist  primarily  of  installment  loans to  individuals  for
personal, family and household purposes,  including automobile and boat loans to
individuals.

Citizens'  policy is to discontinue the accrual of interest on loans  delinquent
over ninety days unless fully  secured and in the process of  collection.  It is
our policy  that 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,  2000,  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 our loans are secured by real estate in Collier County, Florida,
where our branch offices are located.  Accordingly,  the ultimate collectibility
of a  substantial  portion of our loan  portfolio is  susceptible  to changes in
market conditions in Collier County.

Allowance For Loan Losses

In  considering  the adequacy of the allowance  for loan losses,  we look at the
risks associated with our loan portfolio. As of December 31, 2000, approximately
45% of outstanding  loans are commercial  real estate secured loans.  Commercial
loans are generally  considered to have a greater risk than other  categories of
loans. We believe that the real estate  collateral  securing our commercial real
estate loans reduces the risk of loss inherently present in these loans.

At December 31, 2000, our consumer loan portfolio  consisted  primarily of lines
of credit and installment loans secured by automobiles, boats and other consumer
goods, generally to customers who also have deposit relationships with us. We do
not purchase  consumer loans through  dealers or brokers,  which  generally have
higher risk of losses.  Management  believes that the risk  associated  with the



                                       4
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consumer loan  portfolio has been  adequately  provided for in the allowance for
loan losses.

Residential  real estate mortgage loans  constitute  approximately  46% of loans
outstanding  at December 31, 2000.  These loans are  considered by management to
have less risk due to the fact that they are secured by residential real estate,
where the  amount of the  original  loan  generally  does not  exceed 80% of the
appraised  value of the collateral or is otherwise  secured by private  mortgage
insurance.

Management  reports to the Board of Directors  monthly on the loan  portfolio in
order 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  complement our internal system,  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  collectability 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, the past
loss experience,  adverse  situations which 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 conditions of the local market.  During the year ended
December 31, 2000, we charged off three loans in the amount of $279,000  against
the  allowance  for loan  losses.  In  addition,  $16,000  was  charged-off  for
uncollected overdrafts from our deposit customers.

The  allowance  for loan  losses is  maintained  at a level  which we believe is
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

A wide range of interest-bearing  and  noninterest-bearing  accounts are offered
through CCB, 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 our market
area, obtained through the personal  solicitation of our officers and directors,
direct mail solicitation and advertisements published in the local media. We pay
competitive  interest  rates  on time and  savings  deposits  up to the  maximum
permitted by law or  regulation.  In  addition,  we have  implemented  a service
charge fee schedule which is competitive  with other  financial  institutions in
our market area, covering such matters as maintenance fees on checking accounts,
per item processing fees, returned check charges and the like.

Correspondent Banking

CCB 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, 2000, CCB had sold $3.5 million in Federal Funds.  In addition,  at December
31, 2000, CCB had a $3.0 million advance  outstanding from the Federal Home Loan
Bank of Atlanta.

Loan   participations  are  purchased  and  sold  by  CCB  without  recourse  to
correspondent  banks with respect to loans which exceed the bank's legal lending
limit,  which at December 31, 2000,  was $3.1 million.  To limit our credit risk
exposure to single  borrowers,  we  established  an internal  bank lending limit
which,  at  December  31,  2000,  was $2.5  million.  Both CFC and CCB  Mortgage
originate loans that are closed and funded by correspondent banks. Since CFC and
CCB Mortgage both act as mortgage  brokers,  neither company will close loans in
their own name. In some instances,  loans originated by CFC and CCB Mortgage are
referred to CCB and are retained by the bank.

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Data Processing

CCB has a data processing servicing agreement with Alltel Information  Services,
Inc. This servicing  agreement  provides us with a full range of data processing
services, including an automated general ledger, deposit accounting, commercial,
real estate and installment  lending data  processing and a central  information
file ("CIF").  For this service,  CCB pays a monthly fee based on the type, kind
and volume of data  processing  services  provided,  priced at a stipulated rate
schedule.

Employees

We  currently  employ  approximately  70  full  time  and 5 part  time  persons,
including  22  officers.  Employees  are hired as  needed  to meet  company-wide
personnel demands.

Monetary Policies

The  results of our  operations  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
credit losses and earnings.

Supervision and Regulation

Citizens and CCB operate in a highly regulated environment with numerous federal
and  state  laws  and  regulations   governing  its  activities.   Our  business
activities,  which  are  governed  by  statute,  regulation  and  administrative
policies,  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
following  is a brief  summary  of the more  recent  legislation  which  affects
Citizens and our subsidiaries:

In November 1999, the financial services regulations were significantly reformed
with the adoption of the  Gramm-Leach-Bliley  Act ("GLA").  The GLA provides for
the  streamlining of the regulatory  oversight  functions of the various federal
banking agencies.  Of significance,  the GLA permits bank holding companies that
are  well  managed,  well  capitalized  and that  have at  least a  satisfactory
Community  Reinvestment  Act rating to operate as  Financial  Holding  Companies
("FHC").  In  addition  to  activities  that are  permissible  for bank  holding
companies and their subsidiaries, the GLA permits FHCs and their subsidiaries to
engage in a wide variety of other  activities  that are "financial in nature" or
are  incidental  to  financial  activities.  These new  activities  will  enable
Citizens and its subsidiaries to consider and engage in new lines of business.


The GLA also requires  financial  institutions  to permit,  with few exceptions,
their  customers to "opt out" of having  their  personal  financial  information
shared with  nonaffiliated  third parties.  The GLA bars financial  institutions
from disclosing  customer  account numbers to direct marketers and mandates that
institutions   provide  annual  disclosure  to  their  customers  regarding  the
institution's privacy policies and procedures.

Citizens is  regulated  by the  Federal  Reserve  Board  under the Bank  Holding
Company Act of 1956,  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.



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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 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.

As a publicly  traded company with its shares of common stock  registered  under
the  Securities  Act of 1933,  Citizens  is  required  to file  periodic  public
disclosure reports with the Securities and Exchange  Commission  pursuant to the
Securities Exchange Act of 1934, and the regulations promulgated thereunder.

Form 10-KSB is a required annual report that must contain a complete overview of
Citizens' business,  financial,  management,  regulatory,  legal,  ownership and
organizational status. Citizens must file Form 10-KSB by March 31 of each year.

Similarly,  Form  10-QSB,  must  contain  information  concerning  Citizens on a
quarterly  basis.  Although  Form  10-KSB  requires  the  inclusion  of  audited
financial statements,  unaudited statements are sufficient for inclusion on Form
10-QSB. Additionally, any significant non-recurring events that occur during the
subject  quarter,  as  well as  changes  in  securities,  any  defaults  and the
submission of any maters to a vote of security holders, must also be reported on
Form 10-QSB.

Additionally,  if any  of six  significant  events  (a  change  in  control,  an
acquisition or disposition of significant assets, bankruptcy or receivership,  a
change in certifying  accountant,  any  resignation  of directors or a change in
fiscal year end) occurs in a period  between the filing of Form 10-KSB or a Form
10-QSB, such event must be reported on a Form 8-KSB within 15 days of the event.
When  communicating  with  shareholders,  Citizens' proxy  solicitations for its
Annual Meetings of Shareholders,  or any Special  Meeting,  must contain certain
detailed disclosures regarding the current status of Citizens.

Individual  directors,  officers and owners of more than 10% of Citizens' stock,
must also file  individual  disclosures  of the  amount of  Citizens  securities
(stock,  options or warrants) they  beneficially  own and of any transactions in
such  securities  to which  they are  parties.  The  initial  status of all such
persons was reported on individual Form 3s. Subsequent  securities  transactions
will be reported on Form 4 as they occur,  and an annual  report of ownership is
filed on Form 5. In  certain  instances,  the filing of a Form 4 or a Form 5 can
relieve the reporting individual of their duty to file the other.

The National  Association of Securities Dealers has adopted a rule requiring the
audit  committees  of Boards of  Directors  of  reporting  corporations  such as
Citizens  to  undertake  certain   organizational  and  operational  steps.  The
Securities and Exchange  Commission has adopted a similar rule.  These standards
require  our audit  committee  to be  comprised  of a majority  of  independent,
non-employee  directors who are  financially  literate.  Furthermore,  the audit
committee has been required to adopt a formal charter defining the scope for its
operations.  The  Securities  and Exchange  Commission's  rule also requires our
auditors to review the financial statements contained in our Form 10-QSBs.

As a  state-chartered  bank, CCB is subject to the supervision of the Department
and the FDIC.  With  respect to  expansion,  CCB may  establish  branch  offices
anywhere within the State of Florida. CCB 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.  The usury laws also apply to CFC and CCB
Mortgage.  In  addition,  CCB,  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.



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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 CCB 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, 2000, our total  risk-based  capital and Tier 1 capital
ratio were 14.27% and 10.93%,  respectively  for  Citizens and 10.65% and 7.85%,
respectively  for CCB.  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.

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 ("FDICIA"),
created five "capital categories" ("well capitalized," "adequately capitalized,"
"undercapitalized,"    "significantly    undercapitalized"    and    "critically
undercapitalized")  which  are  defined  in the  FDICIA  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., a holding company) 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 5% 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



                                       8
<PAGE>

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 FDICIA,  the  regulators  have
adopted regulations which, among other things,  prescribe the capital thresholds
for each of the five capital categories established by the FDICIA. The following
table reflects the capital thresholds:
<TABLE>

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


Based  upon  the  above  regulatory   ratios,  CCB  is  considered  to  be  well
capitalized.

The Act also provided  that banks must meet new safety and soundness  standards.
In order to comply  with the  FDICIA,  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 FDICIA  implements
were designed to bolster and protect the deposit insurance fund.

Under the Riegle-Neal  Interstate Banking and Branching  Efficiency Act of 1994,
restrictions on interstate  acquisitions of banks by bank holding companies were
repealed,  such that  Citizens  and any other  bank  holding  company is 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 is 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 through  acquisition,  but does not allow de novo
branching.




                                       9
<PAGE>

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

ITEM 2. - DESCRIPTION OF PROPERTY

         The  Marco  Island  main office  facility  is a  one-story  modern bank
         building consisting of 7,500 square feet. The headquarters of Citizens,
         CFC  and CCB Mortgage are also located in this facility. The East Trail
         Office  consists of a 2-story (12,000 square feet) facility. The entire
         building  is occupied by Citizens'  staff and includes a branch office,
         and  executive  and  operations  staff for  CCB and CCB  Mortgage.  The
         Moorings  Office  consists  of 3,864  square feet  located in a 3-story
         professional  office condominium building.  The Fountain Park office is
         a  one-story  modern bank build ing  consisting  of 4,584  square feet,
         which  was  constructed  in 2000 and opened as a full  service  banking
         center in August 2000. All four facilities are owned by CCB.

ITEM 3. - LEGAL PROCEEDINGS

         There are no material  pending legal  proceedings  to which Citizens or
         our  subsidiaries  is a party  or of  which  any of our  properties  is
         subject;  nor  are  there  material  proceedings  known  to  us  to  be
         contemplated  by any  governmental  authority;  nor are there  material
         proceedings  known  to  us,  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 our subsidiaries.

ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                     PART II


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

Citizens' common stock has been listed on the Nasdaq SmallCap Market since April
27, 2000.  The high and low bid prices in each calendar  quarter since the stock
was listed were:

                                            2000
                               ------------------------------
                                High                     Low
                               ------                   -----
            4th quarter        $11.00                  $ 5.50
            3rd quarter          8.00                    7.50
            2nd quarter          8.00                    7.38

As of  February  28,  2001,  the  approximate  number  of  holders  of record of
Citizens' common stock was 600.

On  January  31,  2001,  Citizens  paid a cash  dividend  of $.05  per  share to
shareholders of record as of January 19, 2001 and on February 14, 2000, Citizens
paid a cash dividend of $.05 per share to  shareholders  of record as of January
31,  2000.  Citizens  also  paid  an 8%  stock  dividend  in  January,  1999  to
stockholders of record as of December 31, 1998. No other cash or stock dividends
have been paid.  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 our  overall  operations.  Future cash  dividends  will depend on our
earnings, capital requirements, financial condition and other factors considered
relevant by our Board of Directors.

CCB is  restricted  in its ability to pay  dividends to Citizens  under  Florida
banking laws and by regulations of the Federal  Deposit  Insurance  Corporation.
Pursuant to Section 658.37, Florida Statutes, a state-chartered 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 CCB's
capital below required levels.



                                       10
<PAGE>



Item 6.  Management  Discussion  and Analysis of Financial Condition and Results
         of Operations


<TABLE>

                                                SELECTED FINANCIAL DATA

                                       At December 31, or for the Year then Ended
                                    (Dollars in thousands, except per share figures)



                                                               2000       1999        1998         1997        1996
At Year End:

<S>                                                      <C>            <C>         <C>          <C>          <C>
Cash and cash equivalents.............................   $    8,036     16,928      24,663       12,211       8,042
Securities available for sale.........................        4,287      6,022       -            -           -
Securities held to maturity...........................       13,000     13,000       8,500        2,499       2,240
Loans, net............................................      133,126     79,988      44,933       26,420      12,116
All other assets......................................        8,401      6,255       4,130        3,292       2,630
                                                            -------     ------      ------       ------      ------
         Total assets.................................   $  166,850    122,193      82,226       44,422      25,028
                                                            =======    =======      ======       ======      ======

Deposit accounts......................................      144,390    102,498      63,990       36,938      17,885
All other liabilities.................................        4,762      1,711       1,011          713       1,179
Stockholders' equity..................................       17,698     17,984      17,225        6,771       5,964
                                                            -------     ------      ------       ------      ------

         Total liabilities and stockholders' equity...   $  166,850    122,193      82,226       44,422      25,028
                                                            =======    =======      ======       ======      ======
For the Year:

Total interest income.................................       10,792      6,792       4,129        2,523         740
Total interest expense................................        5,018      2,750       2,009        1,208         283
                                                            -------      -----       -----        -----      ------
         Net interest income..........................        5,774      4,042       2,120        1,315         457

Provision for loan losses.............................        1,045        437         162          153         145
                                                            -------      -----       -----        -----      ------
         Net interest income after provision for
           loan losses................................        4,729      3,605       1,958        1,162         312
                                                            -------      -----       -----        -----      ------
Noninterest income....................................        1,516        592         341          273          70
Noninterest expenses..................................        5,281      3,234       1,935        1,260         915
                                                            -------      -----       -----        -----      ------
Earnings (loss) before income taxes (benefit).........          964        963         364          175        (533)
Income taxes (benefit)................................          363        348         158           65        (191)
                                                            -------      -----       -----        -----      ------
Net earnings (loss)...................................   $      601        615         206          110        (342)
                                                            =======      =====       =====        =====      ======
Basic earnings (loss) per share (1)...................   $      .17        .18         .08          .06        (.22)
                                                            =======      =====       =====        =====      ======
Diluted earnings (loss) per share (1).................   $      .17        .17         .08          .06        (.22)
                                                            =======      =====       =====        =====      ======
Ratios and Other Data:

Return on average assets..............................          .43%       .61%        .32%         .30%      (2.71)
Return on average equity..............................         3.34%      3.50%       1.71%        1.72%     (10.35)
Average equity to average assets......................        12.83%     17.51%      18.91%       17.47%      26.16%
Interest-rate spread during the period................         3.67%      3.62%       3.00%        3.50%       2.33%
Net yield on average interest-earning assets..........         8.32%      7.43%       7.36%        8.04%       6.61%
Noninterest expenses to average assets................         3.77%      3.22%       3.04%        3.45%       7.24%
Ratio of average interest-earning assets to average
         interest-bearing liabilities.................         1.20       1.27        1.22         1.18        1.69
Nonperforming loans and foreclosed real estate as
         a percentage of total assets at end of year..          .27%      NIL         NIL          NIL         NIL
Allowance for credit losses as a percentage
         of total loans at end of year................         1.22%      1.11%       1.01%        1.12%       1.18%
Total number of full-service banking offices..........            4          3           3            2           1
Total shares outstanding at end of year (1)...........    3,389,579  3,486,767   3,455,039    1,697,354   1,528,438
Book value per share at end of year...................       $ 5.22       5.16        4.99         3.99        3.91

<FN>

(1)      Share amounts  reflect the two-for-one  stock split effective  December 15, 1997, and the 8% stock dividend to
         stockholders of record on December 31, 1998.
</FN>
</TABLE>



                                       11
<PAGE>



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


                                     General

Citizens  Community  Bancorp,  Inc.  ("Citizens")  owns 100% of the  outstanding
common stock of Citizens  Community Bank of Florida ("CCB"),  Citizens Financial
Corp.  ("CFC") and CCB  Mortgage  Company  ("CCB  Mortgage")  (collectively  the
entities are referred to as the "Company").  Citizens'  primary  business is the
ownership  and  operation  of  CCB,  CFC  and  CCB  Mortgage.  CCB is a  Florida
state-chartered  commercial  bank and its  deposits  are  insured by the Federal
Deposit  Insurance  Corporation.  CCB opened for business on March 8, 1996,  and
provides community banking services, through four banking offices, to businesses
and  individuals  in Collier  County,  Florida.  CFC was  formed  and  commenced
business as a commercial  mortgage  broker in 1997.  CCB Mortgage was formed and
commenced business in 1999 as a residential mortgage broker,  offering a variety
of fixed- and adjustable-rate residential permanent, construction and lot loans.

                                     Merger

On  December  18,  2000,  Citizens  entered  into a  definitive  agreement  (the
"Agreement") to merge with F.N.B. Corporation ("F.N.B."). Under the terms of the
Agreement,  F.N.B.  will  exchange  shares  of its  common  stock  for  all  the
outstanding  shares  of the  Company.  The  merger  was  approved  by  Citizens'
shareholders  on March 22, 2001.  The merger is subject to regulatory  approval,
and is expected to be completed prior to June 30, 2001.

                         Liquidity and Capital Resources

A state-chartered  commercial bank is required under Florida Law and regulations
to  maintain  a  liquidity  reserve  of at least  15% of its  total  transaction
accounts  and  8% of  its  total  nontransaction  accounts  subject  to  certain
restrictions. The reserve may consist of cash-on-hand,  demand deposits due from
correspondent banks, and other investments and short-term marketable securities.

The Company's primary source of cash during the year ended December 31, 2000 was
from net deposit inflows of $41.9 million.  Cash was used primarily to originate
loans.  At  December  31,  2000,  the  Company had  outstanding  commitments  to
originate loans totaling $200,000,  commitments to borrowers for available lines
of credit totaling $29.0 million and time deposits  maturing in the next year of
$42.8  million.  At December 31, 2000,  CCB  exceeded its  regulatory  liquidity
requirements.

                           Regulation and Legislation

As a state-chartered  commercial bank, CCB is subject to extensive regulation by
the Florida  Department of Banking and Finance  ("Florida  DBF") and the Federal
Deposit Insurance Corporation  ("FDIC").  CCB files reports with the Florida DBF
and the FDIC concerning its activities and financial  condition,  in addition to
obtaining  regulatory approvals prior to entering into certain transactions such
as  mergers  with or  acquisitions  of other  financial  institutions.  Periodic
examinations  are  performed  by the Florida  DBF and the FDIC to monitor  CCB's
compliance with the various regulatory  requirements.  Citizens and CCB are also
subject to regulation and examination by the Federal Reserve Board of Governors.

                                   Credit Risk

The Company's  primary business is providing deposit related services and making
real estate secured  residential and commercial  loans as well as other business
and consumer loans. The lending  activities  entail  potential loan losses,  the
magnitude of which depend on a variety of economic factors  affecting  borrowers
which are beyond our control. While we have instituted  underwriting  guidelines
and credit  review  procedures  to protect the  Company  from  avoidable  credit
losses, some losses will inevitably occur. At December 31, 2000, the Company had
$451,000 in  nonperforming  loans.  In 1999,  the  Company had no  nonperforming
assets or loans which were delinquent 90 days or more or were nonperforming.

                                       12
<PAGE>


Credit Risk

Citizens  primary  business is making  commercial,  business,  consumer and real
estate loans.  That activity  entails  potential  loan losses,  the magnitude of
which  depend on a variety of economic  factors  affecting  borrowers  which are
beyond the control of Citizens.  While  management has  instituted  underwriting
guidelines  and credit  review  procedures to protect  Citizens  from  avoidable
credit losses, some losses will inevitably occur.

The following table sets forth certain  information  regarding  nonaccrual loans
and  foreclosed  real estate,  including the ratio of such loans and  foreclosed
real estate to total assets as of December 31,  2000.  There were no  nonaccrual
loans or foreclosed real estate in 1999, 1998, 1997 or 1996.

<TABLE>
                                                                                        At December 31,
                                                                                             2000
                                                                                        --------------
                                                                                        ($ in thousands)

     Nonperforming (nonaccrual) loans:
<S>                                                                                         <C>
         Residential real estate loans..................................................    $ 225
         Commercial real estate.........................................................      221
         Consumer loans and other.......................................................        5
                                                                                            -----
               Total nonperforming (nonaccrual) loans...................................      451

               Total nonperforming loans to total assets................................      .27%
                                                                                            =====
     Foreclosed real estate:
         Real estate acquired by foreclosure or deed in lieu of foreclosure.............       -
                                                                                            -----
               Total nonperforming loans and foreclosed real estate.....................    $ 451
                                                                                            =====
               Total nonperforming and foreclosed real estate to total assets...........      .27%
                                                                                            =====
</TABLE>

Interest  income  that  would have been  recorded  under the  original  terms of
nonaccrual  loans and the interest  income  actually  recognized  are summarized
below:

                                                         Year Ended December 31,
                                                                 2000
                                                         -----------------------
                                                             (In thousands)

     Interest income that would have been recognized........    $(45)
     Interest income recognized.............................      31
                                                                  --
     Interest income foregone...............................    $(14)
                                                                  ==

                                       13
<PAGE>

<TABLE>

The following  table sets forth  information  with respect to activity  Citizens
allowance for loan losses for the periods indicated:

                                                                                   Year Ended December 31,
                                                                     ------------------------------------------------
                                                                     2000       1999       1998        1997      1996
                                                                                     ($ in thousands)

<S>                                                             <C>           <C>        <C>         <C>        <C>
Average loans outstanding, net..............................    $ 107,993     63,483     35,329      20,537     3,842
                                                                  =======     ======     ======      ======     =====
Allowance at beginning of year..............................          885        453        298         145       -
                                                                  -------     ------     ------      ------     -----
Charge-offs:
     Commercial loans.......................................         (276)        -          -           -        -
     Consumer loans.........................................          (16)        (5)        (7)         -        -
     Residential............................................           (3)        -          -           -        -
                                                                  -------     ------     ------      ------     -----

         Total loans charged-off............................         (295)        (5)        (7)         -        -
                                                                  -------     ------     ------      ------     -----

Recoveries..................................................            1         -          -           -        -
                                                                  -------     ------     ------      ------     -----

         Net charge-offs....................................         (294)        (5)        (7)         -        -
                                                                  -------     ------     ------      ------     -----

Provision for loan losses charged to operating expenses.....        1,045        437        162         153       145
                                                                  -------     ------     ------      ------     -----

Allowance at end of year....................................   $    1,636        885        453         298       145
                                                                  =======     ======     ======      ======     =====

Ratio of net charge-offs to average loans outstanding.......        .0027      .0001      .0002          -        -
                                                                  =======     ======     ======      ======     =====

Allowance as a percent of total loans.......................         1.22%      1.11%      1.01%       1.12%     1.18%
                                                                  =======     ======     ======      ======     =====

Total loans at end of year..................................    $ 134,288     80,617     45,212      26,655    12,262
                                                                  =======     ======     ======      ======    ======
</TABLE>


<TABLE>


The following table presents information regarding total allowance for losses as
well as the  allocation  of such  amounts  to the  various  categories  of loans
(dollars in thousands):

                                                                               At December 31,
                                         ---------------------------------------------------------------------------
                                                 2000            1999           1998            1997            1996
                                         ------------  --------------  -------------  --------------   -------------

                                                Loans           Loans          Loans           Loans           Loans
                                                   To              To             To              To              To
                                                Total           Total          Total           Total           Total
                                         Amount Loans   Amount  Loans  Amount  Loans   Amount  Loans   Amount  Loans
                                         ------ -----   ------  -----  ------  -----   ------  -----   ------  -----

<S>                                     <C>       <C>   <C>      <C>   <C>       <C>    <C>       <C>   <C>       <C>
     Commercial real estate loans.....  $   949   45%   $ 527    52%   $ 315     48%    $ 94      35%   $ 62      31%
     Residential real estate loans....      156   46       99    31       51     32       42      27      22      36
     Commercial loans.................      419    7      221     7       68     11      117      29      55      31
     Consumer loans...................      112    2       38    10       19      9       45       9       6       2
                                            ---   --      ---    --       --     --      ---      --      --      --
     Total allowance for loan
         losses.......................  $ 1,636  100%   $ 885   100%   $ 453    100%   $ 298     100%  $ 145     100%
                                          =====  ===      ===   ===      ===    ===      ===     ===     ===     ===
</TABLE>

                                       14
<PAGE>

                           Loan Portfolio Composition

Residential real estate loans and land loans comprise the largest group of loans
in the portfolio,  amounting to approximately $61.4 million, or 46% of the total
loan  portfolio as of December 31, 2000.  Commercial  real estate loans comprise
the second  largest  group of loans in our loan  portfolio,  amounting  to $61.1
million or 45% of the total loan  portfolio as of December 31, 2000.  Commercial
real estate  loans  consist of  approximately  $36  million of loans  secured by
nonresidential  property and  approximately  $25.1  million of loans  secured by
construction/developed land. As of December 31, 2000, consumer loans and savings
account loans,  amounted to $2.6 million or 2% of the total loan portfolio.  The
following table sets forth the loan portfolio composition:
<TABLE>

                                                                      At December 31,
                                ---------------------------------------------------------------------------------------
                                     2000               1999              1998             1997               1996
                                --------------    --------------    --------------    --------------     --------------
                                          % of              % of              % of              % of               % of
                                Amount   Total    Amount   Total    Amount   Total    Amount   Total     Amount   Total
                                -----    -----    ------   -----    ------   -----    ------   -----     ------   -----
                                                                       (In thousands)

<S>                          <C>           <C>  <C>          <C>  <C>          <C>  <C>         <C>    <C>         <C>
Commercial real estate.....  $  61,133     45%  $ 42,287     52%  $ 21,820     48%  $  9,423    35%    $ 3,758     31%
Residential real estate....     61,442     46     24,921     31     14,571     32      7,261    27       4,384     36
Commercial.................      9,083      7      5,706      7      4,994     11      7,710    29       3,815     31
Consumer ..................      2,630      2      7,703     10      3,827      9      2,261     9         305      2
                               -------    ---     ------    ---     ------    ---     ------   ---      ------    ---
         Loans, gross......    134,288    100%    80,617    100%    45,212    100%    26,655   100%     12,262    100%
                                          ===               ===               ===              ===                ===
Add (subtract):
     Deferred costs, net...        474               256               174                63                (1)
     Allowance for
         loans losses......     (1,636)             (885)             (453)             (298)             (145)
                                 -----               ---               ---               ---               ---
         Loans, net........  $ 133,126          $ 79,988          $ 44,933          $ 26,420           $12,116
                               =======            ======            ======            ======            ======
</TABLE>






                                       15
<PAGE>

                                   Securities

The  securities  portfolio is  comprised  primarily  of U.S.  Government  agency
securities.  According to Financial Accounting Standards No. 115, the securities
portfolio must be categorized as either "held to maturity", "available for sale"
or "trading".  Securities held to maturity  represent those securities which the
Company  has  the  positive  intent  and  ability  to hold  to  maturity.  These
securities are carried at amortized  cost and were comprised of U.S.  Government
agency  securities.  Securities  available for sale represent those  investments
which may be sold for various  reasons  including  changes in interest rates and
liquidity  considerations.  These  securities  are reported at fair market value
with  unrealized  gains  and  losses  being  reported  as a net  amount in other
comprehensive  income, net of income taxes and were comprised of U.S. government
agency securities,  mortgage-backed  securities and equity  securities.  Trading
securities  are held primarily for resale and are recorded at their fair values.
Unrealized  gains or losses on trading  securities  are included  immediately in
earnings.  At December 31, 2000,  1999 and 1998,  the Company had no  securities
categorized for trading purposes.

The following  table sets forth the carrying  value of the Company's  securities
portfolio:

                                                          At December 31,
                                                      ------------------------
                                                      2000       1999     1998
                                                      ----       ----     ----
                                                           (In thousands)
     Securities available for sale:
         U.S. Government agency securities....... $    999       1,743     -
         Mortgage-backed securities..............    3,098       4,089     -
         Equity securities.......................      190         190     -
                                                       ---         ---    ----
               Total available for sale.......... $  4,287       6,022     -
                                                     =====       =====    ====
     Securities held to maturity-
         U.S. Government agency securities....... $ 13,000      13,000   8,500
                                                    ======      ======   =====

The following table sets forth, by maturity  distribution,  certain  information
pertaining to the securities portfolio (dollars in thousands):
<TABLE>

                                                                                  After One Year
                                                              One Year or Less     to Five Year           Total
                                                              ----------------  -----------------   ------------------
                                                              Carrying Average  Carrying  Average   Carrying   Average
                                                               Value    Yield    Value     Yield     Value      Yield
At December 31, 2000:                                         -------- -------  --------  -------   --------   -------
<S>                                                          <C>        <C>    <C>         <C>     <C>          <C>
   U.S. Government agency securities........................ $  999     6.00%  $ 13,000    5.86%   $ 13,999     5.75%
                                                                ===     ====     ======    ====                 ====
   Mortgage-backed securities...............................                                          3,098     6.28%
   Equity securities........................................                                            190     ====
                                                                                                     ------
     Total..................................................                                       $ 17,287     5.87%
                                                                                                     ======     ====
At December 31, 1999:
   U.S. Government agency securities........................ $  750     6.06%  $ 13,993    5.87%   $ 14,743     5.76%
                                                                ===     ====     ======    ====                 ====
   Mortgage-backed securities...............................                                          4,089     6.73%
   Equity securities........................................                                            190     ====
                                                                                                     ------
     Total..................................................                                       $ 19,022     5.98%
                                                                                                     ======     ====
At December 31, 1998:
   U.S. Government agency securities........................ $   -        - %  $  8,500    5.17%   $  8,500     5.17%
                                                                ===     ====     ======    ====       =====     ====
</TABLE>


                                       16
<PAGE>



                         Regulatory Capital Requirements


Federal and state banking  regulations  place certain  restrictions on dividends
paid and loans or advances made by CCB to Citizens. As of December 31, 2000, CCB
had not paid any dividends to Citizens.

Citizens  (on a  consolidated  basis) and CCB are subject to various  regulatory
capital  requirements  administered  by the federal and state banking  agencies.
Failure to meet minimum capital  requirements can initiate certain mandatory and
possibly  additional  discretionary  actions by regulators  that, if undertaken,
could have a direct material  effect on Citizens'  financial  statements.  Under
capital adequacy  guidelines and the regulatory  framework for prompt corrective
actions,  Citizens and CCB must meet specific  capital  guidelines  that involve
quantitative measures of their assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting  practices.  The capital amounts
and classification  are also subject to qualitative  judgments by the regulators
about components,  risk weightings,  and other factors. Prompt corrective action
provisions are not applicable to bank holding companies.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  Citizens and CCB to maintain minimum amounts and percentages (set forth
in the  following  table)  of  total  and  Tier I  capital  (as  defined  in the
regulations)  to  risk-weighted  assets (as  defined)  and of Tier I capital (as
defined) to average assets (as defined). Management believes, as of December 31,
2000 and 1999,  that Citizens and CCB met all capital  adequacy  requirements to
which they are subject.

As of December 31, 2000, the most recent  notification  from the Federal Deposit
Insurance Corporation  categorized CCB as well capitalized.  An institution must
maintain  minimum  total  risk-based,  Tier I  risk-based  and  Tier I  leverage
percentages  as set forth in the  following  tables.  There are no conditions or
events since the  notification  that  management  believes  have  changed  CCB's
category.  Citizens' and CCB's actual capital  amounts and  percentages are also
presented Note 15 to the Consolidated Financial Statements.

                                   Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from  interest-rate  risk inherent in
its lending and  deposit-taking  activities.  To that end,  management  actively
monitors and manages its interest-rate risk exposure.  The measurement of market
risk associated  with financial  instruments is meaningful only when all related
and offsetting on- and  off-balance-sheet  transactions are aggregated,  and the
resulting  net  positions are  identified.  Disclosures  about the fair value of
financial instruments,  which reflect changes in market prices and rates, can be
found in Note 7 of Notes to Consolidated Financial Statements.

The primary objective in managing interest-rate risk is to maximize earnings and
minimize the potential  adverse impact of changes in interest rates on CCB's net
interest  income and capital,  while  adjusting  the  Company's  asset-liability
structure to obtain the maximum  yield-cost  spread on that  structure.  We rely
primarily  on our  asset-liability  structure  to  manage  interest  rate  risk.
However,  a sudden and  substantial  increase  in interest  rates may  adversely
impact  our  earnings,  to the  extent  that  the  interest-earning  assets  and
interest-bearing  liabilities  do not  change  at the  same  speed,  to the same
extent, or on the same basis. The Company does not engage in securities  trading
activities.


                                       17
<PAGE>

                          Asset - Liability Structure

As part of its  asset and  liability  management,  the  Company  has  emphasized
establishing and implementing internal  asset-liability  decision processes,  as
well as communications  and control  procedures to aid in managing the Company's
asset and liability mix and to improve earnings. We believe that these processes
and procedures  provide the Company with better capital planning,  asset mix and
volume controls,  loan-pricing guidelines,  and deposit interest-rate guidelines
which should result in tighter controls and less exposure to interest-rate risk.

The matching of assets and  liabilities  may be analyzed by examining the extent
to which such assets and  liabilities  are  "interest-  rate  sensitive"  and by
monitoring  an  institution's  interest  rate  sensitivity  "gap."  An  asset or
liability is said to be interest-rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest-rate sensitivity
gap  is  defined  as  the  difference   between   interest-earning   assets  and
interest-bearing  liabilities  maturing or repricing within a given time period.
The gap ratio is computed by dividing interest rate sensitive assets by interest
rate sensitive  liabilities.  A gap ratio of 1.0% represents perfect matching. A
gap is considered  positive when the amount of  interest-rate  sensitive  assets
exceeds interest-rate  sensitive liabilities.  A gap is considered negative when
the  amount  of  interest-rate   sensitive   liabilities  exceeds  interest-rate
sensitive assets. During a period of rising interest rates, a negative gap would
generally  be  expected  to  adversely  affect net  interest  income  since more
liabilities  than assets are subject to maturity  or  repricing,  conversely,  a
positive gap would  generally  result in an increase in net interest income with
rising rates.  During a period of falling  interest  rates, a negative gap would
result  in an  increase  in net  interest  income,  while a  positive  gap would
adversely affect net interest income.

In order to minimize the potential for adverse effects of material and prolonged
increases in interest  rates on the results of  operations,  asset and liability
management  policies are monitored to better match the  maturities and repricing
terms of both  interest-earning  assets and interest-bearing  liabilities.  Such
policies  have  consisted  primarily  of: (i)  emphasizing  the  origination  of
adjustable-rate  loans;  (ii)  maintaining a stable core deposit base; and (iii)
maintaining  a  significant  portion  of  liquid  assets  (cash  and  short-term
securities).

<TABLE>

The following table reflects the contractual  principal  repayments by period of
the Company's loan portfolio at December 31, 2000 (in thousands):

                                                Commercial
                                                Real                         Residential
         Years Ending                           Estate         Commercial     Mortgage       Consumer
         December 31,                           Loans          Loans           Loans          Loans         Total
         ------------                           ----------     ----------    -----------     --------       -----
<S>        <C>                                 <C>              <C>            <C>            <C>          <C>
           2001.............................   $ 24,837         5,909          3,500          1,015        35,261
           2002.............................      7,857           669          1,116            313         9,955
           2003.............................      2,951         1,013          1,456            333         5,753
           2004-2005........................      3,987           901            990            607         6,485
           2006-2007........................      4,960            -             255             36         5,251
           2008 and beyond..................     16,541           591         54,125            326        71,583
                                                 ------         -----         ------          -----       -------
           Total............................   $ 61,133         9,083         61,442          2,630       134,288
                                                 ======         =====         ======          =====       =======
</TABLE>


Of the $99  million  of loans due  after  2001,  16% of such  loans  have  fixed
interest rates and 84% have adjustable interest rates.

Scheduled  contractual  principal  repayments of loans do not reflect the actual
life of such assets.  The average life of loans is substantially less than their
average contractual terms due to prepayments.  In addition,  due-on-sale clauses
on loans  generally  give the Company the right to declare a  conventional  loan
immediately due and payable in the event, among other things,  that the borrower
sells the real property subject to the mortgage and the loan is not repaid.  The
average life of mortgage loans tends to increase, however, when current mortgage
loan rates are higher than rates on existing mortgage loans and, conversely, the
average life decreases when rates on existing  mortgages are higher than current
mortgage loan rates.


                                       18
<PAGE>

The   following   table  sets  forth   certain   information   relating  to  our
interest-earning  assets and  interest-bearing  liabilities at December 31, 2000
that are estimated to mature or are scheduled to reprice within the period shown
(dollars in thousands):
<TABLE>

                                                                 More
                                                                 Than         More
                                                                 Three      Than One     More
                                                                 Months       Year     Than Three
                                                     Three       to One     to Three   Years to     More Than
                                                     Months      Year        Years     Five Years   Five Years    Total
                                                     ------      -------    --------   ----------   ----------    -----
Mortgage, commercial and consumer loans (1):
<S>                                                <C>            <C>        <C>          <C>                    <C>
    Variable rate...........................       $ 53,983       3,274      41,629       9,935         -        108,821
    Fixed rate..............................          1,575       4,876       8,193       4,311       6,512       25,467
                                                     ------       -----      ------      ------       -----      -------

         Total loans........................         55,558       8,150      49,822      14,246       6,512      134,288

Interest bearing deposits...................             17         -           -           -           -             17
Federal funds sold and securities
    purchased under agreements
    to resell...............................          3,472         -           -           -           -          3,472
Federal Home Loan Bank stock................            -           -           -           -           550          550
Securities held to maturity (2).............            -           -         5,000       8,000         -         13,000
Securities available for sale...............          3,788         499         -           -           -          4,287
                                                     ------       -----      ------       -----       -----      -------

         Total rate-sensitive assets........         62,835       8,649      54,822      22,246       7,062      155,614
                                                     ------       -----      ------      ------       -----      -------
Deposit accounts (3):
    Savings and NOW deposits................         36,232         -           -           -           -         36,232
    Money-market deposits...................         33,860         -           -           -           -         33,860
    Time deposits ..........................         13,225      29,540      15,634       1,458         88        59,945
    FHLB advance  ..........................          3,000         -           -          -            -          3,000
                                                     ------      ------      ------       -----       ----       -------
         Total rate-sensitive
             liabilities....................       $ 86,317      29,540      15,634       1,458         88       133,037
                                                     ======      ======      ======      ======       ====       =======

GAP repricing differences...................       $(23,482)    (20,891)     39,188      20,788      6,974        22,577
                                                     ======      ======      ======      ======      =====       =======

Cumulative GAP    ..........................       $(23,482)    (44,373)     (5,185)     15,603     22,577
                                                     ======      ======       =====      ======     ======
Cumulative GAP/total assets.................             14%         27%          3%          9%        14%
                                                     ======      ======       =====      ======     ======

<FN>

(1) In preparing  the table  above,  adjustable-rate  loans are included in  the
    period in which the interest  rates are next scheduled to adjust rather than
    in the period in which the loans  mature.  Fixed-rate  loans are  scheduled,
    including repayment, according to their maturities.
(2) Securities are scheduled through the maturity dates.
(3) Money-market,  NOW, and savings  deposits are regarded  as ready  accessible
    withdrawable  accounts.  Time  deposits  are  scheduled through the maturity
    dates.
</FN>
</TABLE>



                                       19
<PAGE>


Origination, Sale and Repayment of Loans. The Company generally originates loans
on real estate  located in our primary  geographical  lending  area in Southwest
Florida.  Residential  mortgage loan originations are generated from depositors,
other  existing  customers,  advertising  and  referrals  from mortgage and real
estate  brokers  and  developers.   The  Company's  residential  mortgage  loans
generally  are  originated  to  ensure   compliance   with   documentation   and
underwriting  standards which permit their sale to the Federal National Mortgage
Association ("Fannie Mae") and other investors in the secondary market.

Since  November,   1999,  substantially  all  residential  mortgage  loans  were
originated by the Company  through CCB Mortgage.  For certain  adjustable  rate,
construction  and lot loans, the loans were closed by CCB for its permanent loan
portfolio.  All other loans originated by CCB Mortgage were closed and funded by
other third party banks or mortgage companies.  Both CCB and CCB Mortgage intend
to  continue  to cross sell loan and deposit  products  that meet CCB's  desired
asset liability mix and generate additional revenues for the Company.

Similar to CCB  Mortgage,  CFC  originates  loans,  some of which are closed and
funded by CCB and some of which are closed and funded by third  parties.  During
the year ending December 31, 2000, there were no loans closed in the name of CCB
Mortgage or CFC, all loans originated by both subsidiaries were closed by CCB or
third parties.  The Company intends to continue to utilize both subsidiaries for
both loan and deposit origination referrals.

<TABLE>

The following table sets forth total loans originated, repaid and sold:

                                                                               Year Ended December 31,
                                                                  --------------------------------------------------
                                                                  2000       1999         1998         1997     1996
                                                                  ----       ----         ----         ----     ----
                                                                                  (In thousands)
      Originations:
<S>                                                           <C>           <C>          <C>            <C>    <C>
         Commercial loans..................................   $ 12,646      3,379        2,964          756    3,855
         Commercial real estate loans......................     23,356     22,884       11,798        9,426    3,797
         Residential mortgage loans........................     43,848     18,442       10,785       13,897    4,384
         Consumer loans....................................      1,300      5,600        2,800        2,888      305
                                                                ------     ------       ------       ------   ------
             Total loans originated........................     81,150     50,305       28,347       26,967   12,341

      Principal reductions.................................     27,479     14,900        9,209        7,887       79
      Loans sold...........................................       -           -            565        4,687      -
                                                                ------     ------       ------       ------   ------
      Increase in total loans..............................   $ 53,671     35,405       18,573       14,393   12,262
                                                                ======     ======       ======       ======   ======
</TABLE>


                       Deposits and Other Sources of Funds

General. In addition to deposits, the sources of funds available for lending and
other business  purposes include loan  repayments,  loan sales, and Federal Home
Loan Bank ("FHLB")  advances.  Loan repayments are a relatively stable source of
funds,  while  deposit  inflows and outflows  are  influenced  significantly  by
general  interest  rates and market  conditions.  FHLB advances may be used on a
short-term or long-term  basis to compensate  for  reductions in other  sources,
such as  deposits  at less than  projected  levels and are also used to fund the
origination of mortgage loans.

Deposits.  Deposits are attracted principally from our primary geographic market
areas in  Collier  County,  Florida.  CCB  offers a broad  selection  of deposit
instruments  including  demand  deposit  accounts,  NOW accounts,  money- market
accounts,  regular savings  accounts,  term certificate  accounts and retirement
savings plans (such as IRA  accounts).  Certificate  of deposit rates are set to
encourage longer  maturities as cost and market  conditions will allow.  Deposit
account  terms vary,  with the  primary  differences  being the minimum  balance
required,  the time  period the funds must  remain on deposit  and the  interest
rate.  Deposit  interest rates are set weekly based on a review of deposit flows
for the previous week, a survey of rates among  competitors  and other financial
institutions  in  Southwest  Florida.   Commercial  banking   relationships  are
emphasized  in an effort to increase  demand  deposits as a percentage  of total
deposits.  A courier  service is  provided to better  serve the banks'  business
customers.


                                       20
<PAGE>

<TABLE>

The following  table shows the  distribution  of, and certain other  information
relating to deposit accounts by type (dollars in thousands):

                                                                            At December 31,
                                                 --------------------------------------------------------------------
                                                        2000                     1999                    1998
                                                        ----                     ----                    ----
                                                              % of                    % of                     % of
                                                  Amount     Deposits      Amount    Deposits      Amount    Deposits
<S>                                            <C>              <C>     <C>            <C>      <C>              <C>
         Noninterest-bearing demand
                  deposits.....................$  14,353        9.94%   $  12,210      11.91%   $   6,365        9.95%
         Savings and NOW deposits..............   36,232       25.09       34,292      33.46       33,308       52.05
         Money-market deposits.................   33,860       23.45       21,722      21.19        4,011        6.27
                                                  ------       -----       ------      -----       ------       -----
                  Subtotal.....................   84,445       58.48       68,224      66.56       43,684       68.27
                                                  ------       -----       ------      -----       ------       -----
         Time deposits:
                  2.00% - 3.99%................      377         .26          262        .26          265         .41
                  4.00% - 4.99%................    2,389        1.65       10,371      10.12        3,093        4.83
                  5.00% - 5.99%................    7,983        5.53       18,765      18.31       11,952       18.68
                  6.00% - 6.99%................   35,792       24.79        4,876       4.75        4,996        7.81
                  7.00% - 7.99%................   13,404        9.29          -           -           -            -
                                                  ------       -----       ------      -----       ------       -----
         Total time deposits (1)...............   59,945       41.52       34,274      33.44       20,306       31.73
                                                  ------      ------      -------     ------       ------      ------
         Total deposit.........................$ 144,390      100.00%   $ 102,498     100.00%   $  63,990      100.00%
                                                 =======      ======      =======     ======       ======      ======
<FN>

(1)      Includes  individual  retirement accounts ("IRAs") totaling  $2,948,626
         and $1,896,095 at December 31, 2000 and 1999, all of which are  in  the
         form of time deposits.
</FN>
</TABLE>

Jumbo time deposits ($100,000 and over) mature as follows (in thousands):

                                                             At December 31,
                                                          --------------------
                                                          2000    1999    1998
                                                          ----    ----    ----
         Due three months or less.....................$  5,537   4,929     825
         Due over three months to six months..........   3,872   1,840     409
         Due over six months to one year..............   8,890   3,328   2,399
         Due over one year............................   7,470   2,521   1,809
                                                        ------  ------   -----
                                                      $ 25,769  12,618   5,442
                                                        ======  ======   =====


                                       21
<PAGE>

                              Results of Operations

The Company's  operating  results depend  primarily on its net interest  income,
which is the difference between interest income on  interest-earning  assets and
interest  expense  on  interest-bearing  liabilities,  consisting  primarily  of
deposits.  Net interest  income is determined by the  difference  between yields
earned on interest-earning assets and rates paid on interest-bearing liabilities
("interest-rate spread") and the relative amounts of interest-earning assets and
interest-bearing  liabilities. The Company's interest-rate spread is affected by
regulatory,  economic,  and competitive  factors that influence  interest rates,
loan demand, and deposit flows. In addition,  the net earnings are also affected
by  provisions  for future loan  losses,  the level of  nonperforming  loans and
foreclosed  real estate,  as well as the level of our  noninterest  income,  and
noninterest  expenses,  such as salaries and employee  benefits,  occupancy  and
equipment costs and income taxes.

The following table sets forth, for the periods indicated, information regarding
(i)  the  total   dollar   amount  of   interest   and   dividend   income  from
interest-earning  assets and the resultant  average yield; (ii) the total dollar
amount of interest  expense on  interest-bearing  liabilities  and the resultant
average costs; (iii) net  interest/dividend  income;  (iv) interest rate spread;
(v) net interest margin; and (vi) the ratio of average  interest-earning  assets
to average interest-bearing  liabilities.  Average balances are based on average
daily balances (dollars in thousands).

<TABLE>
                                                  2000                           1999                           1998
                                      -----------------------------   ----------------------------   ---------------------------
                                                 Interest   Average            Interest    Average            Interest   Average
                                      Average      and      Yield/    Average    and       Yield/    Average    and      Yield/
                                      Balance    Dividends  Rate      Balance  Dividends   Rate      Balance  Dividends   Rate
                                      -------    ---------  -------   -------  ---------   -------   -------  ---------  -------
Interest-earning assets:
<S>                                 <C>           <C>       <C>  <C>            <C>        <C>      <C>         <C>       <C>
     Loans.......................   $ 107,993     9,513     8.81%$    63,483    5,275      8.31%    $ 35,329    2,944     8.33%
     Securities..................      18,304     1,057     5.78      15,521      902      5.81        7,670      476     6.21
     Other interest-earning
         assets (1)..............       3,468       222     6.40      12,356      615      4.98       13,131      709     5.40
                                        -----     -----               ------      ---                 ------    -----
         Total interest-earning
           assets................     129,765    10,792     8.32      91,360    6,792      7.43       56,130    4,129     7.36
                                      -------    ------               ------    -----                           -----

Noninterest-earning assets.......      10,426                          9,107                           7,420
                                      -------                         ------                          ------

         Total assets............   $ 140,191                      $ 100,467                        $ 63,550
                                      =======                        =======                          ======
Interest-bearing liabilities:
     Savings, money-market and
         NOW deposits............      60,396     2,106     3.48      44,641    1,303      2.92       26,748      912     3.41
     Time deposits...............      44,019     2,677     6.08      27,556    1,447      5.25       19,302    1,097     5.68
     Other.......................       3,452       235     6.81        -         -          -          -         -         -
                                      -------    ------              -------    -----                 ------    -----
         Total interest-bearing
           liabilities...........     107,867     5,018     4.65      72,197    2,750      3.81       46,050    2,009     4.36
                                                  -----                         -----
Noninterest-bearing liabilities..      14,344                         10,674                           5,484
Stockholders' equity.............      17,980                         17,596                          12,016
                                      -------                         ------                          ------
         Total liabilities and
           stockholders' equity..   $ 140,191                      $ 100,467                        $ 63,550
                                      =======                        =======                          ======

Net interest/dividend income.....               $ 5,774                       $ 4,042                         $ 2,120
                                                 ======                         =====                           =====
Interest-rate spread (2).........                           3.67%                          3.62%                          3.00%
                                                            ====                           ====                           ====
Net interest margin (3)..........                           4.45%                          4.42%                          3.78%
                                                            ====                           ====                           ====
Ratio of average interest-earning
     assets to average interest-
     bearing liabilities.........        1.20                           1.27                            1.22
                                         ====                           ====                            ====

<FN>

(1)  Includes interest-bearing deposits,  federal funds sold,  Federal Home Loan
     Bank stock and securities  purchased under agreements to resell.
(2)  Interest-rate spread represents the difference between the average yield on
     interest-earning  assets  and  the   average   cost   of   interest-bearing
     liabilities.
(3)  Net  interest  margin  is  net interest income divided by average interest-
     earning assets.
</FN>
</TABLE>


                                       22
<PAGE>



     Rate/Volume Analysis

The following table sets forth certain information regarding changes in interest
income and  interest  expense for the periods  indicated.  For each  category of
interest-earning  assets  and  interest-bearing   liabilities,   information  is
provided  on  changes  attributable  to (1)  changes  in  rate  (change  in rate
multiplied by prior volume),  (2) changes in volume (change in volume multiplied
by prior  rate) and (3) changes in  rate-volume  (change in rate  multiplied  by
change in volume).

<TABLE>

Year Ended December 31, 2000 vs. 1999:
                                                                                     Increase (Decrease) Due to
                                                                                  -----------------------------------
                                                                                                     Rate/
                                                                                  Rate    Volume     Volume     Total
                                                                                  ----    ------     ------     -----
                                                                                      (In thousands)
Interest-earning assets:
<S>                                                                             <C>        <C>          <C>     <C>
    Loans....................................................................   $  317     3,699        222     4,238
    Securities...............................................................       (6)      162         (1)      155
    Other interest-earning assets............................................      176      (442)      (127)     (393)

      Total..................................................................      487     3,419         94     4,000

Interest-bearing liabilities:
    Deposits:
      Savings, money-market and NOW deposits.................................      254       460         89       803
      Time deposits..........................................................      229       864        137     1,230
      Other..................................................................       -        -          235       235
                                                                                   ---     -----        ---     -----
      Total..................................................................      483     1,324        461     2,268
                                                                                   ---     -----        ---     -----
Net change in net interest income............................................   $    4     2,095       (367)    1,732
                                                                                   ===     =====        ===     =====
Year Ended December 31, 1999 vs. 1998:

Interest-earning assets:
    Loans....................................................................   $   (7)    2,345         (7)    2,331
    Securities...............................................................      (31)      488        (31)      426
    Other interest-earning assets............................................      (55)      (42)         3       (94)
                                                                                    --        --         --     -----
      Total..................................................................      (93)    2,791        (35)    2,663
                                                                                    --     -----         --     -----
Interest-bearing liabilities:
    Deposits:
      Savings, money-market and NOW deposits.................................     (131)      610        (88)      391
      Time deposits..........................................................      (83)      469        (36)      350
                                                                                    --     -----        ---       ---
      Total..................................................................     (214)    1,079       (124)      741
                                                                                   ---     -----        ---     -----
Net change in net interest income............................................    $ 121     1,712         89     1,922
                                                                                   ===     =====        ===     =====
</TABLE>




                                       23
<PAGE>

Comparison of Years Ended December 31, 2000 and 1999


     General. Net earnings for the year ended December 31, 2000 were $601,128 or
          $.17 per basic and diluted share compared to net earnings  $615,259 or
          $.18 per basic and $.17 per diluted share for the year ended  December
          31, 1999. This decrease in net operating  results was primarily due to
          an increase in the loan loss  provision  only  partially  offset by an
          increase in net interest income and noninterest income. An increase in
          noninterest  expenses also  contributed to reduced  earnings for 2000,
          all as a result of the growth of the  Company  and the  opening of the
          fourth branch office in August 2000.

     Interest Income and Expense. Interest income increased by $4.0 million from
          $6.8 million for the year ended December 31, 1999 to $10.8 million for
          the year ended December 31, 2000.  Interest  income on loans increased
          to $9.5  million  from $5.3  million due to an increase in the average
          loan  portfolio  balance for the year ended  December 31, 2000, and an
          increase in the  weighted-average  yield earned to 8.81% for 2000 from
          8.31% for 1999.  Interest on securities  increased to $1.1 million due
          to an increase in the average  securities  balance in 2000,  partially
          offset by a slight  decrease in the average yield earned from 5.81% in
          1999 to 5.78%  in 2000.  Interest  on  other  interest-earning  assets
          decreased  from  $12.4  million  to $3.5  million  primarily  due to a
          decrease  in the  average  balance in federal  funds  sold,  partially
          offset by an increase in the  weighted-average  yield  earned on those
          assets.

          Interest  expense  increased to $5.0 million in 2000 from $2.8 million
          in 1999.  Interest  expense  increased due to the $35.6 million growth
          in average interest-bearing deposits in 2000 together with an increase
          in the rates paid on deposits in 2000.

     Provision for Loan  Losses.  The  provision  for loan losses was charged to
          earnings to bring the total allowance to a level deemed appropriate by
          management  and is based upon  historical  experience,  the volume and
          type of  lending  conducted  by the  Company.  In  addition,  industry
          standards,  the  amounts  of  nonperforming  loans,  general  economic
          conditions,  particularly  as they relate to market  areas,  and other
          factors related to the  collectibility of the Company's loan portfolio
          were considered. The allowance for loan losses increased from $886,000
          in 1999 to  $1,636,000  in 2000.  The  increase  was due to the  $53.7
          million  increase in the loan portfolio  during the year as well as an
          additional  increase  related to  management's  evaluation of the loan
          portfolio.  Management  believes that the allowance for loan losses of
          $1,636,000 is adequate at December 31, 2000.

     Noninterest Income.  Noninterest  income increased from $592,000 in 1999 to
          $1,517,000  in 2000  primarily  due to  increased  service  charges on
          deposit  accounts in 2000 compared to 1999 and an increase in mortgage
          brokerage fees associated with CCB Mortgage.

     Noninterest Expense.  Total  noninterest  expense increased to $5.3 million
          for the year ended December 31, 2000 compared to $3.2 million in 1999,
          primarily due to increases in employee  compensation  and benefits and
          occupancy and equipment expense resulting,  primarily from the opening
          of the  fourth  banking  office  in 2000 and the  additional  mortgage
          broker fees paid to CCB mortgage loan originators. All other operating
          expenses also  increased  primarily  due to the overall  growth of the
          Company.

     Income Taxes.  The income tax provision was $363,313 (an effective  rate of
          37.7%) for 2000  compared to a $347,876 (an  effective  rate of 36.1%)
          for 1999.



                                       24
<PAGE>


Comparison of Years Ended December 31, 1999 and 1998



     General. Net earnings for the year ended December 31, 1999 were $615,259 or
          $.18 per basic and $.17 per diluted  share  compared  to net  earnings
          $205,854  or $.08 per  basic  and  diluted  share  for the year  ended
          December 31,  1998.  This  improvement  in net  operating  results was
          primarily  due to an increase in net interest  income and  noninterest
          income,  partially  offset by an increase in noninterest  expenses and
          the  provision  for loan  losses,  all as a result  of  growth  of the
          Company.

     Interest Income and Expense. Interest income increased by $2.7 million from
          $4.1 million for the year ended  December 31, 1998 to $6.8 million for
          the year ended December 31, 1999.  Interest  income on loans increased
          to $5.3  million from $2.9 million due an increase in the average loan
          portfolio  balance for the year ended  December  31,  1999,  partially
          offset by a decrease in the weighted-average yield earned to 8.31% for
          1999 from 8.33% for 1998.  Interest  on  securities  increased  to $.9
          million due to an increase in the average  securities balance in 1999,
          partially  offset by a decrease in the average yield earned from 6.21%
          in 1998 to 5.81% in 1999.  Interest on other  interest-earning  assets
          decreased  to $.6 million  primarily  due to a decrease in the average
          balance and a decrease in the  weighted-average  yield earned on those
          assets.

          Interest expense increased  to $2.8 million in 1999 from $2.0  million
          in 1998.  Interest  expense  increased due to the $26.1 million growth
          in average  interest-bearing deposits  in 1999,  partially offset by a
          decrease in the weighted-average rate paid.

     Provision for Loan  Losses.  The  provision  for loan losses was charged to
          earnings to bring the total allowance to a level deemed appropriate by
          management  and is based upon  historical  experience,  the volume and
          type of  lending  conducted  by the  Company.  In  addition,  industry
          standards,  the  amounts  of  nonperforming  loans,  general  economic
          conditions,  particularly  as they relate to market  areas,  and other
          factors related to the  collectibility of the Company's loan portfolio
          were considered. The provision for loan losses increased from $161,711
          in 1998 to $437,000 in 1999.  The  year-over-year  increase was due to
          the $35 million increase in loan portfolio during the year. Management
          believes that the allowance for loan losses of $885,617 is adequate at
          December 31, 1999.

     Noninterest Income.  Noninterest  income increased from $341,397 in 1998 to
          $592,202 in 1999 primarily due to increased service charges on deposit
          accounts in 1999 compared to 1998.

     Noninterest Expense.  Total  noninterest  expense increased to $3.2 million
          for the year ended December 31, 1999 compared to $1.9 million in 1998,
          primarily due to increases in employee  compensation  and benefits and
          occupancy and equipment expense  resulting,  in part, from the opening
          of the Moorings office in September 1998. All other operating expenses
          also increased primarily due to the overall growth of the Company.

     Income Taxes.  The income tax provision was $347,876 (an effective  rate of
          36.1%) for 1998  compared to a $157,893 (an  effective  rate of 43.4%)
          for 1998.


                                       25
<PAGE>

                     Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with generally  accepted  accounting  principles,  which requires the
measurement of financial  position and operating  results in terms of historical
dollars,  without  considering changes in the relative purchasing power of money
over time due to inflation. Unlike most industrial companies,  substantially all
of the assets and  liabilities  of the  Company  are  monetary  in nature.  As a
result,  interest  rates  have  a  more  significant  impact  on  the  Company's
performance  than the effects of general levels of inflation.  Interest rates do
not  necessarily  move in the same  direction  or in the same  magnitude  as the
prices of goods and  services,  since such prices are affected by inflation to a
larger extent than interest rates.

                         Future Accounting Requirements

Financial Accounting  Standards 133 - Accounting for Derivative  Investments and
Hedging  Activities (as amended) requires companies to record derivatives on the
balance sheet as assets or liabilities,  measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending  on the use of the  derivatives  and  whether  they  qualify for hedge
accounting.  The  key  criterion  for  hedge  accounting  is  that  the  hedging
relationship  must be highly effective in achieving  offsetting  changes in fair
value or cash  flows.  The  Company  will be  required  to adopt this  Statement
January 1, 2001. This Statement is not expected to have a material impact on the
Company.

                           Selected Quarterly Results

Selected  quarterly  results of  operations  for the four  quarters in the years
ended December 31 are as follows (in thousands, except share amounts:
<TABLE>

                                                  2000                                          1999
                                ----------------------------------------       ---------------------------------------
                                 Fourth     Third      Second    First          Fourth    Third      Second    First
                                Quarter     Quarter    Quarter   Quarter       Quarter    Quarter    Quarter   Quarter
                                -------     -------    -------   -------       -------    -------    -------   -------
<S>                             <C>         <C>        <C>        <C>          <C>        <C>        <C>       <C>
Interest income............     $ 3,213     2,904      2,504      2,171        1,946      1,815      1,630     1,401
Interest expense...........       1,628     1,417      1,088        885          805        756        642       547
Net interest income........       1,585     1,487      1,416      1,286        1,141      1,059        988       854
Provision for loan
   losses..................         580       220        160         85           80        103        133       121
Noninterest income.........         298       371        437        410          187        139        133       133
Noninterest expense........       1,426     1,339      1,311      1,205          977        760        755       742
Earnings (loss) before
   income taxes............        (123)      299        382        406          271        335        233       124
Net earnings (loss)........         (74)      185        237        253          169        209        151        87
Basic earnings (loss) per
   common share (1)........        (.02)      .05        .07        .07          .05        .06        .04       .03
Diluted earnings (loss) per
   common share (1)........        (.02)      .05        .07        .07          .05        .06        .04       .03
Cash dividends declared
   per common share........         -          -          -         .05           -          -          -        -

</TABLE>




                                       26
<PAGE>

















                          Independent Auditors' Report



Board of Directors
Citizens Community Bancorp, Inc.
Marco Island, Florida:

         We  have  audited  the  accompanying  consolidated  balance  sheets  of
Citizens  Community  Bancorp,  Inc. and Subsidiaries (the "Company") at December
31,  2000  and  1999,  and the  related  consolidated  statements  of  earnings,
stockholders'  equity,  and cash  flows for each of the years in the  three-year
period  ended   December  31,  2000.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects,  the financial position of the Company
at December 31, 2000 and 1999,  and the results of its  operations  and its cash
flows for each of the years in the three-year period ended December 31, 2000, in
conformity with generally accepted accounting principles.





HACKER, JOHNSON & SMITH PA
Tampa, Florida
January 26, 2001


                                       27
<PAGE>

                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                           Consolidated Balance Sheets

<TABLE>

                                                                                                  At December 31,
                                                                                              -----------------------
                                                                                               2000              1999
                                                                                               ----              ----
    Assets

<S>                                                                                   <C>                   <C>
Cash and due from banks............................................................   $   4,547,319         6,035,589
Interest-bearing deposits..........................................................          16,763         2,000,000
Federal funds sold and securities purchased under agreements to resell.............       3,471,786         8,892,655
                                                                                        -----------      ------------

              Cash and cash equivalents............................................       8,035,868        16,928,244

Securities available for sale......................................................       4,287,311         6,022,103
Securities held to maturity........................................................      13,000,000        13,000,000
Loans, net of allowance for loan losses of $1,635,822 and $885,617.................     133,125,702        79,987,726
Premises and equipment, net........................................................       5,948,650         5,039,789
Federal Home Loan Bank stock, at cost..............................................         550,000           214,800
Deferred tax asset.................................................................         203,561            32,775
Accrued interest receivable and other assets.......................................       1,698,621           967,253
                                                                                        -----------      ------------

              Total assets.........................................................   $ 166,849,713       122,192,690
                                                                                        ===========      ============

    Liabilities and Stockholders' Equity

Liabilities:
    Noninterest-bearing demand deposits............................................      14,352,337        12,208,961
    Savings and NOW deposits.......................................................      36,232,566        34,292,059
    Money-market deposits..........................................................      33,859,590        21,722,006
    Time deposits..................................................................      59,945,026        34,274,902
                                                                                        -----------      ------------

              Total deposits.......................................................     144,389,519       102,497,928

    Official checks................................................................         978,363         1,060,366
    Federal Home Loan Bank advance.................................................       3,000,000            -
    Other liabilities..............................................................         783,590           650,769
                                                                                        -----------      ------------

              Total liabilities....................................................     149,151,472       104,209,063
                                                                                        -----------      ------------

Commitments (Note 7)

Stockholders' Equity:
    Preferred stock, $.01 value; 2,000,000 shares authorized,
         none issued or outstanding................................................         -                  -
    Common stock, $.01 par value; 8,000,000 shares authorized, 3,389,579
         and 3,486,767 shares issued and outstanding...............................          33,896            34,868
    Additional paid-in capital.....................................................      18,565,340        19,310,313
    Accumulated deficit............................................................        (926,844)       (1,353,625)
    Accumulated other comprehensive income (loss)..................................          25,849            (7,929)
                                                                                        -----------      ------------

              Total stockholders' equity...........................................      17,698,241        17,983,627
                                                                                        -----------      ------------

              Total liabilities and stockholders' equity...........................   $ 166,849,713       122,192,690
                                                                                        ===========      ============
</TABLE>


See Accompanying Notes to Consolidated Financial Statements.





                                       28
<PAGE>





                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                       Consolidated Statements of Earnings

<TABLE>

                                                                                   Year Ended December 31,
                                                                          -------------------------------------------
                                                                                2000            1999             1998
                                                                                ----            ----             ----
Interest income:
<S>                                                                    <C>                 <C>              <C>
   Loans ...........................................................   $   9,512,533       5,274,975        2,943,598
   Securities........................................................      1,057,402         901,457          476,060
   Other interest-earning assets.....................................        222,274         615,424          709,403
                                                                          ----------      ----------       ----------

         Total interest income.......................................     10,792,209       6,791,856        4,129,061
                                                                          ----------      ----------       ----------

Interest expense:
   Deposits..........................................................      4,783,395       2,749,603        2,009,177
   Federal Home Loan Bank advances...................................        234,913         -                 -
                                                                          ----------      ----------       ----------

         Total interest expense......................................      5,018,308       2,749,603        2,009,177
                                                                          ----------      ----------       ----------

Net interest income..................................................      5,773,901       4,042,253        2,119,884

         Provision for loan losses...................................      1,045,000         437,000          161,711
                                                                          ----------      ----------       ----------

Net interest income after provision for loan losses..................      4,728,901       3,605,253        1,958,173
                                                                          ----------      ----------       ----------

Noninterest income:
   Service charges and fees on deposit accounts......................        344,290         238,295          169,691
   Mortgage brokerage fees...........................................        894,537          65,539            -
   Other service charges and fees....................................        217,693         194,260          111,279
   Other ............................................................         60,222          94,108           60,427
                                                                          ----------      ----------       ----------

         Total noninterest income....................................      1,516,742         592,202          341,397
                                                                          ----------      ----------       ----------

Noninterest expenses:
   Compensation and  benefits........................................      3,147,001       1,624,999          899,761
   Occupancy and equipment...........................................        667,693         440,281          330,474
   Advertising.......................................................        229,903         134,026          104,710
   Office supplies...................................................        145,925         122,965          107,577
   Data processing...................................................        202,992         170,575           78,024
   Professional fees.................................................        150,353         182,770           67,672
   Other ............................................................        737,335         558,704          347,605
                                                                          ----------      ----------       ----------

         Total noninterest expenses..................................      5,281,202       3,234,320        1,935,823
                                                                          ----------      ----------       ----------

Earnings before income taxes.........................................        964,441         963,135          363,747

         Income taxes................................................        363,313         347,876          157,893
                                                                          ----------      ----------       ----------

Net earnings ........................................................  $     601,128         615,259          205,854
                                                                          ==========      ==========       ==========

Earnings per share:

         Basic.......................................................$            .17            .18              .08
                                                                          ===========     ==========       ==========

         Diluted.....................................................$            .17            .17              .08
                                                                          ===========     ==========       ==========

See Accompanying Notes to Consolidated Financial Statements.

</TABLE>


                                       29
<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity

                  Years Ended December 31, 2000, 1999 and 1998

<TABLE>

                                                                                                   Accumulated
                                                    Common Stock        Additional                   Other             Total
                                               ----------------------   Paid-In      Accumulated   Comprehensive    Stockholders'
                                               Shares          Amount   Capital        Deficit     Income (Loss)       Equity
                                               ------          ------   ----------   -----------   -------------    --------------

<S>                 <C> <C>                  <C>             <C>         <C>          <C>                              <C>
Balance at December 31, 1997..............   1,571,624       $ 15,716    7,010,515    (255,473)         -              6,770,758
                                                                                                                      ----------

     Net earnings and comprehensive
        income............................      -                -             -       205,854          -                205,854

Sale of shares of common
     stock at $7.50 per share ............   1,000,000        10,000     7,413,256        -             -              7,423,256

Issuance of shares of common
     stock to holders of  warrants........     625,513         6,255     2,808,553        -             -              2,814,808

Stock options exercised...................       2,000            20         9,832        -             -                  9,852

Stock dividend...........................      255,902         2,559     1,916,706  (1,919,265)         -                  -
                                            ----------       -------   -----------   ---------     -------------      ----------

Balance at December 31, 1998..............   3,455,039        34,550    19,158,862  (1,968,884)         -             17,224,528
                                                                                                                      ----------

Comprehensive income:
     Net earnings.........................      -                -             -       615,259          -                615,259

     Net change in unrealized loss on
        securities available for sale.....      -                -             -          -          (7,929)              (7,929)
                                                                                                                      ----------

Comprehensive income......................      -                -             -          -             -                607,330
                                                                                                                      ----------

Stock options exercised...................      31,728           318       151,451        -             -                151,769
                                            ----------      --------   -----------    ---------    -------------      ----------

Balance at December 31, 1999..............   3,486,767        34,868    19,310,313   (1,353,625)     (7,929)          17,983,627
                                                                                                                      ----------


Comprehensive income:
     Net earnings.........................      -                -             -        601,128         -                601,128

     Net change in unrealized gain (loss)
        on securities available for sale..      -                -             -          -          33,778               33,778
                                                                                                                      ----------

Comprehensive income......................      -                -             -          -             -                634,906
                                                                                                                      ----------

Stock issued as compensation..............       5,600            56        41,947        -             -                 42,003
                                                                                                                      ----------

Stock options exercised...................       6,696            67        46,437        -             -                 46,504
                                                                                                                      ----------

Stock repurchased.........................    (109,484)       (1,095)     (833,357)       -             -               (834,452)
                                                                                                                      ----------

Cash dividend.............................       -               -             -       (174,347)        -               (174,347)
                                          -------------  -----------   -------------- ---------    -------------      ----------

Balance at December 31, 2000..............   3,389,579      $ 33,896    18,565,340     (926,844)     25,849           17,698,241
                                             =========        ======    ==========    =========    =============      ==========


See Accompanying Notes to Consolidated Financial Statements.
</TABLE>



                                       30
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
<TABLE>

                                                                                     Year Ended December 31,
                                                                                 2000             1999           1998
                                                                                 ----             ----           ----
Cash flows from operating activities:
<S>                                                                      <C>                   <C>            <C>
    Net earnings ......................................................  $    601,128          615,259        205,854
    Adjustments to reconcile net earnings to net cash provided
      by operating activities:
        Depreciation...................................................       310,881          216,949        191,670
        Provision for loan losses......................................     1,045,000          437,000        161,711
        (Credit) provision for deferred income taxes...................      (191,159)         (47,844)       157,893
        Amortization of loan fees and premiums and discounts on
           securities available for sale...............................       (53,258)         (76,665)      (103,785)
        Increase in accrued interest receivable and other assets.......      (731,368)        (514,149)      (144,952)
        Loans originated for sale......................................          -                -          (565,000)
        Proceeds from sale of loans originated for sale................          -                -           565,000
        Increase in other liabilities..................................       132,821          356,637         54,946
        Stock issued as compensation...................................        42,003             -               -
                                                                         ------------        ---------       --------

               Net cash provided by operating activities...............     1,156,048          987,187        523,337
                                                                           ----------        ---------       --------

Cash flows from investing activities:
    Purchase of securities available for sale..........................        -            (6,207,508)           -
    Principal pay-downs on securities available for sale...............       955,018             -               -
    Maturities of securities available for sale........................       750,000          160,090            -
    Purchases of securities held to maturity...........................        -            (8,000,000)   (13,499,095)
    Maturities of securities held to maturity..........................        -             3,499,045      7,500,000
    Net increase in loans..............................................   (54,045,793)     (35,401,290)   (18,572,979)
    Purchase of Federal Home Loan Bank stock...........................      (335,200)         (87,700)      (127,100)
    Purchase of premises and equipment, net............................    (1,219,742)      (1,706,814)      (895,597)
                                                                           ----------       ----------    -----------

               Net cash used in investing activities...................   (53,895,717)     (47,744,177)   (25,594,771)
                                                                           ----------       ----------    -----------

Cash flows from financing activities:
    Net increase deposits..............................................    41,891,591       38,507,470     27,052,091
    Net (decrease) increase in official checks.........................       (82,003)         362,908        223,937
    Sales of common stock..............................................        46,504          151,769     10,247,916
    Repurchase of common stock.........................................      (834,452)            -              -
                                                                                                                 -
    Cash dividends paid................................................      (174,347)            -              -
                                                                                                                 -
    Increase in the Federal Home Loan Bank advance.....................     3,000,000             -              -
                                                                           ----------       ----------    -----------

               Net cash provided by financing activities...............    43,847,293       39,022,147     37,523,944
                                                                           ----------       ----------    -----------

Net (decrease) increase in cash and cash equivalents...................    (8,892,376)      (7,734,843)    12,452,510

Cash and cash equivalents at beginning of year.........................    16,928,244       24,663,087     12,210,577
                                                                           ----------       ----------    -----------

Cash and cash equivalents at end of year...............................  $  8,035,868       16,928,244     24,663,087
                                                                           ==========       ==========     ==========

Supplemental disclosure of cash flow information:
   Cash paid during the year for:
        Interest....................................................... $   4,923,042        2,536,826       1,952,818
                                                                          ===========       ==========     ===========

        Income taxes...................................................$      696,826          345,000           -
                                                                         ============       ==========     ===========

    Noncash transaction-
        Change in unrealized gain (loss) on securities available for
           sale........................................................$        33,778          (7,929)          -
                                                                         =============      ==========     ===========

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.



                                       31
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

       December 31, 2000 and 1999 and for each the Years In the Three-Year
                         Period Ended December 31, 2000


(1)  Summary of Significant Accounting Policies
    Organization.  Citizens Community Bancorp,  Inc.  ("Citizens") is a one-bank
        holding  company  and  owns  100% of the  outstanding  common  stock  of
        Citizens  Community Bank of Florida  ("CCB"),  Citizens  Financial Corp.
        ("CFC") and CCB Mortgage  Company ("CCB  Mortgage").  Citizens'  primary
        business is the  ownership  and  operation of CCB, CFC and CCB Mortgage.
        CCB is a Florida  state-chartered  commercial  bank and its deposits are
        insured by the  Federal  Deposit  Insurance  Corporation.  CCB  provides
        community  banking services to businesses and individuals  predominantly
        in  Collier  County,   Florida.   CFC  and  CCB  Mortgage  are  mortgage
        origination companies operating in Southwest Florida. CFC specializes in
        commercial  mortgage  originations  while CCB Mortgage is a  residential
        real estate brokerage company. Collectively the entities are referred to
        as the "Company." The Company  operates  predominantly in one reportable
        industry segment: banking.

    Basis of Presentation.  The accompanying  consolidated  financial statements
        include  the  accounts  of  Citizens,  CCB,  CFC and CCB  Mortgage.  All
        significant  intercompany accounts and transactions have been eliminated
        in consolidation.  The accounting and reporting practices of the Company
        conform  to  generally  accepted  accounting  principles  and to general
        practices within the banking industry.

    Use of  Estimates.   In  preparing   consolidated  financial  statements  in
        conformity with generally accepted accounting principles,  management is
        required to make  estimates  and  assumptions  that affect the  reported
        amounts of assets and  liabilities  as of the date of the balance  sheet
        and  reported  amounts of revenues  and  expenses  during the  reporting
        period.  Actual  results  could  differ from those  estimates.  Material
        estimates that are particularly susceptible to significant change in the
        near term relate to the determination of the allowance for loan losses.

    Cash and Cash  Equivalents.  For purposes of the consolidated  statements of
        cash flows, cash and cash equivalents include cash and balances due from
        banks,  interest-bearing  deposits,  federal  funds sold and  securities
        purchased under agreements to resell,  all of which mature within ninety
        days.

    Securities.  Securities  may be classified  as trading,  held to maturity or
        available  for sale.  Trading securities are held principally for resale
        and  recorded  at  their  fair  values.  Unrealized  gains and losses on
        trading  securities  are included  immediately in earnings.  The Company
        does   not   maintain   any   securities   in   a   trading   portfolio.
        Held-to-maturity  securities  are   those  which  the  Company  has  the
        positive  intent  and  ability to hold to maturity  and are  reported at
        amortized  cost. Available-for-sale securities consist of securities not
        classified  as trading  securities nor as  held-to-maturity  securities.
        Unrealized  holding gains and losses, net of tax, on  available-for-sale
        securities  are  reported  as  a net  amount  in a  other  comprehensive
        income.  Gains and losses on the sale of  available-for-sale  securities
        are  determined using the  specific-identification  method. Premiums and
        discounts  on  securities  available  for  sale and held to maturity are
        recognized  in interest income using the interest method over the period
        to maturity.

    Loans Held for Sale.  Mortgage loans originated and intended for sale in the
        secondary  market  are carried at the lower of cost or estimated  market
        value in  the  aggregate.  At December 31, 2000 and 1999,  there were no
        loans held for sale.

    Loans.  Loans  management  has  the  intent  and  ability  to  hold  for the
        foreseeable  future  or until  maturity or pay-off are reported at their
        outstanding  principal adjusted  for any charge-offs,  the allowance for
        loan losses,  and  any deferred  fees or costs on  originated  loans and
        unamortized premiums or discounts on purchased loans.

                                                                     (continued)



                                       32
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
    Loans,  Continued.  Loan  origination  fees  and  certain direct origination
        costs  are  capitalized  and recognized as an adjustment of the yield of
        the related loan.

        The accrual of interest on loans is discontinued at the time the loan is
        ninety days  delinquent  unless the loan is  well-collateralized  and in
        process of collection.  In all cases,  loans are placed on nonaccrual or
        charged-off at an earlier date if collection of principal or interest is
        considered doubtful.

        All  interest  accrued  but not  collected  for loans that are placed on
        nonaccrual or  charged-off  is reversed  against  interest  income.  The
        interest  on  these  loans  is  accounted  for  on  the   cash-basis  or
        cost-recovery method, until qualifying for return to accrual.  Loans are
        returned to accrual  status when all the principal and interest  amounts
        contractually due are brought current and future payments are reasonably
        assured.

    Allowance for Loan Losses.  The allowance for loan losses is  established as
        losses are  estimated  to have  occurred  through a  provision  for loan
        losses  charged  to  earnings.  Loan  losses  are  charged  against  the
        allowance  when  management  believes  the  uncollectibility  of a  loan
        balance is confirmed. Subsequent recoveries, if any, are credited to the
        allowance.

        The  allowance  for loan  losses  is  evaluated  on a  regular  basis by
        management  and  is  based  upon  management's  periodic  review  of the
        collectibility  of the  loans  in light of  historical  experience,  the
        nature and volume of the loan  portfolio,  adverse  situations  that may
        affect  the  borrower's  ability  to  repay,   estimated  value  of  any
        underlying   collateral  and  prevailing   economic   conditions.   This
        evaluation is inherently  subjective as it requires  estimates  that are
        susceptible  to  significant   revision  as  more  information   becomes
        available.

        A loan is considered  impaired when,  based on current  information  and
        events,  it is probable  that the Company  will be unable to collect the
        scheduled  payments of principal or interest  when due  according to the
        contractual  terms  of  the  loan  agreement.   Factors   considered  by
        management in determining impairment include payment status,  collateral
        value,  and  the  probability  of  collecting  scheduled  principal  and
        interest payments when due. Loans that experience  insignificant payment
        delays and payment shortfalls  generally are not classified as impaired.
        Management  determines  the  significance  of payment delays and payment
        shortfalls on a case-by-case basis, taking into consideration all of the
        circumstances  surrounding  the loan  and the  borrower,  including  the
        length of the delay,  the reasons for the delay,  the  borrower's  prior
        payment  record,  and the amount of the  shortfall  in  relation  to the
        principal  and interest  owed.  Impairment is measured on a loan by loan
        basis for  commercial  loans by either  the  present  value of  expected
        future cash flows discounted at the loan's effective  interest rate, the
        loan's  obtainable  market price, or the fair value of the collateral if
        the loan is collateral dependent.

        Large  groups of  smaller  balance  homogeneous  loans are  collectively
        evaluated for impairment.  Accordingly,  the Company does not separately
        identify  individual  consumer  and  residential  loans  for  impairment
        disclosures.

    Premises  and  Equipment.  Premises and  equipment  are stated at cost less
        accumulated  depreciation.  Depreciation  expense  is  computed  on  the
        straight-line  basis  over  the  estimated  useful  life of each type o
         asset.

                                                                     (continued)




                                       33
<PAGE>




                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
    Stock Compensation Plans. Statement of Financial Accounting Standards (SFAS)
        No.  123,  Accounting  for  Stock-Based  Compensation,   encourages  all
        entities to adopt a fair value based method of  accounting  for employee
        stock compensation plans,  whereby  compensation cost is measured at the
        grant  date based on the value of the award and is  recognized  over the
        service period,  which is usually the vesting period.  However,  it also
        allows an entity to  continue  to  measure  compensation  cost for those
        plans using the intrinsic value based method of accounting prescribed by
        Accounting  Principles Board Opinion No. 25, Accounting for Stock Issued
        to Employees,  whereby  compensation  cost is the excess, if any, of the
        quoted market price of the stock at the grant date (or other measurement
        date) over the amount an employee  must pay to acquire the stock.  Stock
        options  issued under the Company's  stock option plan have no intrinsic
        value at the grant date, and under Opinion No. 25 no  compensation  cost
        is  recognized  for them.  The Company has elected to continue  with the
        accounting  methodology in Opinion No. 25 and, as a result, has provided
        proforma  disclosures  of net  earnings and earnings per share and other
        disclosures,  as if the fair value based method of  accounting  had been
        applied.

    Transfer of Financial  Assets.  Transfers of financial  assets are accounted
        for as sales, when control over the assets has been surrendered. Control
        over transferred  assets is deemed to be surrendered when (1) the assets
        have been  isolated  from the Company,  (2) the  transferee  obtains the
        right (free of  conditions  that  constrain it from taking  advantage of
        that right) to pledge or exchange the  transferred  assets,  and (3) the
        Company does not maintain  effective control over the transferred assets
        through an agreement to repurchase them before their maturity.

    Income Taxes.  Deferred  income tax assets and  liabilities  are recorded to
        reflect the tax  consequences  on future years of temporary  differences
        between revenues and expenses reported for financial statement and those
        reported for income tax  purposes.  Deferred tax assets and  liabilities
        are  measured  using the enacted tax rates  expected to apply to taxable
        income in the years in which those temporary differences are expected to
        be realized or settled.

    Off-Balance-Sheet  Instruments.  In the  ordinary  course of  business,  the
        Company  has  entered  into   off-balance-sheet   financial  instruments
        consisting of commitments to extend credit.  Such financial  instruments
        are recorded in the financial statements when they are funded.

    Advertising.  The Company expenses all media advertising as incurred.

    FairValues  of  Financial  Instruments.   The  fair  value  of  a  financial
        instrument is the current amount that would be exchanged between willing
        parties,  other  than  in a  forced  liquidation.  Fair  value  is  best
        determined based upon quoted market prices.  However, in many instances,
        there are no quoted market prices for the  Company's  various  financial
        instruments. In cases where quoted market prices are not available, fair
        values are based on estimates  using  present  value or other  valuation
        techniques.   Those  techniques  are   significantly   affected  by  the
        assumptions  used,  including  the discount rate and estimates of future
        cash flows. Accordingly, the fair value estimates may not be realized in
        an immediate  settlement of the  instrument.  SFAS 107 excludes  certain
        financial   instruments  and  all  nonfinancial   instruments  from  its
        disclosure requirements.  Accordingly,  the aggregate fair value amounts
        presented may not necessarily represent the underlying fair value of the
        Company.  The following methods and assumptions were used by the Company
        in estimating fair values of financial instruments:

            Cash  and  Cash  Equivalents.  The carrying amounts of cash and cash
            equivalents approximates their fair value.

            Securities.   Fair  values  for  securities  held  to  maturity  and
            available  for  sale  are  based  on  quoted  market  prices,  where
            available.  If quoted market prices are not  available,  fair values
            are based on quoted market prices of comparable instruments.

                                                                     (continued)



                                       34
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(1)  Summary of Significant Accounting Policies, Continued
      Fair Values of Financial Instruments, Continued.

        Loans.  For  variable-rate  loans  that  reprice  frequently and have no
        significant  change  in  credit risk,  fair values are based on carrying
        values.  Fair values for certain fixed-rate mortgage (e.g.  one-to-four
        family  residential),  commercial  real estate and commercial loans are
        estimated  using  discounted  cash  flow analyses,  using interest rates
        currently  being  offered  for  loans with similar terms to borrowers of
        similar credit quality.

        Federal  Home  Loan Bank Stock.  Fair value of the Company's  investment
        in  Federal  Home  Loan  Bank  stock is based on its  redemption  value,
        which is its cost of $100 per share.

        Deposit  Liabilities.  The  fair  values   disclosed  for  demand,  NOW,
        money-market  and  savings  deposits  are, by  definition,  equal to the
        amount  payable  on  demand  at  the  reporting  date  (that  is,  their
        carrying  amounts).  Fair  values   for  fixed-rate  time  deposits  are
        estimated  using  a  discounted  cash  flow   calculation  that  applies
        interest  rates  currently  being  offered  on  these   accounts   to  a
        schedule of aggregated expected monthly maturities on time deposits.

        Federal  Home  Loan Bank  Advance.  The fair  value of the  Company's
        advance with the Federal Home Loan Bank is the  carrying  amount;  it
        renews daily.

        Accrued Interest.  The  carrying amounts of accrued interest approximate
        their fair values.

        Off-Balance-Sheet Instruments. Fair values for off-balance-sheet lending
        commitments  are  based  on fees currently charged to enter into similar
        agreements,  taking into account the remaining  terms of the  agreements
        and the counterparties' credit standing.

    Earnings Per Share. Basic earnings per share is computed on the basis of the
        weighted-average  number of common shares outstanding.  Diluted earnings
        per share is  computed  based on the  weighted-average  number of shares
        outstanding plus the effect of outstanding stock options, computed using
        the treasury stock method.

    Future  Accounting  Requirements.   Financial  Accounting  Standards  133  -
        Accounting  for  Derivative   Investments  and  Hedging  Activities  (as
        amended) requires  companies to record  derivatives on the balance sheet
        as  assets  or  liabilities,  measured  at fair  value.  Gains or losses
        resulting  from  changes  in the  values of those  derivatives  would be
        accounted for depending on the use of the  derivatives  and whether they
        qualify for hedge accounting.  The key criterion for hedge accounting is
        that the hedging  relationship  must be highly  effective  in  achieving
        offsetting  changes in fair value or cash  flows.  The  Company  will be
        required to adopt this Statement  effective January 1, 2001.  Management
        does not anticipate  that this Statement will have a material  impact on
        the Company.

    Comprehensive   Income.   Accounting   principles   generally  require  that
        recognized  revenue,  expenses,  gains  and  losses be  included  in net
        earnings.  Although certain changes in assets and  liabilities,  such as
        unrealized  gains  and  losses  on  available-for-sale  securities,  are
        reported as a separate  component  of the equity  section of the balance
        sheet,  such  items,   along  with  net  earnings,   are  components  of
        comprehensive income.

    Reclassifications.  Certain  amounts  in  the  1999  and  1998  consolidated
        financial  statements  have  been  reclassified to conform with the 2000
        presentation.

                                                                     (continued)



                                       35
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(2)  Securities
    Securities have been classified in accordance with management's  intent. The
        carrying amount of securities and their  approximate  fair values are as
        follows:
<TABLE>

                                                                    Amortized    Unrealized     Unrealized         Fair
                                                                      Cost            Gains         Losses        Value
                                                                    ---------    ----------     ----------        -----
              Securities Available for Sale:
              December 31, 2000:
<S>                                                              <C>                                   <C>      <C>
                    U.S. Government agencies...................  $  1,000,000         -                943      999,057
                    Mortgage-backed securities.................     3,055,870        64,589         22,205    3,098,254
                    Equity securities..........................       190,000         -              -          190,000
                                                                   ----------    ----------     ----------    ---------

                    Total......................................  $  4,245,870        64,589         23,148    4,287,311
                                                                   ==========    ==========     ==========    =========

              December 31, 1999:
                    U.S. Government agencies...................     1,750,000            78          7,500    1,742,578
                    Mortgage-backed securities.................     4,094,808         4,437          9,720    4,089,525
                    Equity securities..........................       190,000         -              -          190,000
                                                                  -----------    ----------     ----------    ---------

                    Total......................................  $  6,034,808         4,515         17,220    6,022,103
                                                                   ==========    ==========     ==========    =========

              Securities Held to Maturity:
                  December 31, 2000-
                    U.S. Government agencies...................  $ 13,000,000         -             41,300   12,958,700
                                                                   ==========    ==========     ==========   ==========

                  December 31, 1999-
                    U.S. Government agencies...................  $ 13,000,000         -            438,400   12,561,600
                                                                   ==========    ==========     ==========   ==========


    The scheduled maturities of securities are as follows:

                                                                  Available for Sale             Held to Maturity
                                                                 -------------------          ------------------------
                                                                 Amortized       Fair         Amortized          Fair
                                                                 Cost            Value        Cost               Value
                                                                 ---------      ------        ---------          -----
         December 31, 2000:
              Due in one or less............................   $ 1,000,000     999,057                -              -
              Due after one through five years...............            -           -       13,000,000     12,958,700
              Mortgage-backed securities.....................    3,055,870   3,098,254                -              -
              Equity securities..............................      190,000     190,000                -              -
                                                                 ---------   ---------       ----------     ----------

                                                               $ 4,245,870   4,287,311      13,000,000      12,958,700
                                                                 =========   =========      ==========      ==========

    There were no sales of securities in 2000, 1999 or 1998.
                                                                                                            (continued)
</TABLE>



                                       36
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(3)  Loans
    The components of loans are as follows:
<TABLE>
                                                                                                     At December 31,
                                                                                                   -------------------
                                                                                                   2000           1999
                                                                                                   ----           ----

<S>                                                                                      <C>                <C>
              Commercial real estate..................................................   $   61,133,227     42,286,675
              Residential real estate.................................................       61,442,202     24,920,678
              Commercial..............................................................        9,082,953      5,706,516
              Consumer................................................................        2,629,448      7,703,412
                                                                                           ------------     ----------

                                                                                            134,287,830     80,617,281
              Add (Subtract):
                Deferred costs, net...................................................          473,694        256,062
                Allowance for loan losses.............................................       (1,635,822)      (885,617)
                                                                                           ------------     ----------

              Loans, net..............................................................   $  133,125,702     79,987,726
                                                                                            ===========     ==========


    An analysis of the change in the allowance for loan losses follows:
                                                                                        Year Ended December 31,
                                                                                -------------------------------------

                                                                                    2000           1999          1998
                                                                                    ----           ----          ----

              Balance at beginning of year...............................   $    885,617        453,211       298,000
              Provision for loan losses..................................      1,045,000        437,000       161,711
              Loans charged-off, net of recoveries.......................       (294,795)        (4,594)       (6,500)
                                                                               ---------        -------       -------

              Balance at end of year.....................................   $  1,635,822        885,617       453,211
                                                                               =========        =======       =======

    Impaired collateral dependent loans were as follows:
                                                                                       Year Ended December 31,
                                                                                -------------------------------------
                                                                                    2000           1999           1998
                                                                                    ----           ----           ----

              Balance at end of year.....................................      $     -              -              -
                                                                                ========         ======          =====

              Average balance during year................................      $ 103,432            -              -
                                                                                 =======         ======          =====

              Interest income recognized on impaired loans...............      $   9,797            -              -
                                                                                ========         ======          =====

(4)  Premises and Equipment
    A summary of premises and equipment follows:
                                                                                               At December 31,
                                                                                        -----------------------------

                                                                                               2000              1999
                                                                                               ----              ----

              Land..................................................................    $ 1,880,955         1,768,020
              Bank premises.........................................................      2,883,832         2,340,036
              Furniture, fixtures and equipment.....................................      2,009,492         1,430,067
                                                                                          ---------         ---------

                  Total, at cost....................................................      6,774,279         5,538,123

              Less accumulated depreciation.........................................        825,629           498,334
                                                                                          ---------         ---------

                  Premises and equipment, net.......................................    $ 5,948,650         5,039,789
                                                                                          =========         =========
</TABLE>

                                                                     (continued)



                                       37
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(5)  Deposits
    The  aggregate  amount  of time  deposits  with a  minimum  denomination  of
         $100,000, was approximately $25,769,000 and $12,618,000 at December 31,
         2000 and 1999, respectively.

    At December  31,  2000 the  scheduled  maturities  of time  deposits  are as
follows:

              Year Ending
              December 31,                                          Amount
              -----------                                           ------

              2001............................................. $ 42,764,537
              2002-2003........................................   15,634,416
              2004-2005........................................    1,457,892
              Thereafter.......................................       88,181
                                                               -------------

                                                                $ 59,945,026

(6)  Federal Home Loan Bank Advance
     At December  31,  2000,  the  Company  had a  $3,000,000  advance  from the
         Federal  Home Loan Bank of Atlanta.  This  advance  renews daily and at
         December  31,  2000 had an  interest-rate  of 6.35%.  This  advance  is
         collateralized  by a  blanket  lien  on  the  Company's  1 to 4  family
         mortgage loans. There were no advances in 1999 or 1998.

(7)  Financial Instruments
     The Company is a party to financial instruments with off-balance-sheet risk
         in the normal  course of  business to meet the  financing  needs of its
         customers. These financial instruments are commitments to extend credit
         and  may  involve,   to  varying   degrees,   elements  of  credit  and
         interest-rate  risk in excess of the amount  recognized  in the balance
         sheet. The contract amounts of these instruments  reflect the extent of
         involvement the Company has in these financial instruments.

     The Company's exposure to credit loss in the event of nonperformance by the
         other  party to the  financial  instrument  for  commitments  to extend
         credit is represented by the contractual  amount of those  instruments.
         The Company uses the same credit  policies in making  commitments as it
         does for on-balance-sheet instruments.

     Commitments  to  extend credit are agreements to lend to a customer as long
         as there is no violation of any condition established in the  contract.
         Commitments  generally have fixed expiration dates or other termination
         clauses and may require payment of a fee. Since some of the commitments
         are expected to expire without being drawn upon,  the total  commitment
         amounts do not  necessarily  represent  future cash  requirements.  The
         Company  evaluates each customer's  credit worthiness on a case-by-case
         basis.  The amount of  collateral  obtained if deemed  necessary by the
         Company  upon  extension  of  credit  is based on  management's  credit
         evaluation of the counterparty.


<TABLE>

     The estimated fair values of the financial  instruments were as follows (in
thousands):

                                                                   At December 31, 2000         At December 31, 1999
                                                                 ----------------------         --------------------
                                                                 Carrying          Fair         Carrying       Fair
                                                                  Amount          Value          Amount        Value
         Financial assets:
<S>                                                            <C>                <C>             <C>         <C>
              Cash and cash equivalents.....................   $    8,036         8,036           16,928      16,928
              Securities available for sale.................        4,287         4,287            6,022       6,022
              Securities held to maturity...................       13,000        12,959           13,000      12,562
              Loans receivable..............................      133,126       133,968           79,988      79,880
              Federal Home Loan Bank stock..................          550           550              215         215
              Accrued interest receivable...................        1,197         1,197              739         739

         Financial liabilities:
              Deposit liabilities...........................      144,390       144,619          102,498     102,595
              Federal Home Loan Bank advance................        3,000         3,000             -           -
</TABLE>

                                                                     (continued)



                                       38
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(7) Financial Instruments, Continued
    A    summary of the amounts of the Company's  financial  instruments,  which
         approximates  market value with off-balance  sheet risk at December 31,
         2000 follows:

              Unfunded loan commitments.......................... $     200,000
                                                                    ============

              Available lines of credit.......................... $  29,036,000
                                                                    ============

(8)  Credit Risk
    The  Company  grants  the  majority  of its  loans to  borrowers  throughout
         Collier County,  Florida.  Although the Company has a diversified  loan
         portfolio,  a significant  portion of its  borrowers'  ability to honor
         their  contracts  is  dependent  upon the  economy in  Collier  County,
         Florida.

(9)  Income Taxes
    The income tax provision consisted of the following:
<TABLE>

                                                                                           Year Ended December 31,
                                                                                      -------------------------------
                                                                                      2000           1999        1998
                                                                                      ----           ----        ----
              Current:
<S>                                                                              <C>              <C>
                  Federal....................................................... $ 473,376        340,930           -
                  State.........................................................    81,096         54,790           -
                                                                                  --------        -------      ------

                     Total current provision....................................   554,472        395,720           -
                                                                                   -------        -------      ------

              Deferred:
                  Federal.......................................................  (161,647)       (43,651)     134,815
                  State.........................................................   (29,512)        (4,193)      23,078
                                                                                   -------        -------      -------

                     Total deferred (credit) provision..........................  (191,159)       (47,844)     157,893
                                                                                   -------        -------      -------

                     Total...................................................... $ 363,313        347,876      157,893
                                                                                   =======        =======      =======
</TABLE>

    The  reasons for the  differences  between the statutory  Federal income tax
         rate and the effective tax rate are summarized as follows:
<TABLE>

                                                              2000                 1999                   1998
                                                     --------------------    ------------------     -------------------
                                                                     % of                 % of                  % of
                                                                   Pretax                Pretax                 Pretax
                                                     Amount      Earnings    Amount    Earnings     Amount    Earnings
                                                     ------      --------    ------    --------     ------    --------
         Income tax provision at statutory
<S>                                                <C>              <C>    <C>            <C>     <C>            <C>
              Federal income tax rate............  $327,910         34.0%  $327,464       34.0%   $123,674       34.0%
         Increase (decrease) resulting from:
              State taxes, net of Federal tax
                  benefit........................    34,045          3.5     33,394        3.5      15,231        4.2
              Other..............................     1,358           .2    (12,982)      (1.4)     18,988        5.2
                                                   --------        -----    -------       ----     -------      -----

                                                   $363,313         37.7%  $347,876       36.1%   $157,893       43.4%
                                                    =======         ====    =======       ====     =======       ====
</TABLE>

                                                                     (continued)



                                       39
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(9)  Income Taxes, Continued
    The  tax  effects of  temporary  differences  that give rise to  significant
         portions of the deferred tax assets and  deferred tax  liabilities  are
         presented below.
<TABLE>
                                                                                               At December 31,
                                                                                            -------------------
                                                                                               2000           1999
                                                                                               ----           ----
              Deferred tax assets:
<S>                                                                                       <C>              <C>
                  Allowance for loan losses...........................................    $ 527,030        223,310
                  Organization and start-up costs.....................................        7,271         13,318
                  Unrealized loss on securities available for sale....................            -          4,781
                  Other...............................................................        7,293              -
                                                                                           --------        -------

                    Total deferred tax asset..........................................      541,594        241,409
                                                                                            -------        -------

              Deferred tax liabilities:
                  Depreciation........................................................      126,646        115,802
                  Accrual to cash adjustment..........................................      195,795         92,832
                  Unrealized gain on securities available for sale....................       15,592              -
                                                                                            -------        -------

                    Total deferred tax liabilities....................................      338,033        208,634
                                                                                            -------        -------

                    Net deferred income tax asset.....................................    $ 203,561         32,775
                                                                                            =======         ======
</TABLE>

(10)  Stock Options
     The Company has  established  three Stock Option plans,  one for directors,
         one for officers and employees and one for the advisory  board. A total
         of 523,000  shares of common stock has been reserved for the plans.  At
         December  31, 2000,  80,812  shares  remain  available  for grant.  The
         directors  options  have terms of ten years and vest over three  years.
         The officers and employee options have terms of ten years and vest over
         five years.  The advisory  board have terms of five years and vest over
         three years.

<TABLE>

                                                                                   Range of     Weighted-
                                                                                   Per Share    Average
                                                                      Number       Option       Per Share    Aggregate
                                                                       of          Exercise     Exercise     Option
                                                                      Shares       Price        Price        Price
                                                                      ------      ---------    ---------    ----------

<S>                                   <C> <C>                        <C>        <C>    <C>        <C>          <C>
              Outstanding at December 31, 1997....................   167,840    $ 4.17-5.56       4.68         785,074
              Options granted.....................................   268,812      6.48-9.26       7.56       2,033,513
              Options terminated..................................   (67,651)     4.67-9.26       5.46        (369,644)
              Options exercised...................................    (2,160)     4.67-5.21       4.56          (9,852)
                                                                    --------                                 ----------

              Outstanding at December 31, 1998....................   366,841      4.17-9.26       6.65       2,439,091

              Options granted.....................................   156,500      9.00-9.50       9.36       1,464,840
              Options terminated..................................   (44,173)     4.63-9.26       6.03        (266,573)
              Options exercised...................................   (31,728)     4.17-6.95       4.78        (151,769)
                                                                    --------                                 ---------

              Outstanding at December 31, 1999...................    447,440      4.17-9.50       7.79       3,485,589

              Options granted.....................................    72,436      7.63-9.00       8.14         589,629
              Options terminated..................................   (70,992)     6.95-9.50       8.80        (624,995)
              Options exercised...................................    (6,696)     6.95-7.87       6.95         (46,504)
                                                                     -------                                 ---------

              Outstanding at December 31, 2000...................    442,188    $ 4.17-9.50       7.70       3,403,719
                                                                     =======      =========       ====       =========
</TABLE>

    The  weighted-average  remaining  contractual life of the outstanding  stock
         options  at  December  31,  2000 and 1999 was 73 months  and 92 months,
         respectively.
                                                                     (continued)


                                       40
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued

(10)  Stock Options, Continued
    These options are exercisable as follows:
<TABLE>
                                                                                       Weighted-    Remaining
                                                                            Number     Average      Contractual
                                                                              of       Exercise     Life in
               Year Ending                                                  Shares     Price        Months
               -----------                                                  ------     ---------    -----------

<S>                                                                        <C>           <C>               <C>
                     Currently....................................         209,618       $ 7.30            78
                     2001.........................................          75,258         7.78            72
                     2002.........................................          69,426         8.38            66
                     2003.........................................          52,464         8.45            62
                     2004.........................................          28,675         8.47            67
                     2005.........................................           6,747         8.18            63
                                                                          --------

                                                                           442,188       $ 7.70            73
                                                                           =======         ====            ==
</TABLE>

    FASB Statement 123 requires proforma information  regarding net earnings and
       earnings per share.  This proforma  information has been determined as if
       the  Company had  accounted  for its stock  options  under the fair value
       method of that statement and is as follows:
<TABLE>

                                                                                       Year Ended December 31,
                                                                                  -------------------------------
                                                                                  2000           1999        1998
                                                                                  ----           ----        ----

               Net earnings:
<S>                                                                          <C>              <C>         <C>
                     As reported.............................................$ 601,128        615,259     205,854
                                                                               =======        =======     =======

                     Proforma................................................$ 263,649        175,256     106,098
                                                                               =======        =======     =======

               Basic earnings per share:
                     As reported.............................................$     .17            .18         .08
                                                                               =======        =======     =======

                     Proforma ...............................................$     .08            .05         .04
                                                                               =======        =======     =======

               Diluted earnings per share:
                     As reported.............................................$     .17            .17         .08
                                                                               =======        =======     =======

                     Proforma................................................$     .08            .05         .04
                                                                               =======        =======     =======
</TABLE>

    Thefair value of each option  grant is  estimated on the date of grant using
       the minimum value method with the following assumptions:
<TABLE>

                                                                                          Year Ended December 31,
                                                                                      ------------------------------
                                                                                      2000         1999         1998
                                                                                      ----         ----         ----

<S>                                                                                    <C>            <C>         <C>
               Risk-free interest rate...........................................      5.5%           6%          5%
               Expected dividend yield...........................................        -%           -%          -%
               Volatility........................................................    38.01%       14.03%          -%
               Expected life in years............................................      9.4           10          10
               Fair value per share granted......................................  $  7.27         4.49        2.65
                                                                                      ====         ====        ====
</TABLE>


                                                                     (continued)




                                       41
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(11)  Earnings Per Share ("EPS")
    Thefollowing is a  reconciliation  of the numerators and denominators of the
       basic and diluted earnings per share computations.

<TABLE>

                                                                   Year Ended December 31,
                                            2000                             1999                             1998
                               -----------------------------    -----------------------------    -----------------------------
                                           Weighted-  Per                   Weighted-  Per                   Weighted-  Per
                                           Average    Share                 Average    Share                 Average    Share
                               Earnings    Shares     Amount    Earnings    Shares     Amount    Earnings    Shares     Amount
                               --------    ---------  ------    --------    ---------  ------    --------    ---------  ------
<S>                           <C>          <C>         <C>     <C>          <C>         <C>     <C>          <C>         <C>
     Basic EPS:
         Net earnings
          available to
          common
          stockholders......  $ 601,128    3,451,552   $ .17   $ 615,259    3,470,664   $ .18   $ 205,854    2,597,330   $ .08
                                                         ===                              ===                              ===
     Effect of dilutive
       securities:
         Incremental shares
          from assumed
          exercise of
          options ..........                  58,585                           98,118                           44,602
                                              ------                           ------                           ------

     Diluted EPS:
         Net earnings
          available to
          common
          stockholders
          and assumed
          conversions.......  $ 601,128    3,510,137   $ .17   $ 615,259    3,568,782   $ .17   $ 205,854     2,641,932  $ .08
                                =======    =========     ===     =======    =========     ===     =======     =========    ===
</TABLE>

<TABLE>

     Shares not included in the  computations  of diluted  earnings per share because the option exercise price was not
         less than the average market price are as follows:

                                                         Number of       Price         Year           Year
                                                         Shares          Range        Issued         Expires
         Year Ended December 31:
<S>      <C>                                               <C>        <C>    <C>     <C>  <C>       <C>  <C>
         2000 .........................................    166,872    $ 8.80-9.50    1999-2000      2009-2010
         1999 .........................................          -              -            -              -
         1998 ..........................................         -              -            -              -
</TABLE>

(12) Profit Sharing Plan
     The Company  sponsors a Section 401(k) profit sharing plan available to all
         employees  electing to participate after meeting certain age and length
         of service requirements. Expense related to the Company's contributions
         to the profit  sharing plan included in the  accompanying  consolidated
         statements of earnings was approximately $17,000, $5,000 and $3,000 for
         the years ended December 31, 2000, 1999 and 1998, respectively.

(13) Merger
     On  December 18, 2000,  Citizens  entered into a definitive  agreement (the
         "Agreement")  to merge with F.N.B.  Corporation  ("F.N.B.").  Under the
         terms of the Agreement, F.N.B. will exchange shares of its common stock
         for all  outstanding  shares of the  Company.  The merger is subject to
         both regulatory and stockholder approval.

                                                                     (continued)



                                       42
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(14) Regulatory Matters
     Federal  and  state  banking  regulations  place  certain  restrictions  on
         dividends  paid and loans or advances  made by CCB to  Citizens.  As of
         December 31, 2000, CCB had not paid any dividends to Citizens.

     Citizens  (on  a  consolidated  basis)  and  CCB  are  subject  to  various
         regulatory capital  requirements  administered by the federal and state
         banking  agencies.  Failure to meet minimum  capital  requirements  can
         initiate  certain  mandatory  and  possibly  additional   discretionary
         actions by regulators that, if undertaken, could have a direct material
         effect  on  Citizens'  financial  statements.  Under  capital  adequacy
         guidelines and the regulatory  framework for prompt corrective actions,
         Citizens and CCB must meet  specific  capital  guidelines  that involve
         quantitative   measures  of  their  assets,   liabilities  and  certain
         off-balance  sheet  items as  calculated  under  regulatory  accounting
         practices.  The capital amounts and  classification are also subject to
         qualitative   judgments  by  the  regulators  about  components,   risk
         weightings,  and other factors. Prompt corrective action provisions are
         not applicable to bank holding companies.

     Quantitative measures  established by regulation to ensure capital adequacy
         require  Citizens and CCB to maintain  minimum  amounts and percentages
         (set  forth in the  following  table) of total  and Tier I capital  (as
         defined in the regulations) to risk-weighted assets (as defined) and of
         Tier I capital (as defined) to average assets (as defined).  Management
         believes,  as of December 31, 2000 and 1999,  that Citizens and CCB met
         all capital adequacy requirements to which they are subject.

     As  of December 31,  2000,  the most recent  notification  from the Federal
         Deposit Insurance Corporation  categorized CCB as well capitalized.  An
         institution must maintain minimum total  risk-based,  Tier I risk-based
         and Tier I leverage  percentages as set forth in the following  tables.
         There  are  no  conditions  or  events  since  the  notification   that
         management  believes have changed CCB's  category.  Citizens' and CCB's
         actual capital amounts and percentages are also presented in the table.

<TABLE>

                                                                                                         To Be Well
                                                                                                       Capitalized Under
                                                                                      Minimum            the Provisions
                                                                                  For Capital            of Prompt and
                                                        Actual              Adequacy Purposes          Corrective Action
                                                 --------------------------------------------        --------------------
                                                 Amount         %          Amount         %          Amount          %
                                                 ------      ------        ------      ------        ------        -----
     As of December 31, 2000:
         Total Capital to Risk-Weighted Assets:
<S>                                            <C>            <C>        <C>             <C>
              Citizens.....................    $ 19,095       14.27%     $ 10,706        8.00%         N/A          N/A
              CCB .........................      13,730       10.65        10,314        8.00      $ 12,892        10.00%

         Tier I Capital to Risk-Weighted Assets:
              Citizens.....................      17,422       13.02         5,154        4.00          N/A          N/A
              CCB .........................      12,119        9.40         5,157        4.00         7,736         6.00

         Tier I Capital to Average Assets:
              Citizens.....................      17,422       10.93         6,375        4.00          N/A          N/A
              CCB .........................      12,119        7.85         6,175        4.00         7,719         5.00

     As of December 31, 1999:
         Total Capital to Risk-Weighted Assets:
              Citizens.....................        N/A         N/A           N/A         N/A           N/A          N/A
              CCB .........................       9,232       12.17         5,927        8.00         7,409        10.00

         Tier I Capital to Risk-Weighted Assets:
              Citizens.....................        N/A         N/A           N/A         N/A           N/A          N/A
              CCB .........................       8,427       11.11         2,964        4.00         4,445         6.00

         Tier I Capital to Average Assets:
              Citizens.....................        N/A         N/A           N/A         N/A           N/A          N/A
              CCB .........................       8,427        8.25         4,085        4.00         5,106         5.00

                                                                     (continued)

</TABLE>


                                       43
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(15) Parent  Company  Only  Financial   Information   Citizens'   unconsolidated
     financial information is as follows:
<TABLE>

                            Condensed Balance Sheets
                                 (In thousands)
                                                                                                      At December 31,
                                                                                                     -----------------
                                                                                                     2000         1999
                                                                                                     ----         ----
                  Assets

<S>                                                                                              <C>             <C>
              Cash and interest-bearing deposits...............................................  $  1,363        1,112
              Securities purchased under agreements to resell..................................       101        1,300
              Securities available for sale....................................................       190          190
              Loans receivable.................................................................     4,800        5,751
              Investment in subsidiaries.......................................................    12,401        8,663
              Premises and equipment, net......................................................         1          883
              Other assets.....................................................................       120           85
                                                                                                  -------     --------

                  Total assets.................................................................  $ 18,976       17,984
                                                                                                   ======       ======

                  Liabilities and Stockholders' Equity

              Liabilities......................................................................     1,278            -
              Stockholders' equity.............................................................    17,698       17,984
                                                                                                   ------       ------

                  Total liabilities and stockholders' equity...................................  $ 18,976       17,984
                                                                                                   ======       ======

                       Condensed Statements of Operations
                                 (In thousands)

                                                                                              Year Ended December 31,
                                                                                           ----------------------------
                                                                                           2000        1999       1998
                                                                                           ----        ----       ----

              Revenues..............................................................      $ 646         753        416
              Expenses..............................................................       (345)       (254)      (106)
                                                                                            ---         ---        ---

                  Earnings before income of subsidiaries
                    and income taxes................................................        301         499        310

              Earnings of subsidiaries..............................................        413         294         11
                                                                                            ---         ---       ----

                  Earnings before income taxes......................................        714         793        321

              Income taxes..........................................................        113         178        115
                                                                                            ---         ---        ---

                  Net earnings......................................................      $ 601         615        206
                                                                                            ===         ===        ===
</TABLE>

                                                                     (continued)





                                       44
<PAGE>



                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

              Notes to Consolidated Financial Statements, Continued


(15)  Parent Company Only Financial Information, Continued

<TABLE>

                       Condensed Statements of Cash Flows
                                 (In thousands)

                                                                                              Year Ended December 31,
                                                                                           ----------------------------
                                                                                           2000        1999        1998
                                                                                           ----        ----        ----
         Cash flows from operating activities:
<S>                                                                                     <C>             <C>         <C>
              Net earnings...........................................................   $   601         615         206
              Adjustments to reconcile net earnings to net cash provided
                by operating activities:
                  Equity in undistributed earnings of subsidiaries...................      (413)       (294)        (11)
                  Increase in other assets...........................................       (35)        (73)        (12)
                  Increase (decrease) in other liabilities...........................     1,278        (115)        111
                  Depreciation.......................................................         -           -          15
                  Stock issued as compensation.......................................        42           -           -
                                                                                          -----        ----         ---

                  Net cash provided by operating activities..........................     1,473         133         309
                                                                                          -----        ----         ---

         Cash flows from investing activities:
              Securities purchased under agreements to resell........................     1,199       7,405      (8,705)
              Purchase of available for sale securities..............................         -        (190)          -
              Sale (purchase) of premises and equipment, net of transfer to
                  subsidiary.........................................................       882        (883)       (467)
              Net decrease (increase) in loans receivable............................       951      (3,715)       (775)
              Investment in subsidiary...............................................    (3,291)     (1,921)       (750)
                                                                                          -----       -----       -----

                  Net cash provided by (used in) investing activities................      (259)       696      (10,697)
                                                                                          -----       ----       ------

         Cash flows from financing activities:
              Cash dividend paid.....................................................      (174)         -            -
              Net proceeds from issuance of common stock.............................        46        152       10,248
              Repurchase of common stock.............................................      (835)         -            -
                                                                                          -----       ----       ------

                  Net cash (used in) provided by financing activities................      (963)       152       10,248
                                                                                          -----       ----       ------

         Net increase (decrease) in cash and interest-bearing deposits...............       251        981         (140)

         Cash and interest-bearing deposits at beginning of the year.................     1,112        131          271
                                                                                          -----       ----       ------

         Cash and interest-bearing deposits at end of year...........................   $ 1,363      1,112          131
                                                                                          =====      =====       ======

</TABLE>


                                       45
<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

Directors

         Diane  M. Beyer, director since 1995. Term will expire 2001. Ms. Beyer,
         age  61, is a founding director and Assistant Secretary of Citizens and
         is  a member  of its  Executive  and  Audit  Committees.  She is also a
         founding  director  and Vice Chairman of the Board of Directors of CCB,
         chairing  its Executive,  Compensation & Personnel  Committees.  She is
         also  a  member  of  CCB's  Audit,  Asset  Liability  and  Building   &
         Facilities  Committees.  Ms.  Beyer, a human resources consultant,  has
         business  experience  in  administration.  She  is currently a Managing
         Partner  of RFB Associates,  L.L.C.,  a Naples-based  consulting  firm.
         Before  relocating to Naples,  Florida in 1993, Ms. Beyer was Corporate
         Secretary  and  Human  Resources   Manager  of  a  large  real   estate
         development  company in Southern  California.  Ms. Beyer is a member of
         the  National  Association of Women in Construction and is on the Board
         of  Directors  of  a non-profit  volunteer  organization  in Naples and
         surrounding communities.

         John V.  Cofer,  director since 1999. Term will expire 2001. Mr. Cofer,
         age 57, is  Vice  Chairman of the Board of  Directors  of Citizens  and
         Chairman of the Board of CCB  Mortgage.  Mr.  Cofer is Chairman of the
         Strategic  Planning  Committee.  Mr.  Cofer's prior business  interests
         included  Senior Partner of Oxford  Development Corp. of Bethesda,  MD,
         where  Mr. Cofer was  responsible  for the  development  of over 16,000
         housing  units and the  management of over 27,000 housing units in nine
         states.  He was also President of Krupp Development of Boston, MA.

         Joel  M. Cox, Sr., director since 1995. Term will expire 2001. Mr. Cox,
         age  62, has over 38 years of experience in banking and insurance.  Mr.
         Cox  is a founding  director of Citizens  and serves as Chairman of the
         Executive  Committee.  Mr.  Cox  is a member of the Board of CCB and is
         Chairman  of the Asset/Liability Committee and the Vice Chairman of the
         Loan  committee.   He  also  serves  on  CCB's  Audit,   Building  and
         Facilities,  Compensation  and Personnel and Executive Committees.  Mr.
         Cox has been Vice  President and Director of Cox Insurance Agency, Inc.
         of  Marco  Island,  Florida,  since 1985.  He currently  serves as Vice
         President  of  the  Kiwanis  Club of Marco  Island  and  serves  on the
         Chamber of Economic Development Committee.

         Thomas  B. Garrison,  director  since 1995.  Term will expire 2001. Mr.
         Garrision,  age  55, is a founding  director of Citizens  and served as
         Chairman  of the Year 2000 Committee. Mr. Garrison has over 30 years of
         experience  in the design and  development of major software  projects.
         Formerly  with  the  Barron-Collier  Companies,  where he served as the
         Management  Information Systems Director and Chief Information Officer.
         Mr. Garrison  has been a Collier County  resident,  residing in Naples,
         Florida,  since  1988 and has been an active member of several  Collier
         County  civic organizations,  including Toastmasters, Naples Investment
         Club,  Rotary International, Small CAP Investment Club, Naples Computer
         Club.

         James  S.  Hagedorn,  director  since 1996.  Term will expire 2001. Mr.
         Hagedorn,  age  58, is a director and the Vice Chairman of Citizens. He
         is  also a member of the Executive Committee.  Mr. Hagedorn is a member
         of  the Board of Directors  of CCB,  where he serves as Chairman of the
         Loan  Committee.  Mr.  Hagedorn  has  been  President  and  Director of
         Waterside  Development  Corp.  since  1995.  He  served   as  Chairman,
         President  and CEO of The Merchant  Bancorporation of Florida from 1986
         through 1994.

         Dennis  J. Lynch,  director  since 1995.  Term will  expire  2001.  Mr.
         Lynch,  age  59, is a  founding  director  of  Citizens  and  serves as
         Chairman  of  the  ALCO  and is a  member  of the  Loan  Committee  and
         Chairman of  the Board of Directors of CFC. Mr. Lynch has been involved
         in the real  estate  sales and  development  business  since  moving to
         Naples in  1971. He has been the owner and President of Dennis J. Lynch
         and  Associates,  a real estate sales agency established in 1979. Since
         1979,  his  firm has developed  and been involved in the  management of
         over  560,000  square feet of  commercial  real estate space in Collier
         County.

         Robert A.  Marks,  CLU, director since 1999. Term will expire 2001. Mr.
         Marks, age  69, is a member of the Board of Directors of Citizens.  Mr.
         Marks is  Chairman of the Advisory  Board for CCB on Marco Island.  Mr.
         Marks'  prior  business  interest  is  in  the  insurance  industry  as
         Regional  Manager with Metropolitan Life in Nashville Tennessee,  where



                                       46
<PAGE>

         he  was in  charge  of  the  company's  operations  in  the  states  of
         Tennessee  and  Kentucky.  He  retired  in 1986  after 30  years   with
         Metropolitan Life.

         Stephen  A. McLaughlin, director since 1995. Term will expire 2002. Mr.
         McLaughlin,  age  54, is a founding director of Citizens and of CCB. He
         serves as  Chairman of the Loan  Committee and was also a member of the
         Year 2000  Committee. Mr. McLaughlin's business involves the operations
         of  several  Maine-based real estate  consulting and timber  companies,
         including Stillwater Land & Lumber Limited.

         Louis J.  Smith, director since 1997. Term will expire 2001. Mr. Smith,
         age 76,  is a member of the Board of  Directors  of Citizens and serves
         on its  Audit Committee.  Mr. Smith was a self-employed  pharmacist for
         34  years,  and currently owns and operates Pat's Hallmark in the Shops
         of  Marco on Marco Island and is the Officer in Charge of the U.S. Post
         Office  in Marco Island.  Mr. Smith was formerly a director for the 1st
         Wisconsin Bank of Wisconsin (now First-Star).

         Richard  Storm,  Jr.,  director since 1995.  Term will expire 2002. Mr.
         Storm,  age 59, is a 21 year resident of Collier County, Florida and is
         a  founding  director,  Chairman of the Board and CEO of  Citizens  and
         also  serves on the Executive and Strategic Planning  Committees of the
         Board.  He  is also the  Chairman  of the Board and CEO of CCB where he
         serves  on the  Executive,  Loan,  Building  Facilities,  and Loan Loss
         Recovery  Committees.   Mr.  Storm  has  over  25  years  of   director
         experience  in banking and recently  completed two terms as an at-large
         director  for Group VI of the Community  Bankers of Florida.  Mr. Storm
         previously  served as Director and Corporate Secretary, and also served
         on  various Board Committees for Citizens National Corporation,  a bank
         holding  company  located  in  Naples,  Florida.   Following   Citizens
         National's  merger  with  AmSouth  Bank of Florida in 1994,  Mr.  Storm
         served  as a City  Director  of  AmSouth  Bank  until  April  1995.  In
         addition  to  his  bank  affiliations,  Mr.  Storm  has  an   extensive
         background  in   real  estate   management,   marketing,   finance  and
         development.  He  is  President  of Deer Run  Properties,  Inc. (a real
         estate  development  company) and  Chairman and President of Cumberland
         Properties,  Inc., a  shopping  center  owner/operator  with  principal
         offices in Windham, Maine.

         John  G. Wolf,  director  since 1997.  Term will expire 2002. Dr. Wolf,
         age 54,  is Assistant  Treasurer and a member of the Board of Directors
         of  Citizens  and serves as the  Chairman of the Audit  Committee.  Dr.
         Wolf  is a practicing dentist in Naples, Florida.

Non-Director Executive Officers

         Robert  J. David.  Mr. David, age 49, has been Senior Vice President of
         Citizens  and President  and CEO of CFC since 1998.  From 1995 to 1998,
         Mr.  David  was  President  of Business  Financial  Services,  Inc.,  a
         commercial  mortgage  brokerage  business.  Mr.  David also serves as a
         director  of  People's  Community  Bank of  the West  Coast,  Sarasota,
         Florida.

         Bruce  G. Fedor. Mr. Fedor, age 65, has been Vice President and General
         Counsel  for  Citizens and CCB since 1997.  Prior to that time,  he was
         engaged  in the  practice  of law with a number of law firms in Naples,
         Florida.

         Gregory  E.  Smith.  Mr.  Smith,  age 47, is  the  President  and Chief
         Financial  Officer of  Citizens  and  the  President,  Chief  Operating
         Officer  and  a director  of CCB.  Prior to joining  Citizens  in March
         1999, Mr.  Smith was Chief Financial Officer of Lou Gaeta  Development,
         a real  estate  development  company from  December 1996 to March 1999.
         Immediately  prior to  that,  he was Senior  Vice  President  and Chief
         Financial Officer of First National Bank of Lake Park.

ITEM 10. - EXECUTIVE COMPENSATION

         Compensation  Philosophy - The  Board of Directors  believes that there
         is  a close relationship  between the financial  interests of Citizens'
         shareholders  and   our  officers  and  key  employees,  including  the
         officers  of Citizens'  subsidiaries.  The Board further  believes that
         compensation  for  officers and key  employees  should be structured in
         such  a way that total compensation  consists of a base salary, as well
         as  short- and long-term  incentive awards. To that end,  Citizens' has
         created  a  compensation  program that  provides for base salaries that
         are  believed  to be  competitive  within the industry for persons with
         comparable  responsibilities,  combined  with  annual cash bonus awards
         tied  to  specific  performance,  as  well as  long-term  stock  option
         awards,  which  are also related to Citizens' stock performance and the
         performance of the officer or employee and their base salary levels.



                                       47
<PAGE>

         Executive   Base Salary - Base  salaries  for  executive  officers  are
         established   primarily   through   the   use  of  peer  group   salary
         evaluations.  The  Board of Directors utilizes  published  compensation
         studies  with regard to compensation levels and practices of comparable
         banks  and   financial   institutions   in  order  to  formulate    its
         recommendation  regarding  executive officer salaries.  For fiscal year
         2000,   the base  salaries  for Richard  Storm,  Jr.,  Chief  Executive
         Officer  of Citizens and CCB and Gregory E. Smith,  President and Chief
         Financial  Officer  of  Citizens  and  President  and Chief  Operations
         Officer  of  CCB were  established  using  the  Board's  evaluation  of
         salaries  paid  to chief  executive  officers  with  similar  duties at
         comparable financial institutions.

         Annual  Cash Bonus Awards - Cash bonus awards to executive officers, if
         any,  are  determined  annually by the Board of Directors and are based
         primarily  on the Citizens' financial results for that year. Objectives
         are  established  annually  by  the Board  and cash  bonus  awards  are
         determined  in  relationship   to   achievements   relative   to  these
         objectives.

         Long-Term  Pay  Compensation  - The  long-term  compensation  plan   is
         structured around Citizens' 1996 Incentive Stock Option Plan.

         The following Summary Compensation Table shows compensation information
         regarding  Richard  Storm,  Jr.,  Chairman  of  the  Board   and  Chief
         Executive  Officer  of  the  Citizens  and CCB and  Gregory  E.  Smith,
         President  and  Chief  Financial  Officer of Citizens and President and
         Chief  Operations  Officer of CCB. No other executive  officer received
         compensation  at  a level required to be reported  herein by Securities
         and Exchange Commission regulations.
<TABLE>

                                        SUMMARY COMPENSATION TABLE


                                                                                                     Long-Term
                                                                                                    Compensation
                                                    Annual Compensation                                Awards
                                                    -------------------                             ------------
                                                                                                     Securities
Name and Principal                 Year        Salary          Bonus            Other Annual         Underlying
          Position                                                              Compensation          Options


<S>                                <C>        <C>              <C>                <C>
Richard Storm, Jr.                 2000       $52,768          $20,000            $  6,707               -
Chairman and CEO of                1999       $18,400             -                   -                  -
Citizens and CCB.                  1998       $24,000             -                   -                  -

Gregory E. Smith                   2000       $92,346          $15,000            $  7,200             10,000
President and CFO of Citizens      1999       $59,039             -               $ 12,500             25,000
and President and COO of CCB.
</TABLE>



<TABLE>

                                  Aggregated Fiscal Year End Option/SAR Values

   Name                Number of Securities Underlying      Value of Unexercised In-the-Money
                      Unexercised Opition/SARs at Fiscal     Options/SARs at Fiscal Year End
                                 Year End

<S>                               <C>                                  <C>
Richard Storm, Jr.                25,000                               $50,000

Gregory E. Smith                  10,000                               $20,000
</TABLE>



                                       48
<PAGE>

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

        (a)  Security Ownership of Certain Beneficial Owners

         As  of February  28,  2001,  no persons or apparent  groups of persons,
         other  than officers of directors of the Company and its  subsidiaries,
         and  the following person,  are known by management to beneficially own
         five  percent  or more of the  outstanding  shares of  Citizens  common
         stock:


Name                           Amount of Common Stock        Percent of Class
----                           ----------------------        ----------------
Richard Storm, Jr.                    504,557                    14.89%
215 Waterside Circle #201
Marco Island, Florida 34145

        (b)  Security Ownership of Management

         The  following   table  contains  information   regarding  the  current
         beneficial  ownership  of  common  stock  by  each  of   the  Company's
         directors  and  executive  officers,  and  all  of  the  directors  and
         executive  officers  as a group,  as of the Record Date. As required by
         Rule  13d-3,  under  the  Securities  Act  of  1933,  the  number   and
         percentage  of shares held by each person reflects the number of shares
         that  person  currently owns, plus the number of shares that person has
         the right to acquire.

<TABLE>

                                                 Number of                                                   % of Beneficial
Name                                         Shares Owned (1)            Right to Acquire (2)                   Ownership

<S>                                                <C>                          <C>                                <C>
Diane M. Beyer                                     19,008                       10,800                             0.88%
John V. Cofer                                         500                       10,800                             0.33%
Joel M. Cox, Sr. (3)                               66,107                       10,800                             2.26%
Robert J. David (5)                                     0                       26,600                             0.78%
Bruce G. Fedor (5)                                  2,160                       10,800                             0.38%
Thomas B. Garrison                                 57,780                       10,800                             2.02%
James S. Hagedorn (4)                              25,380                       10,800                             1.06%
Dennis J. Lynch                                    77,200                       10,800                             2.59%
Robert A. Marks                                    16,200                       10,800                             0.79%
Stephen A. McLaughlin                              99,360                       10,800                             3.24%
Gregory E. Smith (5)                                  200                       35,000                             1.03%
Louis J. Smith                                     16,632                        5,400                             0.65%
Richard Storm, Jr.(6)                             504,557                       10,800                            15.14%
John J. Wolf                                       64,400                       10,800                             2.21%

All Directors and Executive Officers              949,484                      185,800                            31.73%
as a Group
(14 persons)
<FN>

(1) Includes shares for which the named person:
    1. has sole voting and investment power,
    2. has shared voting and investment power with a spouse, or
    3. holds  in  an  IRA  or  other  retirement  plan program, unless otherwise
       indicated in these footnotes, but
    4. does not include shares that may be acquired by exercising stock options.
(2) Includes shares that may be acquired by exercising stock options.
(3) Includes  19,791  shares owned by various family members or related business
    interests.
(4) Includes 1,080 shares owned by Mr. Hagedorn's spouse.
(5) An executive officer, not a director.
(6) Includes 29,015 shares owned by Mr. Storm's spouse's Profit Sharing Plan.
</FN>
</TABLE>

(c)      Changes in Control

On December  18, 2000,  Citizens  and CCB entered into an Agreement  and Plan of
Merger  ("Agreement")  whereby  Citizens  will be  merged  with and into  F.N.B.
Corporation,  a bank holding company  headquartered in Hermitage,  Pennsylvania.
Due to unforeseen delays in obtaining regulatory approvals,  the parties amended
the Agreement  effective March 21, 2001.  Citizens's  Shareholders  approved the
amended Agreement on March 22, 2001. The merger transaction is expected to close
in the second quarter of 2001.



                                       49
<PAGE>


ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Neither  Citizens nor its  subsidiaries  have engaged in any reportable
         transactions,   including  loans,  to  Citizens'  or its  subsidiaries'
         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 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 exhibits
         which  are marked by a triple asterisk (***) were  previously  filed as
         part  of, and are hereby  incorporated  by reference from Citizens From
         10-KSB  for 1999, as filed with the Securities and Exchange  Commission
         on  March 30,  2000.  The  exhibits  which are marked  with a quadruple
         asterisk  (****)  were  previously  filed  as part of,  and are  hereby
         incorporated  by reference from F.N.B.  Corporation's Form S-4 as filed
         with  the Securities and Exchange  Commission on February 21, 2001. 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      Bylaws of Citizens
        *4.1      Specimen Common Stock Certificate
        *4.2      Specimen Warrant Certificate
        *4.4      Warrant Plan
      **10.1      Incentive Stock Option Plan for Key Officers and Employees
      **10.2      1998 Directors Stock Option Plan
     ***10.4      Employment Contract with Richard Storm, Jr.
     ***10.5      Employment Contract with Gregory E. Smith
    ****10.6      Agreement and Plan of Merger

         (b)  Reports on Form 8-K. Citizens hereby incorporates by reference the
              -------------------
         Form  8-K filed with the Securities and Exchange Commission on December
         20, 2001.



                                       50
<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: April 5, 2001               By: /s/ Richard Storm, Jr.
                                       -----------------------------------------
                                       Richard Storm, Jr.
                                       Chairman of the Board and Chief Executive
                                       Officer



Dated: April 5, 2001               By: /s/ Gregory E. Smith
                                       -----------------------------------------
                                       Gregory E. Smith
                                       President and Principal Financial 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                                                 April 5, 2001
----------------------------------------------
DIANE M. BEYER
Director


/s/ John V. Cofer                                                  April 5, 2001
----------------------------------------------
JOHN V. COFER
Vice Chairman


/s/ Joel M. Cox, Sr.                                               April 5, 2001
----------------------------------------------
JOEL M. COX, SR.
Director


/s/ Thomas B. Garrison                                             April 5, 2001
----------------------------------------------
THOMAS B. GARRISON
Director


/s/ James S. Hagedorn                                              April 5, 2001
----------------------------------------------
JAMES S. HAGEDORN
Vice Chairman/Director


/s/ Dennis J. Lynch                                                April 5, 2001
----------------------------------------------
DENNIS J. LYNCH
Director


/s/ Robert A. Marks                                                April 5, 2001
----------------------------------------------
ROBERT A. MARKS
Director

/s/ Stephen A. McLaughlin                                          April 5, 2001
----------------------------------------------
STEPHEN A. MCLAUGHLIN
Director



                                       51
<PAGE>


/s/ Louis J. Smith                                                 April 5, 2001
----------------------------------------------
LOUIS J. SMITH
Director


/s/ Richard Storm, Jr.                                             April 5, 2001
----------------------------------------------
RICHARD STORM, JR.
Chairman, Chief Executive Officer and Director


/s/ John G. Wolf                                                   April 5, 2001
----------------------------------------------
JOHN G. WOLF
Director


                                       52