SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549
--------------------------------------------------------------------------------

                                   Form 10-QSB


[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
      SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended December 31, 2001

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
       THE EXCHANGE ACT

For the transition period from ____________ to ___________________.


Commission File Number: 0-24625


                              CFS Bancshares, Inc.
               ---------------------------------------------------
               (Exact name of registrant as specified in charter)

                 Delaware                                   63-1207881
---------------------------------------             ------------------------
(State or other jurisdiction of                          IRS Employer
incorporation or organization)                       Identification Number


  1700 3rd Avenue North
  Birmingham, Alabama                                            35203
-------------------------                                     ----------
(Address of principal                                          Zip Code
 executive office)

      Registrant's telephone number, including area code: (205) 328-2041


Indicate  by check mark  whether  the  registrant  (1) has filed all the reports
required to be filed by section 13 or 15 (d) of the  Securities  Exchange Act of
1934 during the preceding 12 months (or 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
                                       ---     ---


                  Number of shares outstanding of common stock
                             as of December 31, 2001

$0.01 par value common stock                                139,220 shares
----------------------------                                ----------------
       Class                                                 Outstanding

<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY



                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION:                                         PAGE NO.

Item 1 - Financial Statements
Consolidated Balance Sheets at December 31, 2001
and September 30, 2001 (unaudited)                                         -3-

Consolidated Statements of Operations for the Three Months
 Ended December 31, 2001 and 2000 (unaudited)                              -4-

Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 2001 and 2000 (unaudited)                               -6-

Consolidated Statements of Comprehensive Income for the Three Months
 Months Ended December 31, 2001 and 2000 (unaudited)                       -8-

Notes to Consolidated Financial Statements                                 -9-

Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations                                        -11-

PART II - OTHER INFORMATION                                                -13-

SIGNATURES                                                                 -14-

<PAGE>

                       CFS BANCSHARES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                     December 31,     September 30,
                                                                         2001             2001
                                                                         ----             ----
                                 ASSETS
                                 ------
<S>                                                                <C>                  <C>
Cash and amounts due from depository
 institutions                                                      $   4,989,789        3,508,465
Federal funds sold and overnight deposits                              3,430,205        2,610,541
                                                                   -------------     ------------
   Total cash and cash equivalents                                     8,419,994        6,119,006

Interest bearing deposits                                                163,142          163,142
Investment securities held to maturity (fair value of
  $1,002,972 and $1,244,186 respectively)                                972,631        1,210,924
Investment securities available for sale, at fair value (cost of
  $50,656,883 and $46,448,236, respectively)                          50,993,935       47,260,024
Federal Home Loan Bank stock                                             947,500          747,500
Loans receivable, net of allowance                                    40,641,776       41,109,567
Premises and equipment, net                                            3,449,483        3,450,612
Real estate acquired by foreclosure                                      445,089          267,413
Accrued interest receivable on investment securities                     250,062          299,271
Accrued interest receivable on loans                                     300,816          321,442
Other assets                                                             396,104        2,379,392
                                                                   -------------     ------------
          Total assets                                             $ 106,980,532      103,328,293
                                                                   =============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Interest-bearing deposits                                          $  77,227,411       76,945,341
Advance payments by borrowers for
 taxes and insurance                                                      71,405          270,788
Other liabilities                                                      1,087,279        1,262,817
Employee Stock Ownership Plan debt                                        56,000           56,000
FHLB advances                                                         18,950,000       14,950,000
                                                                   -------------     ------------
   Total liabilities                                                  97,392,095       93,484,946

Common stock subject to put option (27,986 shares)                     1,175,412        1,175,412

Stockholders' equity:
Common stock                                                               1,392            1,392
Additional paid-in-capital                                             1,449,196        1,446,846
Retained earnings                                                      6,794,005        6,739,788
Accumulated other comprehensive income                                   206,218          519,545
Unearned common stock held by ESOP                                       (37,786)         (39,636)
                                                                   -------------     ------------
   Total stockholders' equity                                          8,413,025        8,667,935
                                                                   -------------     ------------
          Total liabilities and stockholders' equity               $ 106,980,532      103,328,293
                                                                   =============     ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                     December 31,
                                                 2001               2000
                                                 ----               ----
<S>                                            <C>              <C>
INTEREST INCOME:
Interest and fees on loans                     $899,337         $1,038,243
Interest and dividend income
 on investment securities                       119,968            160,878
Interest income on
 mortgage-backed securities                     495,286            574,756
Other interest income                            19,199             37,118
                                            -----------        -----------
Total interest income                         1,533,790          1,810,995

Interest on deposits                            541,472            783,733
Interest on FHLB advances                       208,804            231,010
                                            -----------        -----------
Total interest expense                          750,276          1,014,743

         Net interest income                    783,514            796,252
Provision for loan losses                            --                 --
                                            -----------        -----------
         Net interest income after
          provision for loan losses             783,514            796,252

OTHER INCOME:
Service charges on deposits                      92,999             88,592
Gain on sale of assets                               --              1,980
Gain on sale of securities                      128,667             12,813
Other                                             5,112              5,483
                                            -----------        -----------
  Total other income                            226,779            108,868

OTHER EXPENSES:
Salaries and employee benefits                  359,257            357,379
Net occupancy expense                            37,110             34,962
Federal insurance premium                         7,960             11,109
Data processing expenses                         54,124             53,294
Professional services                            97,228             87,422
Depreciation and amortization                    41,306             65,261
Advertising expense                              13,836             22,650
Office supplies                                  10,404             21,369
Insurance expense                                18,399             16,641
Other                                           108,768            134,570
                                            -----------        -----------
 Total other expenses                           748,393            804,657
                                            -----------        -----------
Income before income taxes                      261,900            100,463
Income tax expense                               89,346             36,453
                                            -----------        -----------
Net income                                  $   172,554        $    64,010
                                            ===========        ===========
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                     December 31,
                                                 2001               2000
                                                 ----               ----
<S>                                            <C>              <C>

Basic earnings per common share             $      1.26        $      0.51
                                            ===========        ===========

Basic average shares outstanding                136,599            125,870
                                            ===========        ===========

Diluted earnings per common share           $      1.26               0.48
                                            ===========        ===========

Diluted average shares outstanding              136,599            133,070
                                            ===========        ===========

Dividends declared and paid
 per common share                           $      0.85               0.75
                                            ===========        ===========
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                      December 31,
                                                                                 2001             2000
                                                                                 ----             ----
<S>                                                                           <C>                 <C>
Cash flows from operating activities:
Net income                                                                    $ 172,554           64,010
Adjustments to reconcile net income to
 net cash provided by operating activities
  Depreciation and amortization                                                  41,306           65,261
  Compensation expense recognized on ESOP allocation                              4,200            4,000
  Net amortization of premium on investment securities                           26,335            8,416
  Gain on sale of investment securities available for sale                     (128,667)         (12,813)
  Decrease in deferred gain on sale of foreclosed real estate                        --           (1,980)
  Decrease (increase) in accrued interest receivable                             69,835          (24,962)
  Decrease (increase) in other assets                                           143,288         (119,673)
  Decrease in accrued interest on deposits                                      (16,471)         (54,959)
 Decrease in other liabilities                                                  (54,305)        (115,868)
                                                                            -----------      -----------
Net cash provided by (used in) operating activities                             258,075         (188,568)
                                                                            -----------      -----------

Cash flows from investing activities:

Purchase of investment securities available for sale                         (8,172,739)      (3,283,621)
Purchase of FHLB stock                                                         (200,000)              --
Net change in loans                                                             290,115        1,261,531
Proceeds from sale of investment securities
 available for sale                                                           2,025,000        2,878,190
Proceeds from call of investment securities
 available for sale                                                           1,840,000               --
Proceeds from principal collected on
 investment securities held to maturity                                         237,874          817,701
Proceeds from principal collected on
 investment securities available for sale                                     2,041,842          712,555
Purchase of premises and equipment                                                   --          (25,637)
                                                                            -----------      -----------
  Net cash (used in) provided by investing activities                        (1,937,908)       2,360,719
                                                                            -----------      -----------
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                      December 31,
                                                                                 2001             2000
                                                                                 ----             ----
<S>                                                                           <C>                 <C>
Cash flows from financing activities:

Increase in interest bearing deposits                                           298,541          504,082
Advances from FHLB                                                            4,000,000               --
Decrease in advance payments by
 borrowers for taxes and insurance                                             (199,383)        (172,968)
Cash dividends                                                                 (118,337)         (97,500)
                                                                            -----------      -----------
   Net cash provided by financing activities                                  3,980,821          233,614
                                                                            -----------      -----------

Net increase in cash and cash equivalents                                     2,300,988        2,405,765

Cash and cash equivalents at beginning of period                              6,119,006        3,594,355
                                                                            -----------      -----------
Cash and cash equivalents at end of period                                  $ 8,419,994        6,000,120
                                                                            ===========      ===========

Supplemental information on cash payments:
  Interest paid                                                             $   557,943          838,692
  Taxes paid                                                                $        --          136,000

Supplemental information on noncash activities:
 Loans transferred to real estate acquired by foreclosure                   $   177,676               --
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       7
<PAGE>
                       CFS BANCSHARES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                         Three months ended
                                                                             December 31,
                                                                         2001             2000
                                                                         ----             ----
<S>                                                                    <C>               <C>
Net income                                                             $ 172,554         64,010

Other comprehensive income, before tax:
    Unrealized holding gain (loss) arising
      during the period                                                 (346,071)       744,935
    Less reclassification adjustment for gain on
      securities available for sale                                      128,667         12,813
                                                                       ---------       --------
          Total other comprehensive income (loss), before tax           (474,738)       732,122
                                                                       ---------       --------

Income tax expense (benefit) related to other
 comprehensive income:
   Unrealized holding gain (loss) on available
     for sale securities                                                (117,664)       267,920
   Less reclassification adjustment for gains on
     securities available for sale                                        43,747          4,356
                                                                       ---------       --------
          Total income tax expense (benefit) related to
            other comprehensive income                                  (161,411)       263,564
                                                                       ---------       --------

          Total other comprehensive income (loss), net of tax           (313,327)       468,558
                                                                       ---------       --------

          Total comprehensive income (loss)                            $(140,773)       532,568
                                                                       =========       ========
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       8
<PAGE>

                       CFS BANCSHARES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  BASIS OF PRESENTATION

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain  all  adjustments  (none  of which  are  other  than  normal
recurring  accruals)  necessary for a fair presentation of financial position of
the Company  and the results of  operations  for the three month  periods  ended
December 31, 2000 and 2001.  The results  contained in these  statements are not
necessarily  indicative of the results that may be expected for the entire year.
For further  information,  refer to the  consolidated  financial  statements and
notes included in the Company's  annual report on Form 10-KSB for the year ended
September 30, 2001.

2. RECLASSIFICATIONS

Certain  items  in  the  2000  consolidated   financial   statements  have  been
reclassified to conform to current year classifications.

3.  NET INCOME PER SHARE

Presented  below  is a  summary  of the  components  used to  calculate  diluted
earnings per share for the three months ended December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                                       2001        2000
                                                                                       ----        ----
<S>                                                                                   <C>         <C>
Weighted average common shares outstanding                                            136,599     125,870
Net effect of the assumed exercise of stock options based on
 the treasury stock method using average market price for the quarter                      --       7,200
                                                                                      -------     -------
Total weighted average common shares and potential common stock outstanding           136,599     133,070
                                                                                      =======     =======
</TABLE>

4.  SUBSEQUENT EVENTS

On January 24, 2002 shareholders voted to approve the CFS Bancshares, Inc. Stock
Option and Incentive Plan.  Accordingly on 01/24/2002 the Company granted 10,450
options to acquire the Company's stock.  The options are immediately  vested and
exercisable  at the fair value of the Company as defined in the stock option and
incentive plan.


                                       9
<PAGE>

MANAGEMENT DISCUSSION AND ANALYSIS
----------------------------------

REVIEW OF RESULTS OF OPERATIONS

OVERVIEW
--------
Net income for the three months ended December 31, 2001 was $172,554 an increase
of $108,544 or 169.57%  when  compared to the three  months  ended  December 31,
2000. The increase in net earnings resulted  primarily from an increase in gains
on sale of securities available for sale.

NET INTEREST INCOME
-------------------

Net interest  income is the  difference  between the interest and fees earned on
loans,  securities and other interest earning assets  (interest  income) and the
interest  paid on deposits  and FHLB  advances  (interest  expense).  The Bank's
deposits and a portion of its FHLB advances are  primarily  short term in nature
and reprice faster than the Bank's interest earning assets, consisting mainly of
loans and mortgage backed  securities,  which generally have longer  maturities.
The mix of the Bank's  interest  earning  assets and deposits and FHLB  advances
along with the trend of market  interest rates have a substantial  impact on the
change  in net  interest  margin.  The  cost  of  the  Bank's  interest  bearing
liabilities  decreased  120 basis  points from 4.44% for the three month  period
ended  December 31, 2000 to 3.24%  during the three month period ended  December
31, 2001 while the yield on interest  earning assets  decreased 136 basis points
from 7.82% for the three month period  ended  December 31, 2000 to 6.46% for the
comparable  period in the  current  fiscal  year.  The  decline in the yields on
interest  earning  assets  resulted from declines in the average  balance of net
loans  receivable,  as well as a decline in the average  market  interest  rates
between December 2000 and December 2001.

The decrease in the net interest spread of 16 basis points was partially  offset
by  increases  in the  average  balances  of net  interest  earning  assets when
comparing  the three month  period  ended  December  31, 2001 to the three month
period  ended  December 31, 2000.  The Bank's net interest  income  decreased by
$12,738 or 1.60% from  $796,252 for the three month  period  ended  December 31,
2000 to $783,514 for the three month period in the current fiscal year.

OTHER INCOME
------------

Other income  increased  from $108,868 for the three month period ended December
31, 2000 to $226,779 for the  comparable  period in the current fiscal year. The
increase resulted from an increase in the gain on sale of investment  securities
available  for sale.  During the three month period ended  December 31, 2001 the
Bank sold fixed rate investment  securities with a par balance of $2,000,000 for
a net gain of  $128,667.  The Bank  recognized  gains on the sale of  investment
securities during the three month period ended December 31, 2000 of $12,813.

OTHER EXPENSE
-------------
The Bank's other  expense  decreased  by 6.99% or $56,264 from  $804,657 for the
three month period ended December 31, 2000 to $748,393 for the comparable period
in the current year. Decreases in depreciation and amortization, office supplies
and other expense of $23,955,  $10,965 and $25,802 respectively,  were primarily
responsible  for the overall  decline in operating  expense for the three months
ended December 31, 2001 as compared to the three months ended December 31, 2000.
A significant  amount of the furniture  and  equipment  purchased  when the Bank
relocated  its main office during 1996 has been fully  depreciated  which led to
the decrease in depreciation expense. During the three months ended December 31,
2000 the Bank incurred  expenses equal to insurance  deductibles  related to two
legal matters. There were no such expenses during the current fiscal year and as
a result other expense decreased.

                                       10
<PAGE>

REVIEW OF FINANCIAL CONDITION
-----------------------------

Significant  factors affecting the Bank's financial  condition between September
30, 2001 and December 31, 2001 are detailed below:

ASSETS
------
Total assets  increased  $3,652,239 or 3.53% from  $103,328,293 at September 30,
2001  to  $106,980,532  at  December  31,  2001.  Increases  in  cash  and  cash
equivalents  of  $2,300,988  and  investment  securities  available  for sale of
$3,733,911  were  partially  offset by a decrease in other assets of $1,983,288.
Other,  assets which had a balance of $2,379,392 at September 30, 2001, included
a receivable for securities with a par value of $1,840,000 which had been called
by the issuer but not yet  settled.  The Bank  received the funds for the called
security during the early part of October 2001.

LIABILITIES
-----------
Total liabilities  increased  $3,911,349 or 4.18% between September 30, 2001 and
December 31, 2001. The increase resulted from an increase in the Bank's advances
from the Federal Home Loan Bank of Atlanta which  increased by  $4,000,000  from
$14,950,000  at September  30, 2001 to  $18,950,000  at December  31, 2001.  The
additional   funding  from  the  FHLB  was  used  to  purchase  mortgage  backed
securities.

LIQUIDITY
---------

The Bank's primary  sources of liquidity are deposits,  loan payments,  maturing
investment   securities,   principal  and  interest   payments  on  investments,
mortgage-backed  securities  and CMOs,  and advances  from the Federal Home Loan
Bank of Atlanta. Additionally, the Bank has short-term investments that could be
readily  liquidated to meet funding  requirements  and also  maintains  lines of
credit  with  two  correspondent  banks  to  meet  any  requirements  caused  by
short-term  fluctuations in liquidity needs. Management believes that the Bank's
various sources of funds are adequate to meets its liquidity requirements in the
ordinary course of business.

LOAN QUALITY
------------
A key to  long  term  earnings  growth  for  Citizens  Federal  Savings  Bank is
maintenance  of a high  quality  loan  portfolio.  The Bank's  directive in this
regard is carried out through its policies and  procedures  for review of loans.
The goals and results of these  policies and  procedures  are to provide a sound
basis for new credit  extensions  and an early  recognition of problem assets to
allow the most flexibility in their timely disposition.

At December 31, 2001 the Bank had $1,036,019 in assets classified as substandard
including assets acquired by foreclosure or repossession of $445,089,  no assets
classified  as doubtful,  and $155,475 in assets  classified as loss. A specific
loan loss allowance has been  established  for all loans  classified as loss. At
September  30, 2001 the Bank had $935,215 in assets  classified  as  substandard
including real estate acquired by foreclosure of $267,413,  no assets classified
as doubtful, and $155,475 in assets classified as loss.

The  allowance for loan losses was $382,344 at December 31, 2001 and $396,768 at
September  30, 2001.  Management  believes  that the current  allowance for loan
losses is adequate to cover any potential  future loan losses which exist in the
loan portfolio, although there can be no assurance that further increases in the
loan loss allowance will not be made as circumstances warrant.

                                       11
<PAGE>

CRITICAL ACCOUNTING POLICIES

Management  has determined  that the  accounting  for loan loss  allowances is a
critical  accounting  policy  with  respect to the  determination  of  financial
condition and reporting of results of operations.

Management  determines the required allowances by classifying loans according to
credit quality and collateral  security and applying historical loss percentages
to each category.  Additionally,  as necesary,  management  determines  specific
allowances  related to impaired  loans  based on the  present  value of expected
future cash flows discounted at the loan's effective  interest rate, or the fair
value of the collateral if the loan is collateral dependent.  A key component in
the accounting  policy is  management's  ability to timely  identify  changes in
credit quality which may impact the Company's financial results.

Management  recognizes  that in making loans,  credit losses will be experienced
and that the risk of loss will vary with,  among other things,  the type of loan
being made, the  creditworthiness of the borrower over the term of the loan and,
in the case of a  secured  loan,  the  quality  of the  security  for the  loan.
Management's policy is to maintain an appropriate allowance for estimated losses
on the  portfolio  as a whole.  The  allowances  are based on  estimates  of the
historical loan loss experience,  evaluation of economic  conditions and regular
periodic  reviews of the  Bank's  loan  portfolio.  The  Bank's  loan  portfolio
consists  mostly of  residential  and  non-residential  real estate.  Management
believes that the effects of any reasonably  likely changes in the economy would
be limited somewhat due to the fact the loan portfolio is collateralized by real
estate.

INFORMATION ABOUT FORWARD LOOKING STATEMENTS
--------------------------------------------
Any statement  contained in this report which is not a historical fact, or which
might  otherwise be considered an opinion or projection  concerning  the Bank or
its business, whether expressed or implied, is meant as and should be considered
a  forward-looking  statement as that term is defined in the Private  Securities
Litigation  Reform  Act  of  1995.   Forward-looking  statements  are  based  on
assumptions  and  opinions  concerning  a variety  of known and  unknown  risks,
including but not necessarily  limited to changes in market conditions,  natural
disasters  and other  catastrophic  events,  increased  competition,  changes in
availability and cost of reinsurance,  changes in governmental regulations,  and
general economic conditions, as well as other risks more completely described in
the Bank's filings with the Securities and Exchange  Commission,  including this
Annual  Report on Form 10-KSB.  If any of these  assumptions  or opinions  prove
incorrect,  any forward-looking  statement made on the basis of such assumptions
or opinions may also prove materially incorrect in one or more respects.

CAPITAL ADEQUACY AND RESOURCES
------------------------------

Management is committed to maintaining  capital at a level sufficient to protect
stockholders  and depositors,  provide for reasonable  growth,  and fully comply
with all regulatory requirements. Management's strategy to maintain this goal is
to  retain   sufficient   earnings  while  providing  a  reasonable   return  to
stockholders in the form of dividends and return on equity.

The Office of Thrift  Supervision  has  issued  guidelines  identifying  minimum
regulatory "tangible" capital equal to 1.50% of adjusted total assets, a minimum
3.00%  core  capital  ratio and a minimum  risk  based  capital of 8.00% of risk
weighted assets. The Bank has provided the majority of its capital  requirements
through the retention of earnings.

                                       12
<PAGE>

At December 31, 2001 the Bank satisfied all regulatory requirements.  The Bank's
compliance with the current standards is as follows:
<TABLE>
<CAPTION>
                                                      For  capital             Well
                                  Actual           adequacy purposes        capitalized
                                  -------          -----------------        ----------
                            Amount      Ratio      Amount      Ratio     Amount    Ratio
                            ------      -----      ------      -----     ------    -----
<S>                        <C>          <C>        <C>         <C>       <C>        <C>
Total capital
(to risk weighted assets)  $9,318,181   20.02%     3,722,640   8.00%     4,653,300  10.00%
Tier I capital
(to risk weighted assets)  $9,202,351   19.78%     1,861,320   4.00%     2,791,980   6.00%
Tier I capital
(to average assets)        $9,202,351    8.93%     4,119,837   4.00%     5,149,796   5.00%


Reconciliation of capital:            Risk Weighted    Tier I Capital
                                        Capital

Total stockholders' equity (GAAP)      $9,408,569      $9,408,569
Unrealized gain on securities - AFS      (206,218)       (206,218)
Allowance for loan losses                 227,000              --
Equity investments                       (111,170)
         Total                         $9,318,181      $9,202,351
</TABLE>


                                       13
<PAGE>

                  CITIZENS FEDERAL SAVINGS BANK AND SUBSIDIARY

                            PART II OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

The Bank is defending  various lawsuits and claims. In the opinion of management
the ultimate  disposition of these matters will not have a significant effect on
the financial position of the Bank.

ITEM 2: CHANGE IN SECURITIES

None

ITEM 3: DEFAULT UPON SENIOR SECURITIES

Not Applicable

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of stockholders  of CFS Bancshares,  Inc. was held on January
24, 2002 for the purpose of  considering  and acting upon the  election of three
directors of the Company and the approval of the CFS Bancshares, Inc. 2001 Stock
Option and  Incentive  Plan.  The result of the election in which 104,812 out of
139,220 possible votes were received was as follows:
<TABLE>
<CAPTION>
                                                                Votes
                                                                -----
                                                  Votes      Withheld or       Broker
                                                  -----      -----------       ------
                                                   For        Abstained       Non-Vote
                                                   ---        ---------       --------
<S>                                              <C>             <C>            <C>
Bunny Stokes, Jr. as Director                    104,812         None           None
Dr. Ross E. Gardner as Director                  104,812         None           None
Cynthia N. Day as Director                       104,812         None           None
2001 Stock Option Plan                           102,612           25          2,175
</TABLE>


ITEM 5: OTHER INFORMATION:

None

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

None


                                       14
<PAGE>

                       CFS BANCSHARES INC. AND SUBSIDIARY


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      CFS BANCSHARES, INC.
                                          (Registrant)



Date:February 12, 2002                By:/s/ Bunny Stokes, Jr.
     --------------------------          ---------------------------------
                                         Bunny Stokes, Jr.
                                         Chairman/CEO
                                         (principal executive officer)


Date:February 12, 2002                By:/s/ W. Kent McGriff
     --------------------------          ---------------------------------
                                         W. Kent McGriff
                                         Executive Vice President
                                         (principal financial and accounting
                                         officer)



                                       14