<PAGE>
<PAGE>

            SECURITIES AND EXCHANGE COMMISSION

                Washington, D. C.  20549
________________________________________________________________

                         Form 10-QSB


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

      For the quarterly period ended March 31, 2000

[  ]  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 March 31, 2000

$0.01 par value common stock               130,000 shares
----------------------------               -----------------
          Class                              Outstanding


<PAGE>
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             CFS BANCSHARES, INC. AND SUBSIDIARIES



                    TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION:                        PAGE No.


Consolidated Balance Sheets at March 31, 2000
and September 30, 1999 (unaudited)                       -3-

Consolidated Statements of Operations for the
Three and Six Months Ended March 31, 2000 and
1999 (unaudited)                                         -4-

Consolidated Statements of Cash Flows for the
Six Months Ended March 31, 2000 and 1999
(unaudited)                                              -6-

Consolidated Statements of Comprehensive Income
for the Three and Six Months ended March 31, 2000
and 1999 (unaudited)                                     -8-

Notes to Consolidated Financial Statements               -9-

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

PART II - OTHER INFORMATION                             -15-

SIGNATURES                                              -16-

<PAGE>
<PAGE>
                   CFS BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED BALANCE SHEETS
                             (Unaudited)
<TABLE>
<CAPTION>
                                                   March 31,   September 30,
                                                     2000           1999
<S>                                               <C>            <C>
                ASSETS
                ------
Cash and amounts due from depository
  institutions                                   $ 2,618,343        4,811,709
Federal funds sold and overnight deposits            920,889        2,877,742
                                                 -----------      -----------
    Total cash and cash equivalents                3,539,232        7,689,451

Interest bearing deposits                            163,142          161,524
Investment securities held to maturity
  (fair value of $4,334,531 and $4,919,789,
  respectively)                                    4,373,881        4,929,808
Investment securities available for sale,
  at fair value (cost of $38,529,423 and
  $34,389,879, respectively)                      37,595,302       33,604,258
Federal Home Loan Bank stock                         597,500          592,500
Loans receivable, net of allowances               44,006,386       43,521,160
Premises and equipment, net                        3,771,602        3,871,433
Real estate acquired by foreclosure                   27,286           47,270
Accrued interest receivable on investment
  securities                                         136,176          122,584
Accrued interest receivable on mortgage-
  backed securities                                  180,405          169,254
Accrued interest receivable on loans                 340,688          317,617
Other assets                                         589,891        1,077,514
                                                 -----------      -----------
    Total assets                                 $95,321,491       96,104,373
                                                 ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Interest-bearing deposits                        $74,596,773       75,180,323
Advance payments by borrowers for taxes
  and insurance                                       99,778          257,724
Other liabilities                                    769,120          981,602
Employee Stock Ownership Plan debt                    64,000           72,000
FHLB advances                                     11,950,000       11,850,000
                                                 -----------      -----------
    Total Liabilities                             87,479,671       88,341,649

Stockholders' Equity:
Common stock                                         130,000          130,000
Additional paid-in-capital                         1,182,608        1,180,060
Retained earnings                                  7,180,423        7,020,548
Accumulated other comprehensive loss                (598,125)        (502,798)
Unearned common stock held by ESOP                   (53,086)         (65,086)
                                                 -----------      -----------
    Total Stockholders' Equity                     7,841,820        7,762,724
                                                 -----------      -----------
      Total liabilities and stockholders'
        equity                                   $95,321,491       96,104,373
                                                 ===========      ===========
</TABLE>
See accompanying notes to consolidated financial statements
                                 3
<PAGE>
<PAGE>

                   CFS BANCSHARES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                             (UNAUDITED)
<TABLE>
<CAPTION>
                                                         Three Months                 Six Months
                                                        Ended March 31,             Ended March 31,

                                                     2000            1999          2000         1999

<S>                                               <C>            <C>            <C>          <C>
INTEREST INCOME:
Interest and fees on loans                       $  950,775      $1,012,729     $1,912,101   $2,049,139
Interest and dividend income on
  investment securities                             123,754          63,769        243,143       98,481
Interest income on mortgage-backed
    securities                                      474,722         468,317        949,282      955,931
Other interest income                                44,140          14,630         97,703       47,980
                                                 ----------      ----------     ----------   ----------
Total interest income                             1,593,391       1,559,445      3,202,229    3,151,531

Interest on deposits                                669,116         657,469      1,328,747    1,361,326
Interest on FHLB advances                           157,748         132,530        320,261      265,155
                                                 ----------      ----------     ----------   ----------
Total interest expense                              826,864         789,999      1,649,008    1,626,481

    Net interest income                             766,527         769,446      1,553,221    1,525,050
Provision for loan losses                          (100,000)             --       (100,000)          --
                                                 ----------      ----------     ----------   ----------
    Net interest income after
     provision for loan losses                      866,527         769,446      1,653,221    1,525,050

OTHER INCOME:
Service charges on deposits                         107,313          72,270        224,018      182,686
Gain (loss) on sale of assets                        (2,721)         (1,823)        (1,787)       4,524
Gain (loss) on sale of securities                    (6,125)         27,486         (6,125)      27,486
Other                                                 7,303          11,177         14,597       17,758
                                                 ----------      ----------      ---------   ----------
    Total Other Income                              105,770         109,110        230,703      232,454

EXPENSES:
Salaries and employee benefits                      334,668         329,673        655,573      682,884
Net occupancy expense                                30,857          30,509         58,161       58,795
Federal insurance premium                            10,084          25,140         33,673       49,169
Data processing expenses                             52,690          66,327        103,592      131,368
Professional services                                55,865          51,495        148,196      118,606
Depreciation and amortization                        70,734          74,303        148,864      147,246
Advertizing expense                                  16,067          31,942         35,162       83,577
Office supplies                                      16,113          21,269         36,449       35,076
Insurance expense                                    13,569          14,859         29,368       29,717
Other                                               113,832          92,913        223,652      167,997
                                                 ----------      ----------      ---------   ----------
    Total other expense                             714,479         738,430      1,472,690    1,504,435
                                                 ----------      ----------      ---------   ----------
Income before income taxes                          257,818         140,126        411,234      253,069
Income tax expense                                   95,690          45,032        153,859       94,496
                                                 ----------      ----------      ---------   ----------
</TABLE>

See accompanying notes to consolidated financial statements

                              4

<PAGE>
<PAGE>

                   CFS BANCSHARES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)


<TABLE>
<CAPTION>
                                                         Three Months                 Six Months
                                                        Ended March 31,             Ended March 31,

                                                     2000            1999          2000         1999

<S>                                               <C>            <C>            <C>          <C>
Net Income                                        $162,128          95,094       257,375       158,573
                                                  ========        ========       =======       =======
Basic earnings per common share                   $   1.28            0.79          2.03          1.32
                                                  ========        ========       =======       =======
Basic average shares outstanding                   126,545         120,407       126,495       120,407
                                                  ========        ========       =======       =======
Diluted earnings per common share                 $   1.24            0.76          1.96          1.27
                                                  ========        ========       =======       =======
Diluted average shares outstanding                 130,745         125,207       130,975       124,770
                                                  ========        ========       =======       =======
Dividends declared and paid per
   common share                                   $     --              --          0.75          0.75
                                                  ========        ========       =======       =======
</TABLE>

See accompanying notes to consolidated financial statements

                               5
<PAGE>
<PAGE>
                  CFS BANCSHARES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (UNAUDITED)
<TABLE>
<CAPTION>
                                                      Six Months Ended
                                                         March 31,
                                                     2000           1999
<S>                                               <C>            <C>
Cash flows from operating activities:
Net income                                       $    257,375    $   158,573
Adjustments to reconcile net income to
 net cash provided by operating activities
  Loan loss provision                                  50,000             --
  Depreciation and amortization                       148,864        147,246
  Compensation expense recognized on ESOP
     allocation                                         7,000         17,160
  Net amortization of premium on investment
    securities                                         31,699         70,907
  Loss on sale of investment securities held
    to maturity                                         2,042             --
  Loss (gain) on sale or call of investment
    securities available for sale                       4,083        (27,486)
  Loss (gain) on sale of real estate acquired
    by foreclosure                                      1,887         (4,101)
  Increase (decrease) in deferred gain on
    sale of REO                                           935         (1,228)
  Decrease (increase) in accrued interest
    receivable                                        (47,814)       100,190
  Decrease (increase) in other assets                 487,623        (10,449)
  Increase (decrease) in accrued interest
    on deposits                                         4,518        (21,200)
  Decrease in other liabilities                      (202,575)      (256,558)
                                                  -----------    -----------
Net cash provided by (used in) operating
  activities                                          745,637        173,054

Cash flows from investing activities:
Purchase of interest-bearing deposits                  (1,618)        (1,139)
Purchase of investment securities held to
  maturity                                                 --       (502,656)
Purchase of investment securities available
  for sale                                         (6,835,969)    (9,781,740)
Proceeds from sale of investment securities
  held to maturity                                    118,111             --
Maturity or call of investment securities
  available for sale                                       --      1,000,000
Proceeds from sale of investment securities
  available for sale                                  453,861      1,550,760
Proceeds from principal collected on
  investment securities held to maturity              465,142      1,182,112
Proceeds from principal collected on investment
  securities available for sale                     2,214,293      6,710,248
Net change in loans                                  (535,226)     1,828,615
Purchase of premises and equipment                    (49,033)       (57,331)
Proceeds from sale of real estate acquired
  by foreclosure                                       18,097         13,861
                                                  -----------    -----------
    Net cash provided by (used in) investing
      activities                                   (4,152,342)     1,942,730

</TABLE>

See accompanying notes to consolidated financial statements

                              6
<PAGE>
<PAGE>
                  CFS BANCSHARES, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Unaudited)
<TABLE>
<CAPTION>
                                                      Six Months Ended
                                                          March 31,
                                                     2000           1999
<S>                                               <C>            <C>
Cash flows from financing activities:

Net decrease in interest bearing deposits           (588,068)    (1,180,874)
Increase (decrease) in advance payments by
  borrowers for taxes and insurance                 (157,946)      (156,189)
Net proceeds from FHLB advances                      100,000             --
Cash dividends                                       (97,500)       (97,500)
                                                 -----------    -----------
   Net cash used in financing activities            (743,514)    (1,434,563)

Net increase (decrease) in cash and cash
  equivalents                                     (4,150,219)       681,221

Cash and cash equivalents at beginning of
  period                                           7,689,451      5,317,285
                                                 -----------    -----------
Cash and cash equivalents at end of period       $ 3,539,232    $ 5,998,506
                                                 ===========    ===========

Supplemental information on cash payments

   Interest paid                                   1,653,526    $ 1,580,486

Supplemental information on noncash transactions:
  Loans transferred to real estate acquired
    by foreclosure                                        --    $   107,621

</TABLE>

See accompanying notes to consolidated financial statements

                              7
<PAGE>
<PAGE>

                   CFS BANCSHARES, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (Unaudited)




<TABLE>
<CAPTION>
                                                         Three Months                 Six Months
                                                        Ended March 31,             Ended March 31,
                                                 ----------------------------   -----------------------
                                                     2000            1999          2000         1999
                                                 ------------    ------------   ---------    ----------
<S>                                               <C>            <C>            <C>          <C>
Net income                                        $ 162,128        95,094         257,375      158,573

Other comprehensive income, before tax:
  Unrealized holding (losses) gains arising
     during the period                              (64,427)     (190,658)       (159,878)    (212,617)
  Less reclassification adjustment for gains
     (losses) on securities available for sale           --        27,486          (6,125)      27,486
                                                  ---------      --------       ---------    ---------
       Total other comprehensive income,
         before tax                                 (64,427)     (218,144)       (153,753)    (240,103)

Income tax expense (benefit) related to
 other comprehensive income:
  Unrealized holding gain (loss) on available
    for sale securities                             (24,482)      (70,543)        (60,754)    (78,668)
  Less reclassification adjustment for gains
    (losses) on securities available for sale            --        10,170          (2,328)     10,170
                                                  ---------      --------       ---------    --------
       Total income tax expense (benefit)
         related to other comprehensive income      (24,482)      (80,713)        (58,426)    (88,838)
                                                  ---------      --------       ---------    --------
       Total other comprehensive income (loss),
         net of tax                                 (39,945)     (137,431)        (95,327)   (151,265)
                                                  ---------      --------       ---------    --------
       Total comprehensive income (loss)          $ 122,183       (42,337)        162,048       7,308
                                                  =========      ========       =========    ========
</TABLE>


See accompanying notes to consolidated financial statements

                              8
<PAGE>
<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 statement of financial position of the Company and the
results of operations for the three month and six month periods
ended March 31, 1999 and 2000.  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, 1999.

2.  RECLASSIFICATIONS

Certain items in the 1999 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
calculated diluted earnings per share for the three months and
six months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>

                                      Three months ended     Six months ended
                                           March 31,             March 31,
                                       2000        1999      2000        1999
                                      ---------------------------------------
<S>                                   <C>         <C>        <C>        <C>
Weighted average common shares
  outstanding                          126,545    120,407    126,495    120,407
Net effect of the assumed exercise
  of stock options based on the
  treasury stock method using
  average market price for the
  quarter                                4,200      4,800      4,480      4,363
                                       ----------------------------------------
Total weighted average common
  shares and potential common
  stock outstanding                    130,745    125,207    130,975    124,770
                                       ========================================
</TABLE>
4.  RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Financial Accounting Standard No.
133, Accounting for Derivative Instruments and Hedging
Activities, ("FAS133").  The standard establishes comprehensive
accounting and reporting standards for derivative instruments
and hedging activities.  FAS133 requires that all derivative
instruments be recorded in the statement of financial position
at fair value; the accounting for gains or losses due to changes
in fair value of the derivative instruments depends on whether
the derivative instruments qualify as hedging instruments.  If a
derivative instrument does not qualify as a hedge, the gain or
loss is reported in earnings when it occurs.  However, if the
derivative qualifies as a hedging instrument, the accounting
varies based on the type of risk being hedged, and includes
either recognizing earnings for changes in fair value each
reporting period, or accumulating changes in other comprehensive
income and recognizing earnings during the period that the
hedged forecasted
                              9
<PAGE>
<PAGE>
item impacts earnings.  FAS133, as amended, becomes effective
for financial statements for the first quarter of fiscal years
beginning after June 15, 2000.  Management is evaluating the
impact of FASB 133 on the financial condition of the Company.

                              10
<PAGE>
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
----------------------------------

REVIEW OF RESULTS OF OPERATIONS

OVERVIEW
--------

Net income for the six months ended March 31, 2000 was $257,375
an increase of $98,802 or 62.31% when compared to the six months
ended March 31, 1999.  The increase in net earnings resulted
primarily from the recovery in February 2000 of $150,000 from a
$220,000 loan that was charged off during the fiscal year ended
September 30, 1998.  Net income for the three months ended March
31, 2000 was $162,128 an increase of $67,304 or 70.50% as
compared to net income during the three months ended March 31,
1999 of $95,094.  The positive impact of the loan loss recovery
noted above was partially offset by the addition of $50,000 to
the Bank's loan loss provision during the three-month period
ended March 31, 2000.  There were no loan loss provisions added
during the three month or six-month periods ended March 31,
1999.

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 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 nine basis points from 3.95% for the six
month period ended March 31, 1999 to 3.86% during the six month
period ended March 31, 2000 while the yield on interest earning
assets decreased 11 basis points from 7.61% for the six month
period ended March 31, 1999 to 7.50% for the comparable period
in the current fiscal year.

Despite a slight decrease in the net interest spread of two
basis points the Bank's net interest income increased by $28,171
or 1.85% from $1,525,050 for the six month period ended March
31, 1999 to $1,553,221 for the six month period in the current
fiscal year.  Net interest income for the three months ended
March 31, 2000 remained relatively unchanged declining by $2,919
or.38% from $769,446 for the three months ended March 31, 1999
to $766,527 for the three months ended March 31, 2000.  The
decline in net interest income during the three month and six
month period ended March 31, 2000 relates to larger than normal
levels of short term assets and from an advance from the Federal
Home Loan Bank to assure that adequate levels of liquidity were
maintained during the transition from 1999 to 2000.

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

Other income decreased from $232,454 for the six month period
ended March 31, 1999 to $230,703 for the comparable period in
the current fiscal year. Decreases in gains on sale of assets
and securities of $39,922 were offset by an increase in service
charges on deposits of $41,332 when comparing the six months
ended March 31, 2000 to the comparable period in the prior
fiscal year.  During the three months ended March 31, 2000 other
income declined by $3,340.  The changes, which impacted the six-
month period as, described above had a similar impact on the
results for the three month period ended March 31, 2000 as
compared to the same period in the prior fiscal year.

                              11
<PAGE>
<PAGE>
OTHER EXPENSE
-------------
During the six month period ended March 31, 2000 the Bank's
other expense decreased by 2.11% or $31,745 from $1,504,435 for
the six month period ended March 31, 1999 to $1,472,690 for the
comparable period in the current year. Salaries and employee
benefits, federal insurance premiums, data processing expense
and advertising expense decreased by $27,311, $15,496, $27,776
and $48,415 respectively when comparing the six months ended
March 31, 1999 to the six month period ended March 31, 2000.
The decrease in salaries and employee benefits resulted from a
decline in the expense associated with the Bank's Employee Stock
Ownership Plan due to the completion of the allocation of shares
related to a $412,750 ten year loan made in 1989.

The decrease in federal insurance premiums resulted from an
improved FDIC classification of the Bank.  The decrease in data
processing expense resulted from declines in Year 2000 related
expenses.  The decline in advertising resulted from decreases in
the amount of media purchases compared to the six-month period
ended March 31, 1999 during which the Bank was conducting an
extensive advertising campaign.

The decreases described above were partially offset by increases
in professional services and other expense of $29,590 and
$55,655, respectively. The increase in professional services
resulted from an unsuccessful bid by the Bank for another
institution offered by the FDIC.  The increase in other expense
included higher expenses for property tax and state franchise
tax, as well as an increase in charitable contributions and
travel expense.

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

Significant factors affecting the Bank's financial condition
from September 30, 1999 to March 31, 2000 are detailed below:

ASSETS
------

Total assets decreased $782,882 or .81% from $96,104,373 at
September 30, 1999 to $95,321,491 at March 31, 2000.
Significant changes in assets balances include an increase in
investment securities available for sale which increased by
$3,991,044 or 11.88% from $33,604,258 at September 30, 1999 to
$37,595,302 at March 31, 2000.  The increase was funded from
decreases in cash and cash equivalents which were maintained at
a higher than normal level at September 30, 1999 in anticipation
of possible Year 2000 liquidity demands.  Other assets declined
from $1,077,514 at September 30, 1999 to $589,891 at March 31,
2000 as the result of approximately $470,000 of short term
receivables at September 30, 1999 being collected during the
current fiscal year.

LIABILITIES
-----------

Total liabilities decreased $861,978 or .98% between September
30, 1999 and March 31, 2000.  The decrease resulted from a
decline in the Bank's interest bearing deposits of $583,550 from
$75,180,323 at September 30, 1999 to $74,596,773 at March 31,
2000.  Though deposits declined between September 1999 and March
2000 the deposit balance at March 31, 2000 is an increase of
approximately $2.7 million from the balances at December 31,
1999.  The bank had significant deposit withdrawals during the
period between September 30, 1999 and December 31, 1999 related
to Year 2000 concerns and from normal seasonal patterns.

                              12
<PAGE>
<PAGE>
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 March 31, 2000 the Bank had $694,389 in assets classified as
substandard including assets acquired by foreclosure or
repossession of $27,286, no assets classified as doubtful and
$58,728 in assets classified as loss.  A specific loan loss
reserve has been established for all loans classified as a loss.
At September 30, 1999 the Bank had $848,537 in assets classified
as substandard including real estate acquired by foreclosure of
$47,270, no assets classified as doubtful and $54,589 in assets
classified as loss.

The allowance for loan losses was $318,536 at March 31, 2000.
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.

LIQUIDITY AND INTEREST SENSITIVITY
----------------------------------

The Bank is required under applicable federal regulations to
maintain specified levels of cash and "liquid" investments in
qualifying types of United States Treasury and federal agency
securities and other investments.  Such investments serve as a
source of funds upon which the Bank may rely to meet deposit
withdrawals and other short term needs.  The Bank monitors its
cash flow position to assure adequate liquidity levels and to
take advantage of market opportunities.  The Bank maintains
liquidity levels, which significantly exceed the minimum
regulatory requirements.  Management believes that the Bank's
liquidity is adequate to fund all outstanding commitments and
other cash needs.

Changes in interest rates will necessarily lead to changes in
net interest margin.  The Bank's goal is to minimize volatility
in the net interest margin by taking an active role in managing
the level, mix and maturity of assets and liabilities.  The
Bank's primary emphasis in reducing its interest rate risk is
to focus on reducing the weighted average maturity of the loan
portfolio and by purchasing adjustable rate securities.

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.

                              13
<PAGE>
<PAGE>
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.

At March 31, 2000 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)     $8,491,878     18.51%     3,670,000      8.00%     4,587,400    10.00%
Tier I capital
(to risk weighted assets)     $8,351,511     18.20%     1,834,960      4.00%     2,752,440     6.00%
Tier I capital
(to average assets)           $8,351,511      8.73%     3,828,517      4.00%     4,785,647     5.00%


Reconciliation of capital:                     Risk Weighted   Tier I Capital
                                                   Capital

Total stockholders' equity (GAAP)                $7,753,386     $7,753,386
Unrealized loss on securities - AFS                 598,125        598,125
Allowance for loan losses                           260,000              -
Equity investments                                 (119,633)
         Total                                   $8,491,878     $8,351,511

</TABLE>

                              14
<PAGE>
<PAGE>
                 CFS BANCSHARES, INC. 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

Not Applicable

ITEM 3: DEFAULT UPON SENIOR SECURITIES

Not Applicable

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

None

ITEM 5: OTHER INFORMATION:

None

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 27 - Financial Data Schedule

No Reports on Form 8-K were filed during the quarter ended March
31, 2000.
                              15
<PAGE>
<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: May 15, 2000       /s/ Bunny Stokes, Jr.
                         -------------------------------------
                         Bunny Stokes, Jr.
                         Chairman/CEO
                         (principal executive officer)


Date: May 15, 2000       /s/ W. Kent McGriff
                         ------------------------------------
                         W. Kent McGriff
                         Executive Vice President
                         (principal financial and accounting
                         officer)


                           16