1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


                                    FORM 10-Q

         (Mark One)
         [        X ]  QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
                  June 30, 1997
         [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from       to

                         Commission file number 0-11535
                      CITY NATIONAL BANCSHARES CORPORATION
             (Exact name of registrant as specified in its charter)

New Jersey                                                   22-2434751
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                            900 Broad Street, 07102
                         Newark, New Jersey (Zip Code)
                    (Address of principal executive offices)

Registrant's telephone number, including area code: (201) 624-0865

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Title of each class
Common stock, par value $10 per share

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

     The  aggregate  market value of voting stock held by non  affiliates of the
     Registrant as of July 31, 1997 was approximately $1,287,320.

There were 114,141 shares of common stock outstanding at July 31, 1997.
<PAGE>
Index                                                                      Page

Part I.    Financial Information

Item 1.    Financial Statements

           Consolidated Balance Sheet as of June 30, 1997 and
           December 31, 1996..................................................3

           Consolidated Statement of Income for the Six Months Ended June 30,
           1997 and 1996 and for the Three Months Ended June 30, 1997 and
           1996...............................................................4

          Consolidated  Statement of Changes in Stockholders' Equity for the Six
          Months Ended June 30, 1997 and 1996 5

          Consolidated Statement of Cash Flows for the Six Months Ended June 30,
          1997 and 1996.......................................................6

           Notes to Consolidated Financial Statements.........................7

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operaions 8

Part II.   Other Information.................................................12

Signatures...................................................................14

Item 4.    Submission of matters to a vote of security holders

Item. 6.   Exhibits and reports on Form 8-K..................................15











                                   2
<PAGE>


CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES

Consolidated Balance Sheet (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                 <C>            <C>


                                                                     June 30,       December 31,
Dollars in thousands, except per share data                            1997            1996

Assets

Cash and due from banks                                                $3,510           $2,767
Federal funds sold                                                        -              8,900
Interest bearing deposits with banks                                       38               74
Investment securities available for sale                               31,668           30,997
Investment securities held to maturity (Market value of $28,772
at June 30, 1997 and $29,517 at December 31,1996                       29,252           29,866
Loans held for sale                                                       551              291
loans                                                                  56,937           57,128
Less: Reserve for possible loan losses                                    800              750
Net loans                                                              56,137           56,378

Premises and equipment                                                  3,318            3,331
Accrued interest receivable                                             1,011            1,078
Other real estate owned                                                   627              672
Other assets                                                            1,673              597

Total assets                                                         $127,785         $134,951

Liabilities and Stockholders' Equity
Deposits:
  Demand                                                              $13,482          $13,699
  Savings                                                              27,726           37,527
  Time                                                                 64,289           64,628
Total deposits                                                        105,497          115,854
Short-term borrowings                                                   8,000            5,175
Accrued expenses and other liabilities                                  1,103            3,886
Long-term debt                                                          3,749            1,749

Total liabilities                                                     118,349          126,664

Commitments and contingencies

Stockholders' equity
        Preferred stock, no par value: Authorized 100,000 shares;
        Series A , issued and outstanding 8 shares in 1997 and 1996       200              200
        Series B , issued and outstanding 20 shares in 1997 and 1996      500              500
        Series C , issued and outstanding 108 shares in 1997 and 1996      27               27
        Series D , issued and outstanding 3,208 shares in 1997            820               -
        Common stock, par value $10: Authorized 400,000 shares;
               114,980 shares issued in 1997 and 1996,
               114,141 shares outstanding in 1997 and 1996              1,150            1,150
       Surplus                                                            901              901
       Retained earnings                                                5,933            5,645
       Less:
              Net unrealized loss on investment securities available       70              111
              Treasury stock, at cost - 839 shares                         25               25

Total stockholders' equity                                              9,436            8,287

Total liabilities and stockholders' equity                           $127,785         $134,951
</TABLE>


See accompanying notes to consolidated financial statements.

                3

<PAGE>


CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                                       Three months ended              Six months ended
                                                            June 30,                        June 30,
<S>                                                   <C>               <C>            <C>             <C>



Consolidated Statement of Income (Unaudited)

Dollars in thousands, except per share data             1997           1996             1997          1996


Interest income
Interest and fees on loans                              $1,282        $1,200           $2,535        $2,245
Interest on Federal funds sold and securities
purchased under agreements to resell                       122            61              243           116
Interest on other short-term investments                    39            36               39           144
Interest on deposits with banks                             -              2                1             4
Interest and dividends on investment securities:
        Taxable                                             960           897            1,857         1,715
        Tax-exempt                                           29            29               58            58
Total interest income                                     2,432         2,225            4,733         4,282

Interest expense
Interest on deposits                                      1,003           798            1,924         1,523
Interest on short-term borrowings                            68            65              116           102
Interest on long-term debt                                   55            24               91            49


Net interest income                                       1,306         1,338            2,602         2,608

Provision for possible loan losses                           23            23               50            33
Net interest income after provision

         for possible loan losses                         1,283         1,315            2,552         2,575

Other operating income
Service charges on deposit accounts                         142           136              285           279
Other income                                                146           164              304           333
Net gain on sales of investment securities                   19            (1)              40             9
Total other operating income                                307           299              629           621

Other operating expenses
Salaries and other employee benefits                        666           649            1,307         1,310
Occupancy expense                                            78            70              165           134
Equipment expense                                            93           105              190           178
Other expenses                                              358           340              727           706
Total other operating expenses                            1,195         1,164            2,389         2,328


Income before income tax expense                            395           450              792           868
Income tax expense                                          143           157              287           303

Net income                                                 $252          $293             $505          $565

Net income per share

Primary                                                   $2.21         $2.57            $4.04         $4.96
Fully diluted                                              1.99          2.31             3.65          4.47
Primary average shares outstanding                      114,141       114,141          114,141       113,501
Fuully diluted average shares outstanding               127,991       127,991          127,991       127,351
</TABLE>

See accompanying notes to consolidated financial statements.
                        4
<PAGE>


CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES

Consolidated Statement of Changes
In Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
<S>                                   <C>      <C>      <C>       <C>            <C>                 <C>             <C>     
                                                                                   
                                                                                   Net Unrealized         
                                                                                   Gain (Loss) on
                                                                                   Investment
                                        Common            Preferred Retained       Securities         Treasury
Dollars in thousands, except per share  Stock   Surplus     Stock   Earnings       Available for Sale  Stock           Total

Balance, December 31, 1995               $1,120      $886      $200    $4,856           $(141)         $(25)           $6,896
Net income                                   -         -         -        565               -             -               565
Proceeds from issuance of common stock       30        15        -         -                -             -                45
Proceeds from issuance of preferred st       -         -        527        -                -             -               527
Change in net unrealized loss on investment
       securities available for sale         -         -         -         -               (60)           -               (60)
Dividends paid                               -         -                 (156)              -             -              (156)
Balance, June 30, 1996                   $1,150      $901      $727    $5,265           $(201)         $(25)           $7,817

Balance, December 31, 1996               $1,150      $901      $727    $5,645           $(111)         $(25)           $8,287
Net income                                   -         -         -        505               -             -               505
Proceeds from issuance of preferred st       -         -        820        -                -             -               820
Change in net unrealized loss on
       investment securities available       -         -         -         -                41            -                41
Dividends paid                               -         -         -       (217)              -             -              (217)
Balance, June 30, 1997                   $1,150      $901    $1,547    $5,933            $(70)         $(25)           $9,436
</TABLE>

See accompanying notes to consolidated financial statements.

                  5

<PAGE>




CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES

Consolidated Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                <C>               <C>

                                                                    Six Months  Ended
                                                                     June 30,

In thousands                                                           1997            1996

Operating activities
Net income                                                               $505             $565
Adjustments to reconcile net income to net cash from operating activities:
    Depreciation and amortization                                         183              158
    Provision for possible loan losses                                     50               33
    Discount accretion, net of premium amortization
         on investment securities                                         (12)              26
    Net gains on calls of investment securities held to maturity          (42)             (10)
    Gains and commissions on loans held for sale                          (12)             (40)
Decrease (increase) in accrued interest receivable                         67             (165)
Deferred (benefit) income tax expense                                     (26)              80
(Increase) decrease in other assets                                    (1,078)             223
(Decrease) increase in accrued expenses and other liabilities          (2,783)              59

Net cash (used in) provided by operating activities                    (3,148)             929

Investing activities
Loans originated for sale                                                (756)          (1,439)
Proceeds from sales of loans held for sale                                480            1,313
Decrease (increase) in loans                                              170           (5,321)
Purchase of loans in conjunction with branch acquisitions                  -            (4,035)
Decrease in interest bearing deposits with banks                           36              286
Proceeds from sales and calls of investment securities available for    4,718               -
Proceeds from maturities of investment securities availabe for sale,
      including principal payments                                     18,625            3,446
Proceeds from maturities of investment securities held to maturity,
      including principal payments                                        604            3,787
Purchases of investment securities available for sale                 (23,881)          (2,200)
Purchases of investment securities held to maturity                        -           (10,025)
Purchases of premises and equipment                                      (170)          (1,144)
Decrease in other real estate owned                                        94              -

Net cash used in investing activities                                     (80)         (15,332)

Financing activities
Deposits acquired in branch acquisition                                   -              7,661
Issuance of long-term debt                                              2,000
Decrease in deposits                                                  (10,357)          (5,468)
Increase in short-term borrowings                                       2,825            6,526
Proceeds from issuance of common stock                                    -                 45
Proceeds from issuance of preferred stock                                 820              527
Dividends paid on preferred stock                                         (44)             -
Dividends paid on common stock                                           (173)            (156)

Net cash (used in) provided by financing activities                    (4,929)           9,135

Net decrease in cash and cash equivalents                              (8,157)          (5,268)

Cash and cash equivalents at beginning of period                       11,667           10,294

Cash and cash equivalents at end of period                             $3,510           $5,026

Cash paid during the year:
Interest                                                               $1,982           $1,646
Income taxes                                                              303              168

Noncash investing activities:
Transfer of loans to other real estate owned                               49               94
</TABLE>

See accompanying notes to consolidated financial statements.
                  6

<PAGE>



CITY NATIONAL BANCSHARES CORPORATION
Notes to Consolidated Financial Statements (Unaudited)


1.  Basis of presentation

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance with generally  accepted  accounting  principles for
     interim  financial  information.  Accordingly,  they do not include all the
     information  and  footnotes  required  by  generally  accepted   accounting
     principles for complete financial statements. In the opinion of management,
     all  adjustments  (consisting  of  normal  recurring  accruals)  considered
     necessary for a fair  presentation  of the financial  statements  have been
     included.  Operating results for the six months and three months ended June
     30, 1997 are not necessarily indicative of the results that may be expected
     for the year ended December 31,1997.

2.  Principles of consolidation

     The accompanying  consolidated financial statements include the accounts of
     City  National   Bancshares   Corporation  (the   "Corporation")   and  its
     subsidiary,  City National Bank of New Jersey (the "Bank"). All significant
     intercompany accounts and transactions have been eliminated in
     consolidation.

3. Net income per common share

     Primary  income per common share is  calculated by dividing net income less
     dividends  on  preferred  stock by the  weighted  average  number of common
     shares   outstanding.   Common  shares  issuable  upon  conversion  of  the
     subordinated  debentures  have been  excluded  from the primary  income per
     common share as they are not considered to be common stock equivalents.  On
     a fully diluted basis,  both net income and common shares  outstanding  are
     adjusted  to  assume  the  conversion  of  the   convertible   subordinated
     debentures from the date of issue.

4. Recent accounting pronouncements

     Financial  Accounting Board Statement of Financial Accounting Standards No.
     128,  "Earnings per share" (SFAS 128)  establishes  standards for computing
     and  presenting  earnings  per share  (EPS) and  applies to  entities  with
     publicly held common stock or potential common stock. SFAS 128 replaces the
     presentation  of primary EPS with a presentation  of basic EPS and requires
     dual  presentation  of basic  and  diluted  EPS on the  face of the  income
     statement for all entities  with complex  capital  structures.  SFAS 128 is
     effective for financial statements issued for periods ending after December
     15,  1997,  including  interim  periods,  and  earlier  application  is not
     permitted.  SFAS 128 also requires restatement of all prior period EPS data
     presented.  SFAS  128 in not  expected  to have a  material  effect  on the
     Corporation's consolidated financial statements.
<PAGE>

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

Results of operations

     Net income for the first half of 1997 was $505,000 compared to $565,000 for
     the  similar  1996  period.  Returns  on average  stockholders'  equity and
     average  assets were 12.13% and .72% for the 1997 first half and 14.94% and
     .88% for the  corresponding  1996 period.  Related  earnings per share on a
     fully diluted basis decreased to $3.65 from $4.47.

     1997 second  quarter net income  declined to $252,000  from $293,000 a year
     earlier.  Returns on average  stockholders'  equity and average assets were
     12.12% and .71% for the 1997 second quarter,  while the corresponding  1996
     returns were 15.34% and .88%. Related fully diluted per share earnings were
     $1.99 compared to $2.31.

     Lower  gains and  commissions  on loan sales  resulting  from a decrease in
     mortgage loans originated for sale,  along with higher  operating  expenses
     were the primary reasons for the lower earnings in both periods.

Net interest income

     For the first half of 1997, net interest  income was  relatively  unchanged
     from the same  1996  period,  although  the  related  net  interest  margin
     declined  to 4.09% from to 4.47%.  The  decreased  margin  resulted  from a
     higher cost of funds. Average interest earning assets for the first half of
     1997 rose to $139.3  million  from  $127.1  million  in 1996.  Most of this
     growth  occurred  within the loan  portfolio,  which  averaged  $57 million
     compared  to  $50.2  million  , a 20.2 %  increase.  Most of this  increase
     resulted from greater commercial real estate loan activity.

     Interest  income was higher due to the increase in earning assets and a the
     increase in loan  volume  contributed  to an  increase in the average  rate
     earned  to 7.40%  from  7.31%.  Interest  expense  rose as well,  due to an
     increase  in the cost of funding  interest  earning  assets,  from 2.84% to
     3.31%.

     Net  interest  income  for the second  quarter of 1997 was also  relatively
     unchanged from a year earlier,  decreasing slightly, by 2.4%, due to higher
     deposit costs which were not offset by  commensurate  increases in interest
     income.
<PAGE>

Provision and reserve for possible loan losses

Changes in the reserve for possible loan losses are set forth below.

<TABLE>
<CAPTION>

<S>                                                             <C>              <C>            <C>            <C>
                                                                     Six Months                     Three Months
                                                                   Ended June 30,                  Ended June 30,

(Dollars in thousands)                                            1997            1996           1997            1996
Balance at beginning of period                                    $750            $650           $760            $675
Provision for possible loan losses                                  50              33             23              23
Recoveries of previous charge-offs                                  29              84             17              66
                                                                   829             767            800             764
Less: Charge-offs                                                   29              67              -              64
Balance at end of period                                          $800            $700           $800            $700

</TABLE>



     Management  believes  that the reserve for possible loan losses is adequate
     based on an  ongoing  evaluation  of the loan  portfolio.  This  evaluation
     includes  consideration  of  past  loan  loss  experience,  the  level  and
     composition  of  nonperforming  loans,  collateral  adequacy,  and  general
     economic conditions within the Bank's market area,  including the effect of
     such conditions on particular industries.

     While  management  uses available  information to determine the adequacy of
     the reserve, future additions may be necessary based on changes in economic
     conditions or in subsequently  occurring  events  unforeseen at the time of
     evaluation.
<TABLE>
<CAPTION>
<S>
                                                 <C>              <C>                 <C>                 <C>

(Dollars in thousands)                            June 30, 1997     March 31, 1997     December 31, 1996   June 30, 1996
--------------------------------------------------------------------------------------------------------------------------
Reserve for possible loan losses as a percentage of:
Total loans                                                 1.41%               1.34%               1.31%           1.29%
Total nonperforming loans                                  85.02%              77.08%              70.89%          78.83%
Total nonperforming assets
   (nonperforming loans and OREO)                          51.02%              46.51%              43.35%          83.75%
Net charge-offs (recoveries) as a
  percentage of average                                        -%              (.03)%                .02%          (.03)%
loans
(year-to-date)

</TABLE>

Nonperforming loans

     Nonperforming loans include loans on which the accrual of interest has been
     discontinued or loans which are  contractually  past due 90 days or more as
     to interest or principal payments on which interest income is still being

<PAGE>

     accrued.  Nonaccrual  loans  include  loans  where  principal  or  interest
     interest  income is still being accrued  Delinquent  interest  payments are
     credited  to  income  when  received.  The  following  table  presents  the
     principal  amounts  of  nonperforming  loans  past  due 90 days or more and
     accruing.
<TABLE>
<CAPTION>
<S>
                                    <C>              <C>                   <C>

(Dollars in thousands)               June 30, 1997    December 31, 1996     June 30, 1996
--------------------------------------------------------------------------------------------
Nonaccrual loans
Commercial                                      $381                $ 423              $143
Installment                                        8                    4                 2
Real estate                                      322                  598               393
Total                                            711                1,025               536
Loans past due 90 days
 or more and still accruing
Commercial                                         -                   14                 -
Installment                                        -                    -                 -
Real estate                                      230                   19               351
Total                                            230                   33               351
Total nonperforming loans                       $941               $1,058              $888

</TABLE>

     Nonperforming  assets are  generally  well secured by real estate and small
     commercial  buildings.  It is the Bank's intent to move nonperforming loans
     into other real estate owned ("OREO") as rapidly as possible and to dispose
     of all OREO properties at the earliest  possible date at prices  considered
     reasonable under the circumstances.

Other operating income

     Other  operating  income,  including the results of  investment  securities
     transactions,  rose  slightly in both the first half and second  quarter of
     1997  compared to the similar 1996  periods,  as gains and  commissions  on
     sales of  residential  mortgages,  which  are  included  in  other  income,
     decreased,  offset by higher  net gains on sales of  investment  securities
     available for sale.

Other operating expenses

     Other  operating  expenses  rose  2.6% for both the first  half and  second
     quarter  of 1997  compared  to the  similar  1996  periods.  The  six-month
     increase  resulted  primarily from higher  occupancy and equipment  expense
     associated with the completion of the  administrative  office  renovations,
     along with the operation of a branch office acquired on March 8, 1996 for a
     full six months in 1997.  1997 second  quarter  expenses rose due to higher
     salaries and other operating benefits and increased other expenses.

Income tax expense

     Income tax expense as a percentage  of pretax income rose from 34.9% in the
     first  quarter and first half of 1996 to 36.2% for the similar 1997 periods
     as a result of higher levels of income subject to state income tax.
<PAGE>

Short-term interest earning assets

     Short-term  interest earning assets rose 6.5%,  averaging $10.6 million for
     the first six months of 1997  compared to $9.9 million for the similar 1996
     period.

Investment securities

     The available for sale portfolio was relatively unchanged,  totalling $31.7
     million at June 30, 1997  compared  to $31  million at the end of 1996,  an
     increase of 2.2%.  Related  unrealized  depreciation  decreased  to $52,000
     compared to $106,000 at 1996 year-end.

     The held to maturity portfolio also changed  nominally,  declining by 2.1%,
     from $29.9  million at December 31, 1996 to $29.3 million at June 30, 1997.
     Related  unrealized  depreciation  was  up,  increasing  from  $349,000  to
     $480,000 at June 30, 1997.

     At June 30, 1997,  included in both the aforementioned  portfolios were six
     structured notes with a carrying value of $5.2 million and a related market
     value  of $5  million,  reflecting  unrealized  depreciation  of  $211,000,
     compared  to  $143,000 at 1996  year-end.  These notes  consist of step-up,
     dual-index  and  deleveraged  notes,  the  market  values  of  which do not
     necessarily  move in the same direction as general  changes in bond prices.
     Management  believes  that holding  these notes will not have a significant
     impact on the financial condition or operations of the Corporation.

Loans

     Loans held for sale rose from  $291,000 at December  31,1996 to $551,000 at
     June 30,  1997 while loans  originated  for sale during the 1997 first half
     totalled  $756,000  compared to $1.4 million during the half of 1996. Loans
     totalled  $56.9  million  at June 30,  1997  compared  to $57.1  million at
     December 31, 1996.

Deposits

     Average  deposits for the first half of 1997 rose 7.2 %, to $120.4  million
     compared  to $112.3  million  for the first half of 1996,  with most of the
     growth  occurring in certificates of deposits of $100,000 or more issued to
     local municipalities.

Short-term borrowings

     Average  short-term  borrowings rose 13% from the first half of 1996 to the
     corresponding  1997 period,  reflecting  higher levels of U.S. Treasury tax
     and loan note option balances.

Long-term debt

     Long-term debt increased $2 million in the first half of 1997 from December
     31,  1996,  as a result of $2 million in  Federal  Home Loan Bank  advances
     incurred in February, 1997.
<PAGE>

Liquidity

     The liquidity  position of the  Corporation  is dependent on the successful
     management  of its assets and  liabilities  so as to meet the needs of both
     deposit  and  credit   customers.   Liquidity   needs  arise  primarily  to
     accommodate  possible deposit outflows and to meet borrowers'  requests for
     loans.  Such needs can be satisfied by investment  and loan  maturities and
     payments,  along with the ability to raise  short-term  funds from external
     sources.

     It is  the  responsibility  of  the  Asset/Liability  Management  Committee
     ("ALCO")  to monitor  and oversee  all  activities  relating  to  liquidity
     management and the protection of net interest  income from  fluctuations in
     interest rates.

     The Bank  depends  primarily  on  deposits  as a source  of funds  and also
     provides for a portion of its funding needs through short-term  borrowings,
     such  as  Federal  Funds   purchased,   securities  sold  under  repurchase
     agreements and borrowings under the U.S.  Treasury tax and loan note option
     program.

     The major  contribution  during the first  quarter  of 1997 from  operating
     activities to the Corporation's liquidity came from higher accrued expenses
     and other liabilities.

     Net cash used in  investing  activities  was  primarily  the  result of the
     purchase of investment  securities available for sale, which totalled $23.9
     million,  while  sources of cash  provided  by  investing  activities  were
     derived  primarily from proceeds from  maturities,  principal  payments and
     early  redemptions  of  investment  securities  available  for sale,  which
     amounted to $18.6 million.

     The primary  source of funds from  financing  activities  resulted  from an
     increase in  long-term  debt of $2 million  while a decrease in deposits of
     $10.4 million representing the highest use of cash in financing activities.

Interest rate sensitivity

     The management of interest rate risk is also important to the profitability
     of the Corporation. Interest rate risk arises when an earning asset matures
     or when its interest rate changes in a time period different from that of a
     supporting interest bearing liability, or when its interest rate changes in
     a time  period  different  from that of an interest  earning  asset that it
     supports.  While  the  Corporation  does  not  match  specific  assets  and
     liabilities,  total earnings  assets and interest  bearing  liabilities are
     grouped to  determine  the  overall  interest  rate risk within a number of
     specific time frames.

     Interest sensitivity analysis attempts to measure the responsiveness of net
     interest income to changes in interest rate levels.  The difference between
     interest sensitive assets and interest sensitive liabilities is referred to
     as  the  interest  sensitivity  gap.  At  any  given  point  in  time,  the
     Corporation   may  be  in  an   asset-sensitive   position,   whereby   its
     interest-sensitive assets exceed its interest-sensitive liabilities or in a
     liability-sensitive  position,  whereby its interest-sensitive  liabilities
     exceed its interest-sensitive assets, depending on management's judgment as
     to projected interest rate trends.

     One  measure of  interest  rate risk is the  interest-sensitvity  analysis,
     which  details the repricing  differences  for assets and  liabilities  for
     given  periods.  The primary  limitation  of this  analysis is that it is a
     static (i.e,  as of a specific  point in time)  measurement  which does not
     capture risk that varies  nonproportionally with changes in interest rates.
     Because of this limitation, the Corporation uses a simulation model as its

<PAGE>

     primary method of measuring interest rate risk. This model,  because of its
     dynamic  nature,  forecasts  the  effects  of  different  patterns  of rate
     movement and variances in the effects of rate changes on the  Corporations'
     mix of interest-sensitive assets and liabilities.

     At June 30,1997,  the Corporation had a cumulative one-year static gap of a
     negative $10  million,  representing  7.88% of total  assets  compared to a
     negative $12.4 million gap at December 31,1996,  which represented 9.19% of
     total assets.  Utilizing a dynamic  simulation model,  management  believes
     that this amount would not result in a  significant  change in net interest
     income should interest rates rise or fall up to 300 basis points,  which is
     the  maximum  change  that  management  uses to measure  the  Corporation's
     exposure to interest rate risk.

Capital

     On June 28, 1997 the  Corporation  issued  $820,000  of 6.5%  noncumulative
     preferred  stock in a  placement.  Stockholders'  equity  amounted  to $9.4
     million at June 30, 1997  compared to $8.3  million to December  31,  1996.
     Stockholders'  equity as a percentage of total assets was 7.39% at June 30,
     1997 compared to 6.14% at December 31, 1996.

     Risk-based  capital  ratios are expressed as a percentage of  risk-adjusted
     assets,  and relate  capital to the risk  factors of a bank's  asset  base,
     including off-balance sheet risk exposures. Various weights are assigned to
     different asset categories as well as off-balance sheet exposures depending
     on the risk associated with each. In general,  less capital is required for
     less risk.

     At June 30,1997, the Corporation's core capital (Tier 1 ) and total (Tier 1
     plus  Tier  2)   risked-based   capital  ratios  were  16.90%  and  22.05%,
     respectively.

PART II Other information

Item 4. Submission of matters to a Vote of Security Holders

     a)  The  Annual  Meeting  of  Stockholders  of  City  National   Bancshares
     Corporation  was held on April 16, 1997.  The  stockholders  voted upon the
     election  of one  person,  named  in the  proxy  statement,  to  serve as a
     director of the  Corporation  for a term of three  years.  One director was
     elected  at  the  Annual  Meeting  with  the  number  of  votes  "For"  and
     "Abstained" indicated. There were no votes "Against".

                                 Number of Votes

       Name                                    For                     Abstained
Leon Ewing                                  68,197                         239

     The terms of the  following  directors  were  continued  after  the  Annual
     Meeting:  Douglas Anderson,  Eugene Giscombe,  Barbara Bell Coleman, Norman
     Jeffries, Louis E. Prezeau, and Lamar Whigam.

     Stockholders also voted to amend the articles of incorporation to authorize
     a new class of non-voting common stock. Stockholders voted 67,396 "For" the
     proposal, 537 shares " Against" the proposal and 503 shares "Abstained".

     Finally,  stockholders  also voted upon the ratification of the appointment
     of KMPG Peat  Marwick as  independent  auditors  for the fiscal  year ended
     December 31, 1997.  Stockholders voted 68,198 shares "For" the proposal, 42
     shares " Against" and 196 shares "Abstained".
<PAGE>

Item 5. Other Matters

     a) On March 31, 1997,  the Board  approved the  declaration  of a $1.50 per
     share  dividend  to  common  stockholders,   payable  on  May  2,  1997  to
     stockholders of record on April 2, 1997.

Item 6. Exhibits

(a)Exhibits

     (3)(i)  Certificate  of  Designation  Establishing  and Fixing the  Powers,
     Designations,  Preferences and Relative  Participating,  Optional and Other
     Special Rights, and the Qualifications,  Limitation and Restrictions of the
     6 1/2% Non-cumulative Perpetual Preferred Stock, Series D

    (10) Material Contracts Employment Agreement between Registrant to Louis E.
          Prezeau, President & CEO dated May 24, 1997

    (11) Statement Regarding Calculation of Per Share Earnings

    (27) Financial Data Schedule


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 hereunto duly authorized.

         CITY NATIONAL BANCSHARES CORPORATION
         (Registrant)

         August 11, 1997    ____________________
                            Edward R. Wright
                            Senior Vice President and Chief Financial
                            Officer (Principal Financial and Accounting Officer)