<PAGE>

                       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 March 31, 2006

[ ]  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)

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

<TABLE>
<S>                                                               <C>
            900 Broad Street,                                       07102
           Newark, New Jersey                                     (Zip Code)
(Address of principal executive offices)
</TABLE>

Registrant's telephone number, including area code: (973) 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
    -----    -----

Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act). (Check
one):

Large filer       Accelerated filer       Non-accelerated filer   X
            -----                   -----                       -----

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes       No   X
    -----    -----

The aggregate market value of voting stock held by non-affiliates of the
Registrant as of April 25, 2006 was approximately $5,759,810.

There were 133,606 shares of common stock outstanding at May 7, 2006.

<PAGE>

<TABLE>
<CAPTION>
Index                                                                       Page
-----                                                                       ----
<S>                                                                         <C>
PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets as of March 31, 2006 (Unaudited) and
         December 31, 2005...............................................     3

         Consolidated Statements of Income (Unaudited) for the Three
         Months Ended March 31, 2006 and 2005............................     4

         Consolidated Statements of Cash Flows (Unaudited) for the Three
         Months Ended March 31, 2006 and 2005............................     5

         Notes to Consolidated Financial Statements (Unaudited)..........     6

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.......................................     7

Item 3.  Quantitative and Qualitative Disclosures about Market Risk......    12

Item 4.  Controls and Procedures.........................................    12

PART II OTHER INFORMATION................................................    13

Item 1.  Legal proceedings...............................................    13

Item 1a. Risk Factors....................................................    13

Item 6.  Exhibits and Reports on Form 8-K................................    13

Signatures...............................................................    15
</TABLE>


                                        2

<PAGE>

CITY NATIONAL BANCSHARES CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                   March 31,   December 31,
Dollars in thousands, except per share data                           2006         2005
                                                                   ---------   ------------
<S>                                                                <C>         <C>
ASSETS

Cash and due from banks                                            $  6,661      $  6,260
Federal funds sold                                                   21,900        15,200
Interest bearing deposits with banks                                  1,257         1,260
Investment securities available for sale                            105,376       109,725
Investment securities held to maturity (Market value of $42,427
   at March 31, 2006 and $39,427 at December 31,2005 )               42,717        39,419
Loans held for sale                                                      --           124
Loans                                                               183,901       179,093
Less: Allowance for loan losses                                       2,165         2,165
                                                                   --------      --------
Net loans                                                           181,736       176,928
                                                                   --------      --------
Premises and equipment                                                4,262         4,342
Accrued interest receivable                                           1,933         1,917
Bank-owned life insurance                                             3,906         3,870
Other assets                                                          5,288         4,496
                                                                   --------      --------
TOTAL ASSETS                                                       $375,036      $363,541
                                                                   ========      ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
   Demand                                                          $ 43,255      $ 31,492
   Savings                                                          152,013       155,232
   Time                                                             127,091       125,705
                                                                   --------      --------
Total deposits                                                      322,359       312,429
Accrued expenses and other liabilities                                5,700         4,730
Short-term borrowings                                                 1,324           540
Long-term debt                                                       20,700        20,700
                                                                   --------      --------
Total liabilities                                                   350,083       338,399

Commitments and contingencies

Stockholders' equity
   Preferred stock, no par value: Authorized 100,000 shares;
      Series A, issued and outstanding 8 shares in 2006 and 2005        200           200
      Series C, issued and outstanding 108 shares in 2006
         and 2005                                                        27            27
      Series D, issued and outstanding 3,280 shares in 2006
         and 2005                                                       820           820
   Preferred stock, no par value, perpetual noncumulative:
      Authorized 200 shares;
      Series E, issued and outstanding 29 shares in 2006 and
         28 shares in 2005                                            1,450         1,400
   Preferred stock, no par value, perpetual noncumulative:
      Authorized 7,000 shares;
      Series F, issued and outstanding 7,000 shares in 2006
         and 2005                                                     6,790         6,790
   Common stock, par value $10: Authorized 400,000 shares;
      134,530 shares issued in 2006 and 2005
      133,606 shares outstanding in 2006 and 133,650 shares
         outstanding in 2005                                          1,345         1,345
   Surplus                                                            1,115         1,115
   Retained earnings                                                 14,770        14,464
   Accumulated other comprehensive loss                              (1,502)         (973)
   Treasury stock, at cost - 924 and 880 common shares in 2006
      and 2005, respectively                                            (62)          (46)
                                                                   --------      --------
Total stockholders' equity                                           24,953        25,142
                                                                   --------      --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $375,036      $363,541
                                                                   ========      ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements
                                        3

<PAGE>

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED MARCH 31,
                                                       ----------------------------
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA                   2006       2005
                                                            --------   --------
<S>                                                    <C>             <C>
INTEREST INCOME
Interest and fees on loans                                  $  3,081   $  2,503
Interest on Federal funds sold and securities
   purchased under agreements to resell                          379        197
Interest on deposits with banks                                   20          5
Interest and dividends on investment securities:
   Taxable                                                     1,472      1,345
   Tax-exempt                                                    250        171
                                                            --------   --------
Total interest income                                          5,202      4,221
                                                            --------   --------

INTEREST EXPENSE
Interest on deposits                                           2,126      1,245
Interest on short-term borrowings                                  7          2
Interest on long-term debt                                       313        294
                                                            --------   --------
Total interest expense                                         2,446      1,541
                                                            --------   --------
Net interest income                                            2,756      2,680
Provision for loan losses                                         --         40
                                                            --------   --------
Net interest income after provision for loan losses            2,756      2,640
                                                            --------   --------

OTHER OPERATING INCOME
Service charges on deposit accounts                              289        292
Agency fees on commercial loans                                   95        104
Other income                                                     159        227
Net (losses) gains on sales of investment securities             (16)        27
                                                            --------   --------
Total other operating income                                     527        650
                                                            --------   --------

OTHER OPERATING EXPENSES
Salaries and other employee benefits                           1,376      1,241
Occupancy expense                                                234        194
Equipment expense                                                137        134
Data processing expense                                           82         81
Other expenses                                                   680        653
                                                            --------   --------
Total other operating expenses                                 2,509      2,303
                                                            --------   --------
Income before income tax expense                                 774        987
Income tax expense                                               186        301
                                                            --------   --------
NET INCOME                                                  $    588   $    686
                                                            ========   ========

NET INCOME PER SHARE
Basic                                                       $   2.28   $   4.64
Diluted                                                         2.28       4.58
                                                            ========   ========
Basic average common shares outstanding                      133,606    133,534
Diluted average common shares outstanding                    133,606    135,192
                                                            ========   ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                        4

<PAGE>

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                             MARCH 31,
                                                        -------------------
IN THOUSANDS                                              2006       2005
                                                        --------   --------
<S>                                                     <C>        <C>
OPERATING ACTIVITIES
Net income                                              $    588   $    686
Adjustments to reconcile net income to net cash from
   operating activities:
   Depreciation and amortization                             119        114
   Provision for loan losses                                  --         40
   Premium amortization (discount accretion) of
      investment securities                                   48        (11)
   Amortization of intangible assets                          30         30
   Net losses (gains) on securities transactions              16        (27)
   Net gains on sales of loans held for sale                  (9)        (1)
Loans originated for sale                                 (1,101)       (62)
Proceeds from sales and principal payments from
   loans held for sale                                     1,234         63
(Increase) decrease in accrued interest receivable           (16)        27
Deferred taxes                                              (338)       483
(Increase) decrease in bank-owned life insurance             (36)        54
Increase in other assets                                    (146)      (852)
Increase in accrued expenses and other liabilities           970      1,664
                                                        --------   --------
Net cash provided by operating activities                  1,359      2,208
                                                        --------   --------

INVESTING ACTIVITIES
Increase in loans, net                                    (4,808)    (2,674)
Decrease (increase) in interest-bearing deposits
   with banks                                                  3       (115)
Proceeds from maturities of investment securities
   available for sale, including principal
   repayments and early redemptions                       23,166     29,134
Proceeds from maturities of investment securities
   held to maturity, including principal repayments
   and early redemptions                                     229      3,971
Proceeds from sales of investment securities
   available for sale                                      2,533        291
Purchases of investment securities available for sale    (22,273)   (34,281)
Purchases of investment securities held to maturity       (3,535)    (2,999)
Purchases of premises and equipment                          (39)       (83)
                                                        --------   --------
Net cash used in investing activities                     (4,724)    (6,756)
                                                        --------   --------

FINANCING ACTIVITIES
Increase in deposits                                       9,930     13,882
Increase (decrease) in short-term borrowings                 784       (930)
Proceeds from issuance of preferred stock                     50        800
Proceeds from issuance of common stock                        --          9
Purchases of treasury stock                                  (16)        (9)
Dividends paid on preferred stock                           (282)       (67)
                                                        --------   --------
Net cash provided by financing activities                 10,466     13,685
                                                        --------   --------
Net increase in cash and cash equivalents                  7,101      9,137
Cash and cash equivalents at beginning of period          21,460     11,717
                                                        --------   --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD              $ 28,561   $ 20,854
                                                        ========   ========

CASH PAID DURING THE YEAR:
Interest                                                $  2,120   $  1,277
Income taxes                                                 285         --
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                        5
<PAGE>

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

1. 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" or "CNB"). All intercompany accounts and
transactions have been eliminated in consolidation.

2. Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with U.S. generally accepted accounting principles for interim
financial information. Accordingly, they do not include all the information
required by U.S. generally accepted accounting principles for complete financial
statements. These consolidated financial statements should be reviewed in
conjunction with the financial statements and notes thereto included in the
Corporation's December 31, 2005 Annual Report to Stockholders.

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 three months ended
March 31, 2006 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2006. In preparing the financial
statements, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
liabilities as of the date of the balance sheet and revenues and expenses for
the related periods. Actual results could differ significantly from those
estimates.

3. Net income per common share

The following table presents the computation of net income per common share.

<TABLE>
<CAPTION>
                                          Three Months Ended
                                              March 31,
                                         -------------------
In thousands, except per share data        2006       2005
                                         --------   --------
<S>                                      <C>        <C>
Net income                               $    588   $    686
Dividends paid on preferred stock             282         67
                                         --------   --------
Net income applicable to common shares        306   $    619
                                         ========   ========

NUMBER OF AVERAGE COMMON SHARES
Basic                                     133,606    133,534
                                         --------   --------
Diluted                                   133,606    135,192
                                         --------   --------

NET INCOME PER COMMON SHARE
Basic                                    $   2.28   $   4.64
Diluted                                      2.28       4.58
</TABLE>

Basic income per common share is calculated by dividing net income less
dividends on preferred stock by the weighted average number of common shares
outstanding. On a diluted basis, both net income and common shares outstanding
are adjusted to assume the conversion of the convertible subordinate debentures.
For the three months ended March 31, 2006, the convertible preferred stock is
antidilutive.

Net income per share data has been revised for the first quarter of 2005. For
this period, the Corporation had accrued the dividends to be paid on preferred
stock. SFAS No. 128, "Earnings per Share" (FAS 128) requires that net income
available to common shareholders be computed by deducting from net income
dividends declared in the period, not accrued, on preferred stock. In addition,
during 2005, the Corporation issued convertible preferred stock. FAS 128
requires that the dilutive effect of convertible securities be reflected in net
income per share by applying the if-converted method. The Corporation had not
applied the if-converted method in calculating net income per share for the
first quarter of 2005. The Corporation has concluded that these adjustments are
immaterial to the financial statements on both a qualitative and quantitative
basis for the previously issued 2005 first quarter financial statements.
Accordingly, adjustments have been made in the current period financial
statements.

4. Comprehensive Income (Loss)

Total comprehensive income (loss) includes net income and other comprehensive
income or loss which is comprised of unrealized gains and losses on investment
securities available for sale, net of taxes. The Corporation's total
comprehensive income (loss) for the three months ended March 31, 2006 and 2005
was $59,000 and $(64,000), respectively. The difference between the
Corporation's net income and total comprehensive income for these periods
relates to the change in net unrealized gains and losses on investment
securities available for sale during the applicable period of time.

5. Reclassifications

Certain reclassifications have been made to the 2005 consolidated financial
statements in order to conform with the 2006 presentation.


                                       6

<PAGE>

6. Recent Accounting Pronouncement

In May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 154, "Accounting Changes and Error
Corrections: a replacement of APB Opinion No. 20 and FASB Statement 3." (SFAS
No. 154), which requires a corporation to apply voluntary changes in accounting
principles retrospectively wherever it is practicable. The retrospective
application requirement replaces the requirement in APB 20 to recognize most
voluntary changes in accounting principles by including the cumulative effect of
the change in net income during the period the change occurred. Retrospective
application will be the required transition period for new accounting
pronouncements in the event that a newly-issued pronouncement does not specify
transition guidance. SFAS No. 154 is effective for accounting periods starting
in the fiscal year beginning after December 15, 2005. The adoption of SFAS No.
154 did not have a significant impact on City National Bank of New Jersey's
financial condition or results of operations.

In November 2005, the FASB issued FASB Staff Position FAS 115-1 and FAS 124-1,
"The Meaning of Other-Than-Temporary Impairment and its Application to Certain
Investments" ("FSP FAS 115-1"). FSP FAS 115-1 addresses the determination as to
whether an investment is considered impaired, whether the impairment is other
than temporary, and the measurement of an impairment loss. FSP FAS 115-1
requires that (1) for each individual impaired security, a company assert its
ability and intent to hold to recovery and to designate an expected recovery
period in order to avoid recognizing an impairment charge through earnings; (2)
a company need not make such an assertion for minor impairments caused by
changes in interest rate and sector spreads; (3) the company must recognize an
impairment charge on securities impaired as a result of interest rate and/or
sector spreads immediately upon changing their assertion to an intent to sell
such security; and (4) defines when a change in a company's assertion for one
security would not call into question assertions made for the other impaired
securities. FSP FAS 115-1 is effective for other-than-temporary impairment
analysis conducted in reporting periods beginning after December 15, 2005. The
adoption of FSP FAS 115-1 did not have a significant impact on City National
Bank of New Jersey's financial condition or results of operations.

ITEM 2

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

The purpose of this analysis is to provide information relevant to understanding
and assessing the Corporation's results of operations for the first quarter of
the current and previous years and financial condition at the end of the current
quarter and previous year-end.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This management's discussion and analysis contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are not historical facts and include expressions about management's
expectations about new and existing programs and products, relationships,
opportunities, and market conditions. Such forward-looking statements involve
certain risks and uncertainties. These include, but are not limited to,
unanticipated changes in the direction of interest rates, effective income tax
rates, loan prepayment assumptions, deposit growth, the direction of the economy
in New Jersey and New York, continued levels of loan quality, continued
relationships with major customers as well as the effects of general economic
conditions and legal and regulatory issues and changes in tax regulations.
Actual results may differ materially from such forward-looking statements. The
Corporation assumes no obligation for updating any such forward-looking
statement at any time.

EXECUTIVE SUMMARY

The primary source of the Corporation's income comes from net interest income,
which represents the excess of interest earned on interest-earning assets over
the interest paid on interest-bearing liabilities. This income is subject to
interest rate risk resulting from changes in interest rates. The most
significant component of the Corporation's interest earning assets is the loan
portfolio. In addition to the aforementioned interest rate risk, the portfolio
is subject to credit risk.

During 2005, the Federal Reserve Bank raised the target federal funds interest
rate from 2.25% to 4.25% and has continued to raise the rate during the first
quarter of 2006 to 4.75%. Concurrently, the spread between the three-month U.S.
Treasury bill rate and the 10-year U.S. Treasury bond rate has narrowed from 32
basis points at the end of 2005 to 16 basis points at the end of March 2006.
These rate increases have caused the yield curve to remain flat during the first
quarter of 2006 and has led to continued interest rate compression throughout
the banking industry, leading to generally lower interest rate margins. As a
result, the Corporation's net interest margin declined from 3.38% in the first
quarter of 2005 to 3.19% in the first quarter of 2006, generating a nominal 2.8%
increase in net interest income. This, along with lower sources of non-interest
income and higher levels of non-interest expense, resulted in a 14.3% decline in
net income, from $686,000 to $588,000.

RESULTS OF OPERATIONS


                                        7

<PAGE>

Net income declined 14.3% to $588,000 for the first quarter of 2006 from
$686,000 for the same 2005 quarter. Related earnings per share on a diluted
basis were $2.28 and $4.58. A nominal increase in net interest income along with
lower sources of non-interest income and higher non-interest expense were the
reasons for the earnings decline. The decrease in earnings per share occurred
due to higher preferred stock dividend requirements. The Corporation expects to
experience earnings per share dilution until the capital raised in 2005 can be
leveraged.

The first quarter of 2006 and 2005 both include the accretion of deferred income
into interest income as an earnings enhancement totalling $11,000 and $29,000,
respectively. This income was received from the U.S. Treasury Community
Development Financial Institution ("CDFI") Fund for purchasing long-term
certificates of deposits from banks in low-income areas at below market rates
and extending credit at below-market rates to consumers in low-income areas.

FINANCIAL CONDITION

At March 31, 2006, total assets rose to $375 million from $363.5 million at the
end of 2005, while total deposits increased to $322.4 million from $312.4
million, comprising most of this asset growth. Average assets also rose during
the first nine months of 2005, increasing $36.7 million, or 10.6% to $382.6
million from $345.9 million a year earlier. This increase was due primarily to
higher municipal account balances.

Federal funds sold

Federal funds sold increased to $21.9 million at March 31, 2006 compared to
$15.2 million at the end of 2005, while the related average balance rose
slightly to $34.5 million for the first three months of 2006 from $32.5 million
for the first three months of 2005. The increases resulted from higher
short-term municipal deposit balances and reinvestment of maturity and payment
proceeds from investment securities available for sale.

Investments

The investment securities available for sale ("AFS") portfolio declined to
$105.4 million at March 31, 2006 from $109.7 million at the end of 2005, while
the net related unrealized loss, net of tax, increased to $1.5 million from
$973,000 at the end of 2005. The decline resulted from the reinvestment of
maturity and payment proceeds into Federal funds sold in an effort to mitigate
interest rate risk by remaining more liquid. The unrealized loss rose due to the
increase in interest rates. Investments held to maturity ("HTM") increased to
$42.7 million at March 31, 2006 from $39.4 million at the end of 2005. The
increase occurred due to the purchase of medium term tax-exempt securities,
which have held favorable yield advantages to taxable investments during the
first quarter.

Most of the decrease in the available for sale portfolio consisted of
mortgage-backed security payments, as the Corporation continued to mitigate its
interest rate risk by not reinvesting the proceeds into the investment
portfolio. At March 31, 2006, the Corporation held mortgage-backed securities
with a carrying value totalling $77.5 million, representing 52.2% of the total
investment portfolio compared to $77.7 million, representing 52.1% at the end of
2005. These investments carry a significant degree of interest rate risk due to
the uncertainty of the underlying prepayment assumptions.

Loans

Loans rose to $183.9 million at March 31, 2006 from $179.1 million at December
31, 2005, while average loans increased 13.4% to $179.2 million for the first
quarter of 2006 from $158 million for the first quarter of 2005. Most of the
increase occurred in the commercial real estate portfolio, which comprises most
of the Corporation's loan portfolio. The Corporation originates nominal consumer
or residential mortgage loans to hold in the portfolio. The Corporation expects
this trend to continue.


                                        8

<PAGE>

Provision and allowance for loan losses

Changes in the allowance for loan losses are set forth below.

<TABLE>
<CAPTION>
                                       Three Months
                                     Ended March 31,
                                     ---------------
(Dollars in thousands)                2006     2005
                                     ------   ------
<S>                                  <C>      <C>
Balance at beginning of period       $2,165   $2,076
Provision for loan losses                --       40
Recoveries of previous charge-offs        3       10
                                     ------   ------
                                      2,168    2,126
Less: Charge-offs                         3       --
                                     ------   ------
Balance at end of period             $2,165   $2,126
                                     ======   ======
</TABLE>

The allowance for loan losses is a critical accounting policy and is maintained
at a level determined by management to be adequate to provide for probable
losses inherent in the loan portfolio. The reserve is increased by provisions
charged to operations and recoveries of loan charge-offs. The reserve is based
on management's evaluation of the loan portfolio and several other factors,
including past loan loss experience, general business and economic conditions,
concentrations of credit and the possibility that there may be inherent losses
in the portfolio which cannot currently be identified. Although management uses
the best information available, the level of the allowance for loan losses
remains an estimate which is subject to significant judgment and short-term
change.

<TABLE>
<CAPTION>
                                     Three Months                  Three Months
                                         Ended       Year Ended        Ended
                                       March 31,    December 31,     March 31,
(Dollars in thousands)                   2006           2005           2005
                                     ------------   ------------   ------------
<S>                                  <C>            <C>            <C>
Allowance for loan
   losses as a percentage of:
Total loans                              1.18%           1.21%          1.31%
Total nonperforming loans               88.66%         107.39%        107.70%
Total nonperforming assets
   (nonperforming loans and OREO)       88.66%         107.39%        107.70%
Net charge-offs as a percentage
   of average loans (year-to-date)         --%            .02%            --%
</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 accrued.
Delinquent interest payments are credited to principal when received. The
following table presents the principal amounts of nonperforming loans.

<TABLE>
<CAPTION>
                                March 31,   December 31,   March 31,
(Dollars in thousands)             2006         2005          2005
                                ---------   ------------   ---------
<S>                             <C>         <C>            <C>
Nonaccrual loans
Commercial                        $  821       $  742        $  251
Installment                           81           85            85
Real estate                        1,012        1,020         1,007
                                  ------       ------        ------
Total                              1,914        1,847         1,343
                                  ------       ------        ------
Loans past due 90 days
   or more and still accruing
Commercial                           120           --            --
Installment                            7            7            29
Real estate                          401          162           216
                                  ------       ------        ------
Total                                528          169           245
                                  ------       ------        ------
Total nonperforming loans         $2,442       $2,016        $1,588
                                  ======       ======        ======
</TABLE>


                                        9

<PAGE>

Nonperforming loans rose to $2.4 million at March 31, 2006 from $2 million at
December 31, 2005 due primarily to an increase in commercial real estate
nonperforming loans. None of the loans on nonaccrual status exceeds $300,000.
Because management considers collateral values and guarantees adequate, there
were no impairment charges on nonaccrual loans recorded for the quarters ending
March 31, 2006 or March 31, 2005.

Deposits

Total deposits rose $10 million to $322.4 million at March 31, 2006 from $312.4
million at the end of 2005, while average deposits rose 9.9%, to $331 million
for the first three months of 2006 from $301.2 million for the first three
months of 2005. The increases occurred due to higher short-term municipal
balances.

Total demand deposits rose to $43.3 million at March 31, 2006 from $31.5 million
at the end of 2005, while average demand deposits for the first three months of
2006 increased to $40.1 million from $35.6 million for the first three months of
2005. The growth in demand deposits resulted from higher municipal account
balances. Total savings accounts, which include passbooks and statement savings
accounts along with money market and Super NOW accounts, declined to $152
million at March 31, 2006 from $155.2 million at the end of 2005, while savings
balances averaged $164.2 million in the first three months of 2006 compared to
$143.7 million in the first three months of 2005. Both changes resulted from
changes in short-term municipal account balances. Time deposits rose slightly to
$127.1 million at March 31, 2006 from $125.7 million at December 31, 2005, while
average time deposits rose to $126.8 million for the first quarter of 2006 from
$121.9 million for the similar 2005 quarter. The increases were also due to
higher municipal account balances.

The Bank's deposit levels may change significantly on a daily basis because
deposit accounts maintained by municipalities represent a significant part of
the Bank's deposits and are more volatile than commercial or retail deposits.
These municipal accounts represent a substantial part of the Bank's deposits,
and tend to have high balances and comprised most of the Bank's accounts with
balances of $100,000 or more at March 31, 2006 and December 31, 2005. These
accounts are used for operating and short-term investment purposes by the
municipalities. All the foregoing deposits require collateralization with
readily marketable U.S. Government securities.

While the collateral maintenance requirements associated with the Bank's
municipal and U.S. Government account relationships might limit the ability to
readily dispose of investment securities used as such collateral, management
does not foresee any need for such disposal, and in the event of the withdrawal
of any of these deposits, these securities are readily marketable.

Short-term borrowings

Short-term borrowings totalled $1,324,000 at the end of the first quarter of
2006, compared to $540,000 at December 31, 2005, while the related average
balances were $718,000 for the first three months of 2006 compared to $334,000
for the first three months of 2005. The increases resulted primarily from
increased note option account balances.

Long-term debt

Long-term debt was relatively unchanged at March 31, 2006 from December 31,
2005, while the related average balance was $20.7 million for the first quarter
of 2006 compared to $22.8 million for the same period in 2005 due to repayments.

Capital

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.
Capital levels are managed through asset size and composition, issuance of debt
and equity instruments, treasury stock activities, dividend policies and
retention of earnings.

At March 31, 2006, the Corporation's leverage, core capital (Tier 1) and total
(Tier 1 plus Tier 2) risked-based capital ratios were 8.60%, 14.90% and 16.09%,
respectively, while the Bank's ratios were 5.58%, 9.91% and 10.89%. Proceeds
from the subordinated debt securities issued in March, 2004 have been retained
at the parent company, but are available to be downstreamed to the Bank at any
time to support deposit growth or for other purposes.

The Corporation adopted FIN 46R as of December 31, 2003 and elected to
retroactively restate all periods presented. FIN 46R required the Corporation to
deconsolidate its investment in the subsidiary trust formed in connection with
the issuance of trust preferred securities. The deconsolidation of the
subsidiary trusts results in the Corporation reporting on


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<PAGE>

its balance sheet the subordinated debentures that have been issued from City
National Bancshares to the subsidiary trusts. The adoption of FIN 46R did not
have a significant effect on the Corporation's consolidated financial
statements. In July 2003, the Board of Governors of the Federal Reserve System
instructed bank holding companies to continue to include the trust preferred
securities in their Tier 1 capital for regulatory capital purposes until notice
is given to the contrary. There can be no assurance that the Federal Reserve
will continue to allow institutions to include trust preferred securities in
Tier 1 capital for regulatory capital purposes. As of March 31, 2006, assuming
the Corporation was not allowed to include the $7.0 million in trust preferred
securities issued by the subsidiary trusts in Tier 1 capital, the Corporation
would remain "well capitalized."

Net interest income

On a fully taxable equivalent ("FTE") basis, net interest income rose $116,000,
or 4.2% to $2,885,000 in the first quarter of 2006 from $2,769,000 in 2005,
while the related net interest margin declined 18 basis points, to 3.20% from
3.38%. Higher levels of earning assets, which averaged $365.1 million in the
first quarter of 2006 compared to $328.7 million in the first quarter of 2005,
was the primary contributor to the higher net interest income. The increased
assets resulted from higher municipal account balances. Interest margin
compression, resulting from a flat yield curve, where short-term rates have
risen faster than long-term rates, contributed to the lower margin.

Interest income on a FTE basis increased $1,022,000, or 23.7% in the first
quarter of 2006 primarily due to the aforementioned increase in earning assets.
The yield on interest earning assets rose 60 basis points, from 5.32% to 5.92%.
The increase in earning assets occurred primarily in the loan portfolio.

Interest income from Federal funds sold rose by 92.4%, due primarily to a higher
average rate. The federal funds target rate has been raised 50 basis points by
the Federal Reserve Bank since the end of 2005. The related yield increased from
200 basis points to 4.46%.

Interest income on taxable investment securities rose $127,000 in 2006 due to
both higher volume and a higher average rate. The taxable investment portfolio
averaged $125.9 million in 2006 compared to $121.9 million in 2005 with most of
the increase occurring in mortgage-backed agency securities. Tax-exempt income
was 46.2% higher due to increased volume as the tax-exempt portfolio averaged
$24.3 million in 2006 compared to $15.4 million in 2005.

Interest income on loans rose 23.1% due to higher loan volume and a higher
average rate. The most significant increase occurred in the commercial real
estate portfolio.

Interest expense rose 58.8% in 2006, as the average rate paid on interest
bearing liabilities rose by 102 basis points, from 2.16% to 3.18%. Most of this
increase was due to the higher average balances of interest-bearing deposit
accounts along with higher rates paid on all interest-bearing liabilities.
Interest expense on money market accounts increased to $868,000 for the first
quarter of 2006 from $406,000 for the first quarter of 2005 due to both higher
volume and an increase in the average rate paid from 2.11% to 3.67%. Interest
expense on Super NOW deposits increased by 44% in the 2006 first quarter
compared to a year earlier due to a higher average rate paid in 2006. Interest
expense on time deposits rose 44% for the first quarter of 2006 compared to a
year earlier also due primarily to the higher average rate paid in 2006.

Other operating income

Other operating income, including the results of investment securities
transactions, declined by $123,000 in the first quarter of 2006 compared to the
similar 2005 period, due primarily to a loss of $57,000 incurred by an
unconsolidated leasing company in which the Bank owns a minority interest
compared to a gain of $17,000 recorded in 2005.

Other operating expenses

Other operating expenses increased $206,000, or 9% in the first quarter of 2006
to $2,509,000 from $2,303,000 in the first quarter of 2005, with the increase
attributable primarily to higher salaries and benefit expense.

Income tax expense

Income tax expense decreased in the first quarter of 2006 from the similar 2005
period due to higher levels of tax-exempt income. Income tax expense as a
percentage of pretax income declined in the first quarter of 2006 to 24%
compared to 30.5% for the first quarter of 2005 for the same reason.

Provision for loan losses


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<PAGE>

There was no provision in the first quarter of 2006 compared to $40,000 in the
first quarter of 2005 due to nominal charge-offs and loan growth in 2006.

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 Bank
also utilizes the Federal Home Loan Bank for longer-term funding purposes.
Finally, the holding company utilizes the capital markets when necessary, having
raised $8.2 million through the issuance of preferred stock during 2005.

The major contribution during the first quarter of 2006 from operating
activities to the Corporation's liquidity came from the sale of residential
mortgage loans in the secondary market while the highest use of cash was for the
origination of such loans. Net cash used in investing activities was primarily
for purchases of investment securities available for sale, 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. The highest source of cash provided by financing activities
resulted from an increase in deposits, while there were no significant uses of
funds.

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Due to the nature of the Corporation's business, market risk consists primarily
of its exposure to interest rate risk. Interest rate risk is the impact that
changes in interest rates have on earnings. The principal objective in managing
interest rate risk is to maximize net interest income within the acceptable
levels of risk that have been established by policy. There are various
strategies which may be used to reduce interest rate risk, including the
administration of liability costs, the reinvestment of asset maturities and the
use of off-balance sheet financial instruments. The Corporation does not
presently utilize derivative financial instruments to manage interest rate risk.

Interest rate risk is monitored through the use of simulation modeling
techniques, which apply alternative interest rate scenarios to periodic
forecasts of changes in interest rates, projecting the related impact on net
interest income. The use of simulation modeling assists management in its
continuing efforts to achieve earnings growth in varying interest rate
environments.

Key assumptions in the model include anticipated prepayments on mortgage-related
instruments, contractual cash flows and maturities of all financial instruments,
deposit sensitivity and changes in interest rates.

These assumptions are inherently uncertain, and as a result, these models cannot
precisely estimate the effect that higher or lower rate environments will have
on net interest income. Actual results may differ from simulated projections due
to the timing, magnitude or frequency of interest rate changes, as well as
changes in management's strategies.

Based on the results of the most recent interest simulation model, the
Corporation is interest rate sensitive in either a rates-up or rates-down
environment. If interest rates rose 200 basis points from current rates in an
immediate and parallel shock, net interest income would decrease 2%; if rates
decreased 200 basis points, net interest income would decline by 8.4%.
Accordingly, the Corporation is more asset- sensitive since the interest rate
risk is greater in a falling rate environment.

ITEM 4. CONTROLS AND PROCEDURES

The Corporation's Chief Executive Officer and Chief Financial Officer, with the
assistance of other members of the Corporation's management, have evaluated the
effectiveness of the Corporation's disclosure controls and procedures as of the
end of the period covered by this Quarterly Report on Form 10-Q. Based on such
evaluation, the Corporation's


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<PAGE>

Chief Executive Officer and Chief Financial Officer have concluded that the
Corporation's disclosure controls and procedures are effective.

The Corporation's Chief Executive Officer and Chief Financial Officer have also
concluded that there have not been any changes in the Corporation's internal
control over financial reporting that has a materially affected, or is
reasonably likely to materially affect, the Corporation's internal control over
financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, the Corporation or its subsidiary may, from
time to time, be party to various legal proceedings relating to the conduct of
its business. In the opinion of management, the consolidated financial
statements will not be materially affected by the outcome of any pending legal
proceedings.

ITEM 1A. RISK FACTORS

For a summary of risk factors relevant to the corporation and its subsidiary's
operations, please refer to Part I, Item 1a in the Corporation's December 31,
2005 Annual Report to Stockholders. There have been no material changes in the
risk factors since December 31, 2005.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     (3)(a)    The Corporation's Restated Articles of Incorporation
               (incorporated herein by reference to Exhibit (3)(d) of the
               Corporation's Current Report on Form 8-K dated July 28, 1992).

     (3)(b)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's Non-cumulative Perpetual Preferred
               Stock, Series A (incorporated herein by reference to Exhibit
               (3)(b) of the Corporation's Annual Report on Form 10-K for the
               year ended December 31, 1995).

     (3)(c)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's Non-cumulative Perpetual Preferred
               Stock, Series B (incorporated herein by reference to Exhibit
               (3)(c) of the Corporation's Annual Report on Form 10-K for the
               year ended December 31, 1995).

     (3)(d)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's Non-cumulative Perpetual Preferred
               Stock, Series C (incorporated herein by reference to Exhibit
               (3(i) to the Corporation's Annual Report on Form 10-K for the
               year ended December 31, 1996).

     (3)(e)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's Non-cumulative Perpetual Preferred
               Stock, Series D (incorporated herein by reference to Exhibit
               filed with the Corporation's Annual Report on Form 10-K dated
               July 10, 1997).

     (3)(f)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's Non-cumulative Perpetual Preferred
               Stock, Series E (incorporated herein by reference to the
               Corporation's current report on Form 8-K filed on March 4, 2005).

     (3)(g)    Amendments to the Corporation's Articles of Incorporation
               establishing the Corporation's MultiMode Series F Non-cumulative
               Redeemable Preferred Stock (incorporated herein by reference to
               Exhibit (3)(f) to the Corporation's Quarterly Report on Form 10-Q
               for the quarter ended September 30, 2005).

     (3)(h)    The amendment to the By-Laws of the Corporation (incorporated
               herein by reference to Exhibit (3)(c) of the Corporation's Annual
               Report on Form 10-K for the year ended December 31, 1991).

     (3)(i)    The By-Laws of the Corporation (incorporated herein by reference
               to Exhibit (3)(b) of the Corporation's Annual Report on Form 10-K
               for the year ended December 31, 1988).

     (4)(a)    The Debenture Agreements between the Corporation and its
               Noteholders (incorporated herein by reference to Exhibit (4)(a)
               of the Corporation's Annual Report on Form 10-K for the year
               ended December 31, 1993).


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<PAGE>

     (4)(b)    Note Agreement dated December 28, 1995 by and between the
               Corporation and the Prudential Foundation (incorporated herein by
               reference to Exhibit (4)(b) to the Corporation's Annual Report on
               Form 10-K for the year ended December 31, 1995).

     (4)(c)    Indenture dated July 11, 2002 between the Corporation and
               Wilmington Trust Company (incorporated herein by reference to
               Exhibit (4)(c) to the Corporation's Quarterly Report on Form 10-Q
               for the quarter ended June 30, 2002).

     (10)(a)   The Employees' Profit Sharing Plan of City National Bank of New
               Jersey (incorporated herein by reference to Exhibit (10) of the
               Corporation's Annual Report on Form 10-K for the year ended
               December 31, 1988).

     (10)(b)   The Employment Agreement among the Corporation, the Bank and
               Louis E. Prezeau dated May 5, 2003 (incorporated herein by
               reference to Exhibit (10)(b) to the Corporation's Quarterly
               Report on Form 10-K for the year ended December 31, 2003).

     (10)(c)   Lease and option Agreement dated May 6, 1995 by and between the
               RTC and City National Bank of New Jersey (incorporated herein by
               reference to Exhibit (10)(d) to the Corporation's Annual Report
               on Form 10-K for the year ended December 31, 1995).

     (10)(d)   Amended and Restated Asset Purchase and Sale Agreement between
               the Bank and Carver Federal Savings Bank dated as of February 27,
               2001 (incorporated by reference to Exhibit 10(d) to the
               Corporation's Annual Report on Form 10-K for the year ended
               December 31, 2000).

     (10)(e)   Secured Promissory Note of the Corporation dated December 28,
               2001 payable to National Community Investment Fund in the
               principal amount of $1,000,000, (incorporated by reference to
               Exhibit 10(e) to the Corporation's Annual Report on Form 10-K for
               the year ended December 31, 2001).

     (10)(f)   Loan Agreement dated December 28, 2001 by and between the
               Corporation and National Community Investment Fund (incorporated
               by reference to Exhibit 10(f) to the Corporation's Annual Report
               on Form 10-K for the year ended December 31, 2001).

     (10)(g)   Pledge Agreement dated December 28, 2001 by and between the
               Corporation and National Community Investment Fund (incorporated
               by reference to Exhibit (g) to the Corporation's Annual Report on
               Form 10-K for the year ended December 31, 2001).

     (10)(h)   Asset Purchase and Sale Agreement between City National Bank of
               New Jersey and Carver Federal Savings Bank dated as of January
               26, 1998 (incorporated by reference to Exhibit 10(h) to the
               Corporation's Annual Report on Form 10-K for the year ended
               December 31, 1998).

     (10)(i)   Promissory Note dated May 6, 2002 payable to United Negro College
               Fund, Inc., in the principal amount of $200,000 (incorporated by
               reference to Exhibit 10(i) to the Corporation's Quarterly Report
               on Form 10-Q for quarter ended March 31, 2002).

     (10)(j)   Guarantee Agreement dated July 11, 2002 from the Corporation in
               favor of Wilmington Trust Company, as trustee for holders of
               securities issued by City National Bank of New Jersey Capital
               Trust I (incorporated by reference to Exhibit 10(j) to the
               Corporation's Quarterly Report on Form 10-Q for the quarter ended
               June 30, 2002).

     (10(k)    Amended and Restated Declaration of Trust of City national Bank
               of New Jersey Capital Trust I, dated July 11, 2002 (incorporated
               by reference to Exhibit 10(k) to the Corporation's Quarterly
               Report on Form 10-Q for the quarter ended June 30, 2002).

     (10)(l)   Purchase and Assumption Agreement dated as of March 31, 2004, by
               and among The Prudential Savings Bank, F.S.B., The Prudential
               Bank and Trust Company and City National Bank of New Jersey
               (incorporated herein by reference to Exhibit 10(l) to the
               Corporation's Quarterly Report on Form 10-Q for the quarter ended
               March 31, 2004).


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<PAGE>

     (10)(m)   Guarantee Agreement dated March 17, 2004 from the Corporation in
               favor of U.S. Bank, N.A., as trustee for holders of securities
               issued by City National Bank of New Jersey Capital Statutory
               Trust II (incorporated herein by reference to Exhibit (10)(m) to
               the Corporation's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 2004).

     (10)(n)   Purchase Agreement dated September 27, 2005 by and between
               Sandler O'Neil & Partners, L.P., and the Corporation with respect
               to issue and sale of 7,000 shares of the Corporation's MultiMode
               Series F Non-cumulative Redeemable Preferred Stock (incorporated
               herein by reference to Exhibit (10)(n) to the Corporation's
               Quarterly Report on Form 10-Q for the quarter ended September 30,
               2005).

     (11)      Statement regarding computation of per share earnings. The
               required information is included on page 6.

     (31)      Certification of Principal Executive Officer (302).

     (32)      Certifications of periodic Report (906).

(c)  Reports on Form 8-K.

     No reports on Form 8-K were filed during the quarter ended March 31, 2006.

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)

May 10, 2006                            /s/ Edward R. Wright
                                        ----------------------------------------
                                        Edward R. Wright
                                        Senior Vice President and Chief
                                        Financial Officer (Principal Financial
                                        and Accounting Officer)


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