<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 September 30, 2001

   [ ]      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: (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 [ ]

The aggregate market value of voting stock held by non-affiliates of the
Registrant as of November 6, 2001 was approximately $1,610,950.

There were 125,216 shares of common stock outstanding at August 1, 2001.
<PAGE>
<TABLE>
<CAPTION>
Index                                                                                                Page
<S>                                                                                                  <C>

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheet as of September 30, 2001 (Unaudited) and December 31, 2000....     3

         Consolidated Statement of Income (Unaudited) for the Nine Months Ended September 30, 2001
         and 2000 and for the Three Months Ended September 30, 2001 and 2000......................     4

         Consolidated Statement of Cash Flows (Unaudited) for the Nine Months Ended
         September 30, 2001 and 2000..............................................................     5

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

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

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...............................    13

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

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

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

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




                                       2
<PAGE>
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                          September 30,    December 31,
Dollars in thousands, except per share data                                                   2001             2000
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>              <C>
ASSETS

Cash and due from banks                                                                    $    6,492       $    8,884
Federal funds sold                                                                             31,100           26,700
Interest bearing deposits with banks                                                            3,654              153
Investment securities available for sale                                                       35,094           33,852
Investment securities held to maturity (Market value of $31,702
       at September 30, 2001 and $31,686 at December 31, 2000)                                 31,125           32,078
Loans held for sale                                                                                --              148
Loans                                                                                         102,903           90,653
Less: Reserve for loan losses                                                                   1,425            1,200
----------------------------------------------------------------------------------------------------------------------
Net loans                                                                                     101,478           89,453
----------------------------------------------------------------------------------------------------------------------

Premises and equipment                                                                          4,256            3,471
Accrued interest receivable                                                                     1,515            1,410
Other real estate owned                                                                           359              621
Other assets                                                                                    4,871            3,672
----------------------------------------------------------------------------------------------------------------------

TOTAL ASSETS                                                                               $  219,944       $  200,442
======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
   Demand                                                                                  $   72,786       $   54,789
   Savings                                                                                     68,603           53,521
   Time                                                                                        53,108           67,859
----------------------------------------------------------------------------------------------------------------------
Total deposits                                                                                194,497          176,169
Short-term borrowings                                                                              --               46
Accrued expenses and other liabilities                                                          1,988            1,567
Long-term debt                                                                                 12,279           12,425
----------------------------------------------------------------------------------------------------------------------

Total liabilities                                                                             208,764          190,207

Commitments and contingencies

Stockholders' equity
   Preferred stock, no par value: Authorized 100,000 shares;
      Series A, issued and outstanding, 8 shares in 2001 and 2000                                 200              200
      Series C, issued and outstanding, 108 shares in 2001 and 2000                                27               27
      Series D, issued and outstanding, 3,280 shares in 2001 and 2000                             820              820
   Common stock, par value $10: Authorized 400,000 shares;
      122,030 shares issued in 2001 and 2000,
      125,216 shares outstanding in 2001, and 121,406 shares outstanding in 2000                1,260            1,220
   Surplus                                                                                        999              968
   Retained earnings                                                                            7,877            7,292
   Accumulated other comprehensive (loss)                                                          19             (273)
   Treasury stock, at cost - 764 shares in 2001 and 624 shares in 2000, respectively              (22)             (19)
----------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                                     11,180           10,235
----------------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 $  219,944       $  200,442
======================================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED             NINE MONTHS ENDED
Consolidated Statement of Income (Unaudited)                SEPTEMBER 30,                  SEPTEMBER 30,
                                                       -----------------------       -----------------------

Dollars in thousands, except per share data              2001           2000           2001           2000
------------------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>            <C>

INTEREST INCOME
Interest and fees on loans                             $  1,960       $  1,919       $  5,918       $  5,471
Interest on Federal funds sold and securities
   purchased under agreements to resell                     207             94            676            410
Interest on other short-term investments                     33              2             56             39
Interest and dividends on investment securities:
   Taxable                                                  929            979          2,837          3,012
   Tax-exempt                                               105             93            284            267
------------------------------------------------------------------------------------------------------------
Total interest income                                     3,234          3,087          9,771          9,199
------------------------------------------------------------------------------------------------------------

INTEREST EXPENSE
Interest on deposits                                      1,109          1,340          3,566          4,072
Interest on short-term borrowings                            10             42             31            177
Interest on long-term debt                                  172            164            524            517
------------------------------------------------------------------------------------------------------------
Total interest expense                                    1,291          1,546          4,121          4,766
------------------------------------------------------------------------------------------------------------

Net interest income                                       1,943          1,541          5,650          4,433
Provision for loan losses                                    66            130            201            479
------------------------------------------------------------------------------------------------------------
Net interest income after provision
   for loan losses                                        1,877          1,411          5,449          3,954
------------------------------------------------------------------------------------------------------------

OTHER OPERATING INCOME
Service charges on deposit accounts                         252            211            655            514
Other income                                                167            106            579            543
Net gain on sales of investment securities
   available for sale                                         5              8              8              3
------------------------------------------------------------------------------------------------------------
Total other operating income                                424            325          1,242          1,060
------------------------------------------------------------------------------------------------------------

OTHER OPERATING EXPENSES
Salaries and other employee benefits                        950            779          2,675          2,291
Occupancy expense                                           151            139            436            360
Equipment expense                                           117            117            353            348
Other expenses                                              685            399          1,803          1,296
------------------------------------------------------------------------------------------------------------
Total other operating expenses                            1,903          1,434          5,267          4,295
------------------------------------------------------------------------------------------------------------


Income before income tax expense                            398            302          1,424            719
Income tax expense                                          139             66            529            157
------------------------------------------------------------------------------------------------------------

NET INCOME                                             $    259       $    236       $    895       $    562
------------------------------------------------------------------------------------------------------------

NET INCOME PER COMMON SHARE

Basic                                                  $   2.06       $   1.94       $   6.75       $   3.93
Diluted                                                    1.94           1.78           6.23           3.62
------------------------------------------------------------------------------------------------------------

Basic average common shares outstanding                 125,216        121,415        122,592        120,766
Diluted average common shares outstanding               133,766        133,915        133,775        133,266
------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.

                                        4
<PAGE>
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                        NINE MONTHS ENDED
                                                                                          SEPTEMBER 30,
                                                                                    ------------------------

IN THOUSANDS                                                                          2001            2000
------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>             <C>

OPERATING ACTIVITIES
Net income                                                                          $    895        $    562
Adjustments to reconcile net income to net cash from operating activities:
    Depreciation and amortization                                                        329             343
    Provision for loan losses                                                            201             479
    Premium amortization on investment securities                                         38              13
    Net gains on sales and early redemptions of investment securities                     (8)             (3)
    Gains on sales of loans held for sale                                                 (3)            (15)
Loans originated for sale                                                                (90)           (437)
Proceeds from sales of loans held for sale                                               241             825
Decrease in accrued interest receivable                                                 (103)           (264)
Deferred income tax benefit (expense)                                                     60            (112)
Increase in other assets                                                              (1,489)           (551)
Increase in accrued expenses and other liabilities                                       421              98
------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                                499             938
------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES

Increase in loans, net                                                               (12,225)         (4,212)
(Increase) decrease in interest bearing deposits with banks                           (3,501)          2,067
Proceeds from maturities of investment securities available for sale,
    including sales, principal payments and calls                                      7,406           6,507
Proceeds from maturities of investment securities held to maturity,
    including principal payments and calls                                             7,874           4,560
Purchases of investment securities available for sale                                 (7,933)         (5,378)
Purchases of investment securities held to maturity                                   (7,148)         (1,977)
Purchases of premises and equipment                                                   (1,114)           (181)
Decrease in other real estate owned, net                                                 262              56
------------------------------------------------------------------------------------------------------------

Net cash (used in) provided by investing activities                                  (16,386)          1,442
------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Purchase of deposits                                                                  16,369           8,339
Increase in deposits                                                                   1,959           4,173
Decrease in short-term borrowings                                                        (46)         (1,842)
Decrease in long-term debt                                                               (75)         (5,500)
Proceeds from issuance of common stock                                                    --              37
Purchase of treasury stock                                                                (3)             (2)
Dividends paid on preferred stock                                                        (67)            (87)
Dividends paid on common stock                                                          (242)           (225)
------------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                                             17,895           4,893
------------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                              2,008           7,273

Cash and cash equivalents at beginning of period                                      35,584          11,609
------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $ 37,592        $ 18,882
============================================================================================================

CASH PAID DURING THE YEAR
Interest                                                                            $  3,918        $  4,611
Income taxes                                                                             616             320

NONCASH INVESTING ACTIVITIES
Transfer from investment securities held to maturity to investment securities
    available for sale, at amortized cost                                                246              --
Conversion of long-term debt into common stock                                            71              --
</TABLE>


See accompanying notes to 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 accounting principles generally accepted in the United States
of America for interim financial information. Accordingly, they do not include
all the information and footnotes required by accounting principles generally
accepted in the United States of America 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, 2000 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 and nine months ended September 30, 2001 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2001.

3. Net income per common share

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

<TABLE>
<CAPTION>
                                              Three Months Ended           Nine Months Ended
                                                 September 30,               September 30,
In thousands, except per share data           2001          2000          2001          2000
----------------------------------------------------------------------------------------------
<S>                                         <C>           <C>           <C>           <C>
Net income                                  $    259      $    236      $    895      $    562
Dividends paid on preferred stock                 --            --            67            87
----------------------------------------------------------------------------------------------
Net income applicable to basic
  common shares                                  259           236           828           475
Interest expense on convertible
  Subordinated debentures, net of
  income taxes                                     2             2             6             8
----------------------------------------------------------------------------------------------
Net income applicable to diluted
 common shares                              $    261      $    238      $    834      $    483
==============================================================================================
NUMBER OF AVERAGE COMMON SHARES
Basic                                        125,216       121,415       122,592       120,766
----------------------------------------------------------------------------------------------
Diluted:
  Average common shares outstanding          125,216       121,415       122,592       120,766
  Average common shares converted from
    convertible subordinate debentures         8,550        12,500        11,183        12,500
----------------------------------------------------------------------------------------------
                                             133,766       133,915       133,775       133,266
==============================================================================================
NET INCOME PER COMMON SHARE
Basic                                       $   2.06      $   1.94      $   6.75      $   3.93
Diluted                                         1.94          1.78          6.23          3.62
</TABLE>

4. Recent accounting pronouncements

In June, 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No
133, "Accounting for Derivative Instruments and Hedging Activities". This
statement, as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities", establishes accounting and
reporting standards for derivative instruments and for hedging activities. SFAS
No. 133 supersedes the disclosure requirements in SFAS No. 80, 105, and 119.
This statement was to be effective for periods after June 15, 1999. SFAS 137
extended the adoption date of SFAS 133 to fiscal years beginning after June 15,
2000. The Corporation adopted the provisions of SFAS 133 on January 1, 2001, at
which time investment securities with a carrying value of $246,000 and a related
market value of $266,000 were transferred from the held to maturity portfolio to
the available for sale portfolio. As a result of the reclassification, the
Corporation recorded other comprehensive income, net of tax of $14,000


                                        6
<PAGE>
cumulative effect of an accounting change.

On July 20, 2001, the Financial Accounting Standards Board issued Statement No.
141, Business Combinations, and Statement No. 142, "Goodwill and Other
Intangible Assets." Statement 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001
as well as all purchase method business combinations completed after June 30,
2001. Statement 141 also specifies the criteria acquired intangible assets must
meet to be recognized and reported apart from goodwill. Statement 142 will
require that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least annually in
accordance with the provisions of Statement 142. Statement 142 will also require
that intangible assets with definite useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

Statement 142 requires that after June 30, 2001, goodwill and any intangible
asset determined to have an indefinite useful life will not be amortized, but
will continue to be evaluated for impairment in accordance with the appropriate
pre-Statement 142 accounting literature. Goodwill and intangible assets acquired
in business combinations completed before July 1, 2001 will continue to be
amortized prior to the adoption of Statement 142.

The Corporation is required to adopt the provisions of Statement of 141
immediately. The initial adoption of Statement 141 had no impact on the
Corporation's consolidated financial statements. The Corporation is required to
adopt Statement 142 effective January 1, 2002. The Corporation currently has no
recorded goodwill and does not anticipate that Statement 142 will significantly
impact the Corporation's accounting for currently recorded intangible assets,
primarily core deposit intangibles.







                                       7
<PAGE>
Item 2


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

During the first quarter of 2001, City National Bancshares Corporation ("CNBC")
was certified by the Department of the Treasury as a Community Development
Financial Institution Corporation, or CDFI. This certification means that the
Treasury Department has formerly recognized CNBC for "having a primary purpose
of promoting community development." Certification as a CDFI will bring certain
financial benefits by providing financial incentives for expanding in lending
and other community development efforts in the urban areas where the Bank's
offices are located. In June, 2001, the Bank acquired a branch office located in
Brooklyn, New York, from a savings bank, assuming $16.4 million in deposits and
also opened a new branch in Newark, New Jersey.

Additionally, during the third quarter of 2001, City National Bank of New Jersey
was advised by the Department of the Treasury that the Bank has qualified for a
$2 million award under the Treasury's Bank Enterprise Award Program. This
program provides financial incentives to banks making qualifying loans and
investments in distressed communities. The award will be received when the Bank
has provided documentation that the required amount of qualifying loans and
investments have been made. The award has not been reflected in the financial
statements and will be recorded when received.

FINANCIAL CONDITION

At September 30, 2001, total assets increased to $219.9 million from $200.4
million at the end of 2000, while total deposits rose to $194.5 million from
$176.2 million, due primarily to the aforementioned branch acquisition. Most of
this deposit growth was used for loan originations, as total loans increased to
$102.9 million at September 30, 2001 from $90.7 million at the end of 2000.

Federal funds sold

Federal funds sold increased to $31.1 million at September 30, 2001 from $26.7
million at the end of 2000, while the related average balances were $21.1
million for the first nine months of 2001 compared to $9 million for the first
nine months of 2000. The increase at the end of September, 2001 resulted from
the deposit proceeds received in the June 2001 branch acquisition, while average
balances rose due to increased commercial account balances.

Interest bearing deposits with banks

Interest bearing deposits with banks rose from $153,000 at December 31, 2000 to
$3.7 million at September 30, 2001, while the related average balance increased
in the first nine months of 2001 to $2 million from $1 million for the similar
2000 period. Both increases resulted from the Bank's participation in a CDFI
investment program.

Investments

The investment securities available for sale ("AFS") portfolio rose slightly to
$35.1 million at September 30, 2001 from $33.9 million at the end of 2000, while
the related net unrealized loss decreased from $273,000, to a gain of $19,000,
reflecting the Bank's transfer of $246,000 of investment securities with a
market value of $266,000 on January 1, 2001, in connection with the Bank's
adoption of SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities", along with the effects of a decline in interest rates. The
investments held to maturity ("HTM") portfolio decreased to $31.1 million at
September 30, 2001 from $32.1 million at the end of 2000 due primarily to
maturities that were not reinvested in the portfolio.

At September 30, 2001, the Bank held callable U.S. government agency notes with
a carrying value of $14.8 million, of which $14.2 million were included in the
HTM portfolio. Gross unrealized depreciation on


                                       8
<PAGE>
the total callable portfolio totalled $125,000 compared to $649,000 at the end
of 2000 due to a reduction in interest rates. Because of their call features,
these bonds tend to reflect depreciation regardless of bond market conditions as
they will earn less than current issues if interest rates rise, whereas if rates
fall, they then may be redeemed at par by the issuer. However, at the time of
purchase, they have a higher coupon rate than similar noncallable securities and
the favorable spreads provide compensation for the interest rate risk inherent
in this investment due to the call feature. The bonds are callable at par, which
approximates carrying value. Management believes that holding the callable
securities will not have a significant impact upon the financial condition or
operations of the Corporation, although reinvestment of proceeds received from
such securities that are redeemed prior to maturity may be reinvested at lower
rates than received on the redeemed securities.

Loans

Loans rose $12.2 million, to $102.9 million at September 30, 2001 from $90.7
million December 31,2000, while average loans increased 12% to $94.1 million for
the first nine months of 2001 from $84 million in the first nine months of 2000.
Most of the increase occurred in the commercial real estate portfolio. There
were no loans held for sale at September 30, 2001 compared to $148,000 at
December 31, 2000.

Provision and reserve for loan losses

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

<TABLE>
<CAPTION>
                                             Three Months               Nine Months
                                          Ended September 30,       Ended September 30,
(Dollars in thousands)                     2001         2000         2001         2000
----------------------------------------------------------------------------------------
<S>                                      <C>          <C>          <C>          <C>
Balance at beginning of period           $  1,400     $    908     $  1,200     $  1,975
Provision for loan losses                      66          130          201          479
Recoveries of previous charge-offs             22           24          152           81
                                         --------     --------     --------     --------
                                            1,488        1,062        1,553        2,535
Less: Charge-offs                              63           20          128        1,493
                                         --------     --------     --------     --------
Balance at end of period                 $  1,425     $  1,042     $  1,425     $  1,042
                                         ========     ========     ========     ========
</TABLE>

Management believes that the reserve for 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, 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>
                                    September 30,   December 31,   September 30,
(Dollars in thousands)                  2001           2000            2000
--------------------------------------------------------------------------------
<S>                                 <C>             <C>            <C>
Reserve for loan
  losses as a percentage of:
Total loans                              1.38%          1.32%           1.22%
Total nonperforming loans              120.56%        171.18%          84.99%
Total nonperforming assets
  (nonperforming loans and OREO)        92.47%         90.77%          55.78%

Net charge-offs as a percentage
  of average loans (year-to-date)         N/A            N/A            1.68%
</TABLE>



                                       9
<PAGE>
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 income when received. The following
table presents the principal amounts of nonperforming loans past due 90 days or
more and accruing.

<TABLE>
<CAPTION>
                                    September 30,   December 31,   September 30,
(Dollars in thousands)                  2001           2000            2000
--------------------------------------------------------------------------------
<S>                                 <C>             <C>            <C>
Nonaccrual loans
Commercial                             $  242         $  131          $  587
Installment                                22             21              21
Real estate                               423            305             279
                                       ------         ------          ------
Total                                  $  687            457             887
                                       ------         ------          ------

Loans past due 90 days
  or more and still accruing
Commercial                                 --             --               7
Installment                                 5             --              17
Real estate                               494            244             315
                                       ------         ------          ------
Total                                     499            244             339
                                       ------         ------          ------
Total nonperforming loans              $1,186         $  701          $1,226
                                       ======         ======          ======
</TABLE>

Total nonperforming loans rose during the first nine months of 2001 due to the
addition of a $200,000 residential loan to loans past due 90 days or more but
still accruing.

There were no impaired loans at September 30, 2001 or December 31, 2000. There
were no impaired loans during the first nine months of 2001 while impaired loans
averaged $651,000 for the first nine months of 2000.

DEPOSITS

Total deposits rose $18.3 million to $194.5 million at September 30, 2001 from
$176.2 million at the end of 2000, while average deposits rose 17.3%, to $173.2
million for the first nine months of 2001 from $147.6 million for the first nine
months of 2000. Total deposits rose because of growth in commercial accounts,
along with the aforementioned branch acquisition in June, 2001. The major source
of the growth in average deposits was from the aforementioned increase in
commercial accounts, along with approximately $10 million of deposits acquired
in connection with the purchase of a branch office in May, 2000.

Total savings deposits increased from $53.5 million at December 31, 2000 to
$68.6 million at September 30, 2001, while average savings deposits for the
first nine months of 2001 rose to $61.8 million from $47.2 million for the first
nine months of 2000. The increase in actual balances resulted primarily from
June, 2001 branch acquisition, while the increase in the average balances
resulted primarily from a branch acquired in May, 2000. Total time deposits
decreased to $53.1 million at the end of September 2001 from $67.9 million at
December 31, 2000, while average time deposits declined to $62.9 million for the
first nine months of 2001 from $73.1 for the first nine months of 2000. The
decreases in time deposits resulted from a planned reduction in municipal
deposit account balances, due to the availability of less expensive funds from
the newly acquired branch.



                                       10
<PAGE>
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 September 30, 2001. 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 decreased from $46,000 at December 31, 2000 to $0 at
September 30, 2001, while the average balances were $1 million for the first
nine months of 2001 compared to $4 million for the first nine months of 2000.
These borrowings are comprised primarily of U.S. Treasury tax and loan note
option balances, which may be withdrawn at any time.

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 September 30, 2001, the Corporation's leverage, core capital (Tier 1) and
total (Tier 1 plus Tier 2) risked-based capital ratios were 4.84%, 8.15% and
10.35%, respectively, while the Bank's ratios were 5.54%, 9.34% and 10.73%.

RESULTS OF OPERATIONS

Net income increased to $259,000 for the third quarter of 2001 from $236,000 for
the same 2000 quarter due primarily to a 26.1% increase in net interest income
offset by higher operating expenses. Related earnings per share on a diluted
basis were $1.94 and $1.78. Net income increased to $895,000 for the first nine
months of 2001 from $562,000 for the similar 2000 period due primarily to
improved net interest income. Related earnings per share on a diluted basis rose
to $6.23 from $3.62.

Income and expense comparisions for the first nine months of 2001 with the
similar period in 2000 were affected by the operation for nine months in 2001 of
the branch acquired in May, 2000.

Net interest income

In the third quarter of 2001, net interest income on a tax equivalent basis rose
20.7% from the same 2000 period, while the related net interest margins were
4.13% compared to 3.76%. The increased income resulted from higher levels of
earning assets, while the higher interest margin was due to the benefits from
the lower interest rate environment.

For the first nine months of 2001, net interest income on a tax equialvent basis
rose 27.5% from the same 2000 period, while the related net interest margins
were 4.25% compared to 3.65%. The increased net interest income and higher net
interest margin resulted from higher levels of earnings assets, primarily from
increased loan volume. A reduction in interest rates during the 2001 first half
also contributed to the


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60 basis point improvement in net interest margin. Because the Corporation is
liability-sensitive to changes in interest rates, the Corporation's cost of
funds declined 76 basis points to 3.17% from 3.93% a year earlier, while the
yield on interest earning assets declined 16 basis points, to 7.42% from 7.58% a
year earlier. In a declining interest rate environment, however, there exists
interest rate risk in the investment portfolio due to the holding of $14.8
million of callable agency securities. Should these securities be called, the
proceeds would be reinvested at lower rates, reducing the overall yield on
interest earning assets.

Interest income on a tax equivalent basis rose 6.9% in the first nine months of
2001 compared to the first nine months of 2000 due to the increased earning
asset levels. Interest expense declined 13.8% between the same periods due
primarily to a reduction in the cost to fund interest earning assets, from 3.93%
to 3.17%.

Other operating income

Other operating income, including the results of investment securities
transactions, rose 30.5% in the third quarter of 2001 compared to the similar
2000 period, while such income increased 17.2% during the nine months ended June
30, 2001 compared to the first nine months of 2000. Higher commercial loan
agency fees was the primary reason for the quarterly increase, while higher
service charges on deposit accounts drove the year-to-date increase.

Other operating expenses

Other operating expenses rose 32.7% for the third quarter of 2001 to $1,903,000
from $1,434,000 in the third quarter of 2000, with the increase attributable
primarily to the costs associated with operating the branch opened in June 2001,
along with higher salaries and benefit expenses. Merit increases, along with
staffing increases resulting from product and the branch expansion, contributed
to the salary increase, while higher health insurance costs was the primary
cause for the increased benefit expense. For the first nine months of 2001,
other operating expenses rose 22.6%, to $5,267,000 from $4,295,000 a year
earlier. This increase occurred for the same reasons that caused the third
quarter increase, as well as the operation of the branch acquired in 2001
compared to nine months in 2000.

Income tax expense

Income tax expense rose in the third quarter of 2001 from the similar 2000
quarter as well as for the first nine months of 2001 for the first nine months
of 2000 due to higher taxable income levels. Income tax expense as a percentage
of pretax income increased in all periods as well as for the same reason,
compared to the same periods of 2000.

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.



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The major contribution during the first nine months of 2001 to the Corporation's
liquidity came from deposits, while the highest use of cash was for loan
originations. Mautrities of investment securities provide secondary sources of
liquidity.

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, if interest
rates increased or decreased 100 basis points from current rates in an immediate
and parallel shock, the effects on earnings and capital are within the
limitations established by the Corporation.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In May of 1998, CNB commenced a lawsuit against an entity that acted as an agent
for CNB in the sale of CNB's money orders, and certain affiliates of such entity
for fraud and other damages. CNB alleges, among other things, that at various
times during its business relationship with the defendants, the defendants
stole, misappropriated, hypothecated or embezzled a sum of approximately
$805,000 from CNB. The defendants have responded alleging CNB records regarding
these transactions are in error. CNB has filed appropriate proofs of loss under
various insurance policies, including CNB's fidelity bond. The likelihood of
CNB's success in this litigation and its ability to recover any amount for which
it obtains judgment is uncertain.

The case has been completed and post-trial submissions, which include findings
of fact, conclusions of law and closing arguments, are being prepared.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits



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      (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 current report on Form
                  10-K dated July 10, 1997).

      (3)(f)      The amended 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).

      (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).

      (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 Company's Annual Report
                  on Form 10-K for the year ended December 31, 1995).

      (10)(a)     The Employee's 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 24, 2000 incorporated herein by
                  reference to Exhibit 10(b) to the Corporation's Quarterly
                  Report on Form 10-Q for the first quarter ended March 31,
                  2001.

      (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).

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

(c)   No reports on Form 8-K were filed during the quarter ending September 30,
      2001.



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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)

November 13, 2001           /s/ Edward R. Wright
                            -------------------------------
                            Edward R. Wright
                            Senior Vice President and Chief Financial
                            Officer (Principal Financial and Accounting Officer)









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