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, 1999
         [   ] 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 May 13, 1999 was approximately $1,416,775.

There were 118,221 shares of common stock outstanding at May 13, 1999.

<PAGE>
                                       1

Index                                                                       Page

Part I.  Financial Information

Item 1.  Financial Statements

         Consolidated Balance Sheet as of March 31, 1999 and
         December 31, 1998 ....................................................3

         Consolidated Statement of Income for the Three Months Ended
         March 31, 1999 and  1998..............................................4

         Consolidated Statement of Changes in Stockholders' Equity for the Three
         Months Ended March 31, 1999 and 1998..................................5

         Consolidated Statement of Cash Flows for the Three Months Ended
         March 31, 1999 and 1998...............................................6

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

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

Part II. Other Information

Item 1. Legal proceedings.....................................................15

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

Signatures ...................................................................17

<PAGE>
                                       2
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY
Consolidated Balance Sheet (Unaudited)
                                                          March 31, December 31,
Dollars in thousands, except per share data                 1998         1998
================================================================================
Assets
Cash and due from banks ..................................   $  2,748   $ 20,467
Federal funds sold .......................................     11,300      1,500
Interest bearing deposits with banks .....................         86         25
Investment securities available for sale .................     36,673     32,254
Investment securities held to maturity (Market
  value of $28,257 at March 31, 1999 and $31,580
  at March 31,1998 ) .....................................     28,669     31,712
Loans held for sale ......................................      1,191      2,026
Loans ....................................................     71,419     71,440
Less: Reserve for possible loan losses ...................      1,075      1,415
                                                             --------   --------
Net loans ................................................     70,344     70,025
                                                             --------   --------
Premises and equipment ...................................      3,237      3,308
Accrued interest receivable ..............................      1,196      1,110
Other real estate owned ..................................        531        590
Other assets .............................................      2,101      1,884
                                                             --------   --------
Total assets .............................................   $158,076   $164,901
                                                             ========   ========
Liabilities and Stockholders' Equity
Deposits:
  Demand .................................................   $ 22,136   $ 16,919
  Savings ................................................     48,275     57,523
  Time ...................................................     55,226     63,501
                                                             --------   --------
Total deposits ...........................................    125,637    137,943
Short-term borrowings ....................................      5,072         18
Accrued expenses and other liabilities ...................      1,623      1,068
Long-term debt ...........................................     15,749     15,749
                                                             --------   --------
Total liabilities ........................................    148,081    154,778
Commitments and contingencies
Stockholders' equity
  Preferred stock, no par value:
    Authorized 100,000 shares;
    Series A , issued and outstanding
      8 shares in 1999 and 1998 ..........................        200        200
    Series B , issued and outstanding
      20 shares in 1999 and 1998 .........................        500        500
    Series C , issued and outstanding
      108 shares in 1999 and 1998 ........................         27         27
    Series D , issued and outstanding
      3,280 shares in 1999 and 1998 ......................        820        820
  Common stock, par value $10: Authorized
    400,000 shares;
    118,780 shares issued in 1999 and 1998
    118,221 shares outstanding in 1999 and 1998 ..........      1,188      1,188
  Surplus ................................................        938        938
  Retained earnings ......................................      6,428      6,442
  Less:
    Accumulated other comprehensive (loss) income,
      net of tax .........................................        (89)        25
    Treasury stock, at cost - 559 shares in 1999 and 1998          17         17
                                                             --------   --------
Total stockholders' equity ...............................      9,995     10,123
                                                             --------   --------
Total liabilities and stockholders' equity ...............   $158,076   $164,901
                                                             ========   ========
See accompanying notes to consolidated financial statements.
<PAGE>
                                       3

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

Consolidated Statement of Income (Unaudited)
                                                    Three months ended March 31,
Dollars in thousands, except per share data                  1999          1998
================================================================================
Interest income
Interest and fees on loans ...........................     $  1,512     $  1,281
Interest on Federal funds sold and securities
  purchased under agreements to resell ...............          102          136
Interest on other short-term investments
Interest on deposits with banks ......................            1            1
Interest and dividends on investment securities:
  Taxable ............................................          867          860
  Tax-exempt .........................................           58           53
                                                           --------     --------
Total interest income ................................        2,540        2,331
                                                           --------     --------
Interest expense
Interest on deposits .................................          914        1,000
Interest on short-term borrowings ....................           33           42
Interest on long-term debt ...........................          219           55
                                                           --------     --------
Total interest expense ...............................        1,166        1,097
                                                           --------     --------
Net interest income ..................................        1,374        1,234
Provision for possible loan losses ...................           43           38
                                                           --------     --------
Net interest income after provision
  for possible loan losses ...........................        1,331        1,196
                                                          --------     --------
Other operating income
Service charges on deposit accounts ..................          127          149
Other income .........................................          271          187
Net gain on sales of investment
  securities available for sale ......................           15            8
                                                           --------     --------
Total other operating income .........................          413          344
                                                           --------     --------
Other operating expenses
Salaries and other employee benefits .................          673          644
Occupancy expense ....................................          102           80
Equipment expense ....................................          100           88
Other expenses .......................................          404          326
                                                           --------     --------
Total other operating expenses .......................        1,279        1,138
                                                           --------     --------
Income before income tax expense .....................          465          402
Income tax expense ...................................          159          136
                                                           --------     --------
Net income ...........................................     $    306     $    266
                                                           ========     ========
Net income per share
Basic ................................................     $   1.68     $   1.64
Diluted ..............................................         1.53         1.46
                                                           ========     ========
Basic average common shares outstanding ..............      118,221      114,141
Diluted average common shares outstanding ............      132,071      127,991
                                                           ========     ========

See accompanying notes to consolidated financial statements.
<PAGE>
                                       4
<TABLE>
<CAPTION>
CITY NATIONAL BANCSHARES CORPORATION
 AND SUBSIDIARY

Consolidated Statement of Changes
in Stockholders' Equity (Unaudited)
                                                                                                Accumulated
                                                                                                   Other
                                                   Common               Preferred    Retained   Comprehensive  Treasury
Dollars in thousands, except per share data         Stock    Surplus      Stock      Earnings   Income (Loss)    Stock       Total
====================================================================================================================================
<S>                                                <C>         <C>         <C>         <C>         <C>          <C>         <C>    
Balance, December 31, 1997 ...................     $ 1,150     $   901     $ 1,547     $ 6,497     $   (38)     $   (25)    $10,032
Comprehensive income:
Net income ...................................        --          --          --           266        --           --           266
Unrealized gain on securities
  available for sale, net of tax .............        --          --          --          --            50         --            50
                                                                                                                            -------
  Total comprehensive income,
    net of tax ...............................        --          --          --          --          --           --           316
Dividends paid on preferred stock ............        --          --          --           (82)       --           --           (82)
Dividends paid on common stock ...............        --          --          --          (199)       --           --          (199)
                                                   -------     -------     -------     -------     -------      -------     ------- 
Balance, March 31, 1998 ......................     $ 1,150     $   901     $ 1,547     $ 6,482     $    12      $   (25)    $10,067
                                                   =======     =======     =======     =======     =======      =======     =======
Balance, December 31, 1998 ...................     $ 1,188     $   938     $ 1,547     $ 6,442     $    25      $   (17)    $10,123
Comprehensive income:
Net income ...................................        --          --          --           306        --           --           306
Unrealized loss on securities
  available for sale, net of tax .............        --          --          --          --          (114)        --          (114)
                                                                                                                            -------
  Total comprehensive income,
    net of tax ...............................        --          --          --          --          --           --           192
Dividends paid on preferred stock ............        --          --          --          (107)       --           --          (107)
Dividends paid on common stock ...............        --          --          --          (213)       --           --          (213)
                                                   -------     -------     -------     -------     -------      -------     ------- 
Balance, March 31, 1999 ......................     $ 1,188     $   938     $ 1,547     $ 6,428     $   (89)     $   (17)    $ 9,995
                                                   =======     =======     =======     =======     =======      =======     =======
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
                                       5

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

Consolidated Statement of Cash Flows (Unaudited)
                                                             Three Months Ended,
                                                                 March 31
                                                          ----------------------
In thousands                                                    1999       1998
================================================================================
Operating activities
Net income ...............................................    $   306   $   266
Adjustments to reconcile net income to net
  cash from operating activities:
  Depreciation and amortization ..........................         98        86
  Provision for possible loan losses .....................         43        38
  Premium amortization (discount accretion)
    on investment securities .............................         26       (43)
  Net gains on sales and early redemptions of
    investment securities ................................        (15)       (8)
  Gains on loans held for sale ...........................        (21)      --
Loans originated for sale ................................        --       (353)
Proceeds from sales and principal payments
  from loans held for sale ...............................        592       --
(Increase) decrease in accrued interest receivable .......        (86)      106
Deferred income tax expense (benefit) ....................         19       (28)
Increase in other assets .................................       (217)     (287)
Increase  in accrued expenses and other liabilities ......        609       553
                                                              --------  --------
Net cash provided by operating activities ................      1,354       330
                                                              --------  --------
Investing activities
Increase in loans, net ...................................        (98)     (433)
Increase in interest bearing deposits with banks .........        (61)       (8)
Proceeds from maturities of investment securities
  available for sale, including sales, principal
  repayments and early redemptions .......................      2,857     3,088
Proceeds from maturities of investment securities
  held to maturity, including sales, principal
  repayments and early redemptions .......................      5,867     6,102
Purchases of investment securities available for sale ....     (7,469)   (1,678)
Purchases of investment securities held to maturity ......     (2,829)   (4,500)
Decrease in other real estate owned, net .................         59        49
Purchases of premises and equipment ......................        (27)      (78)
                                                              --------  --------
Net cash (used in) provided by  investing activities .....     (1,701)     2,542
                                                              --------  --------
Financing activities
Decrease in deposits .....................................    (12,306)   (5,799)
Increase in short-term borrowings ........................      5,054     1,787
Dividends paid on preferred stock ........................       (107)      (82)
Dividends paid on common stock ...........................       (213)     (199)
                                                              --------  --------
Net cash used in financing activities ....................     (7,572)   (4,293)
                                                              --------  --------
Net decrease in cash and cash equivalents ................     (7,919)   (1,421)
Cash and cash equivalents at beginning of period .........     21,967    13,260
                                                              --------  --------
Cash and cash equivalents at end of period ...............    $14,048   $11,839
                                                              ========  ========
Cash paid during the year:
Interest .................................................    $ 1,251   $   983
Income taxes .............................................         10       --

See accompanying notes to consolidated financial statements.
<PAGE>
                                       6

CITY NATIONAL BANCSHARES CORPORATION
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 significant  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  generally  accepted  accounting   principles  for  interim
financial information.  Accordingly, they do not include all the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring  accruals)  considered  necessary for a fair presentation of
the financial  statements  have been included.  Operating  results for the three
months ended March 31, 1999 are not  necessarily  indicative of the results that
may be expected for the year ended December 31,1999.

3. Net income per common share

Basic  income  per common  share is  calculated  by  dividing  net  income  less
dividends  paid 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.

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

Results of operations

Net  income  rose 15% in the  first  quarter  of 1999 to  $306,000  compared  to
$266,000  for the similar  1998  period.  Related  earnings per share on diluted
basis  increased  to $1.53 from $1.46.  Higher net interest  income,  which rose
11.4%,  along with a 20%  increase  in  non-interest  income,  were the  primary
reasons for the improved earnings.

Total assets  declined from $164.9  million at the end of 1998 to $158.1 million
at  the  end  of  the  1999  first  quarter,  reflecting  the  withdrawal  of  a
nonrecurring  $15.9  million  municipal  deposit  received  at the end of  1998.
Average  total assets rose 13.7% for the first  quarter of 1999  compared to the
1998 first quarter,  to $154.8 million from $136.2  million,  reflecting  higher
loan volume and increased Federal Home Loan Bank advances.

Net interest income

In the first quarter of 1999, net interest income on a tax equivalent basis rose
11.3% from the same 1998  period,  while the related net  interest  margins were
3.88%  compared  to 4.02%,  representing  a  decrease  of 14 basis  points.  The
increased income resulted from higher levels of earning assets,  while the lower
interest  margin was due to the  continued  pressures  from a low interest  rate
environment.

Interest  income on a tax equivalent  basis rose 9% in the first quarter of 1999
compared to the first quarter of 1998 due to the additional  earnings  generated
from the purchase of $15.6 million of loans at the end of 1998. Interest expense
rose 6.3%  between the same  periods due to higher  interest  bearing  liability
levels. The average rate paid fell 25 basis points,  from 4.11% to 3.86%, due to
a lower cost of retail deposits.
<PAGE>
                                       7

Provision and reserve for possible loan losses

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

                                                Ended March 31,
                                    ----------------------------------------
(Dollars in thousands)                     1999                1998
----------------------------------------------------------------------------
Balance at beginning of period ...................         $1,415         $  825
Provision for possible loan losses ...............             43             38
Recoveries of previous charge-offs................             18             46
                                                           ------         ------
                                                            1,476            909
Less: Charge-offs                                             401             84
                                                           ------         ------
Balance at end of period .........................         $1,075         $  825
                                                           ======         ======

Management  believes that the reserve for possible loan losses is adequate based
on an  ongoing  evaluation  of the  loan  portfolio.  This  evaluation  includes
consideration  of past  loan loss  experience,  the  level  and  composition  of
nonperforming  loans,  collateral  adequacy,  and general  economic  conditions,
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.

                                                March 31, December 31, March 31,
(Dollars in thousands)                            1999       1998          1998
--------------------------------------------------------------------------------
Reserve for possible loan losses as a percentage of:

Total loans ................................       1.51%       1.98%       1.32%

Total nonperforming loans ..................      74.76%      78.51%      62.31%

Total nonperforming assets
  (nonperforming loans and OREO) ...........      46.51%      53.78%      41.52%

Net charge-offs as a percentage
  of average loans (year-to-date) ..........        .53%       0.72%       0.02%

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.
Nonaccrual loans include loans where principal or 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.
<PAGE>
                                       8


                                       March 31,     December 31,      March 31,
(Dollars in thousands)                    1999           1998             1998
--------------------------------------------------------------------------------

Nonaccrual loans
Commercial .....................          $  787          $1,148          $  827
Installment ....................               2               1              11
Real estate ....................             302             306             186
                                          ------          ------          ------
Total ..........................           1,091           1,455           1,024
                                          ------          ------          ------
Loans past due 90 days
  or more and still accruing
Commercial .....................            --              --                --
Installment
                                               3            --                --
Real estate ....................             344             341             300
                                          ------          ------          ------
Total ..........................             347             341             300
                                          ------          ------          ------
Total nonperforming loans ......           1,438           1,796           1,324
                                          ------          ------          ------
Troubled debt restructurings ...           1,261           1,261           1,261
                                          ------          ------          ------
Total loans and troubled
  debt restructurings ..........          $2,699          $3,057          $2,585
                                          ======          ======          ======

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 and in fact CNB is liable to the defendants for
amounts  due as a  result  of  these  errors  and for  damages  incurred  by the
defendants  as  a  result  of  CNB's  collection  efforts.  The  amount  of  the
defendants'  counterclaim  has not been  quantified.  This  litigation is in the
midst of discovery.  The likelihood of CNB's success in this  litigation and its
ability to recover any amount for which it obtains  judgment is  uncertain.  CNB
has filed appropriate proofs of loss under various insurance policies, including
CNB's  fidelity  bond.  It is also too early to  determine  the  amount CNB will
ultimately recover, if any, under these insurance policies.

Based on an evaluation of the information currently available, the Bank provided
an $805,000  addition to the reserve for possible loan losses in 1998.  $405,000
was charged off during the fourth  quarter of 1998 and the remaining  balance of
$400,000 was  charged-off in the first quarter of 1999, and represented the only
impaired  loan in 1999.  The average  balance of impaired  loans during 1999 was
$396,000.

Troubled  debt  restructurings  includes  two loans to one  commercial  borrower
totaling $1.3 million. A $1 million  construction loan was originated in August,
1996 and subsequently  increased by $200,000.  Payments remained current through
June,  1997 when  construction  was  completed  and the loan was  converted to a
permanent commercial  mortgage,  at which time principal paydowns were scheduled
to commence.

Prior to  becoming  90 days past due,  the  terms of the loan were  modified  to
continue interest only payments for a specified period of time, during which the
loan performed in accordance  with the modified terms. In October 1998, the loan
terms were again modified to extend the amortization  period from five to thirty
years and reduce the maturity from July 1, 2003 to July 1, 1999.
<PAGE>
                                       9

While payments are being made for the revised amount, they are consistently paid
subsequent to their due date. The loan is secured by a leasehold mortgage on the
financed property and the borrower's  principals have provided joint and several
personal guarantees.

In  addition,  a $100,000  working  capital  loan drawn down under a credit line
secured by receivables was originated in July,  1997. No principal  amortization
is currently required. While the working capital loan is currently performing in
accordance with its original terms, at March 31, 1999, the interest  payment was
thirty days past due.

Nonperforming  assets are generally  secured by residential and small commercial
real estate.  It is the Bank's  intent to dispose of all other real estate owned
("OREO")  properties  at the earliest  possible  date at or near current  market
value.

At March  31,  1999,  there  were no  commitments  to lend  additional  funds to
borrowers for loans that were on nonaccrual or contractually  past due in excess
of 90 days and still accruing  interest,  or to borrowers  whose loans have been
restructured.

Other operating income

Other  operating  income,   including  the  results  of  investment   securities
transactions,  rose 20% during the three months ended March 31, 1999 compared to
the similar 1998 quarter,  due primarily to the receipt of $51,000 from the U.S.
Department  of the  Treasury,  under its Bank  Enterprise  Award  Program.  This
program  provides  financial  incentives  to banks  making  qualifying  loans in
distressed communities.

Other operating expenses

Other operating  expenses rose 12.4% for the first quarter of 1999 to $1,279,000
from  $1,138,000  in the first quarter of 1998,  with the increase  attributable
primarily to the costs of operating a new branch opened during May,  1998.  Also
contributing to the increased costs were litigation costs related to an impaired
loan and to higher expenses related to foreclosed properties.

Income tax expense

Income tax expense as a percentage of pretax income increased slightly, to 34.2%
from 33.8% for the first quarter of 1999 compared to the first quarter of 1998.

Investment securities

Investment  securities  rose to $65.3 million at March 31, 1999 from $64 million
at the end of 1998.  Most of this  increase  occurred in the  available for sale
("AFS")  portfolio to provide  greater  flexibility  in  responding  to changing
interest rate conditions.  Net gross unrealized losses in the AFS portfolio rose
to  $188,000 at March 31,  1999 from a net gross  unrealized  gain of $40,000 at
1998  year-end  due to the effects of an increase in interest  rates  during the
first quarter of 1999.

The held to maturity ("HTM")  portfolio  carried net gross unrealized  losses of
$412,000 at March 31, 1999  compared to  $133,000  at December  31,  1998.  This
increase  was  also  due to the  higher  interest  rate  environment  and  had a
particularly  negative impact on the Bank's $17.1 million  portfolio of callable
agency  bonds,  which had net gross  unrealized  losses of $319,000  compared to
$62,000 at the end of 1998. 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 by the issuer.
<PAGE>
                                       10

Management  believes  that  holding  the  callable  securities  will  not have a
significant   impact  upon  the   financial   condition  or  operations  of  the
Corporation.

Loans

Loans were relatively unchanged at March 31, 1999 compared to December 31, 1998,
while loans held for sale  declined from $2 million at December 31, 1998 to $1.2
million at March 31, 1999,  reflecting an increase in loan sales during the 1998
first  quarter,  compared to the first  three  months of 1998 when no loans were
sold.  There were no loans  originated  for sale  during the 1999 first  quarter
compared to $353,000 for the similar 1998 period.

Deposits

Total deposits  declined to $125.6 million at March 31, 1999 from $137.9 million
at the end of 1998,  while average  deposits rose 6%, to $124.9  million for the
first  quarter  of 1999  from  $117.8  million  for the first  quarter  of 1998.
Year-end 1998 included a $15.9 million  nonrecurring  municipal savings deposit,
which was withdrawn shortly after year-end.

Average  savings  deposits rose for the first quarter of 1999 by 44.4% primarily
due to higher municipal Super NOW account balances.

Time deposits  averaged $59.1 million for the first quarter of 1999,  19.1% less
than during the first quarter of 1998,  reflecting  management's decision during
1998 to reduce the Bank's dependency on expensive short-term, volatile municipal
time deposits with Federal Home Loan Bank advances.

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,
tend to  have  high  balance  relationships  and  comprised  most of the  Bank's
accounts with balances of $100,000 or more at March 31, 1999. These accounts are
used  for  operating  and  short-term  investment  purposes.  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

While total short-term borrowings increased from $18,000 at December 31, 1998 to
$5.1 million at the end of the 1999 first quarter,  the related average balances
were $3 million for the first  quarter of 1999  compared to $3.2 million for the
1998  first  quarter,  reflecting  a slight  reduction.  These  borrowings  were
comprised  of U.S.  Treasury  tax and loan  note  option  balances  which  maybe
withdrawn at any time.

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.
<PAGE>
                                       11

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.

The major  contribution  during  the first  nine  months of 1999 from  operating
activities  to the  Corporation's  liquidity  came from  proceeds from sales and
principal  payments of loans held for sale,  while an  increase in other  assets
represented the highest use of cash.

Net cash used in investing  activities  was primarily the result of the purchase
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  held to
maturity.

The primary source of funds from financing  activities resulted from an increase
in short-term borrowings,  while the highest use of cash in financing activities
resulted from a decrease in deposits.

Interest rate sensitivity

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

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

One measure of interest rate risk is the  interest-sensitivity  analysis,  which
details the repricing  differences for assets and liabilities for given periods.
The primary  limitation  of this  analysis is that it is a static (i.e,  as of a
specific  point in time)  measurement  which does not  capture  risk that varies
nonproportionally  with changes in interest rates.  Because of this  limitation,
the  Corporation  uses a  simulation  model as its primary  method of  measuring
interest rate risk.  This model,  because of its dynamic  nature,  forecasts the
effects of different  patterns of rate  movement and variances in the effects of
rate  changes  on  the  Corporations'  mix  of  interest-sensitive   assets  and
liabilities.

At March 31,1999,  the  Corporation  had a cumulative  one-year  static gap of a
negative $15.5 million,  representing 9.84% of total assets. Utilizing a dynamic
simulation  model,  management  believes  that this amount would not result in a
significant  change in net interest income should interest rates rise or fall up
to 200 basis points, which is the maximum change that management uses to measure
the Corporation's exposure to interest rate risk.
<PAGE>
                                       12

Capital

Stockholders'  equity  amounted to  approximately  $10 million at March 31, 1999
compared to $10.1  million at December 31, 1998.  This slight  decline  resulted
from the dividends paid in the first quarter of 1999. The  Corporation  pays its
dividends annually rather than quarterly.  Stockholders'  equity as a percentage
of total assets was 6.32% at March 31,  1999,  compared to 6.14% at December 31,
1998.

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

At March 31, 1999,  the  Corporation's  core capital  (Tier 1) and total (Tier 1
plus Tier 2) risked-based capital ratios were 11.69% and 14.98%, respectively.

Year 2000

Many computer  programs were written using two digits rather than four to define
the applicable year. These programs were written without  considering the impact
of the  upcoming  change in  century  from 1999 to 2000,  and the  programs  may
experience  problems  handling  dates  beyond  1999.  This could cause  computer
applications to fail or create incorrect  information unless corrective measures
are taken.  Incomplete or untimely  resolution of the Year 2000 ("Y2K") issue by
the Bank,  or its major  borrowers  and lenders,  could have a material  adverse
impact on the Bank's business, operations and financial condition.

During  1997,   the   Corporation   established   an  overall  plan  to  address
system-related Y2K issues. The plan calls for either system modifications to, or
replacement of, existing business systems  applications,  including hardware and
equipment.  A majority of the systems are  provided  and  maintained  by outside
vendors with whom management is coordinating the Y2K efforts.  The Bank operates
its deposit,  loan and general ledger systems on one software system licensed to
the Bank through a third party ("primary  software  vendor").  The Bank received
the  software  from  its  primary  software  vendor  and  began  testing  during
September,  1998 to verify the vendor's  representation that the software is Y2K
compliant.  The testing for the deposit, loan and general ledger systems,  which
are the primary functions of this software,  has been completed as of the end of
1998. Additional Y2K software systems have been purchased from other vendors and
the Bank has substantially completed testing those systems for Y2K compliance.

All hardware and equipment not considered to be Y2K compliant has been replaced,
or replacements are on order and expected to be in place by July, 1999.

The cost of this Y2K  compliance  program  related  to system  modifications  is
estimated to be $258,000,  most of which represents  capital  expenditures  that
will be funded through  operating cash flows.  At March 31, 1999,  most of these
costs had been incurred or committed to, most of which are capital costs.

The  Corporation  has also initiated  discussions  with third  parties,  such as
vendors,  customers,  governmental  entities,  and others,  to attempt to obtain
assurance that they have appropriate plans to be Y2K compliant.  At December 31,
1998, the Corporation had contacted its major  depositors and borrowers in order
to assess their Y2K  readiness.  Failure of the  Corporation or third parties to
correct Y2K issues could cause  disruption of operations  resulting in increased
operating costs. In addition,  to the extent customers'  financial positions are
weakened as a result of Y2K issues, credit quality could be adversely affected.
<PAGE>
                                       13

The  Corporation  is  preparing  contingency  plans in the  event of Y2K  system
failures,  including the  identification of back-up data processing  vendors and
alternate sources of liquidity.  Additionally,  the Corporation has the services
of a third party to provide  independent  verification and validation of its Y2K
concerns.  However,  since it cannot  predict  whether its vendors and customers
will  be  successful  in  becoming  Y2K  compliant,  it is  developing  detailed
contingency plans to address the potential of a disruption of operations.

The  Corporation  receives  guidance  from the  Federal  Financial  Institutions
Examination  Council  ("FFIEC"),   the  formal  interagency  body  empowered  to
prescribe  uniform  principles,  standards and  examination  procedures  for the
examination of financial  institutions by the federal regulatory  agencies,  and
participates in scheduled federal Y2K examinations, which are being conducted to
assess each financial institution's Y2K efforts.

The  cost  of the  project  and the  expected  completion  dates  are  based  on
management's  best  estimates.  However,  there can be no  guarantee  that these
estimates  will  be  achieved  and  actual  results  could  differ   materially.
Substantially  all of the work under this program,  including testing of mission
critical  systems,  was completed by the end of 1998, with further testing to be
performed during 1999.

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 and that CNB is liable to the  defendants  for
amounts  due as a  result  of  these  errors  and for  damages  incurred  by the
defendants  as  a  result  of  CNB's  collection  efforts.  The  amount  of  the
defendants'  counterclaim  has not been  quantified.  CNB has filed  appropriate
proofs of loss under various insurance policies,  including CNB's fidelity bond.
This litigation is currently in the midst of discovery.  The likelihood of CNB's
success in this  litigation  and its  ability to recover any amount for which it
obtains judgment is uncertain.

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).
<PAGE>
                                       14

(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, 1997  (incorporated by reference to Exhibit 10 to the
     Corporation's  Quarterly Report on Form 10-Q for the quarter ended June 30,
     1997).

(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) Asset  Purchase and Sale  Agreement  between the Bank and Carver Federal
     Savings Bank dated as of January 26, 1998 (incorporated herein by reference
     to Exhibit  10(d) to the  Corporation's  Annual Report on Form 10-K for the
     year ended December 31, 1997).

(10)(e) Group Term Life Insurance Replacement Plan dated January 1, 1997.

(10)(f) Salary Continuation  Agreement dated January 1, 1997 among the Bank, the
     Corporation and Mr. Prezeau.

(10)(g) Salary Continuation  Agreement dated January 1, 1997 among the Bank, the
     Corporation and Mr. Weeks.

(10)(h) Director Retirement  Agreement dated January 1, 1997 among the Bank, the
     Corporation and Douglas E. Anderson.

(11) Statement  regarding  computation  of  per  share  earnings.  The  required
     information is included on page 24.

(13) Annual  Report to security  holders for the fiscal year ended  December 31,
     1998.

(24) Power of Attorney is located on the signature page.

(27) Financial Data Schedule.

(b) No reports on Form 8-K were filed during the quarter ended March 31, 1999.



<PAGE>
                                       15


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 13, 1999               ____________________
                                    Edward R. Wright
                                    Senior Vice President and Chief Financial
                                    Officer (Principal Financial and Accounting
                                    Officer)