##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 o
    
    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
  New Jersey
    
    22-2434751(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)900 Broad Street, 
Newark, New Jersey
(Address of principal executive offices)
    
    07102
(Zip Code)
    
  þ o
  Large filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ(Do not check if a smaller reporting company)
  o þ




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##### 



Index
    
    PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2010 (Unaudited) and December 31, 2009
    
    
    3Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2010 and 2009
    
    
    4Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2010 and 2009
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Part II Other Information
    
    
    23Item 1. Legal proceedings
    
    
    23Item 6. Exhibits and Reports on Form 8-K
    
    
    23Signatures
    
    
    24EX-31EX-32
  2




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CITY NATIONAL BANCSHARES CORPORATION AND SUBSIDIARY
 
 Consolidated Balance Sheets
 (Unaudited)March 31,
    
    December 31,Dollars in thousands, except per share data
    
    2010
    
    2009AssetsCash and due from banks
    
    $
    8,712
    
    
    $
    6,808Federal funds sold
    
    
    41,100
    
    
    
    5,500Interest bearing deposits with banks
    
    
    607
    
    
    
    609Investment securities available for sale
    
    
    154,194
    
    
    
    122,006Investment securities held to maturity (Market value of $0
at March 31, 2010 and $41,782 at December 31,2009)
    
    
    
    
    
    
    40,395Loans held for sale
    
    
    218
    
    
    
    190Loans
    
    
    267,724
    
    
    
    276,242Less: Allowance for loan losses
    
    
    8,000
    
    
    
    8,650Net loans
    
    
    259,724
    
    
    
    267,592Premises and equipment
    
    
    3,229
    
    
    
    2,949Accrued interest receivable
    
    
    2,415
    
    
    
    2,546Bank-owned life insurance
    
    
    5,585
    
    
    
    5,537Other real estate owned
    
    
    2,352
    
    
    
    2,352Other assets
    
    
    8,617
    
    
    
    9,855Total assets
    
    $
    486,753
    
    
    $
    466,339Liabilities and Stockholders EquityDeposits:Demand
    
    $
    39,168
    
    
    $
    29,304Savings
    
    
    165,729
    
    
    
    149,853Time
    
    
    195,186
    
    
    
    201,119Total deposits
    
    
    400,083
    
    
    
    380,276Accrued expenses and other liabilities
    
    
    7,355
    
    
    
    5,950Short-term portion of long-term debt
    
    
    5,000
    
    
    
    5,000Short-term borrowings
    
    
    870
    
    
    
    100Long-term debt
    
    
    42,000
    
    
    
    44,000Total liabilities
    
    
    455,308
    
    
    
    435,326Commitments and contingenciesStockholders equityPreferred stock, no par value: Authorized 100,000 shares ;Series A , issued and outstanding 8 shares in 2010 and 2009
    
    
    200
    
    
    
    200Series C , issued and outstanding 108 shares in 2010 and 2009
    
    
    27
    
    
    
    27Series D , issued and outstanding 3,280 shares in 2010 and 2009
    
    
    820
    
    
    
    820Preferred stock, no par value, perpetual noncumulative: Authorized 200 shares;Series E, issued and outstanding 49 shares in 2010 and 2009
    
    
    2,450
    
    
    
    2,450Preferred stock, no par value, perpetual noncumulative: Authorized 7,000
shares;Series F, issued and outstanding 7,000 shares in 2010 and 2009
    
    
    6,790
    
    
    
    6,790Preferred stock, no par value, perpetual noncumulative: Authorized 9,439
shares;Series G, issued and outstanding 9,439 shares
    
    
    9,617
    
    
    
    9,499Common stock, par value $10: Authorized 400,000 shares;134,530 shares issued in 2010 and 2009131,290 shares outstanding in 2010 and 2009
    
    
    1,345
    
    
    
    1,345Surplus
    
    
    1,115
    
    
    
    1,115Retained earnings
    
    
    7,641
    
    
    
    8,462Accumulated other comprehensive income
    
    
    1,668
    
    
    
    533Treasury stock, at cost - 3,240 common shares in 2010 and 2009, respectively
    
    
    (228
    )
    
    
    (228
    )Total stockholders equity
    
    
    31,445
    
    
    
    31,013Total liabilities and stockholders equity
    
    $
    486,753
    
    
    $
    466,339
  3




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CITY NATIONAL BANCSHARES CORPORATION AND SUBSIDIARY
 
 Consolidated Statements of Operations (Unaudited)
 Three months ended March 31,Dollars in thousands, except per share data
    
    2010
    
    2009Interest incomeInterest and fees on loans
    
    $
    3,770
    
    
    $
    3,888Interest on Federal funds sold and securities
purchased under agreements to resell
    
    
    8
    
    
    
    29Interest on deposits with banks
    
    
    7
    
    
    
    2Interest and dividends on investment securities:Taxable
    
    
    1,454
    
    
    
    1,809Tax-exempt
    
    
    283
    
    
    
    333Total interest income
    
    
    5,522
    
    
    
    6,061Interest expenseInterest on deposits
    
    
    1,569
    
    
    
    2,087Interest on long-term debt
    
    
    429
    
    
    
    467Total interest expense
    
    
    1,998
    
    
    
    2,554Net interest income
    
    
    3,524
    
    
    
    3,507Provision for loan losses
    
    
    1,381
    
    
    
    501Net interest income after provision
for loan losses
    
    
    2,143
    
    
    
    3,006Other operating incomeService charges on deposit accounts
    
    
    362
    
    
    
    360Other income
    
    
    328
    
    
    
    518Net gains on securities transactions (Notes 4 and 5)
    
    
    1
    
    
    
    Other than temporary impairment losses on securities
    
    
    
    
    
    
    (132
    )Portion of loss recognized in other comprehensive income, before tax
    
 

    
    

    
    
    Net impairment losses on securities recognized in earnings
    
    
    
    
    
    
    (132
    )Total other operating income
    
    
    691
    
    
    
    746Other operating expensesSalaries and other employee benefits
    
    
    1,584
    
    
    
    1,599Occupancy expense
    
    
    367
    
    
    
    326Equipment expense
    
    
    154
    
    
    
    159Management consulting fees
    
    
    265
    
    
    
    77FDIC insurance expense
    
    
    243
    
    
    
    118Other expenses
    
    
    910
    
    
    
    813Total other operating expenses
    
    
    3,523
    
    
    
    3,092(Loss) income before income tax expense
    
    
    (689
    )
    
    
    660Income tax expense
    
    
    15
    
    
    
    162Net (loss) income
    
    $
    (704
    )
    
    $
    498Net (loss) income per common shareBasic
    
    $
    (6.72
    )
    
    $
    1.02Diluted
    
    
    (6.72
    )
    
    
    1.02Basic average common shares outstanding
    
    
    131,290
    
    
    
    131,329Diluted average common shares outstanding
    
    
    131,290
    
    
    
    131,329
  4




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CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY
 
 Consolidated Statements of Cash Flows (Unaudited)
 Three Months EndedMarch 31,In thousands
    
    2010
    
    
    2009Operating activitiesNet (loss) income
    
    $
    (704
    )
    
    $
    498Adjustments to reconcile net (loss) income to net cash from operating activities:Depreciation and amortization
    
    
    105
    
    
    
    112Provision for loan losses
    
    
    1,381
    
    
    
    501Premium amortization (discount accretion) of investment securities
    
    
    19
    
    
    
    (6
    )Amortization of intangible assets
    
    
    46
    
    
    
    53Net (gains) losses on securities transactions
    
    
    (1
    )
    
    
    132Net gains on sales of loans held for sale
    
    
    (6
    )
    
    
    (5
    )Loans originated for sale
    
    
    (218
    )
    
    
    Proceeds from sales and principal payments from loans held for sale
    
    
    196
    
    
    
    272Decrease in accrued interest receivable
    
    
    131
    
    
    
    138Deferred taxes
    
    
    737
    
    
    
    (427
    )Increase in bank-owned life insurance
    
    
    (48
    )
    
    
    (47
    )Increase in other assets
    
    
    (281
    )
    
    
    (163
    )Increase in accrued expenses and other liabilities
    
    
    1,405
    
    
    
    1,254Net cash provided by operating activities
    
    
    2,762
    
    
    
    2,312Investing activitiesDecrease (increase) in loans, net
    
    
    6,487
    
    
    
    (6,347
    )Decrease (increase) in interest-bearing deposits with banks
    
    
    2
    
    
    
    (76
    )Proceeds from maturities of investment securities available for
sale, including principal repayments and early redemptions
    
    
    11,390
    
    
    
    5,842Proceeds from maturities of investment securities held to
maturity, including principal repayments and early redemptions
    
    
    1,247
    
    
    
    2,600Proceeds from sales of investment securities available for sale
    
    
    501
    
    
    
    Purchases of investment securities available for sale
    
    
    (3,077
    )
    
    
    (3,818
    )Purchases of premises and equipment
    
    
    (385
    )
    
    
    (34
    )Net cash provided by (used in) investing activities
    
    
    16,165
    
    
    
    (1,833
    )Financing activitiesIncrease in deposits
    
    
    19,807
    
    
    
    49,279Decrease in long-term debt
    
    
    (2,000
    )
    
    
    (1,000
    )Increase in short-term borrowings
    
    
    770
    
    
    
    60Purchases of treasury stock
    
    
    
    
    
    
    (3
    )Dividends paid on preferred stock
    
    
    
    
    
    
    (363
    )Net cash provided by financing activities
    
    
    18,577
    
    
    
    47,973Net increase in cash and cash equivalents
    
    
    37,504
    
    
    
    48,452Cash and cash equivalents at beginning of period
    
    
    12,308
    
    
    
    25,813Cash and cash equivalents at end of period
    
    $
    49,812
    
    
    $
    74,265Cash paid during the yearInterest
    
    $
    1,883
    
    
    $
    1,062Income taxes
    
    
    10
    
    
    
    285Non-cash transactionsTransfer of loans to other real estate owned
    
    
    
    
    
    
    438Transfer of held to maturity investment portfolio to available for sale portfolio
    
    
    39,144
    
    
    
    
  5




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Three Months EndedMarch 31,In thousands, except per share data
    
    2010
    
    
    2009Net (loss) income
    
    $
    (704
    )
    
    $
    498Dividends on preferred stock
    
    
    178
    
    
    
    363Net (loss) income applicable to basic
common shares
    
    
    (882
    )
    
    
    135Dividends applicable to convertible
preferred stock
    
    
    
    
    
    
    Net (loss) income applicable to diluted
common shares
    
    $
    (882
    )
    
    $
    135Number of average common sharesBasic
    
    
    131,290
    
    
    
    131,329Net (loss) income per common shareBasic
    
    $
    (6.72
    )
    
    $
    1.02Diluted
    
    
    (6.72
    )
    
    
    1.02
     6




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Gross
    
    
    GrossMarch 31, 2010
    
    Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairIn thousands
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury securities
and obligations of U.S.
government agencies
    
    $
    14,256
    
    
    $
    357
    
    
    $
    59
    
    
    $
    14,554Obligations of U.S.
government sponsored
entities
    
    
    16,793
    
    
    
    222
    
    
    
    88
    
    
    
    16,927Obligations of state and
political subdivisions
    
    
    27,399
    
    
    
    1,023
    
    
    
    69
    
    
    
    28,353Mortgage-backed
securities
    
    
    76,189
    
    
    
    3,277
    
    
    
    56
    
    
    
    79,410Other debt securities
    
    
    12,769
    
    
    
    297
    
    
    
    2,089
    
    
    
    10,977Equity securities:Marketable securities
    
    
    722
    
    
    
    
    
    
    
    17
    
    
    
    705Nonmarketable
securities
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    115Federal Reserve Bank
and Federal HomeLoan Bank stock
    
    
    3,153
    
    
    
    
    
    
    
    
    
    
    
    3,153Total
    
    $
    151,396
    
    
    $
    5,176
    
    
    $
    2,378
    
    
    $
    154,194
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Gross
    
    
    GrossDecember 31, 2009
    
    Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairIn thousands
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury securities
and obligations of U.S.
government agencies
    
    $
    12,518
    
    
    $
    231
    
    
    $
    49
    
    
    $
    12,700Obligations of U.S.
government sponsored
entities
    
    
    17,289
    
    
    
    222
    
    
    
    187
    
    
    
    17,324Obligations of state and
political subdivisions
    
    
    546
    
    
    
    7
    
    
    
    
    
    
    
    553Mortgage-backed
securities
    
    
    74,417
    
    
    
    2,797
    
    
    
    76
    
    
    
    77,138Other debt securities
    
    
    12,269
    
    
    
    266
    
    
    
    2,267
    
    
    
    10,268Equity securities:Marketable securities
    
    
    713
    
    
    
    
    
    
    
    18
    
    
    
    695Nonmarketable
securities
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    115Federal Reserve Bank
and Federal HomeLoan Bank stock
    
    
    3,213
    
    
    
    
    
    
    
    
    
    
    
    3,213Total
    
    $
    121,080
    
    
    $
    3,523
    
    
    $
    2,597
    
    
    $
    122,006
  Amortized
    
    
    FairIn thousands
    
    Cost
    
    
    ValueDue within three months:Obligations of state
and political subdivisions
    
    $
    546
    
    
    $
    548Due within one year:Obligations of U.S.
government sponsored entities
    
    
    1,296
    
    
    
    1,299Other debt securities
    
    
    996
    
    
    
    1,011Due after one year but within five years:Obligations of U.S. government sponsored
entities
    
    
    2,320
    
    
    
    2,388Obligations of U.S. state and political
subdivisions
    
    
    9,220
    
    
    
    9,734Mortgage-backed securities
    
    
    236
    
    
    
    245Other debt securities
    
    
    2,459
    
    
    
    2,425Due after five years but within ten years:U.S. Treasury securities and obligations of
U.S. government agencies
    
    
    5,962
    
    
    
    6,094Obligations of U.S. government sponsored
entities
    
    
    1,200
    
    
    
    1,260Obligations of U.S. state and political
subdivisions
    
    
    12,674
    
    
    
    13,103Mortgage-backed securities
    
    
    2,401
    
    
    
    2,477Due after ten years:U.S. Treasury securities and obligations of
U.S. government agencies
    
    
    8,294
    
    
    
    8,461Obligations of U.S. government sponsored
entities
    
    
    11,977
    
    
    
    11,980Obligations of U.S. state and political
subdivisions
    
    
    4,959
    
    
    
    4,967Mortgage-backed securities
    
    
    73,552
    
    
    
    76,689Other debt securities
    
    
    9,314
    
    
    
    7,540Total debt securities
    
    
    147,406
    
    
    
    150,221Equity securities
    
    
    3,990
    
    
    
    3,973Total
    
    $
    151,396
    
    
    $
    154,194
 9




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Less than 12 Months
    
    
    12 Months or More
    
    
    TotalMarch 31, 2010
    
    
    
    
    
    Gross Unrealized
    
    
    
    
    
    
    Gross Unrealized
    
    
    
    
    
    
    Gross UnrealizedIn thousands
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Treasury securities
and obligations of U.S.
government agencies
    
    $
    2,080
    
    
    $
    31
    
    
    $
    2,501
    
    
    $
    28
    
    
    $
    4,581
    
    
    $
    59U.S. Treasury securities
and obligations of U.S.
government agencies
    
    
    3,803
    
    
    
    59
    
    
    
    2,283
    
    
    
    29
    
    
    
    6,086
    
    
    
    88Obligations of U.S. state
and political subdivisions
    
    
    2,272
    
    
    
    16
    
    
    
    670
    
    
    
    53
    
    
    
    2,942
    
    
    
    69Mortgaged-backed securities
    
    
    5,587
    
    
    
    54
    
    
    
    206
    
    
    
    2
    
    
    
    5,793
    
    
    
    56Other debt securities
    
    
    923
    
    
    
    7
    
    
    
    4,917
    
    
    
    2,082
    
    
    
    5,840
    
    
    
    2,089Marketable equity securities
    
    
    722
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    722
    
    
    
    17Total
    
    $
    15,387
    
    
    $
    184
    
    
    $
    10,577
    
    
    $
    2,194
    
    
    $
    25,964
    
    
    $
    2,378
 Less than 12 Months
    
    
    12 Months or More
    
    
    TotalDecember 31, 2009
    
    
    
    
    
    Gross Unrealized
    
    
    
    
    
    
    Gross Unrealized
    
    
    
    
    
    
    Gross UnrealizedIn thousands
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Treasury securities
and obligations of U.S.
government agencies
    
    $
    2,050
    
    
    $
    14
    
    
    $
    2,598
    
    
    $
    35
    
    
    $
    4,648
    
    
    $
    49Obligations of U.S.
Government sponsored
entities
    
    
    2,822
    
    
    
    143
    
    
    
    2,323
    
    
    
    44
    
    
    
    5,145
    
    
    
    187Mortgaged-backed securities
    
    
    4,947
    
    
    
    73
    
    
    
    248
    
    
    
    3
    
    
    
    5,195
    
    
    
    76Other debt securities
    
    
    43
    
    
    
    1
    
    
    
    4,352
    
    
    
    2,266
    
    
    
    4,395
    
    
    
    2,267Equity securities
    
    
    
    
    
    
    
    
    
    
    713
    
    
    
    18
    
    
    
    713
    
    
    
    18Total
    
    $
    9,862
    
    
    $
    231
    
    
    $
    10,234
    
    
    $
    2,366
    
    
    $
    20,096
    
    
    $
    2,597
   For the Three MonthsIn thousands
    
    Ended March 31, 2010Balance, December 31, 2009
    
    $
    2,489Add: Initial
other-than-temporary credit
losses
    
    
    Additional other-than-
temporary credit losses
    
    
    Balance, March 31, 2010
    
    $
    2,489
   10




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Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairIn thousands
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury
securities and
obligations of U.S.
government agencies
    
    $
    1,585
    
    
    $
    62
    
    
    $
    
    
    
    $
    1,647Obligations of U.S.
government
sponsored entities
    
    
    2,459
    
    
    
    19
    
    
    
    73
    
    
    
    2,405Obligations of state and
political subdivisions
    
    
    27,979
    
    
    
    1,135
    
    
    
    72
    
    
    
    29,042Mortgage-backed
securities
    
    
    7,877
    
    
    
    309
    
    
    
    
    
    
    
    8,186Other debt securities
    
    
    495
    
    
    
    7
    
    
    
    
    
    
    
    502Total
    
    $
    40,395
    
    
    $
    1,532
    
    
    $
    145
    
    
    $
    41,782
   Less than 12 Months
    
    
    12 Months or More
    
    
    TotalGross Unrealized
    
    
    
    
    
    
    Gross Unrealized
    
    
    
    
    
    
    Gross UnrealizedIn thousands
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesObligations of
state and political
subdivisions
    
    $
    2,268
    
    
    $
    22
    
    
    $
    672
    
    
    $
    50
    
    
    $
    2,940
    
    
    $
    72Obligations of U.S.
government
sponsored entities
    
    
    1,351
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    1,351
    
    
    
    73Total
    
    $
    3,619
    
    
    $
    95
    
    
    $
    672
    
    
    $
    50
    
    
    $
    4,291
    
    
    $
    145
        (Dollars in thousands)
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale
    
    $
    154,194
    
    
    $
    14,554
    
    
    $
    139,107
    
    
    $
    533Loans held for sale
    
    
    218
    
    
    
    
    
    
    
    
    
    
    
    218Total assets
    
    $
    154,412
    
    
    $
    14,554
    
    
    $
    139,107
    
    
    $
    751
 December 31, 2009(Dollars in thousands)
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Investment securities
available for sale
    
    $
    122,006
    
    
    $
    12,700
    
    
    $
    108,804
    
    
    $
    502Loans held for sale
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    190Total assets
    
    $
    122,196
    
    
    $
    12,700
    
    
    $
    108,804
    
    
    $
    692
 12




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##### Table of Contents



Cash, short-term investments and interest-bearing deposits with banks
  13




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##### Table of Contents



Investment securities
  Loans
  Loans held for sale
  Deposit liabilities
   Short-term borrowings
  Long-term debt
  Commitments to extend credit and letters of credit
   March 31, 2010
    
    
    December 31, 2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairIn thousands
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assetsCash and other short-term
Investments
    
    $
    49,812
    
    
    $
    49,812
    
    
    $
    12,308
    
    
    $
    12,308Interest-bearing deposits
with banks
    
    
    607
    
    
    
    605
    
    
    
    609
    
    
    
    607Investment securities AFS
    
    
    154,194
    
    
    
    154,194
    
    
    
    122,006
    
    
    
    122,006Investment securities HTM
    
    
    
    
    
    
    
    
    
    
    40,395
    
    
    
    41,782Loans
    
    
    267,724
    
    
    
    263,343
    
    
    
    276,242
    
    
    
    270,054Loans held for sale
    
    
    218
    
    
    
    218
    
    
    
    190
    
    
    
    190Financial liabilitiesDeposits
    
    
    400,083
    
    
    
    387,806
    
    
    
    380,276
    
    
    
    369,758Short-term borrowings
    
    
    870
    
    
    
    870
    
    
    
    100
    
    
    
    100Long-term debt
    
    
    47,000
    
    
    
    47,841
    
    
    
    49,000
    
    
    
    49,664
   14




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Item 2
 Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary statement concerning forward-looking statements
  Executive summary
     15




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##### Table of Contents



Financial Condition
          Three MonthsEnded March 31,(Dollars in thousands)
    
    2010
    
    
    2009Balance at beginning of period
    
    $
    8,650
    
    
    $
    3,800Provision for loan losses
    
    
    1,381
    
    
    
    501Recoveries of previous charge-offs
    
    
    9
    
    
    
    10,040
    
    
    
    4,301Less: Charge-offs
    
    
    2,040
    
    
    
    101Balance at end of period
    
    $
    8,000
    
    
    $
    4,200
  16




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##### Table of Contents



March 31,
    
    
    December 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2009Allowance for loan
losses as a percentage of:Total loans
    
    
    2.99
    %
    
    
    3.13
    %
    
    
    1.51
    %Total nonperforming loans
    
    
    36.72
    %
    
    
    48.35
    %
    
    
    49.04
    %Net charge-offs as a percentage
of average loans (annualized)
    
    
    2.97
    %
    
    
    1.17
    %
    
    
    .15
    %
   17




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##### Table of Contents



March 31,
    
    
    December 31,
    
    
    March 31,(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    2009Loans past due 90 days
or more and still accruingCommercial
    
    $
    112
    
    
    $
    555
    
    
    $
    Real estate
    
    
    375
    
    
    
    1,012
    
    
    
    117Installment
    
    
    1
    
    
    
    
    
    
    
    20Total
    
    
    488
    
    
    
    1,567
    
    
    
    137Nonaccrual loansCommercial
    
    
    3,349
    
    
    
    1,237
    
    
    
    2,203Real estate
    
    
    17,943
    
    
    
    15,080
    
    
    
    6,216Installment
    
    
    2
    
    
    
    6
    
    
    
    9Total nonaccrual loans
    
    
    21,294
    
    
    
    16,323
    
    
    
    8,428Total nonperforming loans
    
    
    21,782
    
    
    
    17,890
    
    
    
    8,565Other real estate owned
    
    
    2,352
    
    
    
    2,352
    
    
    
    1,985Total nonperforming assets
    
    $
    24,134
    
    
    $
    20,242
    
    
    $
    10,550
         18




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19




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##### Table of Contents



Consolidated
    
    
    Bank OnlyMarch 31,
    
    
    December 31
    
    
    March 31,
    
    
    December 312010
    
    
    2009
    
    
    2010
    
    
    2009Risk-based capital ratios:Tier 1 capital to risk-
adjusted assets
    
    
    10.11
    %
    
    
    10.45
    %
    
    
    10.28
    %
    
    
    10.62
    %Minimum to be considered well-capitalized
    
    
    6.00
    
    
    
    6.00
    
    
    
    6.00
    
    
    
    6.00Total capital to risk-
adjusted assets
    
    
    12.97
    
    
    
    13.32
    
    
    
    13.07
    
    
    
    13.43Minimum to be considered well-capitalized
    
    
    10.00
    
    
    
    10.00
    
    
    
    10.00
    
    
    
    10.00Leverage ratio
    
    
    6.88
    
    
    
    6.96
    
    
    
    7.00
    
    
    
    7.08Minimum to be considered well-capitalized
    
    
    5.00
    
    
    
    5.00
    
    
    
    5.00
    
    
    
    5.00Total stockholders equity
to total assets
    
    
    6.46
    
    
    
    6.65
    
    
    
    7.39
    
    
    
    7.63
       Results of Operations
  20




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21




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##### Table of Contents



Liquidity
        
  Quantitative and Qualitative Disclosures about Market Risk
      22




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##### Table of Contents



PART II Other information
 
 Item 1. Legal Proceedings
  Item 1a. Risk Factors
    
 Item 6. Exhibits
  (31)
    
    Certifications of Principal Executive Officer and Principal Financial
Officer (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith).(32)
    
    Certifications of Principal Executive Officer and Principal Financial
Officer under 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
(filed herewith).
 23




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CITY NATIONAL BANCSHARES CORPORATION
(Registrant)June 30, 2010
    /s/ Edward R. WrightEdward R. WrightSenior Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer) 24