<PAGE>
                                       1



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549




                                    FORM 10-Q

         (Mark One)
         [        X ]  QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
                  March 31, 1997
         [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from       to

                         Commission file number 0-11535

                      CITY NATIONAL BANCSHARES CORPORATION
             (Exact name of registrant as specified in its charter)

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

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

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes     X                 No

The  aggregate  market  value of  voting  stock  held by non  affiliates  of the
Registrant as of May 12, 1997 was approximately $1,304,960.

There were 114,141 shares of common stock outstanding at May 12, 1997.

<PAGE>
                                       2

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

Consolidated Balance Sheet


                                                         March 31,  December 31,
Dollars in thousands, except per share data                   1997          1996
================================================================================
Assets
Cash and due from banks ............................      $  4,138      $  2,767
Federal funds sold .................................         3,000         8,900
Interest bearing deposits
  with banks .......................................            59            74
Investment securities
  available for sale ...............................        29,280        30,997
Investment securities held
  to maturity (Market value
  of $28,855 at March 31, 1997
   and $29,517 at December 31, 1996) ...............        29,579        29,866
Loans held for sale ................................           200           291
Loans ..............................................        56,702        57,128
Less: Reserve for possible
  loan losses ......................................           760           750
                                                          --------      --------
Net loans ..........................................        55,942        56,378
                                                          --------      --------
Premises and equipment .............................         3,312         3,331
Accrued interest receivable ........................           882         1,078
Other real estate owned ............................           648           672
Other assets .......................................         1,556           597
                                                          --------      --------
Total assets .......................................      $128,596      $134,951
                                                          ========      ========
Liabilities and Stockholders' Equity
Deposits:
  Demand ...........................................      $ 12,798      $ 13,699
  Savings ..........................................        35,463        37,527
  Time .............................................        58,191        64,628
                                                          --------      --------
Total deposits .....................................       106,452       115,854
Short-term borrowings ..............................         5,832         5,175
Accrued expenses and
  other liabilities ................................         4,154         3,886
Long-term debt .....................................         3,749         1,749
                                                          --------      --------
Total liabilities ..................................       120,187       126,664

Commitments and contingencies

Stockholders' equity
  Preferred stock, no par value:
  Authorized 100,000 shares;
  128 shares  issued and
  outstanding in 1997 and 1996 .....................           727           727
  Common stock, par value $10:
    Authorized 400,000 shares;
    114,980 shares issued in 1997
    and 1996, 114,141 shares
    outstanding in 1997 and 1996 ...................         1,150         1,150
  Surplus ..........................................           901           901
  Retained earnings ................................         5,854         5,645
  Less:
    Net unrealized loss on
      investment securities
      available for sale ...........................           198           111
    Treasury stock, at cost -
      839 shares ...................................            25            25
                                                           --------     --------
Total stockholders' equity .........................         8,409         8,287
                                                          --------      --------
Total liabilities and stockholders' equity .........      $128,596      $134,951
                                                          ========      ========

See accompanying notes to consolidated financial statements.

<PAGE>
                                       3

CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARY

Consolidated Statement of Income
                                                    Three months ended March 31,
Dollars in thousands, except per share data                  1997           1996
================================================================================
Interest income
Interest and fees on loans .......................       $  1,253       $  1,045
Interest on Federal funds sold and
  securities purchased under
  agreements to resell ...........................            121            158
Interest on other short term investments
Interest on deposits with banks ..................              1              2
Interest and dividends on investment
   securities:
   Taxable .......................................            897            823
   Tax-exempt ....................................             29             29
                                                          -------       --------
Total interest income ............................          2,301          2,057
                                                          --------      --------
Interest expense
Interest on deposits .............................            921            725
Interest on short-term borrowings ................             48             37
Interest on long-term debt .......................             36             25
                                                         --------       --------
Total interest expense ...........................          1,005            787
                                                         --------       --------
Net interest income ..............................          1,296          1,270
Provision for possible loan losses ...............             27             10
                                                         --------       --------
Net interest income after
  provision for possible loan losses .............          1,269          1,260
                                                         --------       --------
Other operating income
Service charges on deposit accounts ..............            143            143
Other income .....................................            158            169
Net gain on sales of investment
  securities .....................................             21             10
                                                         --------       --------
Total other operating income .....................            322            322
                                                         --------       --------
Other operating expenses
Salaries and other employee benefits .............            641            661
Occupancy expense ................................             87             64
Equipment expense ................................             97             73
Other expenses ...................................            369            366
                                                         --------       --------
Total other operating expenses ...................          1,194          1,164
                                                                        --------
Income before income tax expense .................            397            418
Income tax expense ...............................            144            146
                                                         --------       --------
Net income .......................................       $    253       $    272
                                                         ========       ========
Net income per share
Primary ..........................................       $   1.83       $   2.37
Fully diluted ....................................           1.66           2.10
                                                         ========       ========
Primary average shares outstanding ...............        114,141        113,501
Fully diluted average shares outstanding .........        127,991        127,351
                                                         ========       ========

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

CITY NATIONAL BANCSHARES CORPORATION
 AND SUBSIDIARY
<TABLE>
Consolidated Statement of Changes
in Stockholders' Equity
<CAPTION>
                                                                                               Net Unrealized
                                                                                               Loss on Invest-
                                                       Common             Preferred  Retained  ment Securities    Treasury
Dollars in thousands, except per share data            Stock    Surplus     Stock    Earnings  Available for Sale  Stock       Total
====================================================================================================================================
<S>                                                   <C>        <C>        <C>       <C>          <C>           <C>        <C>
Balance, December 31, 1995 ........................   $ 1,120    $   886        200   $ 4,856      $  (141)      $   (25)   $ 6,896
Net income ........................................      --         --         --         272         --            --          272
Proceeds from issuance of stock ...................        30         15        527      --           --            --          572
Change in net unrealized loss on ..................      --         --         --        --           --
  investment securities available for sale ........       (18)       (18)
Dividends paid on common stock ....................      --         --         --          (2)        --            --           (2)
                                                      -------    -------    -------   -------      -------       -------    -------
Balance, March 31, 1996 ...........................   $ 1,150    $   901    $   727   $ 5,126      $  (159)      $   (25)   $ 7,720
                                                      =======    =======    =======   =======      =======       =======    =======

Balance, December 31, 1996 ........................   $ 1,150    $   901    $   727   $ 5,645      $  (111)      $   (25)   $ 8,287
Net income ........................................      --         --         --         253         --            --          253
Proceeds from issuance of stock ...................      --         --         --        --           --            --            0
Change in net unrealized loss on
  investment securities available for sale ........      --         --         --        --            (87)         --          (87)
Dividends paid on preferred stock .................      --         --         --         (44)        --            --          (44)
                                                      -------    -------    -------   -------      -------       -------    ------- 
Balance, March 31, 1997 ...........................   $ 1,150    $   901    $   727   $ 5,854      $  (198)      $   (25)   $ 8,409
                                                      =======    =======    =======   =======      =======       =======    =======
</TABLE>

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

CITY NATIONAL BANCSHARES CORPORATION                                            
AND SUBSIDIARY                                          
                                                
Consolidated Statement of Cash Flows                                            
                                                
                                                    Three Months Ended March 31,
In thousands                                                 1997        1996
================================================================================
Operating activities
Net income .............................................   $    253    $    272
Adjustments to reconcile net income
  to net cash from operating activities:
  Depreciation and amortization ........................         68          64
  Provision for possible loan losses ...................         27          10
  Writedown of other real estate owned .................         24        --   
  Amortization of premium, net of
    discount accretion on investment
    securities .........................................         19          12
  Net gains on calls of investment
    securities held to maturity ........................        (21)        (10)
  Gains and commissions on loans held for sale .........         (2)        (14)
Decrease in accrued interest receivable ................        196          45
Deferred income tax (benefit) expense ..................        (13)         50
(Increase) decrease in other assets ....................       (959)        176
Increase in accrued expenses and other liabilities .....        339         396
                                                            -------     -------
Net cash (used in) provided by operating activities ....        (69)      1,001
                                                            -------     -------
Investing activities
Loans originated for sale ..............................       --        (1,251)
Proceeds from sales of loans held for sale .............         93       1,432
Decrease (increase) in loans ...........................        409      (1,964)
Purchase of loans in connection with branch
  acquisitions .........................................       --        (4,035)
Decrease in interest bearing deposits with banks .......         15         193
Proceeds from maturities of investment securities
  available for sale, including principal
  payments and calls ...................................      3,574       1,684
Proceeds from maturities of investment securities
  held to maturity, including principal payments
  and calls ............................................        282       3,335
Purchases of investment securities available for sale ..     (1,995)     (2,028)
Purchases of investment securities held to maturity ....       --        (8,812)
Purchases of premises and equipment ....................        (49)       (822)
                                                            -------     -------
Net cash provided by (used in) investing activities ....      2,329     (12,268)
                                                            -------     -------
Financing activities
Deposits assumed in branch acquisition .................       --         7,661
Increase in long term debt .............................      2,000        --   
(Decrease) increase in deposits ........................     (9,402)      4,218
Decrease (increase) in short-term borrowings ...........        657        (134)
Proceeds from issuance of common stock .................       --            45
Proceeds from issuance of preferred stock ..............       --           527
Dividends paid on preferred stock ......................        (44)         (2)
                                                            -------     -------
Net cash (used in) provided by financing activities ....     (6,789)     12,315
                                                            -------     -------
Net (decrease) increase in cash and cash equivalents ...     (4,529)      1,048

Cash and cash equivalents at beginning of period .......     11,667      10,294
                                                            -------     -------
Cash and cash equivalents at end of period .............   $  7,138    $ 11,342
                                                            -------     -------
Cash paid during the year:
Interest ...............................................   $    818    $    731
Income taxes ...........................................          1         (57)
                                                
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"). 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, 1997 are not  necessarily  indicative of the results that
may be expected for the year ended December 31,1997.

3. Net income per common share

Primary  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.  Common shares issuable upon conversion of the subordinated
debentures  have been excluded from the primary  income per common share as they
are not  considered to be common stock  equivalents.  On a fully diluted  basis,
both net  income  and  common  shares  outstanding  are  adjusted  to assume the
conversion of the convertible subordinated debentures from the date of issue.
<PAGE>
                                       7

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

Results of operations

Net income for the first quarter of 1997 was $253,000, a decrease of 7% compared
to $272,000 for the similar 1996 period.  Related  earnings per share on a fully
diluted  basis  decreased to $1.66 from $2.10,  and were  affected by the annual
preferred stock dividend payments.  Returns on average common equity and average
assets were  13.30% and .74% for the first  quarter of 1997 and 14.76 % and .89%
for the corresponding 1996 period.

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

Net interest income

For the first quarter of 1997, net interest income was relatively unchanged from
the same 1996 period.  The related net interest  margins were 4.21%  compared to
4.42%.  Average  interest  earning  assets for the first quarter of 1997 rose to
$126.2 million from $116.5 million in 1996.  Most of this growth occurred within
the loan portfolio,  which averaged $56.6 million  compared to $47.1 million , a
20.2 %  increase,  due in part to the  purchase  of $4  million  in  residential
mortgage loans in conjunction with a March, 1996 branch acquisition.

Interest  income  was  higher due to an  increase  in earning  assets and a more
favorable  earning asset mix,  which  contributed  to an increase in the average
rate earned to 7.44% from 7.13%.  Interest  expense rose as well,  due to higher
interest  bearing  funding sources as well as an increase in the cost of funding
interest earning assets from 3.68% to 3.92%.

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)                                             1997    1996
                                                                   ----    ----
Balance at beginning of period ................................   $ 750   $ 650
Provision (credit) for possible
  loan losses .................................................      27     (10)
Recoveries of previous charge-offs ............................      12      18
                                                                  -----   -----
                                                                    789     678

Less: Charge-offs .............................................      29       3
                                                                  -----   -----
Balance at end of period ......................................   $ 760   $ 675


Ended March 31,

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.

(Dollars in thousands)                        March 31,  December 31,  March 31,
                                                  1997          1996        1996
--------------------------------------------------------------------------------
Reserve for possible loan 
  losses as a percentage of:
Total loans ...............................       1.34%        1.31%       1.32%
Total nonperforming loans .................      77.08%       70.89%      94.27%
Total nonperforming assets
  (nonperforming loans and OREO) ..........      46.51%       43.35%      72.73%
Net charge-offs (recoveries)
  as a percentage of average
  loans (year-to-date) ....................       (.03)%        .02%        .02%

<PAGE>
                                       8

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  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.

(Dollars in thousands)                        March 31, December 31,   March 31,
                                                   1997        1996        1996
--------------------------------------------------------------------------------
Nonaccrual loans
Commercial .................................     $  385      $  423      $   65
Installment ................................          5           4           2
Real estate ................................        596         598         638
                                                 ------      ------      ------
Total ......................................        986       1,025         705
                                                 ------      ------      ------
Loans past due 90 days
 or more and still accruing
Commercial .................................         --          14          --
Installment ................................         --          --          --
Real estate ................................         --          19          11
                                                 ------      ------      ------
Total ......................................         --          33          11
-----------------------------------------------  ------      ------      ------
Total nonperforming loans                          $986      $1,058        $716


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

Other operating income

Other  operating  income,   including  the  results  of  investment   securities
transactions was unchanged for the three months ended March 31, 1997 compared to
the similar 1996 quarter.

Other operating expenses

Other  operating  expenses rose 2.6% for the first quarter of 1997 to $1,194,000
from $1,164,000 in the first quarter of 1996, with the increase  attributable to
higher occupancy and equipment  expense,  due to increased costs associated with
the completion of the administrative office renovations.

Income tax expense

Income tax expense as a percentage of pretax income rose from 34.9% to 36.3% for
the first  quarter of 1997  compared to the first quarter of 1996 as a result of
higher levels of income subject to state income tax.

Short-term interest earning assets

Short-term interest earning assets averaged $9.4 million for the three months of
1997  compared to $12.5  million for the similar  1996  period,  reflecting  the
redistribution of these assets into the loan and investment portfolios.

Investment securities

There was little  activity in either the held to maturity or available  for sale
portfolio during the first quarter of 1997.

Loans

Loans held for sale declined  from  $291,000 at December  31,1996 to $200,000 at
March 31,  1997 while  there were no loans  originated  for sale during the 1997
first quarter  compared to $809,000 during the first three months of 1996. Loans
totalled  $56.7  million at March 31, 1997 compared to $57.1 million at December
31, 1996.

Deposits

Average  deposits for the first quarter of 1997 totalled $117.4 million compared
to $109.4 million for the first quarter of 1996 due primarily to the addition of
$7.6 million in deposits  assumed in  connection  with a branch  acquisition  on
March 8, 1996.
<PAGE>
                                       9

Short-term borrowings

Average  short-term  borrowings rose 32.1% from the first quarter of 1996 to the
corresponding  1997 period,  reflecting  higher levels of U.S.  Treasury tax and
loan note option balances.
Long-term debt

Average long-term debt increased $800,000, or 45.7% in the first quarter of 1997
from the first  quarter of 1996 as a result of $2  million in Federal  Home Loan
Bank advances incurred in February, 1997.

Liquidity

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

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

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

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

Net cash used in investing  activities  was primarily the result of the purchase
of  investment  securities,  which  totalled $2 million,  while  sources of cash
provided by investing  activities  were derived  primarily  from  proceeds  from
maturities,  principal payments and early redemptions of investment  securities,
amounting to $3.8 million.

The primary source of funds from financing  activities resulted from an increase
in  long-term  debt of $2 million  while a decrease in deposits of $9.4  million
represented the highest use of cash for financing activities.

Interest rate sensitivity

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

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

One measure of interest  rate risk is the  interest-sensitvity  analysis,  which
details the repricing  differences for assets and liabilities for given periods.
The primary  limitation  of this  analysis is that it is a static (i.e,  as of a
specific  point in time)  measurement  which does not  capture  risk that varies
nonproportionally  with changes in interest rates.  Because of this  limitation,
the  Corporation  uses a  simulation  model as its 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 31,1997,  the  Corporation  had a cumulative  one-year  static gap of a
negative  $10.7  million,  representing  8.98% of  total  assets  compared  to a
negative $12.4 million gap at December 31,1996, which represented 9.19% of total
assets.  Utilizing a dynamic  simulation  model,  management  believes that this
amount would not result in a  significant  change in net interest  income should
interest rates rise or fall up to 300 basis points,  which is the maximum change
that  management  uses to measure the  Corporation's  exposure to interest  rate
risk.
<PAGE>
                                       10

Capital

Stockholders'  equity amounted to $8.4 million at March 31,1997 compared to $8.3
million to  December  31,1996.  Stockholders'  equity as a  percentage  of total
assets was 6.06% at March  31,1997,  while the  consolidated  leverage ratio was
6.16%,  which  compares  with  existing  guidelines  established  by the Federal
Reserve  Bank  for  bank  holding   companies  of  5%  for   classification   as
well-capitalized.

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  31,1997,  the  Corporation's  core capital (Tier 1 ) and total (Tier 1
plus Tier 2) risked-based capital ratios were 16.90% and 22.05%, respectively.
PART II Other information

Item 6a. Exhibits

         (11 ) Statement re computation of per share earnings

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 12, 1997               ____________________
                                    Edward R. Wright
                                    Senior Vice President and Chief Financial
              Officer (Principal Financial and Accounting Officer)