U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
                                   (Mark One)

 X   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

     For the quarterly period ended September 30, 1998

     Transition report under Section 13 or 15(d) of the Exchange Act

     For the transition period from  _____________  to  _____________  

     Commission file number 33-98090

                        CITIZENS COMMUNITY BANCORP, INC.
       (Exact Name of Small Business Issuer as Specified in Its Charter)

        Florida                                            65-0614044
(State or Other Jurisdiction                             (I.R.S. Employer
of Incorporation or Organization)                       Identification No.)

                             650 East Elkcam Circle
                           Marco Island, Florida 34145
                    (Address of Principal Executive Offices)

                                 (941) 389-1800
                (Issuer's Telephone Number, Including Area Code)


         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

 Check whether the issuer: (1) filed all reports required to be filed by Section
12, 13 or 15(d) of the  Exchange  Act  during  the past 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

 State the  number of shares  outstanding  of each of the  issuer's  classes  of
common equity, as of the latest practicable date:


Common stock, par value $.01 per share                      3,197,137
--------------------------------------           -------------------------------
                (class)                          Outstanding at October 10, 1998






<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES
                                      INDEX


PART I. FINANCIAL INFORMATION

  Item 1. Financial Statements                                       Page

   Condensed Consolidated Balance Sheets -
    September 30, 1998 (unaudited) and December 31, 1997 . . . . . . . .2

   Condensed Consolidated Statements of Earnings -
    Three and Nine Months ended September 30, 1998 and 1997 (unaudited).3

   Condensed Consolidated Statement of Stockholders' Equity -
    Nine Months ended September 30, 1998 (unaudited) . . . . . . . . . .4

   Condensed Consolidated Statements of Cash Flows -
    Nine Months ended September 30, 1998 and 1997 (unaudited). . . . . .5

   Notes to Condensed Consolidated Financial Statements (unaudited). .6-7

  Item 2. Management's Discussion and Analysis of Financial Condition
   and Results of Operations . . . . . . . . . . . . . . . . . . . . 8-11

PART II. OTHER INFORMATION

  Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 12

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                       September 30,              December 31,
                                                       -------------              ------------
 Assets                                                     1998                     1997
 ------                                                     ----                     ----
                                                       (unaudited)

<S>                                                    <C>                       <C>       
Cash and due from banks. . . . . . . . . . . . . . . . $  3,215,944               3,153,577
Federal funds sold . . . . . . . . . . . . . . . . . .    4,097,000               9,057,000
Interest-bearing deposits. . . . . . . . . . . . . . .    7,257,334                  -
                                                       ------------              ----------

      Cash and cash equivalents. . . . . . . . . . . .   14,570,278              12,210,577

Securities held to maturity. . . . . . . . . . . . . .    8,000,000               2,498,614
Restricted securities, Federal Home Loan Bank stock. .      127,100                  -
Loans, net of allowance for loan losses of $405,500
 and $298,000. . . . . . . . . . . . . . . . . . . . .   38,990,322              26,420,149
Premises and equipment, net. . . . . . . . . . . . . .    3,564,939               2,845,997
Accrued interest receivable and other assets . . . . .      436,236                 308,152
Deferred income taxes. . . . . . . . . . . . . . . . .       24,462                 138,043
                                                       ------------              ----------

      Total assets . . . . . . . . . . . . . . . . . . $ 65,713,337              44,421,532
                                                       ============              ==========


 Liabilities and Stockholders' Equity

Liabilities:
 Demand deposits . . . . . . . . . . . . . . . . . . .    2,599,484               3,153,135
 Savings and NOW deposits. . . . . . . . . . . . . . .   21,706,610              16,300,813
 Money-market deposits . . . . . . . . . . . . . . . .    3,365,474               1,302,296
 Time deposits . . . . . . . . . . . . . . . . . . . .   19,344,737              16,182,123
                                                       ------------              ----------

      Total deposits . . . . . . . . . . . . . . . . .   47,016,305              36,938,367

 Official checks . . . . . . . . . . . . . . . . . . .    1,194,221                 473,521
 Accrued expenses and other liabilities. . . . . . . .      296,251                 238,886
                                                       ------------              ----------

      Total liabilities. . . . . . . . . . . . . . . .   48,506,777              37,650,774
                                                       ------------              ----------

Stockholders' Equity:
 Preferred stock, $.01 value, 2,000,000 shares authorized,
   none issued or outstanding. . . . . . . . . . . . .       -                       -
 Common stock, $.01 par value, 8,000,000 shares
   authorized and 3,197,137 and 1,571,624 shares
   issued and outstanding. . . . . . . . . . . . . . .       31,971                  15,716
 Additional paid-in capital. . . . . . . . . . . . . .   17,232,324               7,010,515
 Accumulated deficit . . . . . . . . . . . . . . . . .      (57,735)               (255,473)
                                                       ------------              ----------

      Total stockholders' equity . . . . . . . . . . .   17,206,500               6,770,758
                                                       ------------              ----------

      Total liabilities and stockholders' equity . . . $ 65,713,337              44,421,532
                                                       ============              ==========
</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>

                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                  Condensed Consolidated Statements of Earnings

<TABLE>
<CAPTION>

                                                     Three Months Ended        Nine Months Ended
                                                        September 30,            September 30,
                                                        -------------            -------------
                                                     1998          1997       1998          1997
                                                     ----          ----       ----          ----
                                                         (unaudited)             (unaudited)
<S>                                               <C>          <C>          <C>          <C>      
Interest income:
 Loans                                           $  791,158      554,568    2,272,218    1,292,646
 Securities                                         159,568       34,307      376,085      103,273
 Other interest-earning assets                      190,721      106,905      498,737      344,892
                                                  ---------    ---------    ---------    ---------

   Total interest income                          1,141,447      695,780    3,147,040    1,740,811
                                                  ---------    ---------    ---------    ---------

Interest expense:
 Deposits                                           527,604      344,692    1,524,627      817,069
 Mortgages                                             --           --           --          9,573
                                                  ---------    ---------    ---------    ---------

   Total interest expense                           527,604      344,692    1,524,627      826,642

Net interest income                                 613,843      351,088    1,622,413      914,169

   Provision for loan losses                         36,500       36,000      107,500      138,000
                                                  ---------    ---------    ---------    ---------

Net interest income after provision for
 loan losses                                        577,343      315,088    1,514,913      776,169
                                                  ---------    ---------    ---------    ---------

Noninterest income:
 Other service charges and fees                      74,112       39,383      185,148      115,276
 Net gain from sale of loans                           --         36,044         --         36,044
 Other                                               43,346       21,270      119,994       77,924
                                                  ---------    ---------    ---------    ---------

   Total noninterest income                         117,458       96,697      305,142      229,244
                                                  ---------    ---------    ---------    ---------

Noninterest expense:
 Salaries and employee benefits                     283,753      188,115      749,779      427,762
 Occupancy and equipment                            107,074       75,098      274,021      149,523
 Professional fees                                   14,582        1,279       25,696       25,100
 Other                                              124,516       90,492      461,322      306,466
                                                  ---------    ---------    ---------    ---------

   Total noninterest expense                        529,925      354,984    1,510,818      908,851
                                                  ---------    ---------    ---------    ---------

Earnings before income taxes                        164,876       56,801      309,237       96,562

   Income taxes                                      61,703       22,662      111,499       37,562
                                                  ---------    ---------    ---------    ---------

Net earnings                                     $  103,173       34,139      197,738       59,000
                                                  =========    =========    =========    =========

Earnings per share:
 Basic                                           $      .03          .02          .07          .04
                                                  =========    =========    =========    =========

 Diluted                                         $      .03          .02          .07          .04
                                                  =========    =========    =========    =========

Weighted-average number of shares outstanding:
 Basic                                            2,952,784    1,547,502    2,775,334    1,529,678
                                                  =========    =========    =========    =========

 Diluted                                          2,992,460    1,547,502    2,833,941    1,529,678
                                                  =========    =========    =========    =========

Dividends per share                              $     --           --           --           --
                                                  =========    =========    =========    =========
</TABLE>


See Accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>

                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

            Condensed Consolidated Statement of Stockholders' Equity

                   Nine-Month Period Ended September 30, 1998



<TABLE>
<CAPTION>

                                                          Common Stock           
                                                     ----------------------      Additional                 Total
                                                     Number of                   Paid-In     Accumulated Stockholders'
                                                       Shares        Amount      Capital       Deficit      Equity
                                                       ------        ------      -------       -------      ------

<S>                 <C> <C>                           <C>         <C>          <C>            <C>        <C>      
Balance at December 31, 1997 .....................    1,571,624   $   15,716    7,010,515     (255,473)    6,770,758

Issuance of common stock shares to holders of
  warrants at $4.50 (unaudited)...................      625,513        6,255    2,808,553         --       2,814,808

Issuance of common stock shares at $7.50,
  net of stock offering costs(unaudited) .........    1,000,000       10,000    7,413,256         --       7,423,256

Net earnings for the nine months ended September
  30, 1998 (unaudited) ...........................         --           --           --        197,738       197,738
                                                      ---------   ----------   ----------      -------    ----------

Balance at September 30, 1998 (unaudited)  .......    3,197,137   $   31,971   17,232,324      (57,735)   17,206,560
                                                      =========   ==========   ==========      =======    ==========
</TABLE>





























See Accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>

<TABLE>
<CAPTION>
                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows


                                                                                           Nine Months Ended
                                                                                              September 30,
                                                                                              -------------
                                                                                         1998             1997
                                                                                         ----             ----
                                                                                              (unaudited)
Cash flows from operating activities:
<S>                                                                                <C>                   <C>   
       Net earnings                                                                $    197,738          59,000
       Adjustments to reconcile net earnings to net cash
         provided by operating activities:
         Depreciation                                                                   107,950          69,327
         Provision for loan losses                                                      107,500         138,000
         Provision for deferred income taxes                                            113,581          37,562
         Net amortization of loan fees, premiums and discounts                           85,665          46,482
         Increase in accrued interest receivable and other assets                      (128,084)       (116,550)
         Increase in accrued interest payable and
           other liabilities                                                             57,365          90,685
                                                                                   ------------      ----------

            Net cash provided by operating activities                                   541,715         324,506
                                                                                   ============      ==========

Cash flows from investing activities:
       Purchase of securities held to maturity                                       (8,500,000)     (1,000,000)
       Maturities of securities held to maturity                                      2,999,806         756,065
       Purchase of restricted securities, Federal Home Loan
         Bank stock                                                                    (127,100)           --
       Net increase in loans                                                        (12,764,530)    (12,435,799)
       Purchase of premises and equipment                                              (826,892)       (618,757)
                                                                                   ------------      ----------

            Net cash used in investing activities                                   (19,218,716)    (13,298,491)
                                                                                   ------------      ----------

Cash flows from financing activities:
       Net increase in noninterest-bearing demand,
         savings and NOW deposits                                                     6,915,324       6,413,184
       Net increase in time deposits                                                  3,162,614       9,566,966
       Net increase (decrease) in official checks                                       720,700        (453,882)
       Payment of stock offering costs                                                  (76,745)           --
       Sale of common stock                                                          10,314,809         634,518
       Payment of mortgage payable                                                         --          (525,000)

                                                                                   ============      ==========

            Net cash provided by financing activities                                21,036,702      15,635,786
                                                                                   ============      ==========

Net increase in cash and cash equivalents                                             2,359,701       2,661,801

Cash and cash equivalents at beginning of period                                     12,210,577       8,041,777
                                                                                   ------------      ----------

Cash and cash equivalents at end of period                                         $ 14,570,278      10,703,578
                                                                                   ============      ==========

Supplemental  disclosure of cash flow  information:  Cash paid during the period
       for:
         Interest                                                                  $  1,466,382         740,458
                                                                                   ============      ==========

         Income taxes                                                              $       --              --
                                                                                   ============      ==========

</TABLE>


See Accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

  Notes to Condensed Consolidated Financial Statements (unaudited)

(1)      General. In the opinion of the management,  the accompanying  condensed
         consolidated  financial statements of Citizens Community Bancorp,  Inc.
         and Subsidiaries  (the "Company")  contain all adjustments  (consisting
         principally of normal recurring  accruals)  necessary to present fairly
         the  financial  position  at  September  30,  1998,  and the results of
         operations for the three-month  and nine-month  periods ended September
         30, 1998 and 1997 and the cash flows for the  nine-month  periods ended
         September 30, 1998 and 1997.  The results of  operations  for the three
         and nine months ended September 30, 1998 are not necessarily indicative
         of the results to be expected for the full year.

(2)      Loan Impairment and Credit Losses. No loans were identified as impaired
         at  September  30, 1998 or  September  30,  1997.  The  activity in the
         allowance for loan losses was as follows:
<TABLE>
<CAPTION>

                                                 For the Three         For the Nine
                                                 Months Ended          Months Ended
                                                 September 30,         September 30,
                                                 -------------         -------------
                                                1998       1997       1998       1997
                                                ----       ----       ----       ----
                                                  (Unaudited)           (Unaudited)

<S>                                           <C>         <C>        <C>        <C>    
Balance at beginning of period                $369,000    247,000    298,000    145,000
Provision charged to earnings                   36,500     36,000    107,500    138,000
Charge-offs, net of recoveries                    --         --         --         --
                                              --------    -------    -------    -------

Balance at end of period                      $405,500    283,000    405,500    283,000
                                              ========    =======    =======    =======
</TABLE>

(3)      Earnings Per Share. Earnings per share ("EPS") of common stock has been
         computed  on the  basis of the  weighted-average  number  of  shares of
         common stock outstanding.  Prior to the public stock offering in April,
         1998,  there was no  public  market  for the  Company's  common  stock.
         Therefore  in 1997 the  stock  book  value  was used  for  purposes  of
         calculating  dilution.  There was not  active  trading  market  for the
         Company's  common  stock  during  1998,  therefore,   for  purposes  of
         calculating diluted EPS the $7.50 stock offering price is assumed to be
         the market  price for the three and nine  months  ended  September  30,
         1998.  For  the  three  and  nine  months  ended   September  30,  1998
         outstanding  options are considered dilutive securities for purposes of
         calculating  diluted EPS which is  computed  using the  treasury  stock
         method. All per share amounts reflect the 2 for 1 stock split effective
         December 15, 1997. The following table presents the calculations of EPS
         ($ in thousands, except per share amounts).
<TABLE>
<CAPTION>

                                                                    For the Three Months Ended September 30,
                                              ----------------------------------------------------------------------------------
                                                               1998                                        1997
                                              ----------------------------------------  ----------------------------------------
                                               Earnings       Shares         Per Share     Earnings       Shares       Per Share
                                              (Numerator)     (Denominator)     Amount    (Numerator)  (Denominator)    Amount
                                              -----------     -------------     ------    -----------  -------------    ------
<S>                                          <C>                 <C>         <C>                     <C>                <C>  
         Basic EPS:
    Net earnings available
    to common stockholders                   $     103           2,952,784    $   .03       $ 34         1,547,502      $ .02
                                                                              =======                                   =====  
Effect of dilutive securities-
    Incremental shares from
    assumed conversion
    of options                                                      39,676                                   --
                                                                    ------                             ------------

Diluted EPS:
    Net earnings available
    to common stockholders
    and assumed conversions                  $     103           2,992,460   $   .03                 $ 341,547,502      $ .02
                                             =========           =========   =======                 =============      =====
</TABLE>


                                                                     (continued)


<PAGE>

                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

        Notes to Condensed Consolidated Financial Statements (unaudited)


(3)    Earnings Per Share, Continued.

<TABLE>
<CAPTION>

                                                                    For the Nine Months Ended September 30,
                                              ----------------------------------------------------------------------------------
                                                               1998                                        1997
                                              ----------------------------------------  ----------------------------------------
                                               Earnings       Shares         Per Share     Earnings       Shares       Per Share
                                              (Numerator)     (Denominator)     Amount    (Numerator)  (Denominator)    Amount
                                              -----------     -------------     ------    -----------  -------------    ------
<S>                                          <C>                 <C>         <C>                     <C>                <C>  
         Basic EPS:
    Net earnings available
    to common stockholders                   $     198           2,775,334    $   .07       $ 59         1,529,678      $ .04
                                                                              =======                                   =====  
Effect of dilutive securities-
    Incremental shares from
    assumed conversion
    of options                                                      58,607                                   --
                                                                    ------                             ------------

Diluted EPS:
    Net earnings available
    to common stockholders
    and assumed conversions                  $     198           2,833,941   $   .07        $59      $   1,529,678      $ .04
                                             =========           =========   =======                 =============      =====
</TABLE>

(4)      Regulatory  Capital.  The Bank is required to maintain  certain minimum
         regulatory  capital  requirements.   The  following  is  a  summary  at
         September  30,  1998 of the  regulatory  capital  requirements  and the
         Bank's capital on a percentage basis:

                                                       Ratios of     Regulatory
                                                        the Bank     Requirement

    Total capital to risk-weighted assets               16.15%          8.00%

    Tier I capital to risk-weighted assets              14.11%          4.00%

    Tier I capital to total assets - leverage ratio      7.89%          4.00%

(5)      Impact of New  Accounting  Principle.  On January 1, 1998,  the Company
         adopted  Statement of Financial  Accounting  Standards  130 - Reporting
         Comprehensive   Income  which   establishes   standards  for  reporting
         comprehensive  income. The Standard defines comprehensive income as the
         change  in  equity  of  an  enterprise   except  those  resulting  from
         stockholder  transactions.  All components of comprehensive  income are
         required to be reported in a new financial  statement that is displayed
         with equal prominence as existing financial statements. The Company has
         no  items of other  comprehensive  income,  therefore  a  statement  of
         comprehensive income is not presented.


<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

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

             Comparison of September 30, 1998 and December 31, 1997

Liquidity and Capital Resources
       The  Company's  primary  source  of cash  during  the nine  months  ended
       September  30, 1998 was from net deposit  inflows and  proceeds  from the
       sale of its common stock.  Cash was used primarily for loan  originations
       and for the purchase of  securities.  At September 30, 1998,  the Company
       had outstanding commitments to fund existing and new loans of $8,171,000.
       It is expected  that these  requirements  will be funded from the sources
       described  above. At September 30, 1998, the Bank exceeded its regulatory
       liquidity requirements.

       The following table shows selected ratios for the periods ended or at the
dates indicated:

                                                    Nine Months
                                                        Ended       Year Ended
                                                    September 30,   December 31,
                                                         1998          1997
                                                    -------------   ------------
Average equity as a percentage
  of average assets  . . . . . . . . . . . . . . . . .   22.01%     17.47%

Equity to total assets at end of period . . . . . .      26.18%     15.24%

Return on average assets (1)  . . . . . . . . . . .        .48%       .30%

Return on average equity (1)  . . . . . . . . . . .       2.20%      1.72%

Noninterest expense to average assets (1) . . . . .       3.69%      3.45%

Nonperforming loans and foreclosed real estate to
  total assets at end of period . . . . . . . . . .        NIL        NIL
------------------------------
(1)      Annualized for the nine months ended September 30, 1998.

<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

    Comparison of the Three-Month Periods Ended September 30, 1998 and 1997

Results of Operations:

    General. Net earnings for the three  months  ended  September  30, 1998 were
         $103,173 or $.03 per basic and diluted  share  compared to net earnings
         of $34,139  or $.02 per basic and  diluted  share for the three  months
         ended  September 30, 1997.  This increase in the Company's net earnings
         was primarily due to an increase in net interest income and noninterest
         income,  partially offset by an increase in noninterest  expense due to
         the overall  growth of the Company.  Per share amounts  reflect 2 for 1
         stock split effective December 15, 1997.

    Interest Income and Expense.  Interest  income  increased  by $445,667  from
         $695,780 for the three months ended  September  30, 1997 to  $1,141,447
         for the three months ended September 30, 1998. Interest income on loans
         increased  $236,590  to  $791,158  in 1998  due to an  increase  in the
         average loan portfolio balance for the three months ended September 30,
         1998 to $35.1 million  compared to $23.4 million during the 1997 period
         partially offset by a decrease in the weighted-average  yield from 9.1%
         in 1997 to 9.0% in 1998.  Interest on securities  increased $125,261 to
         $159,568 in 1998 due to a increase in the average securities  portfolio
         during the three months ended  September 30, 1998 to $10.1 million from
         $2.3 million  during 1997.  Interest on other  interest-earning  assets
         increased $83,816 to $190,271 in 1998 due to an increase in the average
         balance of such assets from 1997 to 1998.

         Interest  expense on deposit  accounts  increased  to $527,604  for the
         three  months  ended  September  30, 1998 from  $344,692  for the three
         months ended September 30, 1997.  Interest expense increased  primarily
         because of an increase in the average  balance  from 1997 to 1998.  The
         average balance for the three months ended September 30, 1998 was $51.5
         million compared to $31.8 million during 1997.

    Provision for Loan  Losses.  The  provision  for loan  losses is  charged to
         earnings to bring the total allowance to a level deemed  appropriate by
         management and is based upon historical experience, the volume and type
         of lending conducted by the Company,  industry standards, the amount of
         nonperforming loans, general economic conditions,  particularly as they
         relate to the Company's  market areas, and other factors related to the
         collectibility  of the Company's loan portfolio.  The provision for the
         three months ended September 30, 1998 and 1997 was $36,500 and $36,000,
         respectively. Management believes the balance in the allowance for loan
         losses of $405,500 at September 30, 1998 is adequate.

    OtherIncome.  Other  income  increased  to $117,458 in 1998 from  $96,697 in
         1997  primarily  because of  increases  in  service  charges on deposit
         accounts in 1998.

    Noninterest  Expense.   Total  noninterest  expense  increased  $174,941  to
         $529,925 for the three months ended  September  30, 1998 from  $354,984
         for the three months ended  September  30,  1997,  primarily  due to an
         increase in employee compensation and benefits of $95,638 as well as an
         increase in other  noninterest  expense  and  occupancy  and  equipment
         expense all due to the overall growth of the Company.

    Provision for Income  Taxes.  The income tax  provision for the three months
         ended September 30, 1998 was $61,703, an effective rate of 37% compared
         to $22,662, an effective rate of 39.9% for the comparable 1997 period.



<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

     Comparison of the Nine-Month Periods Ended September 30, 1998 and 1997


Results of Operations:

    General. Net  earnings  for the nine months  ended  September  30, 1998 were
         $197,738 or $.07 per basic and diluted  share  compared to net earnings
         of  $59,000  or $.04 per basic and  diluted  share for the nine  months
         ended  September 30, 1997.  This increase in the Company's net earnings
         was primarily due to an increase in net interest income and noninterest
         income,  partially offset by an increase in noninterest  expenses.  Per
         share amounts reflect 2 for 1 stock split effective December 15, 1997.

    Interest Income and Expense.  Interest  income  increased by $1,406,229 from
         $1,740,811  for the nine months ended  September 30, 1997 to $3,147,040
         for the nine months ended September 30, 1998.  Interest income on loans
         increased  $979,572  to  $2,272,218  in 1998 due to an  increase in the
         average loan portfolio  balance for the nine months ended September 30,
         1998 to $32.1 million  compared to $18.5 million during 1997.  Interest
         on securities increased $272,812 to $376,085 in 1998 due to an increase
         in the  average  securities  portfolio  during  the nine  months  ended
         September 30, 1998 to $8.1 million from $2.3 million during 1997 and an
         increase  in the  weighted-average  yield  from 6.0% in 1997 to 6.2% in
         1998. Interest on other  interest-earning  assets increased $153,845 to
         $498,737 in 1998 primarily due to an increase in the average balance of
         these assets from 1997 to 1998.

         Interest  expense on deposit  accounts  increased to $1,524,627 for the
         nine months ended  September 30, 1998 from $817,069 for the nine months
         ended September 30, 1997.  Interest expense increased primarily because
         of an increase in the average  balance  from 1997 to 1998.  The average
         balance for the nine months ended  September 30, 1998 was $49.7 million
         compared to $27.8 million during 1997.

    Provision for Loan  Losses.  The  provision  for loan  losses is  charged to
         earnings to bring the total allowance to a level deemed  appropriate by
         management and is based upon historical experience, the volume and type
         of lending conducted by the Company,  industry standards, the amount of
         nonperforming loans, general economic conditions,  particularly as they
         relate to the Company's  market areas, and other factors related to the
         collectibility of the Company's loan portfolio. The provision decreased
         from $138,000 for the nine months ended  September 30, 1997 to $107,500
         for the nine months ended September 30, 1998.

    OtherIncome.  Other income  increased  to $305,142 in 1998 from  $229,244 in
         1997  primarily  because of  increases  in  service  charges on deposit
         accounts in 1998.

    Noninterest  Expense.   Total  noninterest  expense  increased  $601,967  to
         $1,510,818  for the nine months ended  September 30, 1998 from $908,851
         for the nine months  ended  September  30,  1997,  primarily  due to an
         increase in employee  compensation  and  benefits of  $322,017,  and an
         increase  in  other  noninterest  expense  of  $154,856  as  well as an
         increase in  occupancy  and  equipment  expenses all due to the overall
         growth of the Company.

    Provision for Income  Taxes.  The income tax  provision  for the nine months
         ended  September  30, 1998 was  $111,499,  an  effective  rate of 36.1%
         compared to $37,562, an effective rate of 38.9% for the comparable 1997
         period.


<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                                Year 2000 Issues


The  Company  is  acutely  aware of the many  areas  affected  by the Year  2000
computer issue, as addressed by the Federal Financial  Institutions  Examination
Council  ("FFIEC") in its  interagency  statement  which provided an outline for
institutions to effectively  manage the Year 2000  challenges.  A Year 2000 plan
has been  approved by the Board of Directors  which  includes  multiple  phases,
tasks to be completed, and target dates for completion. Issues addressed therein
include awareness, assessment, renovation, validation, implementation,  testing,
and contingency planning.

The Company has formed a Year 2000  committee that is charged with the oversight
of completing the Year 2000 project on a timely basis. The Company has completed
its  awareness,  assessment and  renovation  phases and is actively  involved in
validating and  implementing  its plan. At the present time, the Company is into
its  testing  phase  and  anticipates  that  this  phase  will be  substantially
completed  by December  31, 1998.  Since it  routinely  upgrades  and  purchases
technologically advanced software and hardware on a continual basis, the Company
has determined  that the cost of making  modifications  to correct any Year 2000
issues will not substantially affect reported operating results.

The  Company's  main  service  provider  has  completed  testing of its  mission
critical  application  software and item processing  software.  The test results
have been documented and validated.

The Company also recognizes the importance of determining that its borrowers are
facing the Year 2000 problem in a timely  manner to avoid  deterioration  of the
loan portfolio  solely due to this issue.  Significant  relationships  have been
identified and questionnaires  have been completed to assess the inherent risks.
Deposit customers have received statement stuffers and informational material in
this  regard.  The  Company  plans to be  prepared  on a  one-on-one  basis with
significant  borrowers  who has been  identified  as having  high Year 2000 risk
exposure.

Accordingly,  management  does not believe that the Company has incurred or will
incur  substantial  costs associated with the Year 2000 issue. Yet, there can be
no  assurances  that all hardware and software that the Company will use will be
Year  2000  compliant.   Management  cannot  predict  the  amount  of  financial
difficulties  it may incur due to  customers  and vendors  inability  to perform
according to their  agreements  with the Company or the effects that other third
parties  may  cause  as a  result  of this  issue.  Therefore,  there  can be no
assurance  that the  failure or delay of others to address the issue or that the
costs involved in such process will not have a significant adverse effect on the
Company's business, financial condition, and results of operations.

The  Company's  contingency  plans  relative  to Year 2000  issues have not been
finalized  - these  plans are  evolving  as the  testing  of  systems  proceeds.
Management will develop a "worst case scenario"  contingency  plan. With regards
to nonmission critical internal systems, the Company's  contingency plans are to
replace  and/or   upgrade  those  systems  that  test  as  being   noncompliant.
Alternatively,  some  systems  could be handled  manually  on an interim  basis.
Should outside service providers not be able to provide compliant  systems,  the
Company will terminate those  relationships and transfer to other vendors. It is
anticipated that the Company's deposit customers will have increased demands for
cash in the latter part of 1999 and  correspondingly  the Company will  maintain
higher liquidity levels.


<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits. The following exhibits are filed with or incorporated by reference
    into this report.  The exhibit numbers  correspond to the exhibit numbers in
    the referenced documents.


    Exhibit No.    Description of Exhibit

         *3.1      Amended and Restated Articles of Incorporation of the Company
                   (Registration Statement)

         *3.2      By-laws of the Company (Registration Statement)

         *4.1      Specimen Common Stock Certificate (Registration Statement)

         *4.2      Specimen Warrant Certificate (Registration Statement)

         *4.4      Company's Warrant Plan (Registration Statement)

       **10.1      1996 Incentive Stock Option Plan

       **10.2      Company's 1998 Directors  Stock Option Plan 

         27        Financial Data Schedule (for SEC use only)

(b) Reports on Form 8-K.  There were no Form 8-K's filed during the three months
    ended September 30, 1998.

-------------------------
*   Previously filed as a part of, and are hereby incorporated by reference from
    the Company's  Registration  Statement on Form SB-2 under the Securities Act
    of 1933 for the  Company,  as  effective  with the  Securities  and Exchange
    Commission on December 7, 1995, Registration No. 33-98090.

** Previously  filed as an exhibit to the Form 10-QSB for the quarter ended June
   30, 1998.


<PAGE>


                CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION




                                   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 thereunto duly authorized.


                                 CITIZENS COMMUNITY BANCORP, INC.
                                  (Registrant)





Date:         , 1998             By:       /s/ Richard Storm, Jr.
     ---------------             -----------------------------------
                                           Richard Storm, Jr., 
                                                  Chairman of the Board
                                                  and Chief Executive Officer




Date:         , 1998             By:       /s/ Stephen A. McLaughlin
     ---------------             -----------------------------------
                                           Stephen A. McLaughlin, 
                                                  Secretary and Treasurer
                                                  (Chief Accounting Officer)