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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549


                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year ended December 31, 1998 Commission File Number 
0-11709

                         FIRST CITIZENS BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)


          TENNESSEE
(State or other jurisdiction of             62-1180360
incorporation or organization)      (I.R.S. Employer Identification No.)


P. O. Box 370
First Citizens Place, Dyersburg, Tennessee                 38025-0370 
(Address of Principal Executive Offices)                   (Zip Code)


       Registrant's telephone number, including area code (901) 285-4410


        Securities registered pursuant to Section 12(b) of the Act:


                                              Name of each exchange
Title of each class                            on which registered
      NONE                                           NONE


           Securities registered pursuant to Section 12(g) of the Act:

                                  COMMON STOCK
                                (Title of Class)


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 nonaffiliates of the 
registrant at December 31, 1998 was $97,347,000.

Of the registrant's only class of common stock (no par value) there 
were 3,240,315 shares outstanding as of December 31, 1998 (net of
Treasury Stock).

                       DOCUMENTS INCORPORATED BY REFERENCE

                               Portions of the                  
                 Proxy Statement dated March 15, 1998 (Part III)
                         Filed by Electronic Submission





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                           PART I
ITEM 1.  BUSINESS

GENERAL

First Citizens Bancshares, Inc. ("Bancshares") was organized
December, 1982 as a Tennessee Corporation and commenced
operations in September, 1983, with the acquisition of all
Capital Stock of First Citizens National Bank of Dyersburg
("First Citizens").

First Citizens was chartered as a national bank in 1900 and
presently operates a general retail banking business in
Dyersburg (Dyer County), Ripley (Lauderdale County), and Troy
and Union City (Obion County), Tennessee, providing customary
banking services.  First Citizens operates under the
supervision of the Comptroller of the Currency, is insured up
to applicable limits by the Federal Deposit Insurance
Corporation and is a member of the Federal Reserve System. 
First Citizens operates under the day-to-day management of its
own officers and directors; and formulates its own policies
with respect to lending practices, interest rates, service
charges and other banking matters.

Bancshares' primary source of income is dividends received
from First Citizens.  Dividend payments are determined in
relation to First Citizens' earnings, deposit growth and
capital position in compliance with regulatory guidelines. 
Management anticipates that future increases in the capital of
First Citizens will be accomplished through earnings retention
or capital injection.

The following table sets forth a comparative analysis of
Assets, Deposits, Net Loans, and Equity Capital of Bancshares
as of December 31, for the years indicated:

                                      December 31
                                    (in thousands)             
                            1998      1997         1996
   
Total Assets            $421,221   $333,288      $313,069 
Total Deposits           315,317    267,590       256,413   
Total Net Loans          274,724    226,488       209,107
Total Equity Capital      39,281     33,125        29,603 

    
Individual bank performance is compared to industry standards
through utilization of the Uniform Bank Performance Report
(UBPR), published quarterly by the Federal Financial
Institution's Examination Council.
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This report provides comparisons of significant operating
ratios of First Citizens Bancshares with peer group banks. 
Presented in the following chart are comparisons of First
Citizens with peer group banks for the periods indicated:

                         *12/31/98            12/31/97          12/31/96     
              BANCSHARES  PEER GRP BANCSHARES  PEER GRP  BANCSHARES PEER GRP

Average Assets/
Net Interest 
  Income         4.00%      4.15%     4.36%      4.31%      4.28%      4.31% 
   

Average Assets/
Net Operating 
   Income        1.13%      1.19%     1.31%      1.20%      1.21%      1.14% 
 

Net loan losses/
Average total 
   loans          .16%       .17%      .09%       .21%       .26%       .23% 


Primary Capital/  
Average Assets   9.45%      9.27%     9.94%      9.46%      9.46%      9.07% 
 

Cash Dividends/
Net Income **   38.17%     24.44%    35.77%     25.96%     32.27%     23.62% 


*Performance as of 12/31/98 is compared to peer group totals as of
09/30/98

(Most recent Federal Reserve Report)

EXPANSION

Bancshares may, subject to regulatory approval, acquire existing banks
or organize new banks.  The Federal Reserve permits bank holding
companies to engage in non-banking activities closely related to banking
or managing or controlling banks, subject to Board approval or
notification.  In making such determination, the Federal Reserve
considers whether the performance of such activities by a bank holding
company would offer advantages to the public which outweigh possible
adverse effects.  Approval by the Federal Reserve of a Bank Holding
Company's application to participate in a proposed activity is not a
determination that the activity is a permitted non-bank activity for all
bank holding companies.  Approval applies only to the applicant,
although it suggests the likelihood of approval in a similar case.

First Citizens through its strategic planning process has stated its
intention to acquire other financial institutions within the West
Tennessee Area.  First Citizens' objective in acquiring other banking
institutions would be for asset growth and diversification into other
market areas.  Acquisitions would afford the bank increased economies of
scale within the data processing function and better utilization of
human resources.  Any acquisition approved by Bancshares, would be
deemed to be in the best interest of Bancshares and its shareholders.  




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On March 5, 1997 an Acquisition Agreement was executed for the purchase
of the Bank of Troy, Troy, TN, total assets approximately $57 million. 
The Bank of Troy was converted to a branch of First Citizens National
Bank in February, 1999.  A Merger Agreement was signed between First
Citizens National Bank ("The Bank")  and First Volunteer Bank, Union
City, TN. on January 1, 1999.  First Volunteer Assets totaling
approximately $47 million  will be converted as a branch of First
Citizens National Bank on June 11, 1999.   

Beginning in 1997 First Citizens started to expand financial services to
include a finance company and insurance agency.  Delta Finance, located
on St. John Avenue, Dyersburg, TN. was opened in early 1997 and a second
finance company was opened 4th quarter 1998 in Milan, TN.  White and
Associates/First Citizens Insurance, LLC was opened in early 1998.  
Insurance services include a full line of insurance products as well as
financial services.  In 1998 insurance products were expanded to include
a credit insurance company and crop insurance.  A second Insurance
Agency was opened in Obion County second quarter of 1998.

On September 29, 1994, President Clinton signed into law the Riegel-Neal
Interstate Banking and Branching Efficiency Act of 1994.  The Act
provides for nationwide interstate banking and branching within certain
limitations.  A more detailed description of the act is discussed within
the section entitled "Usury, Recent Legislation and Economic
Environment."

SUPERVISION AND REGULATION

Bancshares is a one-bank holding company under the Bank Holding Company
Act of 1956, as amended, and is subject to supervision and examination
by the Board of Governors of the Federal Reserve.

As a bank holding company, Bancshares is required to file with the
Federal Reserve annual reports and other information regarding the
business obligations of itself and its subsidiaries.  Board approval
must be obtained before Bancshares may:

(1)     Acquire ownership or control of any voting securities of a bank or
        Bank Holding Company where the acquisition results in the BHC
        owning or controlling more than 5 percent of a class of voting
        securities of that bank or BHC;

(2)     Acquire substantially all assets of a bank or BHC or merge with
        another BHC.

Federal Reserve approval is not required for a bank subsidiary of a BHC
to merge with or acquire substantially all assets of another bank if
prior approval of a federal supervisory agency, such as the Comptroller
of the Currency is required under the Bank Merger Act.  Relocation of a
subsidiary bank of a BHC from one state to another requires prior
approval of the Federal Reserve and is subject to the prohibitions of
the Douglas Amendment.

The Bank Holding Company Act provides that the Federal Reserve shall not
approve any acquisition, merger or consolidation which would result in a
monopoly or which would be in furtherance of any combination or
conspiracy to monopolize or attempt to monopolize the business of
banking in any part of the United States.  Further, the Federal Reserve
may not approve any other proposed acquisition, merger, or consolid-
ation, the effect of which might be to substantially lessen competition
or tend to create a monopoly in any section of the country, or which in
any manner would be in restraint of trade, unless the anti-competitive
effect of the proposed transaction is clearly outweighed in favor of
public interest by the probable effect of the transaction in meeting the
convenience and needs of the community to be served.  An amendment
effective February 4, 1993 further provides that an application may be
denied if the applicant has failed to provide the Federal Reserve with
adequate assurances that it will make available such information on its 


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operations and activities, and the operations and activities of any
affiliate, deemed appropriate to determine and enforce compliance with
the Bank Holding Company Act and any other applicable federal banking
statutes and regulations.  In addition, consideration is given to the
competence, experience and integrity of the officers, directors and
principal shareholders of the applicant and any subsidiaries as well as 
the banks and bank holding companies concerned.  The Federal Reserve
also considers the record of the applicant and its affiliates in
fulfilling commitments to conditions imposed by the Federal Reserve in
connection with prior applications.

A bank holding company is prohibited with limited exceptions from
engaging directly or indirectly through its subsidiaries in activities
unrelated to banking or managing or controlling banks.  One exception to
this limitation permits ownership of a company engaged solely in
furnishing services to banks; another permits ownership of shares of the
company, all of the activities of which the Federal Reserve has
determined after due notice and opportunity for hearing, to be so
closely related to banking or managing or controlling banks, as to be a
proper incident thereto.  Moreover, under the 1970 amendments to the Act
and to the Board's regulations, a bank holding company and its
subsidiaries are prohibited from engaging in certain "tie-in"
arrangements in connection with any extension of credit or provision of
any property or service. Subsidiary banks of a bank holding company are
subject to certain restrictions imposed by the Federal Reserve Act on
any extension of credit to the bank holding company or to any of its
other subsidiaries, or investments in the stock or other securities
thereof, and on the taking of such stock or securities as collateral for
loans to any borrower.

Bank holding companies are required to file an annual report of their
operations with the Federal Reserve, and they and their subsidiaries are
subject to examination by the Federal Reserve. 

Bancshares is subject to capital adequacy requirements imposed by the
Federal Reserve Bank.  In addition, First Citizens (the principal
subsidiary of the corporation) is restricted by the Office of the
Comptroller of the Currency (Comptroller)from paying dividends in any
years which exceed the net earnings of the current year plus retained
profits of the preceding two years.  It is the policy of First Citizens
to comply with regulatory requirements for the payment of dividends. 
The Federal Reserve adopted a risk-based capital measure for use in
evaluating the capital adequacy of bank holding companies effective
January 1, 1991.  The risk-based capital measure focuses primarily on
broad categories of credit risk and incorporates elements of transfer,
interest rate and market rate risk.  The calculation of risk-based
capital is accomplished by dividing qualifying capital by weighted risk
assets.  The minimum risked-base capital ratio is 8%, at least one-half
or 4.00% must consist of core capital (Tier 1), and the remaining 4.00%
may be in the form of core (Tier 1) or supplemental capital (Tier 2). 
Tier 1 capital/core capital consists of common stockholders equity,
qualified perpetual stock and minority interests in consolidated
subsidiaries.  Tier 2 capital/supplementary capital consists of the
allowance for loan and lease loses, perpetual preferred stock, term
subordinated debt, and other debt and stock instruments.  Bancshares has
historically maintained capital in excess of minimum levels established
by the Federal Reserve.  A risked based capital analysis is performed on
a quarterly basis to test for compliance with Federal Reserve and bank
policy guidelines before declaring a dividend or increasing a dividend. 
First Citizens' policy states that before declaring a dividend the
following ratios will be achieved: (1) Risked Based Capital Tier 1 will
be 8.25% or above; Return on year-to-date average equity 9.00%; Asset
growth and projected one year future asset growth less than 20.00%; and
non performing assets to capital less than 30%.  Non performing assets
include 90 day past due and non accrual loans.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following information relates to the principal executive officers of
Bancshares and its principal subsidiary, First Citizens National Bank as
of December 31, 1998

Name                   Age        Position and Office
                                        
Stallings Lipford       68        Chairman of the Board of Bancshares  
                                  and First Citizens. Mr. Lipford joined First
                                  Citizens in 1950.  He became a member of the
                                  Board of Directors in 1960 and President in
                                  1970.  He was made Vice Chairman of the Board
                                  in 1982.  He served as Vice Chairman of the
                                  Board of Bancshares from September,  1982 to
                                  February, 1984.  The Board elected Mr.
                                  Lipford Chairman of both First Citizens and
                                  Bancshares on  February 14, 1984.  He served
                                  as President of First Citizens and Bancshares
                                  from 1983 to 1992, and as CEO of Bancshares
                                  and First Citizens from 1992 until 1996.

Katie Winchester        58        President and CEO of Bancshares and First
                                  Citizens; employed by First Citizens in 1961;
                                  served as Executive Vice President and
                                  Secretary of the Board from 1986 to 1992. 
                                  She was appointed CEO of Bancshares and First
                                  Citizens in 1996; and President of Bancshares
                                  and First Citizens in 1992.  Ms. Winchester
                                  was elected to the Board of both First
                                  Citizens and Bancshares in 1990.
                    
Ralph Henson            57        Vice President of Bancshares; Executive Vice
                                  President of Loan Administration of First
                                  Citizens. Employed by First Citizens in 1964. 
                                  Mr. Henson served First Citizens as Senior
                                  Vice President and Senior Lending Officer
                                  until his appointment as Executive Vice
                                  President of Loan Administration in February,
                                  1993.
                          
Jeffrey Agee           38          Vice President and Chief Financial Officer of
                                   Bancshares and First Citizens as of April,
                                   1994.  Employed by First Citizens in 1982. 
                                   Served First Citizens previous to April, 1994
                                   as Vice President and Accounting Officer. 
                                   Appointed Senior Vice President and Chief
                                   Financial Officer of First Citizens, April
                                   17, 1996.

Barry Ladd             58          Appointed Executive Vice President and Chief
                                   Administrative Officer of First Citizens and
                                   Bancshares in 1996.  Senior Vice President
                                   and Senior Lending Officer of First Citizens
                                   from April 20, 1994 to January 17, 1996. 
                                   Employed by First Citizens in 1972.  Mr. Ladd
                                   served First Citizens as Vice President and
                                   Lending Officer previous to his appointment
                                   as Senior Vice President.           

Judy Long              44          Senior Vice President and Chief  Operations
                                   Officer and Secretary to First Citizens
                                   National Bank. Ms. Long also serves as Vice
                                   President and Secretary to the Board of
                                   Bancshares.  Served First Citizens previous
                                   to November, 1997, as Senior Vice President
                                   and Administrative Officer.  Employed by
                                   First Citizens on July 19, 1974. Previously
                                   served as Vice President and Loan Operations
                                   Manager (1992-1996).
    <PAGE>7

BANKING BUSINESS

First Citizens operates a general retail banking business in Dyer
County, Tennessee.  The bank expanded its banking operations into
Lauderdale County in 1995 with the purchase of $8 million in assets and
Obion County in 1997 and 1998, purchasing approximately $104 million in
assets. All persons who live in either community or who work in or have
a business or economic interest in either county are considered as
forming a part of the area serviced by First Citizens.  First Citizens
provides customary banking services, such as checking and savings
accounts, funds transfers, various types of time deposits, and safe
deposit facilities.  It also finances commercial transactions and makes
and services both secured and unsecured loans to individuals, firms, and
corporations.  Commercial lending operations include various types of
credit services for its customers.  Agricultural services are provided
that include operating loans as well as financing for the purchase of
equipment and farm land.  The installment lending department makes
direct loans to individuals for personal, automobile, real estate, home
improvement, business and collateral needs.  Mortgage lending makes
available long term fixed and variable rate loans to finance the
purchase of residential real estate.  These loans are sold in the
secondary market without retaining servicing rights.  Credit cards and
open-ended credit lines are available to both commercial customers and
consumers.

Corporate Offices for First Citizens Bancshares and First Citizens
National Bank is located in Dyersburg/Dyer County, Tennessee. 
Dyersburg/Dyer County is located in northwest Tennessee and sits on the
banks of the Mississippi River.  It is 78 miles northeast of Memphis,
Tennessee, 165 miles west of Nashville and 230 miles south of St. Louis,
Missouri.  Dyer County is equidistant between Chicago and New Orleans
with direct rail, Amtrak, highway and interstate service to major
industrial and consumer markets.  Dyersburg/Dyer County is an anchor in
the region that blends education, transportation, industry agribusiness
and retail trade to serve the tristate and service the encompassing
Northwest Tennessee, Northwest Arkansas, and the Missouri Bootheel area. 
Dyer County is a mix of agriculture and industry.  Fifty-six percent of
the land in Dyer County is in agricultural production and farming is a
$79 million industry in the county.  Dyer County is Tennessee's number
one producer of soybeans, grain sorghum, commercial vegetables and rice. 
Other important crops are wheat, cotton, and corn.  The county's 509
farm operations average 435 acres as of December 31, 1998.  Agriculture
loans outstanding on the books of First Citizens National Bank totaled
24,916,979 or 10 percent of total loans.  Agriculture loans totaling
$12,300,046 are well secured with real estate, including farmland,
residential property, and other improvements, while $12,616,933 are
secured loans to finance crop production and the purchase of equipment. 
Approximately $2.3 million in agriculture loans are 90% guaranteed by
Farm Credit Services (a government agency).  There are 61 manufacturers
and processors distributed throughout the county employing approximately
7,500 people.  The local economy appears to be solid and growing.  In
December 1998, Dyer County unemployment rate was 6.9% compared to the
State of Tennessee unemployment rate of 4.1%.  The labor force increased
18.4% from 1980 to 1995.   (Statistics Source:  Economic Overview,
Council for Urban Economic Development, July 28, 1998).  

First Citizens National Bank expanded its' base of operations into Obion
County in 1998. Obion County is located approximately 27 miles north of
Dyersburg and is adjacent to Dyer County.  Economic conditions in Obion
County appear to be solid and growing.  Unemployment rate in Obion
County as of December 31, 1998 was 5.3% compared to the State of
Tennessee Unemployment rate of 4.1%.  Obion County is a mix of
industry, service and retail business.  Goodyear Manufacturing, a
builder of tires, is the largest employer in the county, employing
approximately 3700 workers by year end 1999. Total Assets of First
Citizens National Bank - Troy Branch and First Volunteer Bank are
approximately $104 million consisting primarily of consumer and retail
business loans.   




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First Citizens Financial Plus, Inc., a Bank Service Corporation wholly
owned by First Citizens is a licensed Brokerage Service.  This allows
the bank to compete on a limited basis with numerous non-bank entities 
who pose a continuing threat to our customer base, and are free to
operate outside regulatory control.

First Citizens was granted trust powers in 1925 and has maintained an
active Trust Department since that time.  Assets as of December 31, 1998
were in excess of $167,352,000.  Services offered by the Investment
Management and Trust Services Division include but are not limited to
estate settlement, trustee of living trusts, testamentary trustee, court
appointed conservator and guardian, agent for investment accounts, and
trustee of pension and profit sharing trusts.  

Delta Finance, a finance company wholly owned by First Citizens National
Bank offers finance service to the retail market.  Services offered by
Delta Finance and Delta Finance II consist of but are not limited to
consumer and residential real estate loans.

On February 9, 1998,  White and Associates/First Citizens Insurance LLC
was chartered by the state of Tennessee.  The principal office of White
and Associates/First Citizens is located at 104 North Monroe Street,
Newbern, Tennessee.  White and Associates/First Citizens is a general
insurance agency with products offered as property and casualty, Life
and Health, and Securities.

A second location of White and Associates/First Citizens Insurance was
opened in Bank of Troy on July 1, 1998 with the purchase of Durham
Insurance, Union City, Tennessee.   As of year end, 1998 negotiations to
purchase the Halls Insurance Agency resulted in an agreement to be
acquired by White and Associates/First Citizens Insurance LLC effective
January 1, 1999.  The Halls Insurance Agency was a primary provider of
Crop Insurance coverage in the State of Tennessee.  On December 28, 1998
a credit insurance company was formed and will be known as First
Citizens/White and Associates Insurance Company.    

The business of providing financial services is highly competitive.  The
competition involves not only other banks but non-financial enterprises
as well.  In addition to competing with other commercial banks in the
service area, First Citizens competes with savings and loan
associations, insurance companies, savings banks, small loan companies,
finance companies, mortgage companies, real estate investment trusts,
certain governmental agencies, credit card organizations, and other
enterprises.

The following tabular analysis sets forth the competitive position of
First Citizens when compared with other financial institutions in the
service area for the period ending June 30, 1998. 

                                Dyer County Market       
                                  (Bank's Only)
                                  (in thousands)
                          Total Deposits   % of Market Share
Bank Name                    06/30/98           06/30/98

First Citizens
National Bank                $262,726*            52.33%

First Tennessee
 Bank                         102,693             20.46%

Security Bank                  76,460             15.23%

Union Planters, FSB            60,156             11.98%

       Total                 $502,035            100.00%

*Does not include deposits of $21,282,000 categorized as Overnight and
fixed term Repurchase Agreements.

      <PAGE>9

At December 31, 1998 Bancshares and its subsidiary, First Citizens,
employed a total of 179 full time equivalent employees.  Having been a
part of the local community in excess of 100 years, First Citizens has
been privileged to enjoy a major share of the financial services market. 
Dyersburg and Dyer County are growing and with this growth come demands
for more sophisticated financial products and services.  Strategic
planning has afforded the Company both the physical resources and data
processing technology necessary to meet the financial needs generated by
this growth.

USURY, RECENT LEGISLATION AND ECONOMIC ENVIRONMENT

Tennessee usury laws limit the rate of interest that may be charged by
banks.  Certain Federal laws provide for preemption of state usury laws.
Legislation enacted in 1983 amends Tennessee usury laws to permit
interest at an annual rate of interest four (4) percentage points above
the average prime loan rate for the most recent week for which such an
average rate has been published by the Board of Governors of the 
Federal Reserve, or twenty-four percent (24%), which ever is less (TCA
47-14-102(3)).  The "Most Favored Lender Doctrine" permits national
banks to charge the highest rate permitted by any state lender.

Specific usury laws may apply to certain categories of loans, such as
the limitation placed on interest rates on single pay loans of $1,000.00
or less for one year or less.  Rates charged on installment loans,
including credit cards, as well as other types of loans may be governed
by the Industrial Loan and Thrift Companies Act.

On September 29, 1994, President Clinton signed into law the Riegel-Neal
Interstate Banking and Branching Efficiency Act of 1994 ("Act").  The
Act provides for nationwide interstate banking and branching with
certain limitations. The Act permits bank holding companies to acquire
banks without regard to state boundaries after September 29, 1995.  The
Federal Reserve may approve an interstate acquisition only if, as a 
result of the acquisition, the bank holding company would control less
than 10% of the total amount of insured deposits in the United States or
30% of the deposits in the home state of the bank being acquired.  The
home state can waive the 30% limit as long as there is no discrimination
against out-of-state institutions.

Pursuant to the Act, interstate branching took effect on June 1, 1997,
except under certain circumstances.  Once a bank has established
branches in a host state (a state other than its headquarters state)
through an interstate merger transaction, the bank may establish and
acquire additional branches at any location in the host state where any
bank involved in the interstate merger transaction could have
established or acquired branches under applicable federal or state law. 
The Act further provides that individual states might opt out of
interstate branching, prior to May 31, 1997.  A bank in that state may
merge with a bank in another state provided that neither of the states
have opted out.

There are no known trends, events or uncertainties that are likely to
have a material effect on First Citizens liquidity, capital resources or
results of operation. There currently exists no recommendation by
regulatory authorities which if implemented, would have such an effect. 
There are no matters which have not been disclosed. Bancshares and First
Citizens are located in a highly competitive market.  There are
presently four banks competing for deposit dollars and earning assets,
two of whom are branches of large regional competitors.  First Tennessee
Bank and Union Planters National Bank are two of the largest financial
institutions in the state.  Interstate banking as permitted by recent
federal legislation as discussed herein could possibly bring about the
location of large out of state banks to the area.  If so, First Citizens
would continue to operate as it has in the past, focusing on the wants
and needs of existing and potential customers. The quality of service
and individual attention afforded by an independent community bank
cannot be matched by large regional competitors, managed by a corporate 



     <PAGE>10

team unfamiliar to the area. First Citizens is a forward moving bank
offering products and services required to maintain satisfactory
customer relationships moving into the next decade and beyond.

The Federal Reserve in September, 1996 gave bank holding company section
20 units the right to exclude some securities earnings from the 10% cap
on underwriting revenue.  It later removed three firewalls, one of which
prevented the same bank employee from selling underwriting services,
loans and transactions accounts.  The Federal Reserve on December 20
more than doubled, to 25% the amount of revenue section 20 units may
earn underwriting and dealing in commercial securities.  The Office of
the Comptroller of the Currency in adopting its controversial operating-
subsidiary rule in November 1996, established a procedure that allows
national banks to create subsidiaries to underwrite securities sell
insurance, or conduct other activities that the banks may engage in
directly.  Legislation being considered would possibly limit this action
to operating Subsidiaries of the Holding Company only.

The Comptrollers's operating-subsidiary rule also streamlined national
banks' applications for new branches.  It sets a strict 45-day deadline
for Comptroller action on all applications, with a 10 day extension
possible when serious CRA issues are raised.  The Comptroller provisions
closely parallel changes to Regulation Y issued by the Federal Reserve
in August, 1996.  Those changes give the Federal Reserve 15 days to
process most merger applications.  It also expands data processing 
powers, eliminates tying restriction on nonbanks, and allows bank-run
trusts to buy mutual funds advised by the bank.

The Supreme Court ruled in February, 1996 that states must permit
national banks to sell insurance from places with fewer than 5,000
residents.  In the fall of 1996, the Comptroller issued guidelines that
limit the authority of states to regulate insurance sales by national
banks and allowing bankers to sell insurance to customers outside of
small towns.

Every industry which interprets or stores data formats has been posed
with the year 2000 challenge.  In year 2000 related issues are a widely
recognized universal problem related to the way in which computer
systems process dates.  The numerous inquiries received from both
customers and vendors have made us aware of the level of concern among
those with whom we do business.  Customer confidence in First Citizens
National Bank now and after year 2000 is a top priority.  For this
reason we have dedicated the resources necessary to ensure that the
millennium change will not change the way we service our customers.  As
early as 1997 a plan was developed based on guidelines suggested by the
Federal Financial Institution Examination Council and approved by the
bank's Board of Directors.  A Year 2000 Team was formed, led by
Operations Officer Judy Long, and supported by Senior staff of the
Information Systems Division of First Citizens. 

Will First Citizens National Bank be ready for Year 2000?
Yes!  We have reviewed all mission critical core processing systems,
mainframe and distributed applications, data communications, physical
plant, building security and desktop applications to ensure that they
are capable of functioning through and beyond year 2000.  As of December
31, 1998 we had identified, renovated or replaced and successfully
testing in excess of 90% of all mission critical systems.  Our efforts
to bring 100% of our systems into compliance in a timely manner will be
monitored by our primary regulator, the Comptroller of the Currency on a
quarterly basis during 1999.

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     <PAGE>11

Monetary policies of regulatory authorities, including the Federal
Reserve have a significant effect on operating results of bank holding
companies and their subsidiary banks.  The Federal Reserve regulates the
national supply of bank credit by open market operations in United
States Government securities, changes in the discount rate on bank
borrowings, and changes in reserve requirements against bank deposits. 
A tool once extensively used by the Federal Reserve to control growth
and distribution of bank loans, investments and deposits has been
eliminated through deregulation.  Competition, not regulation, dictates
rates which must be paid and/or charged in order to attract and retain
customers.

Federal Reserve monetary policies have materially affected the operating
results of commercial banks in the past and are expected to do so in the
future.  The nature of future monetary policies and the effect of such
policies on the business and earnings of the company and its
subsidiaries cannot be accurately predicted.

ITEM 2. PROPERTIES

First Citizens owns and occupies a six-story building in Dyersburg,
Tennessee containing approximately 50,453 square feet of office space,
bearing the municipal address of First Citizens Place (formerly 200 West
Court).  An expansion program completed during 1988 doubled the
available floor space of the existing facility.  The space was utilized
to combine all lending and loan related functions.  First Citizens owns
the Banking Annex containing total square footage of 12,989 which
provides operating space for banking departments i.e. agricultural
services, training and public relations, as well as the bank's Brokerage
subsidiaries.  The municipal address of the bank occupied portion of the
Annex is 215-219 Masonic Street.

The land and building occupied by the Downtown Drive-In Branch located
at 113 South Church Street, Dyersburg, Tennessee is owned by First
Citizens.  The building, containing approximately 1,250 square feet, is
located on a lot which measures 120 feet square.  Also located at this
address is a separate ATM facility wholly owned by the Bank.

The Midtown Branch of First Citizens is located at 620 U.S. 51 By-Pass
adjacent to the Green Village Shopping Center.  The building contains
1,920 square feet and has been owned by First Citizens since
construction.  The land on which this Branch is located, having
previously been leased, was purchased during 1987.  In June of 1992 an
additional 1.747 acres adjoining the Midtown Branch property was
purchased to accommodate future growth and expansion. Construction of
a larger facility at this location is scheduled to begin third quarter
of 1999.

In addition, the Midtown Branch Motor Bank is located on .9 acres
adjoining the Midtown Branch.  This property consists of a servicing
facility and six remote teller stations and is owned in its entirety by
the Bank.  A drive-through ATM was located at this facility during 1994.

The Newbern Branch, also owned by First Citizens, is located on North
Monroe Street, Newbern, Tennessee.  The building contains approximately
4,284 square feet and occupies land which measures approximately 1.5
acres. A separate facility located in Newbern on the corner of Highway
51 and RoEllen Road houses an ATM.  Both land and building are owned by
the Bank.

The Super Money Market Branch in the Kroger Supermarket on Highway 78 is
operated under a franchise obtained through National Bank of Commerce,
Memphis, Tennessee.  While the fixtures are owned by First Citizens,
space is made available from the Kroger Company through the franchise
agreement.  An ATM is also located near the branch in the Kroger
facility.



      <PAGE>12

The Industrial Park Branch located at 2211 St. John Avenue is a full
service banking facility that offers  drive-thru Teller and ATM
services.  The building owned by First Citizens National Bank contains
approximately 2,773 square feet and is located on 1.12 acres of land. 
The Industrial Park Branch, became operational In November, 1994.

The Ripley Branch of First Citizens National Bank, purchased January 16,
1995, is located at 292 South Washington Street in Ripley, Tennessee
(Lauderdale County).  The Branch contains approximately 1,450 square
feet and was built in 1984 on a quarter acre of land.  The Ripley Branch
is a full service banking facility that also offers drive-up teller and
twenty four hour ATM services.  On July 14, 1995 the bank purchased
1.151 acres located on Cleveland Street in Ripley, Tennessee for
construction of a branch facility.  Construction of the branch is
underway and expected to be completed by May 1999.  

The Bank of Troy was purchased by First Citizens National Bank in early
1998.  Property purchased by the Bank is located in Troy, Tennessee. 
The Troy Branch has two locations; a main bank building located on
Harper Street just west of Highway 51 and a drive up branch located on
Highway 51.

The main building is a two story brick and siding building.  The site
consists of three lots with maximum dimensions on each side being 272
feet and 260 feet.  The first floor in the main building contains 5,896
square feet and houses a full service branch facility.  Most of the
building was built in 1970 with additions and renovations being made
since that time.

The branch building is a one story brick building. The site is 231 feet
by 100 feet.  It houses a drive-thru window and also has an enclosed
ATM. The building was built in 1975.  First Citizens National Bank has
been granted permission by the Office of the Comptroller of the Currency
to close this facility on May 1, 1999.  Permission was granted based on
volume of business compared to renovation cost as well as cost of
security and communication equipment required to offer safe, amazing
service to our customers.

The Troy Branch also owns and operates a full service ATM located on 
Walmart Drive in Union City, Tennessee.

There are no liens or encumbrances against any of the properties owned
by First Citizens.

ITEM 3. LEGAL PROCEEDINGS

First Citizens is involved in routine legal issues.  However, the
outcome of these issues are not expected to have a material adverse
effect to the bank.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the year ending December 31, 1998, there
were no meetings, annual or special, of the shareholders of Bancshares. 
No matters were submitted to a vote of the shareholders nor were proxies
solicited by management or any other person.



<PAGE>
      <PAGE>13

                         PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED          
STOCKHOLDER MATTERS 

     As of December 31, 1998 there were 846 shareholders of Bancshares'
stock.  Bancshares common stock is not actively traded on any market. 
Per share prices reflected in the following table are based on records
of actual sales during stated time periods.  These records may not
include all sales during these time periods if sales were not reported
to First Citizens for transfer.

               Quarter Ended                High         Low


              March 31, 1998               $23.50      $22.75 
              June 30, 1998                $23.50      $22.75
              September 30, 1998           $30.00      $23.50
              December 31, 1998            $30.00      $30.00

              March 31, 1997               $14.50      $13.75
              June 30, 1997                $17.39      $13.75
              September 30, 1997           $17.50      $16.25
              December 31, 1997            $22.75      $22.75


Dividend payouts per share adjusted for the split were .75 cents in
1998, .50 cents in 1997 and .40 cents in 1996.

                        Dividends - 1998
              Dividend                   Quarter
              Per Share                  Declared
                 .125                       1st
                 .125                       2nd
                 .150                       3rd
                 .150                       4th
                 .200*                      4th
         Total $ .750

All dividends are restated to reflect the 4:1 stock split in June 1998.

*Special dividend paid in fourth quarter, 1998.

Future dividends will depend on Bancshares' earnings and financial
condition and other factors which the Board of Directors of Bancshares
considers relevant.

<PAGE>
      <PAGE>14

ITEM 6. SELECTED FINANCIAL DATA

The following table presents information for Bancshares effective
December 31 for the years indicated.
                                  (in thousands)
                              (except per share data)

                       1998     1997     1996     1995     1994
Net Interest &  
 Fee Income         $ 15,937 $ 13,887 $ 12,822 $ 11,283  $ 10,444

Gross Interest 
  Income            $ 31,153 $ 26,617 $ 24,781 $ 22,465  $ 18,415

Income From
 Continuing 
  Operations        $  4,223 $  4,246 $  3,709 $  2,706  $  2,946

Long Term 
 Obligations(1)     $ 24,342 $  7,813 $  2,997 $  4,652  $  4,125

Income Per Share 
 from Continuing 
  Operation(2)      $   1.34 $   1.42 $   1.26 $    .93  $   1.04

Net Income per  
Common Share (2)
                    $   1.34 $   1.42 $   1.26 $    .93  $   1.04

Cash Dividends 
Declared
per Common 
Share(2)            $    .75 $    .50 $    .40 $    .33  $    .30

Total Assets at 
Year End            $421,221 $333,288 $313,069 $291,412  $256,687

Allowance for 
 Loan Losses 
 as a % Loans           1.26%   1.22%    1.08%    1.16%     1.22% 

Allowance for 
 Loan Losses as 
 a % of Non-
 Performing Loans     509.62% 461.76%  176.08%  707.99%   196.75% 

Loans 90 Days 
 Past Due as a 
 % of Loans              .14%    .00%     .09%     .17%      .62% 

(1)Long Term Obligations consist of FHLB Borrowings matched with 
   Loans & Investments, and an ESOP Obligation.
(2)Restated to reflect 4 for 1 Stock Split on June 15, 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

1998 was a year of significant events for First Citizens Bancshares,
Inc. The purchase of Bank of Troy in February, 1998 and the agreement to
merge with First Volunteer in January, 1999 will expand our market into
Obion County and offer numerous opportunities for future growth of the
First Citizens franchise.  Product lines were further diversified by our
entry into the insurance business through a partnership with White and
Associates Insurance.  The relocation and expansion of our brokerage
subsidiary, First Citizens Financial Plus and the opening of a second
office of Delta Finance will also serve to strengthen earnings going
forward.
      <PAGE>15

Assets:

At December 31, 1998 total assets were reflected on the balance sheet at
$421,220,664, up 26% from year-end 1997. The five year compound growth
in assets of 64% reflects a commitment to remain an independent
community bank, large enough to survive in a highly competitive
environment yet small enough to continue the tradition of quality
personalized service our customers have grown to expect.

Asset growth is important to the future of First Citizens.  Our capital
base is extremely strong and would support a significant expansion in
assets.  However, management's focus will continue to be on growth that
fits the objectives of a well thought out strategic plan. 

Loans:

Outstanding loans at year-end increased 22%, with growth primarily
concentrated in commercial, agricultural and real estate.  The expansion
into Obion County affords new lending opportunities which would support
future growth, while at the same time building on existing customer
relationships.  Net loan growth for the five years ending December 31,
1998 was 65%.  Competition for quality loans continues to place pressure
on the yield and terms customers are willing to accept.  Loan
Administration has taken a conservative position in dealing with
situations which deviate from established underwriting standards, while
recognizing the need to maintain quality loan growth.  

Increased loan demand in 1995 is reflective of our entry into the
Lauderdale County market and opportunities made available as a result of
the acquisition.  Growth in 1996 of 10.2% and in 1997 of 8.3% is an
indicator of increased competition for high quality loans.  An increase
of 22% for the year ending December 31, 1998 reflects loans acquired as
a result of the Troy acquisition.  Excluding the portion of the
increase, loan growth in 1998 was comparable to the prior two year
periods.

The agricultural segment of the West Tennessee economy was dealt a major
blow in 1998 when every primary crop was subjected to some form of
natural disaster.  In addition, reduced export demand forced down
commodity prices to levels not seen in more than a decade.  At December
31, 1998, First Citizens' loan portfolio contained $25 million in
agriculturally related loans.  Many of these loans presented a challenge
to our customers and to First Citizens as lender.  An adequate loan loss
reserve, strong underwriting standards and a 90% guaranty of Farm Credit
Services on many of the loans should minimize the impact to future
earnings of the company.

Asset quality within the loan portfolio remains strong with the
provision with the provision for loan losses at a level which Management
believes adequate to absorb potential losses.  The provision was
increased $370,311 in 1998 in response to an analysis of loans acquired
through purchase of Bank of Troy.  At year-end, the Reserve for Loan
Losses was 1.26% of total portfolio.  Non-performing loans as a 
percentage of total loans were 0.24% at year-end, level with the 1997
ratio and significantly below peer group bank's ratio of 0.91%.

Deposits:

The utilization of deposits to fund overall loan growth is no longer an
option for the banking industry.  Returns generated on investments in
Stocks and Mutual Funds, combined with a high level of customer
confidence in the economy have negated the value of FDIC insurance as a
tool for attracting and holding deposits.  Conversely, the competitive 


      <PAGE>16


nature of the lending market forces down the rate of return, placing
pressure on the ability to maintain acceptable net interest margins.  As
a result, community banks have turned to the Federal Home Loan Bank as a
liquidity source.  The ability to negotiate a fixed level of funding at
a predetermined rate lends significant support to the asset/liability
management process.  It is anticipated that this source will continue to
be utilized as a tool in managing liquidity.

Deposit growth of 17.8% in 1998 includes Bank of Troy deposits, and
follows two years of single digit increases in 1996 and 1997.  An
increase of 13.2% in 1995 is a result of the acquisition of the Ripley
Branch.

Earnings:

Return on average assets was impacted by acquisition and non-recurring
organizational costs in 1998 totaling in excess of $1.3 million. 
Performance ratios for First Citizens National Bank were less impacted
as a result of acquisition costs being dealt with at the Holding company
level.

The primary source of earnings for Bancshares continues to be net
interest income.  A comparison of earnings generated from this source
for the three years ending December 31, 1998, 1997 and 1996 reflect
increases of 14.8%, 8.2% and 13.35%.  Improvement for the most recent
period under comparison is the direct result of increased volume. 
Yields on interest earning assets, i.e. loans and investments, decreased
from 8.97% in 1997 to 8.87% in 1998, while the cost on interest bearing
liabilities increased slightly from 4.80% in 1997 to 4.83% in the year
just ended.  The rise in cost of funds is attributable to a
significantly higher yield on acquired deposits and is being addressed. 
Increased funding costs in 1994 of 9.8% was the determining factor in
the decision to utilize the Federal Home Loan Bank as an additional
funding source.  As a result, we are better able to manage the cost of
funds and restore net interest margins to more acceptable levels.

A consistent and disciplined asset/liability management policy provides
the necessary focus on interest rate risk and rate sensitivity.  An
executive level Asset/Liability Management Committee functions in
accordance with board approved policies to monitor pricing, maturity,
growth and mix strategies.  This oversight allows management to make
informed decisions that limit interest rate risk and ensure a consistent
and every increasing level of earnings.

Growth in non-interest income is key to sustaining increases in over all
net income.  The components of non-interest income include service
charges on deposit accounts, fiduciary income, ATM interchange fees, and
income from subsidiaries (Financial Plus, White and Associates/First
Citizens Insurance, Delta Finance).  Total non-interest income in 1998
increased 14.2% to $4,277,616.  This follows an 11.2% increase in 1997,
and represents the focus on strengthening overall earnings of the
Company.

Non-interest expense increased 23% in 1998, reflecting growth in
salaries and benefits of additional employees at Bank of Troy, Delta
Finance and in support positions at First Citizens National Bank. 
Bringing Bank of Troy in as a branch of First Citizens in 1999 will
allow for a reduction in the number of employees and enhance the
earnings potential of the Company.  Data processing expense increased
15.5% in 1998 as a result of software enhancements, the installation of
a Wide Area Network and addressing issues related to year 2000.  This
increase does not reflect the expense of diverting the time and
attention of key staff members to ensure that systems are compliant and
will deal efficiently with the millennium date change.

      <PAGE>17

At the Holding Company level, the ROA in 1998 was 1.08%, compared to
1.32% in 1997 and 1.21% in 1996.  Return on Average Assets of First
Citizens National Bank were 1.29%,1.31% and 1.23% respectively for 1998,
1997 and 1996.  Returns on average equity were also impacted with the
Bank reporting 14.34%, 14.21% and 14.39% for the years ending December
31, 1998, 1997 and 1996.  ROAE at the Holding Company level also
reflected the impact of acquisition expense with returns of 11.0%, 13.5%
and 13.1% for 1998, 1997 and 1996.

Shareholder Return:

Dividends paid to Shareholders in 1998 were again enhanced by a special
dividend declared during fourth quarter.  This process utilized in each
of the past five years, serves to raise payout ratios to levels targeted
by the bank's capital plan.  In addition a 4 for 1 stock split
distributed to shareholders June 15, 1998 increased the number of shares
outstanding to 3,194,544.  This action follows a 2.5 for 1 split October
15, 1993 and a 10% stock dividend December 15, 1992.  Dividend payouts
per share adjusted for the 1998 split, were 75 cents in 1998, 50 cents
in 1997 and 40 cents in 1996.

Stockholder equity has grown consistently supported by strong earnings
and quality assets.  Total capital increased 18.6% in 1998, following an
increase by 11.9% in 1997.  The purchase of Bank of Troy was funded with
existing equity capital totaling $5.5 million and a loan from SunTrust
Bank in the amount of $4.1 million.  The balance remaining on the note
as of December 31, 1998 was $682,000.  In June 1998, the Employee Stock
Ownership Plan entered into a loan agreement with SunTrust Bank in the
amount of $2,000,000 to fund the purchase of previously authorized and
unissued stock.  The stock will be utilized to satisfy future
allocations to plan participants in accordance with the plan document
approved by the Board of Directors in December 1985.  The balance
remaining on the ESOP loan, which is fully guaranteed by Bancshares, was
$1,407,762 as of December 31, 1998.

Equity Capital:

Risk based and leverage capital levels are well in excess of Regulatory
requirements.  As of December 31, 1998 Bancshares risk based capital was
13.59%, compared to 8% required by Regulation and 10% which is used as a
benchmark to define a well capitalized bank.

Year 2000 Readiness Disclosure:

Year 2000 related issues are a widely recognized, universal problem
related to the way in which computer systems process dates. Numerous
inquiries received from both customers and vendors have made us aware of
the level of concern among those with whom we do business.  Customer
confidence in First Citizens National Bank now and after Year 2000 is a
top priority.  For this reason we have dedicated the resources necessary
to ensure that the millennium change will not change the way we service
our customers.

As early as 1997, a plan was developed based on guidelines suggested by
the Federal Financial Institutions Examination Council and approved by
the bank's Board of Directors.  A year 2000 Team was formed, led by
Senior Vice President and Chief Operations Officer Judy Long, and
supported by senior staff of the Information Systems Division of First
Citizens.

Will First Citizens National Bank be ready for Year 2000?





      <PAGE>18


Yes!  We have reviewed all core operating systems (AS/400), and
distributed applications, data communications, physical plant, building
security and desktop applications to ensure that they are capable of
functioning through and beyond Year 2000.

As of December 31, 1998, we had identified, renovated or replaced and
successfully tested in excess of 90% of all mission critical systems. 
Our efforts to bring 100% of our systems into compliance in a timely
manner will be monitored by our primary regulator, the Comptroller of
the Currency on a quarterly basis during 1999.

Changes in Financial Accounting Standards

FASB 128 (Earnings per share) and FASB 129 (Disclosure of information
about capital structures).  FASB 128 simplifies the computation
guidelines for earnings per share.  Bancshares has a simple capital
structure and these new FASBs will not have a material impact due to our
capital not having dilutive or convertible capital instruments.  These
two FASBs are effective for financial statements for periods ending
after December 15, 1997.

FASB 130 (Reporting comprehensive income).  FASB 130 establishes
reporting and display requirements for comprehensive income and its
components and is effective for fiscal years beginning after December
15, 1997.  Comprehensive income is defined as all changes in equity
during a period except those resulting from investments by owners and
distributions to owners.  This will impact our reporting format, mainly
due to changes in available for sale market values, but FASB 130 should
not pose a material impact on our financials.

FASB 131 (Disclosure about segments of an enterprise and related
information).  This statement establishes standards for the way that
public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises
report selected information about operating segments in interim
financial reports issued to shareholders. This statement does not apply
to non-public companies. This statement is effective for financial
statements for periods beginning after December 15, 1997. This could be
applicable in our new business ventures.

NON-INTEREST INCOME
<TABLE>
The following table reflects non-interest income for the years ending
December 31, 1998, 1997, and 1996: 
<CAPTION>
                                                 December 31
                                               Change from prior year
                                                 (in thousands)
                               Increase                    Increase 
                        Total (Decrease)            Total (Decrease)            Total
                         1998   Amount  Percentage  1997    Amount  Percentage   1996
<S>                    <C>      <C>      <C>       <C>      <C>      <C>       <C>
Service Charges on
 Deposit Accounts      $1,830   $ 144     8.54%    $1,686   $ 229    15.72%    $1,457
Other Service Charges,
 Commissions & Fees    $1,159   $ 308    36.19%    $  851   $ 177    26.27%    $  674
Other Income           $1,288   $  78     6.45%    $1,210   $ (28)   (2.27%)   $1,238
TOTAL NON-INTEREST
 INCOME                $4,277   $ 530    14.14%    $3,747   $ 378    11.22%    $3,369
</TABLE>

Growth in non-interest income is key to sustaining increases
in overall net income as net interest margins continue to be
squeezed.  The components of First Citizens non-interest
income include service charges on deposit accounts, other fees
and service charges, fiduciary income, ATM/POS interchange
fees , and other income from subsidiaries (Financial Plus,
White and Associates/First Citizens Insurance, Delta Finance). 
Total non-interest income in 1998 increased 14.2% to 

      <PAGE>19

$4,277,616 compared to a 11% increase in 1997.  Growth in non-interest 
income represents the banks focus on strengthening
overall earnings of the company.  Other income increased in
1996 due to a one time refund of $70,705 from bankruptcy
trustees of Southeast Fort Worth LTD., increased fee income
from Financial Plus and security gains realized from the sale
of securities.  The Southeast refund partially reimbursed the
bank for settlement made to trust customers by the bank in
December 1996.  
<TABLE>
NON-INTEREST EXPENSE
<CAPTION>
                                                  December 31
                                             Change from prior year
                                               (in thousands)
                                     Increase                  Increase   
                             Total  (Decrease)         Total (Decrease)         Total
                              1998   Amount Percentage 1997    Amount Percentage 1996
<S>                         <C>     <C>      <C>     <C>      <C>       <C>    <C> 
Salaries & Employee
 Benefits                   $ 7,390 $1,410   27.85%  $ 5,980  $ 483     8.79%  $5,497
Net Occupancy Expense       $ 2,090 $  126    6.42%  $ 1,964     56     2.94%  $1,908
Other Operating Expense     $ 3,463 $  889   34.53%  $ 2,574     90     3.63%  $2,484
TOTAL NON-INTEREST EXPENSE  $12,943 $2,425   23.05%  $10,518  $ 629     6.36%  $9,889
</TABLE>

Total non-interest expense increased 23% in 1998 reflecting growth in
salaries and benefits of additional employees at Bank of Troy, Mortgage
Lending, Financial Plus, Delta Finance and in support positions at First
Citizens National Bank.  The Bank of Troy, Troy, TN was converted to the
books of First Citizens National Bank in February, 1999 as a branch of
the bank.  Bringing Troy in as a branch allows for a reduction in number
of employees as well as provide for economies of scale in information
systems.  Non-recurring expense incurred at Bank of Troy in 1998 exceeded
$1.3 million and included benefit plans, additional loan loss reserves and 
buy out of an employment contract of the Bank's former CEO.  Full-time 
equivalent employees were 172 at December 31, 1998 compared to 155 at 
December 31, 1997.   Assets per employee at December 31, 1998 was $2.3 
million compared to $2.4 at December 31, 1997.  Data processing expense 
increased 15.5% in 1998 as a result of software enhancements, the 
installations of a Wide Area Network and cost of addressing year 2000 issues.
The increase does not reflect the time and attention of key staff members to
ensure that systems are compliant and will deal efficiently with the new 
millennium date change.  

Efficiencies implemented over the past five years have reduced and/or
controlled non-interest expense in an acceptable manner.  Going forward,
management will focus on increasing the potential to generate non-interest 
income through investment in non-banking subsidiaries such as
insurance agencies, consumer finance companies, and our brokerage
business.  In addition, we will concentrate on internal income growth in
the bank's mortgage lending and trust services departments.

December 31                            
                Assets Per Employee        Asset Per Employee
                       FCNB                   Peer Groups  
                                (in thousands) 

  *1998               $2,354                      $2,400
   1997               $2,151                      $2,400
   1996               $2,159                      $2,300
   1995               $1,969                      $1,900
   1994               $1,695                      $1,900


*1998 includes Bank of Troy and Delta Finance II.  The assets
per employee increased due to Troy's positive position.

<PAGE>
      <PAGE>20

COMPOSITION OF DEPOSITS

The average daily amounts of deposits and rates paid on such
deposits are summarized for the periods indicated:

                                          December 31
                                        (in thousands)     
                         1998                1997              1996
   
                  Average   Average  Average   Average  Average   Average  
                  Balance    Rate    Balance    Rate    Balance    Rate 
Non-Interest
Bearing Demand
Deposits         $ 33,142     -      $ 27,868     -    $ 26,641      -   

Savings Deposits $ 94,759   3.20%    $ 81,562   3.37%  $ 73,908   3.19%

Time Deposits    $174,685   5.60%    $149,655   5.54%  $146,562   5.63%

TOTAL DEPOSITS   $302,586   4.24%    $259,085   4.26%  $247,111   8.39%

Deposit growth of 17.87% in 1998 includes Bank of Troy
deposits, and follows two years of single digit increases in
1996 and 1997.  The company's marketplace is described as
highly competitive, with a fairly sophisticated customer base. 
Competition is aggressive for both loans and deposits.  A
recent Market study indicates that 60.2 percent of survey
respondents use only one bank in Dyer County, 65% in
Lauderdale County, and 76.6% in Obion County. First Citizens
was rated highest among competitive banks in Dyer County for
providing customer service, hours of operations and being a
hometown bank that makes local decisions.  According to the
survey First Citizens maintains approximately 47% of Dyer
County market share; 24% of Obion County market share and 9.3%
of Lauderdale market share. In the Dyer County market the bank
competes with Union Planters (25.4% market share), First
Tennessee Bank (14.9%), Security Bank (9.0%), as well as
credit unions and finance companies (3.0%).  The bank's
largest competitor in Lauderdale County is Bank of Ripley
54.7%.  Competition in Obion County ranks Commercial Bank and
Trust at 22.9% market share, First State Bank 20.0%, Union
Planters 17.1%, and First Citizens - Bank of Troy and First
Volunteer a total of 28% market share.

Time deposits reflect the largest percentage of growth in the
deposit categories of approximately $25,000,000 since 1997. 
The average rate on total deposits have reduced significantly
from 8.39% in 1996 to 4.24% in 1998.  The utilization of
deposits to fund loan growth is no longer an option for the
banking industry.  Returns generated on investments in stocks
and mutual funds, combined with a high level of customer
confidence in the national economy have negated the value of
FDIC Insurance as a tool for attracting and holding deposits. 
First Citizens has turned to other sources provided by
approved lines of credit through Correspondent Banks and
Federal Home Loan Bank.  As a result we have more control on
maintaining acceptable interest rate margins.  Deposit growth
is projected at 7% or below in the 1999 bank budget.     

Management is continuously monitoring and enhancing the bank's
product line in order to retain existing customers and to
attract new customer relationships.  There were no new
products or services offered in 1998.  However in 1998 an
Internet Banking solution was selected to provide customers
with electronic banking over the Internet.  Nfront, Atlanta,
Georgia is the software provider for the bank's Internet
banking solution.  Beginning in March, 1999 the site will be
open for bank employees and customer focus group testing. 
According to the American Banker dated Monday, March 1, 1998 

      <PAGE>21

only 200 banks with less than $1 billion of assets operate a
Web site and only 20% of those are interactive.  First
Citizens will operate an interactive Web site with transaction
and application processing.  Bill Pay is also an interactive
Web service that will be extended to the bank's customers. One
new product offered in 1997 was a Visa Check Card.  The Visa
Check Card is an electronic check that allows our customers
another convenient method of accessing their checking account
funds without writing a check.  Imaged deposit statements
offered to the market in 1996 continue to be a success with
99.9% acceptance rate.

SHORT TERM BORROWINGS
                                       12/31/98       12/31/97
Amount outstanding-end of Period       $38,107        $21,766
Weighted Average Rate of Outstanding     4.38%          4.35%
 Maximum Amount of Borrowings at 
  Month End                             38,107         36,585
Average Amounts Outstanding for 
  Period                                27,777         26,585
Weighted Average Rate of Average 
  Amounts                                4.46%          4.64%

The long term debt is comprised of Federal Home Loan Bank
borrowings, Finance Company debt, and new debt associated with
the Troy acquisition.  The Finance Company debt is classified
as long term debt due to our intent to renew.  The Parent
Company debt is with SunTrust-Nashville.  The average life is
as presented and the FHLB funds are matched with loans and
investments.

                                Average Average    Average
                         Volume     Rate     Maturity   Variable
FHLB Borrowings-Loans     5,201     5.86%    7 years
FHLB Borrowings-Invest.  10,527     5.77%  10 years  Monthly, Yearly
Finance Company Debt      1,000     6.00%    5 years
Parent Company Debt       2,303     6.89%   2 years    Monthly
ESOP Obligation           1,400     6.89%   7 years    Monthly

The following table sets forth the maturity distribution of Certificates
of Deposit and other time deposits of $100,000 or more outstanding on
the books of First Citizens on December 31, 1998.  The overall total
increased in excess of $10 million when compared to the prior year. 

MATURITY DISTRIBUTION OF TIME DEPOSITS IN AMOUNTS OF $100,000 AND OVER

                                              December 31
                                             (in thousands)
                                   1998                   1997
                            Amount       Percent  Amount       Percent
 Maturing in:
3 months or less           $18,719       41.22%  $13,778       28.33%
Over 3 through 12 months   $22,525       49.60%  $29,237       60.12%
Over 12 months             $ 4,170        9.18%  $ 5,620       11.55%

     TOTAL                 $45,414      100.00%  $48,635      100.00%


<PAGE>
      <PAGE>22

The following table sets forth an analysis of sources and uses of funds
for the years under comparison.

                                SOURCES AND USES OF FUNDS
                                     (in thousands)
                            1998                     1997                1996 
FUNDING USES          Average  Increase        Average  Increase        Average
                      Balance (Decrease)       Balance (Decrease)       Balance
                        Amount            %         Amount          %    Amount

INTEREST-EARNING
ASSETS:     

Loans (Net of 
Unearned Discounts    
& Reserve)          $259,416  $38,431  17.39% $220,985 $ 17,322  8.51% $203,663

Taxable Investment
Securities          $ 79,419  $13,382  20.26% $ 66,037 $  1,645  4.79% $ 64,392

Non-Taxable 
Investment
Securities          $ 12,199  $ 1,664  15.79% $ 10,535 $   (290)(2.68%)$ 10,825

Federal Funds 
Sold                $  2,608  $ 1,633 167.49% $    975 $   (191)(16.38%)$  1,166

Interest Earning
Deposits In 
Banks               $    980  $   685 232.20% $    295 $     99  50.51% $    196

TOTAL INTEREST-
EARNING ASSETS      $354,622  $55,795  18.67% $298,827 $ 15,585   6.64% $280,242

Other Uses          $ 35,343  $ 8,640  32.36% $ 26,703 $ 3,225   13.74% $ 23,478

TOTAL FUNDING 
  USES              $389,965  $64,435  19.79% $325,530 $21,810    7.18% $303,720

INTEREST-BEARING 
  LIABILITIES:

Savings 
 Deposits           $ 94,759  $13,197  16.18% $ 81,562 $ 7,654   10.36% $ 73,908

Time Deposits       $174,685  $25,030  16.73% $149,655 $ 3,093    2.11% $146,562

Federal Funds
Purchased and 
Other Interest 
Bearing 
Liabilities         $ 45,500  $11,101  32.27% $ 34,399 $ 5,929   20.83% $ 28,470

TOTAL INTEREST-
BEARING 
LIABILITIES         $314,944  $49,328  18.57% $265,616 $16,676    6.70% $248,940

Demand Deposits     $ 33,142  $ 5,330  19.16% $ 27,812 $ 1,171    4.40% $ 26,641

Other Sources       $ 41,879  $ 9,777  30.46% $ 32,102 $ 3,963   14.09% $ 28,139

TOTAL FUNDING
 SOURCES:           $389,965  $64,435  19.79% $325,530 $21,810    7.18% $303,720
<PAGE>
      <PAGE>23

<TABLE>
<CAPTION>
SUMMARY - AVERAGE BALANCE SHEET AND NET INTEREST INCOME ANALYSIS

                                     (FIRST CITIZENS NATIONAL BANK)

                               Monthly Average Balances and Interest Rates
                                              (in thousands)
                            1998                    1997                       1996
                 Average            Average  Average           Average   Average         Average
                 Balance   Interest  Rate    Balance  Interest   Rate    Balance  Interest  Rate 
<S>              <C>       <C>      <C>     <C>       <C>       <C>    <C>       <C>      <C>
ASSETS
INTEREST EARNING
  ASSETS:
  Loans (1)(2)                                                                     
        (3)      $259,416  $25,222  9.72%   $220,985  $21,422   9.70%  $203,658 $ 19,768  9.71%

Investment 
Securities:

  Taxable        $ 79,419  $ 5,166  6.50%   $ 66,037  $ 4,563   6.91%  $ 64,392 $  4,353  6.76%
  Tax Exempt (4) $ 12,199  $   855  7.01%   $ 10,535  $   741   7.04%  $ 10,825 $    755  6.98%

Interest Earning  
  Deposits       $    980  $    55  5.61%   $    295  $    11   3.73%  $    196 $      7  3.58%

Federal Funds       
Sold             $  2,608  $   155  5.94%   $    975  $    59   6.06%  $  1,166 $     69  5.92%

                  
Lease Financing  $      0  $     0     0%   $      0  $     0      0%  $      5 $      1 20.00%

Total Interest
  Earning Assets $354,622  $31,453  8.87%   $298,827  $26,796   8.97%  $280,242 $ 24,953  8.91%

NON-INTEREST
  EARNING ASSETS:
Cash and Due From
  Banks          $ 10,355  $    -    -      $ 10,009  $    -     -     $ 10,048 $    -     -

Bank Premises and
  Equipment      $  9,015  $    -    -      $  8,181  $    -     -     $  8,499 $    -     -

Other Assets     $ 15,973  $    -    -      $  8,513  $    -     -     $  4,931 $    -     -

Total Assets     $389,965  $    -    -      $325,530  $    -     -     $303,720 $    -     -

LIABILITIES AND
 SHAREHOLDERS'
  EQUITY:

INTEREST BEARING
  LIABILITIES:
Savings Deposits $ 94,759  $ 3,031  3.20%   $ 81,562  $ 2,747   3.37%  $ 73,908 $  2,355 3.19%
 (5)

Time Deposits    $174,685  $ 9,784  5.60%   $149,655  $ 8,280   5.54%  $146,562 $  8,246 5.63%

Federal Funds
  Purchased and
  Other Interest
  Bearing
  Liabilities    $ 45,500  $ 2,400  5.27%   $ 34,399  $ 1,713   4.98%  $ 28,470 $  1,358 4.77%
Total Interest
  Bearing
  Liabilities    $314,944  $15,215  4.83%   $265,616  $12,740   4.80%  $248,940 $ 11,959  4.81%

NON-INTEREST
  BEARING
  LIABILITIES:

Demand Deposits  $ 33,142  $    -      -    $ 27,812 $    -       -    $ 26,641 $     -     -

Other                                      
  Liabilities    $  3,480  $    -      -    $  2,177 $    -       -    $  2,213 $     -     -

Total 
  Liabilities    $351,566  $    -      -    $295,605 $    -       -    $277,794 $     -     - 

SHAREHOLDERS'
  EQUITY         $ 38,399  $    -      -    $ 29,925 $    -       -    $ 25,926 $     -     -


      <PAGE>24

TOTAL LIABILITIES
  AND SHAREHOLDERS'
  EQUITY         $389,965  $    -      -    $325,530  $    -       -    $303,720 $     -     -

NET INTEREST
  INCOME         $      -  $16,238     -    $      -  $14,056      -    $      - $12,994     -  

NET YIELD ON 
  AVERAGE EARNING
  ASSETS         $     -   $     -  4.57%   $      -  $    -    4.71%   $       - $    -   4.64% 
</TABLE>

(1)    Loan totals are shown net of interest collected, not  
       earned and loan loss reserves.  

(2)    Fee Income is included in interest income and the computations 
       of the yield on loans.  Overdraft Fee Income is excluded from the totals.

(3)    Includes loans on nonaccrual status.

(4)    Interest and rates on securities which are non-taxable for Federal
       Income Tax purposes are presented on a taxable equivalent basis.

(5)    Includes Insured Money Fund, NOW, Club Accounts, and   other Savings. 

VOLUME/RATE ANALYSIS
(First Citizens                1998 Compared to 1997       1997 Compared to 1996
 National Bank)                  Due to Changes in:          Due to Changes in:

                                            Total                         Total
                         Average  Average  Increase    Average  Average Increase
                          Volume    Rate   (Decrease)   Volume   Rate (Decrease)

                                                  (in thousands) 
Interest Earned On:

   Loans                 $ 3,728       72     $3,800    $ 1,682 $   (28)  $1,654
  
   Taxable Investments       925     (322)       603        111      99      210
       
   Tax Exempt Investment
    Securities               117       (3)       114        (20)      6     (14)

   Interest Bearing
    Deposits with Other
     Banks                    26       18         44          3       0        3

   Federal Funds Sold and
     Securities purchased
     under agreements to 
     resell                  158      (62)         96      (11)      1      (10)

   Lease Financing             0       0            0        0       0         0

TOTAL INTEREST EARNING        
     ASSETS               $4,954    $(297)     $4,657   $1,765  $   78    $1,843

Interest Paid On: 
   Savings Deposits          445     (161)        284      244     148       392
   
   Time Deposits           1,387      117       1,504      174    (140)       34
     
   Federal Funds Purchased
     and Securities Sold
     Under Agreement to
     Repurchase              553      134         687      282      73       355
       
TOTAL INTEREST BEARING
     LIABILITIES          $2,385     $  90     $2,473   $  700  $   81   $   781
 
    INTEREST EARNINGS     $2,569     $(387)    $2,182   $1,065  $   (3)   $1,062
  
A summary of average interest earning assets and interest
bearing liabilities is set forth in the preceding table
together with average yields on the earning assets and average
cost on the interest bearing liabilities.  Total interest
earning assets increased 9.40% and 6.63% when comparing 1998
to 1997 and 1996.  Total interest bearing liabilities 




      <PAGE>25

increased 28.31% and 10.35% when comparing 1998, 1997 and 1996
respectively.  Total interest earning assets averaged
$4,954,000 at an average rate of 8.87% while total interest
bearing liabilities averaged $2,385,000 at an average rate of
4.83%.  Net yield on average earning assets (annualized) was
4.57%, 4.71%, and 4.64% for the years 1998, 1997, and 1996. 
Strategic plan beginning 1996 called for a reduction in cost
of funds, thereby improving interest rate margins. 
Asset/Liability policies are in place to protect the company
from the negative effects of volatile swings in interest
rates.  Interest margins are well managed to achieve
acceptable profits and a return on equity within policy
guidelines.

LOAN PORTFOLIO ANALYSIS

COMPOSITION OF LOANS
                                          December 31 
                                      (in thousands)
                          1998       1997     1996      1995     1994
Real Estate Loans:   

Construction           $ 27,048  $ 22,697  $ 17,130  $ 12,954  $ 10,511

Mortgage               $143,097  $136,333  $127,080  $107,844  $ 97,310

Commercial, Financial
and Agricultural Loans $ 77,642  $ 41,929  $ 42,067  $ 45,061  $ 38,843

Installment Loans to
Individuals            $ 27,984  $ 25,904  $ 22,743  $ 23,718  $ 19,117

Other Loans            $  2,449  $  2,414  $  2,369  $  2,329  $  3,000

TOTAL LOANS            $278,220  $229,277  $211,389  $191,906  $168,781

CHANGES IN LOAN CATEGORIES

             December 31, 1998 as compared to December 31, 1997
                               (in thousands)

                         Amount of Increase            % of Increase      
       
Loan Category               (Decrease)                   (Decrease)    

Real Estate                  $11,115                       6.90%          

Commercial, Financial   
  and Agricultural           $35,713                      85.17%

Installment Loans to
 Individuals                 $ 2,080                       8.03%

Other Loans                  $    35                       1.44%

TOTAL LOANS                  $48,943                      21.34%

Outstanding Loans at year-end increased 22%, with growth primarily
concentrated in Commercial, Agricultural, and Real Estate.  The expansion
into Obion County affords new lending opportunities, which would support
future growth projections, while at the same time building on existing
customer relationships.  Net loan growth for the five years ending
December, 1998 was approximately 65 percent.  Competition for quality
loans continues to place pressure on the yield and terms customers are
willing to accept.  Loan Administration has taken a conservative position
in dealing with situations which deviate from established underwriting
procedures, while at the same time recognizing the need to maintain loan
growth.  Increased loan demand in 1995 is reflective of our entrance into
the Lauderdale county market and opportunities made available as a result 

      <PAGE>26

of the acquisition.  Growth in 1996 of 10.2% and 1997 of 8.3% is an
indicator of increased competition for high quality loans.  An increase
of 22% for the year ending December 31, 1998 reflects loans acquired as a
result of the Troy acquisition.  The agricultural segment of the West
Tennessee economy(statistics discussed in the Banking Business section of
this report) was dealt a major blow in 1998 when every primary crop was
subjected to some form of natural disaster.  In addition, reduced export
demand forced down commodity prices to levels not seen in more than a
decade.  At December 31, 1998 First Citizens loan portfolio contained
more than $25 million in agricultural related loans.  Many of these loans
presented a challenge to our customer and to First Citizens.  An adequate
loan loss reserve, strong underwriting standards and a 90% guaranty from
farm credit services on many of the loans should minimize the impact to
future earnings.  

Mortgage loans continue to increase at substantial rate.  Growth in this
category exceeded 1997 and 1996 by 4.96% and 7.28%.  The upward trend is
attributed to substantial growth in Dyer County population as well and
the number of households recorded in Dyer county in the past decade.  The
decrease noted in 1998 is attributed to customers desire to lock in lower
interest rates for 15 years or more in the long term market.  Market
information and employment rates are published in this report in the
section titled Banking Business.

The First Citizens loan portfolio is made up of quality credits, and is
well diversified with a concentration of credit in agricultural related 
loans. A concentration of credit is equal to or greater than 25% of gross
Capital funds or $10,958,051.  Agriculture related loans total over $29 
million.  Problem loans increased $935,779 when compared to December 31, 
1997. Problem loans at December 31,1998 was $4.9 million or 1.76% of total
loans.  The provision for loan losses increased in proportion to loan
growth as required by loan policy.  

The book value of repossessed real property held by First Citizens was
$177,000 at December 31,1998 compared to $0 at December 31, 1997.  
Accounting for adjustments to the value of Other Real Estate when
recorded subsequent to foreclosure is accomplished on the basis of
independent appraisal.  The asset is recorded at the lesser of its
appraised value or the loan balance. 

Loan Administration sets policy guidelines approved by the Board of
Directors regarding portfolio diversification and underwriting standards. 
Loan policy also includes board approved guidelines for collateralization, 
loans in excess of loan to value limits, maximum loan amount,
maximum maturity and amortization period for each loan type.  Policy
guidelines for loan to value ratio and maturities related to various
collateral as follows:

Collateral             Max. Amortization          Max. LTV

Real Estate        Various (see discussion)    Various (see discussion)
Equipment          5 Years                    75%
Inventory          5 Years                    50%
A/R                5 Years                    75%
Livestock          5 Years                    80%
Crops              1 Year                     50%
*Securities        10 Years                   75% (Listed)
                                              50% (Unlisted)

*Maximum LTV on margin stocks (stocks not listed on a national exchange)
when proceeds are used to purchase or carry same, shall be 50%.








      <PAGE>27

Diversification of the banks' real estate portfolio is a necessary and
desirable goal of the bank's real estate loan policy.  In order to
achieve and maintain a prudent degree of diversity, given the composition
of the bank's market area and the general economic state of the market
area, the bank will strive to maintain a real estate loan portfolio
diversification based upon the following:

 . Agricultural loans totaling in the aggregate no more than 20% of the
  Bank's total loans.

 . Land acquisition and development loans totaling in the aggregate no
  more than 10% of the Bank's total loans.

 . Commercial construction loans totaling in the aggregate no more than
  10% of the Bank's total loans.

 . Residential construction loans totaling in the aggregate no more than
  10% of the Bank's total loans.

 . Residential mortgage loans totaling in the aggregate no more than 40%
  of the Bank's total loans.

 . Commercial loans totaling in the aggregate no more than 30% of the
  Bank's total loans.

It is the policy of FCNB that no real estate loan will be made (except in
accordance with the provisions for certain loans in excess of supervisory
limits provided for hereinafter) that exceed the loan-to-value percentage
limitations ("LTV limits") designated by category as follows:

     Loan Category                         LTV Limit

  Raw Land                                    65%
  Land Development or Farmland                75%
  Construction:
     Commercial, multi-family, and
     other non-residential                    80%
     1-to-4 family residential                80%
  Improved Property                           80%
  Owner-occupied 1-to-4 family 
     and home equity                          80%

Multi-family construction loans include loans secured by cooperatives and
condominiums.  Owner-occupied 1-to-4 family and home equity loans which
equal or exceed 90% LTV at origination must have either private mortgage
insurance or other readily marketable collateral pledged in support of
the credit.

On occasion, the Loan Committee may entertain and approve a request to
lend sums in excess of the LTV limits as established by policy, provided
that:

 . The request is fully documented to support the fact that other credit 
  factors justify the approval of that particular loan as an exception
  to the LTV limit; 

 . The loan, if approved, is designated in the Bank's records and
  reported as an aggregate number with all other such loans approved by
  the full Board of Directors on at least a quarterly basis; 
  
 . The aggregate total of all loans so approved,including the extension
  of credit then under consideration, shall not exceed 50% of the
  Bank's total capital; and 


      <PAGE>28

 . Provided further that the aggregate portion of these loans in excess
  of the LTV limits that are classified as commercial, agricultural,
  multi-family or non-1-to-4 family residential property shall not
  exceed 30% of the Bank's total capital.  

Amortization Schedules:  Every loan must have a documented repayment
arrangement.  While reasonable flexibility is necessary to meet the
credit needs of the Bank's customers, in general all loans should be
repaid within the following time frames:

       Loan Category                      Amortized Period

       Raw Land                               10 years 
       Construction:
         Commercial, multi-family, and
         other non-residential                20 years 
         1-to-4 family residential            20 years 
       Improved Property Farmland             20 years 
       Owner-occupied 1-to-4 family 
         and home equity                      20 years       

The average yield on loans of First Citizens National Bank for the years
indicated are as follows:

         1998 -  9.72%
         1997 -  9.70%
         1996 -  9.71%
         1995 -  9.69%
         1994 -  9.12%

The aggregate amount of unused guarantees, commitments to extend credit
and standby letters of credit was $46,855,000 at December 31, 1998.

LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES

                                           Due after
                          Due in one       one year but         Due after
                          year or less     within five years   five years
                                            (in thousands)

Real Estate                 $42,470           $103,885            $23,790

Commercial, Financial
 and Agricultural           $38,493            $27,455            $11,694

All Other Loans             $ 7,850            $22,583            $     0

  TOTALS                    $88,813           $153,923            $35,484

Loans with Maturities After One Year for which:
                                                (in thousands)
Interest Rates are Fixed or Predetermined             $171,584
Interest Rates are Floating or Adjustable             $ 17,823

The degree of interest rate risk that a bank is subject to can be
controlled through a well managed asset/liability management program. 
First Citizens controls interest rate risk by matching assets and
liabilities, (by employing interest-sensitive funds in assets that are
also interest sensitive).  One tool used to ensure market rate return is 
variable rate loans.  Loans totaling $106,636,000 or 38.32% of the total
portfolio are subject to repricing within one year or carry a variable
rate of interest.  Loan maturities in the one to five year category
increased to $153,923,000 at December 31, 1998 from $152,949,000 at
December 31, 1997 as a result of customer demand to lock in fixed rates
for a longer period of time.  The trend exhibited by consumers in recent
years to lock in interest rates is projected to continue in 1999.
      <PAGE>29

NON-PERFORMING LOANS

Nonaccrual, Restructured and Past Due Loans and Foreclosed Properties 
(First Citizens National Bank)
                                               December 31 
                                              (in thousands)

                              1998      1997      1996      1995      1994
Nonaccrual Loans             $ 303     $ 440    $1,118    $  836    $  945 

Restructured Loans               0         0         0         0         0

Foreclosed Property
  Other Real Estate,           177         0        50       111       148

  Other Repossessed 
    Assets                       0         0         0         0         0   
  
Loans and leases 90 days 
  Past due and still 
  accruing interest            425       164       177       313     1,044

Total Nonperforming 
  Assets                     $ 905     $ 604    $1,295    $1,260    $2,137

Nonperforming assets 
 as a percent of 
 loans and leases 
 plus foreclosed  
 property at end 
 of year                      .33%      .27%      .62%      .66%     1.27%

Allowance as a percent of:                  

 Nonperforming 
   assets                  386.30%   461.76%   176.22%   175.88%    96.12%

Gross Loans                  1.26%     1.22%     1.08%     1.16%     1.22%

Addition to Reserve as a 
  percent of Net 
  Charge-Offs              154.27%   364.07%   112.16%   180.20% 1,675.00%

Loans and leases 90 days
  past due as a percent of
  loans and leases at year
  end                         .15%      .08%      .09%      .17%      .62%

Recoveries as a 
  percent of Gross 
  Charge-Offs               34.77%    41.11%    20.15%    44.66%    87.10%

Total Non Performing Assets were $905,000 as of December 31, 1998
compared to $604,000 at year end in 1997.  Non performing Assets as a
percent of loans was .33% compared to .27% in 1997 and .62% in 1996. 
Allowance for Loan Losses as a percent of Nonperforming assets and total
loans were 386.30%, 461.76% and 176.22% for each year ending December
31, 1998, 1997 and 1996.  Loan policy calls for an allowance balance of
at least 1% of total loans.  Continued improvements reflected in the
financial ratios are indicative of well communicated loan policies and
procedures.  Categorization of a loan as non-performing is not in itself
a reliable indicator of potential loan loss.  The banks' policy states
that the bank shall not accrue interest or discount on (1) any asset 


      <PAGE>30

which is maintained on a cash basis because of deterioration in the
financial position of the borrower, (2) any asset for which payment-in-full 
of interest or principal is not expected, or (3) any asset upon
which principal or interest has been in default for a period of 90 days
or more unless it is both well secured and in the process of collection. 
For purposes of applying the 90 day due test for the non-accrual of
interest discussed above, the date on which an asset reaches non-accrual
status is determined by it contractual term.  A debt is well secured if
it is secured (1) by collateral in the form of liens or pledges or real
or personal property, including securities that have a realizable value
sufficient to discharge the debt (including accrued interest) in full,
considered to be proceeding in due course either through legal action,
including judgement enforcement procedures, or, in appropriate
circumstances, through collection efforts not involving legal action
which are reasonably expected to result in repayment of the debt or in
its restoration to a current status.  Loans that represent a potential
loss to First Citizens are adequately reserved for in the provision for
loan losses.

Interest income on loans is recorded on an accrual basis.  The accrual
of interest is discontinued on all loans, except consumer loans, which
become 90 days past due, unless the loan is well secured and in the
process of collection.  Consumer loans which become past due 90 to 120
days are charged to the allowance for loan losses.  The gross interest
income that would have been recorded for the twelve months ending
December 31, 1998 if all loans reported as non-accrual had been current
in accordance with their original terms and had been outstanding
throughout the period is $31,000.  Interest income on loans reported as
ninety days past due and on interest accrual status was $41,000 for
1998.  Loans on which terms have been modified to provide for a
reduction of either principal or interest as a result of deterioration
in the financial position of the borrower are considered to be
"Restructured Loans".  First Citizens has no Restructured Loans for the
period being reported.  

Certain loans contained on the bank's Internal Problem Loan List are not
included in the listing of non-accrual, past due or restructured loans. 
Management is confident that, although certain of these loans may pose
credit problems, any potential for loss has been provided for by
specific allocations to the Loan Loss Reserve Account.  Loan officers
are required to develop a "Plan of Action" for each problem loan within
their portfolio.  Adherence to each established plan is monitored by
Loan Administration and re-evaluated at regular intervals for
effectiveness.

LOAN LOSS EXPERIENCE & RESERVE FOR LOAN LOSSES (in thousands)

                        1998      1997      1996      1995      1994
Average Net Loans
Outstanding          $259,416  $ 220,985  $203,663   $183,018  $160,254

Balance of Reserve
for Loan Losses
at Beginning of
Period               $  2,789  $   2,282  $  2,216   $  2,054  $  1,676

Loan Charge-Offs     $   (952) $    (326) $   (680)  $   (365) $   (186)

Recovery of Loans
Previously Charged 
Off                  $    331  $     134  $    137   $    163  $    162

Net Loans Charged 
Off                  $   (621) $    (192) $   (543)  $   (202) $    (24)

Additions to Reserve
Charged to Expense   $    958  $     699  $     609  $    364  $    402


      <PAGE>31
 
Changes Incident
to Mergers           $    370  $       0  $      0   $      0  $      0

Balance at End of
Period               $  3,496  $   2,789  $  2,282   $  2,216  $  2,054

Ratio of Net Charge-
Offs to Average Net
Loans Outstanding        .13%       .09%      .27%       .11%      .01%

The preceding table summarizes activity posted to the Loan Loss Reserve
Account for the past five years.  The summary includes the average net
loans outstanding; changes in the reserve for loan losses arising from
loans charged off and recoveries on loans previously charged off;
additions to the reserve which have been charged to operating expenses;
and the ratio of net loans charged off to average loans outstanding. 
Changes to the Reserve Account for the quarter just ended consisted of 

(1)  Loans charged off of $952,000 (2) Recovery of loans previously
charged off $331,000 and (3) Additions to reserves totaling $699,000.    

An analysis of the allocation of the allowance for Loan Losses is made
on a fiscal quarter at the end of the month, (February, August, and
November) and reported to the board at its meeting immediately preceding
quarter-end.  Requirements of FASB 114 & 118 have been incorporated into
the policy for Accounting by Creditor for Impairment of a loan.  A loan
is impaired when it is probable that a creditor will be unable to
collect all amounts due of principal and interest according to the
original contractional terms of the loan. First Citizens adopted the
following as a measure of impairment:  (1) Impairment of a loan at First
Citizens shall exist when the present value of expected future cash
flows discounted at the loans effective interest rate impede full
collection of the contract; and (2) Fair Value of the collateral, if the
loan is collateral dependent, indicates unexpected collection of full
contract value.  The Impairment decision will be reported to the Board
of Directors and other appropriate regulatory agencies as specified in
FASB 114 and 118.  The bank will continue to follow regulatory
guidelines for income recognition for purposes of generally accepted
accounting principles, as well as regulatory accounting principles.

An annual review of the loan portfolio to identify the risks will cover
a minimum of 70% of the gross portfolio less installment loans.  In
addition, any single note or series of notes directly or indirectly
related to one borrower which equals 25% of the bank's legal lending
limit will be included in the review automatically.

For analysis purposes, the loan portfolio is separated into four
classifications:

1.  Pass - Loans that have been reviewed and graded high  
    quality or no major deficiencies.

2.  Watch - Loans which, because of unusual circumstances,
    need to be supervised with slightly more attention than is common.

3.  Problem - Loans which require additional collection efforts
    to liquidate both principal and interest.

4.  Specific Allocation - Loans, in total or in part, in which
    a future loss is possible.

<PAGE>
      <PAGE>32

Examples of factors taken into consideration during the review are: 
Industry or geographic economic problems, sale of business, change of or
disagreement among management, unusual growth or expansion of the
business, past due status of either principal or interest for 90 days,
placed on non-accrual or renegotiated status, declining financial
condition, adverse change in personal life, frequent overdrafts, lack of
cooperation by borrower, decline in marketability or market value of
collateral, insufficient cash flow, and inadequate collateral values.

Identification of impaired loans from non-performing assets as well as
bankrupt and doubtful loans is paramount to the reserve analysis. 
Special allocations shall support loans found to be collateral or
interest cash flow deficient.  In addition an allowance shall be
determined for pools of loans including all other criticized assets as
well as small homogeneous loans managed by delinquency.  In no
circumstance shall the reserve fall below 1% of total loans less
government guarantees.  The following is a sample of information
analyzed quarterly to determine the allowance for loan losses.

LOAN LOSS ALLOWANCE ANALYSIS

                          AVERAGE         PERCENT   CURRENT   RESERVE
          LOSS 1 YR.      BALANCE 1 YR.             BALANCE   REQUIRED

  I. CREDIT      $         GROSS  $             %     $          $
     CARDS

 II. INSTALL.    $         NET    $             %     $          $  
     LOANS

III. IMPAIRED WITH ALLOCATIONS                        $          $
     IMPAIRED WITHOUT ALLOCATIONS                     $          $
                                        ALLOWANCE
 IV. DOUBTFUL                              50.00%     $          $
     SUBSTANDARD                           10.00%        
     ACCOUNTS RECEIVABLE FACTORING          1.00%
     WATCH                                  5.00%
     OTHER LOANS NOT LISTED PREVIOUSLY       .75%
     LESS SBA/FMHA GUARANTEED PORTIONS  
                                                    
     TOTAL LOANS                                      $

  V. LETTERS OF CREDIT                       .75%     $          $

 VI. OTHER REAL ESTATE OWNED                                     $
                                                               
     RESERVE REQUIRED                                            $
 
     RESERVE BALANCE                                             $
  
     EXCESS (DEFICIT)                                            $

     RESERVE AS % OF TOTAL LOANS %
     PEER GROUP %

     LOSS EXPERIENCE III & IV 
        (AVERAGE LAST 3 YEARS)                  % OR $

<PAGE>
      <PAGE>33

Accounting for adjustments to the value of Other Real Estate when
recorded subsequent to foreclosure is accomplished on the basis of an
independent appraisal.  The asset is recorded at the lesser of its
appraised value or the loan balance.  Any reduction in value is charged
to the allowance for possible loan losses.  All other real estate
parcels are appraised annually and the carrying value is adjusted to
reflect the decline, if any, in its realizable value.  Such adjustments
are charged directly to expense.

Management estimates the approximate amount of charge-offs for the 12
month period ending December 31, 1999 to be as follows:

Domestic                                            Amount
  Commercial, Financial & Agricultural            $250,000
  Real Estate-Construction                               0
  Real Estate-Mortgage                              50,000
  Installment Loans to individuals & credit cards  100,000
  Lease financing                                        0

            01/01/99 through 12/31/99   Total     $400,000

The following table will identify charge-offs by category for the
periods ending December 31 as indicated:

                                    Year Ending December 31
                                        (in thousands)
                               1998      1997     1996   1995
Charge-offs:
 Domestic:
  Commercial, Financial & 
      Agricultural             $228    $  23     $ 432   $  54
Real Estate-Construction          0        0         0       0
  Real Estate-Mortgage          158        0        20     113
  Installment Loans to 
   individuals & credit cards   566      303       228     198
  Lease financing                 0        0         0       0         

         Total                 $952    $ 326     $ 680   $ 365

Recoveries:
 Domestic:
  Commercial, Financial & 
     Agricultural              $165    $  43     $  32  $  38
  Real Estate-Construction        0        0         0      0
  Real Estate-Mortgage            9        2         3     19
Installment Loans to 
   individuals & credit cards   157       89       102    106
  Lease financing                 0        0         0      0
 
          Total                $331    $ 134     $ 137  $ 163

Net Charge-offs               $(621)   $(192)    $(543) $(202)


<PAGE>
      <PAGE>34


COMPOSITION OF INVESTMENT SECURITIES
                                              December 31 
                                             (in thousands)

                               1998     1997     1996     1995     1994  
   
U. S. Treasury & 
 Government Agencies         $85,221 $58,148   $62,194  $59,462  $47,042

State & Political 
 Subdivisions                $14,806 $10,633   $10,569  $10,776  $10,883

All Others                   $ 2,837 $ 2,395   $ 2,984  $ 3,654  $ 4,801

            TOTALS          $102,765 $71,176   $75,747  $73,892  $62,726


MATURITY AND YIELD ON SECURITIES - DECEMBER 31, 1998
                                   (in thousands)

                           Maturing        Maturing      
                Maturing   After One      After Five     Maturing 
               Within One  Year Within    Years Within   After Ten 
                  Year     Five Years      Ten Years      Years
             Amount Yield Amount  Yield  Amount  Yield  Amount Yield
U. S. Treasury 
and Government 
Agencies    $35,942 6.38% $21,985 6.41% $17,955 6.62% $ 9,339 6.50%

State and 
Political   $ 2,571 6.95% $ 5,016 6.52% $ 2,980 6.90% $ 4,239 7.09%
Subdivisions*

All Others  $   ---  ---% $   ---   --% $ 2,837 6.40% $  ----   --%

TOTALS      $38,513 6.42% $27,001 6.43% $23,772 6.63% $13,578 6.68%

*Yields on tax free investments are stated herein on a taxable
equivalent basis.

HELD TO MATURITY & AVAILABLE FOR SALE SECURITIES - DECEMBER 31, 1998

                                        Held to Maturity   Available for Sale 
                                                    (in thousands)
                                        Amortized  Fair     Amortized   Fair 
                                          Cost     Value       Cost     Value

U.S. Treasury Securities                      0         0      3,553    3,721
U.S. Government Agency and
 corporation obligations                 19,486    19,485     61,545   62,014
Securities issued by states & political
  subdivisions in the U.S.:
  Taxable Securities                          0         0        N/A      N/A
  Tax-exempt Securities                   6,225     6,313      8,438    8,581
U. S. Securities:
   Debt Securities                          N/A       N/A        N/A      N/A
   Equity Securities
    (Including Federal Reserve Stock)                          2,814    2,837
Foreign Securities:
   Debt Securities                          N/A       N/A        N/A      N/A
  Equity Securities                                              N/A      N/A
Total (sum of column A items 1 through
 5.a must equal Schedule HC, item 2.a
 and sum of column D, items 1 through 
 5.b must equal Schedule HC, item 2.b)    25,711   25,798      76,350  77,153





      <PAGE>35

(1)      Includes equity securities without readily determinable fair values
         at historical cost. 
(2)      Includes Small Business Administration "Guaranteed Loan Pool
         Certificates," U.S. Maritime Administration obligations, and Export-
         Import Bank participation certificates.
(3)      Includes obligations (other than pass-through securities, CMOs, and
         REMICs) issued by the Farm Credit System, the Federal Home Loan Bank
         System, the Federal Home Loan Mortgage Corporation, the Federal
         National Mortgage Association, the Financing Corporation, Resolution
         Funding Corporation, the Student Loan Marketing Association, and the
         Tennessee Valley Authority.

A major goal of the bank's investment portfolio management is to
maximize returns from investments while controlling the basic elements
of risk.  The second goal is to provide liquidity and meet financial
needs of the community.  Investment Securities also serve as collateral
for government and public funds deposits.  Investment activity for 1998
was driven primarily by strong loan demand.  The investment portfolio,
which currently totals $102,864,000, is comprised of U. S. Treasury and
U. S. Agency Obligations of $85,221,000, Municipal Obligations of
$14,506,000, and all other investments totaling $2,837,000.  Fixed rate
holdings comprise 90% of the portfolio, while adjustable rate holding 
comprise the remaining 10%.  

The fixed rate holdings currently have an expected average life of 2.7
years.  It is estimated that this average life would extend to 5.5 years
should rates go up by 100 basis points and 6.5 years if rates increase
200 basis points. This is a result of some extension occurring in the
callable bonds and mortgage-backed holdings as rates rise.  Should rates
decline 100 basis points, the average life would decrease to 1.8 years.

In terms of price sensitivity, we estimate that if rates go up 100 basis
points the market value of the portfolio would fall by 3.5%, while rates
up 200 basis points would impact the market value by a negative 7.8%.
This is equal to the price sensitivity of the 4.5 year Treasury bond,
which is consistent with the current average life profile of the
portfolio.  If rates go down 100 basis points, we estimate that the
market value would increase by 1.8%.

The adjustable rate holdings reprice on an annual or more frequent basis
and currently have an average life of 4.6 years.  Due to the structure
of these holdings, we would expect very little extension to occur in
average life should interest rates rise, but could see some shortening
should rates fall. We estimate that the adjustable rate holdings have
the price sensitivity of a 3-year Treasury, although this is more
difficult to project on adjustable rate holdings than on fixed rate
holdings.

FASB 115 required banks to maintain separate investment portfolios for
Held-to-Maturity, Available for Sale, and Trading Account Investments. 
As of December 31, 1998 approximately 63 percent of the bank's total
portfolio was placed in the Held For Sale Account while the remaining 37
percent is contained in the Held to Maturity Account.  FASB 115 also
requires banks to mark to market the Available for Sale and Trading
Account investments at the end of each calendar quarter.  Held-to-Maturity 
account investments are stated at amortized cost on the balance
sheet.  Mark to market resulted in a positive capital entry of $632,849
as reflected on the December 31, 1998 balance sheet.  Mark to market
impact to capital on December 31, 1997 was a positive $512,293.  All
purchase and sale transactions in 1998 were made in accordance with
specifications set forth in FASB 115.  The trading account at December
31, 1998 maintained a zero balance.  First Citizens has not engaged in
Derivative activities as defined by paragraphs 5 thru 7 of FASB 119.




      <PAGE>36

Maturities in the portfolio are made up of 38% within one year, and 26%
maturing after one year and within five years.  Maturities on future
investment purchases will be structured to meet loan demand as well as
projected changes in interest rates.

Gains/Losses reflected in year-end income statements attributable to
trading account securities:

   Year Ended  
     12/31       Gains        Losses           Net

     1998      $    0.00    $    0.00     $     0.00
     1997      $    0.00    $    0.00     $     0.00
     1996      $    0.00    $    0.00     $     0.00
     1995      $    0.00    $    0.00     $     0.00

The following table allocates by category unrealized Gains/Losses within
the total portfolio as of December 31, 1998 (in thousands):
    
                                  Unrealized              Net            
                             Gains        Losses     Gains/Losses

U.S. Treasury                                              
  Securities                $   168        $   0       $   168 

Obligations of U.S.
  Government Agencies
  and Corporations          $   678        $ 210       $   468

Obligations of States
  and Political 
  Subdivisions              $   241        $  10       $   231 

Federal Reserve and
  Corporate Stock           $    23        $   0       $    23 

TOTALS                      $ 1,110        $ 220       $   890 

LIQUIDITY AND INTEREST RATE SENSITIVITY

Liquidity is the ability to meet the needs of our customer base for
loans and deposit withdrawals by maintaining assets which are
convertible to cash equivalents with minimal exposure to interest rate
risk.  Slower deposit growth in recent years has forced banks to seek
alternative funding sources in order to meet loan demand.  First
Citizens has resolved this issue by becoming a member of the Federal
Home Loan Bank and establishing a credit line sufficient to meet all
liquidity needs.

Funds made available through Federal Home Loan Bank totaling $40,000,000
provides a fixed level of funds at a predetermined rate.  Other lines of
credit established with Correspondent banks total $18,500,000. 
Correspondent Bank  lines provide additional liquidity required for
daily settlement of the banks books.  It is anticipated that these
sources of funds will continue to be utilized as a tool in managing
liquidity.    

As a result, the company has experienced no problem with liquidity
during any of the years under review and anticipates that all liquidity
requirements will be effectively met in the future.  Adherence to a
strict Asset/Liability Management Policy will ensure our ability to
effectively manage future interest rate risk.




      <PAGE>37

Liquidity ratio, which was 23.87% at December 31, 1998 indicates the
degree short-term and marketable assets are available to fund short term
liabilities and deposit outflows.  The liquidity ratio is calculated by
comparing net liquid assets to net liabilities.  The stability of our
deposit base, approved lines of credit, sound asset/liability
management, quality assets and a strong capital base assure adequate
liquidity.  Other sources available to meet liquidity needs are loans
and investments totaling over $121 million maturing within one year and
approximately $77 million of the bank's investments placed in the held-for-
sale-account.  Loan to deposit ratio at December 31, 1998 was 92.21%
compared to 85.68% at December 31, 1997. The dependency ratio was 5.31%
at year end, reflecting volatile liabilities relied upon to fund longer
term assets.  

There are no known trends or uncertainties that are likely to have a
material affect on First Citizens liquidity or capital resources.  There
currently exists no recommendations by regulatory authorities which if
implemented, would have such an affect.  There are no matters of which
management is aware that have not been disclosed.

Interest rate sensitivity varies with different types of interest-earning 
assets and interest-bearing liabilities.  Overnight federal
funds, on which rates change daily, and loans which are tied to the
prime rate are much more sensitive than long-term investment securities
and fixed rate loans.  The shorter term interest sensitive assets and
liabilities are the key to measurement of the interest sensitivity gap. 
Minimizing this gap is a continual challenge and a primary objective of
the asset/liability management program.

The following condensed gap report provides an analysis of interest rate
sensitivity of earning assets and costing liabilities.  First Citizens
Asset/Liability Management Policy provides that the net interest income
exposure to Tier I Capital shall not exceed 2.00%.  Interest rate risk
is separated and analyzed according to the following categories of risk:
(1) repricing (2) yield curve (3) option risk (4) price risk and (5)
basis risk.  Trading assets are utilized infrequently and are addressed
in the investment policy.  Any unfavorable trends reflected in interest
rate margins will cause an immediate adjustment to the bank's gap
position or asset/liability management strategies.  The following data
schedule reflects a summary of First Citizens' interest rate risk using
simulations.  The projected 12 month exposure is based on 5 different
rate movements (flat, rising, or declining).  Three different rate
scenarios were used for rising rates since First Citizens is liability
sensitive.  Interest rate risk at December 31, 1998 when compared to the
same time period in 1997 was ($165,000) or .55% of Tier I Capital.
 
<PAGE>
      <PAGE>38
<TABLE>
                                      CONDENSED GAP REPORT
12/31/98                                 CURRENT BALANCES
<CAPTION>
                                                          (in thousands)
                                    DAILY     0-1        1-2      2-3      3-6     6-12
                         TOTAL    FLOATING   MONTHS     MONTHS   MONTHS   MONTHS  MONTHS 
<S>                     <C>       <C>       <C>        <C>       <C>      <C>     <C>
CASH AND DUE FROM:
CASH AND DUE FROM        14,223       -          -          -         -        -       -

TOTAL CASH & DUE FROM    14,223       -          -          -         -        -       -

INVESTMENTS
US TREASURIES             3,721       -          -          -         -      168     337
US AGENCIES              47,535       -          -          -         -      490     980 
VARIABLE AGENCIES        33,967       -      3,000      7,473     1,500    8,843  13,151
MUNICIPALS               14,806       -          -          -         -      857   1,714
EQUITIES                  2,835       -          -          -         -        -       -

TOTAL INVESTMENTS       102,864       -      3,000      7,473     1,500   10,358  16,182 

LOANS:
COMMERCIAL FIXED         63,959       -      9,487      3,313     2,502    5,592   9,423
COMMERCIAL VARIABLE      13,683       -     11,767        942       942       32       -
REAL ESTATE VARIABLE     12,707       -     11,663          -         -    1,044       -
REAL ESTATE FIXED       149,037       -      8,382      2,829     4,803    8,094  10,266
HOME EQUITY LOANS         6,471       -      4,583          -         -      793   1,095 
SEC MORTGAGE              1,930       -      1,930          -         -        -       -
INSTALLMENT LOANS        27,984       -        865        585       455    1,381   4,237
FLOOR PLAN                  270       -          -          -         -        -       -
CREDIT CARDS              1,852       -          -          -         -        -       -
OVERDRAFTS                  327       -          -          -         -        -       -
TOTAL LOANS             278,220       -     48,677      7,669     8,702   16,936  25,021
LOAN LOSS RESERVE         3,496       -          -          -         -        -       -

NET LOANS               274,724       -     48,677      7,669     8,702   16,936  25,021

FED FUNDS SOLD            2,000   2,000          -          -         -        -       -
TOTAL FED FUNDS SOLD      2,000   2,000          -          -         -        -       -

TOTAL EARNING ASSETS    379,588   2,000     51,677     15,142    10,202   27,294  41,203   

OTHER ASSETS:                  
BUILDING, F&F & LAND      9,880       -          -          -         -        -       -
OTHER REAL ESTATE           177       -          -          -         -        -       -
OTHER ASSETS             17,353       -          -          -         -        -       - 

TOTAL OTHER ASSETS       27,410       -          -          -         -        -       -

TOTAL ASSETS            421,221   2,000     51,677     15,142    10,202   27,294  41,203

DEMAND DEPOSITS:
DEMAND DEPOSITS          36,339       -          -          -         -        -       -

TOTAL DEMAND             36,339       -          -          -         -        -       -

SAVINGS ACCOUNTS:
REGULAR SAVINGS          19,969   3,663     16,306          -         -        -       -
NOW ACCOUNT              44,442  44,442          -          -         -        -       -
BUSINESS CHECKING           317     317          -          -         -        -       -
IMF-MMDA                  7,941   7,941          -          -         -        -       -
FIRST RATE ACCOUNT       29,557  29,557          -          -         -        -       -
DOGWOOD CLUB              6,577   6,577          -          -         -        -       -

TOTAL SAVINGS           108,803  92,497     16,306          -         -        -       -
</TABLE>
<PAGE>
      <PAGE>39

                        CONDENSED GAP REPORT
12/31/98                       CURRENT BALANCES
                          (in thousands)

                          1-2      2+
                         YEARS    YEARS
CASH AND DUE FROM:
CASH AND DUE FROM             -  14,223

TOTAL CASH & DUE FROM         -  14,223

INVESTMENTS
US TREASURIES                 -   3,216
US AGENCIES               3,327  42,738
VARIABLE AGENCIES             -       -
MUNICIPALS                1,716  10,519
EQUITIES                      -   2,835
TOTAL INVESTMENTS         5,043  59,308

LOANS
COMMERCIAL FIXED          5,848  27,794
COMMERCIAL VARIABLE           -       -
REAL ESTATE VARIABLE          -       -
REAL ESTATE FIXED        11,309 103,354
HOME EQUITY LOANS             -       -
SEC MORTGAGE                  -       -
INSTALLMENT LOANS         4,383  16,078
FLOOR PLAN                    -     270
CREDIT CARDS                  -   1,852
OVERDRAFTS                    -     327
TOTAL LOANS              21,540 149,675
LOAN LOSS RESERVE             -   3,496

NET LOANS                21,540 146,179

FED FUNDS SOLD                -       -

TOTAL FED FUNDS SOLD          -       -

TOTAL EARNING ASSETS     26,583 205,487

OTHER ASSETS:                  
BUILDING, F&F & LAND          -   9,880
OTHER REAL ESTATE             -     177
OTHER ASSETS                  -  17,353

TOTAL OTHER ASSETS            -  27,410

TOTAL ASSETS             26,583 247,120

DEMAND DEPOSITS:
DEMAND DEPOSITS               -  36,339

TOTAL DEMAND                  -  36,339

SAVINGS ACCOUNTS:
REGULAR SAVINGS               -       -
NOW ACCOUNT                   -       -
BUSINESS CHECKING             -       -   
IMF-MMDA                      -       -
FIRST RATE ACCOUNT            -       -
DOGWOOD CLUB                  -       -

TOTAL SAVINGS                 -       -
<PAGE>
      <PAGE>40   
<TABLE>
                                          CONDENSED GAP REPORT
12/31/98                                     CURRENT BALANCES
                                              (in thousands)
<CAPTION>
                                    DAILY     0-1        1-2      2-3       3-6      6-12
                         TOTAL    FLOATING   MONTHS     MONTHS   MONTHS   MONTHS   MONTHS 
<S>                     <C>       <C>     <C>        <C>       <C>       <C>     <C>
TIME DEPOSITS:     
CD 1 - 2 MONTHS          17,470       -     14,002      3,468         -        -       -
CD 3 MONTHS               6,607       -        321         93     3,432    2,761       -
CD 4 - 5 MONTHS           7,071       -      3,203          8         -    3,860       -
CD 6 MONTHS              21,665       -      5,198      2,318     2,523   10,421   1,205
CD 7 - 11 MONTHS          7,752       -         83        164        80       93   7,332
CD 12 MONTHS             10,491       -        621      2,479       580    2,130   4,659
CD 13 - 17 MONTHS        33,081       -        677      1,542     1,393    7,480  17,114
CD 18 - 23 MONTHS           462       -        120        110         6       54      31
CD 24 MONTHS              5,562       -         41      1,399     1,109      855     562
CD 25 - 30 MONTHS         4,419       -      1,890      1,033        99      116     355
CD 31 - 59 MONTHS         9,404       -        100          -         -       80     328
CD 31 - 59 MONTHS            
  VARIABLE                   12       -          -          -         -        -       -
CD 60 MONTHS              4,971       -        352        188       132      347     505
CD 60 MONTHS VARIABLE       767       -        153         76       174       25       -  
CD SWEET 16              18,852       -      1,339        323       707    2,826   8,964
CD 7 MONTH                1,522       -          -        247       226    1,019      30
IRA-FLOATING                 97       -         97          -         -        -       -
IRA FIXED                19,881       -        737      1,129     1,068    3,401   6,485
CHRISTMAS CLUB               89       -          -          -         -        -      89

TOTAL TIME              170,175       -     28,934     14,577    11,529   35,468  47,659

TOTAL DEPOSITS          315,317  92,497     45,240     14,577    11,529   35,468  47,659

FED FUNDS PURCHASED       2,475   2,475             -          -         -        -       -
TT&L                        121     121          -          -         -        -       -
SECURITIES SOLD-SWEEP    12,581  12,581          -          -         -        -       -
SECURITIES SOLD-FIXED     8,701       -      4,497          -     2,268    1,047     779
FHLB-SHORT TERM          14,350  14,350          -          -         -        -       -
FHLB-LIBOR INVESTMENT     2,000       -      2,000          -         -        -       -
FHLB-LONG TERM           21,342       -          -          -         -        -       -
NOTES PAYABLE-FINANCE   1,000       -      -          -         -        -   1,000
ESOP OBLIGATION           1,408       -          -          -         -        -       -

TOTAL BORROWINGS         63,978  29,527      6,497          -     2,268    1,047   1,779

OTHER LIABILITIES         2,645       -          -          -         -        -       -

TOTAL OTHER LIABILITIES   2,645       -          -          -         -        -       -

TOTAL LIABILITIES       381,940 122,024     51,737     14,577    13,797   36,515  49,438

CAPITAL
STOCK, SURPLUS, P.I.C.   15,600       -          -          -         -        -       -
UNREALIZED GAIN (LOSSES)    481       -          -          -         -        -       -
UNDIVIDED PROFITS        23,200       -          -          -         -        -       -

TOTAL CAPITAL            39,281       -          -          -         -        -       -

TOTAL LIAB'S & CAPITAL  421,221 122,024     51,737     14,577    13,797   36,515  49,438

GAP (SPREAD)                  --120,024        -60        565    -3,595   -9,221  -8,235
GAP % TOTAL ASSETS            -  -28.49      -0.01       0.13     -0.85    -2.19   -1.96
CUMULATIVE GAP                --120,024   -120,084   -119,519  -123,114 -132,335-140,570
CUM. GAP % TOTAL ASSETS       -  -28.49     -28.50     -28.37    -29.22   -31.41  -33.37
</TABLE>

<PAGE>
      <PAGE>41
                          CONDENSED GAP REPORT
12/31/98                   CURRENT BALANCES
                             (in thousands)

                          1-2       2+    
                         YEARS     YEARS  
TIME DEPOSITS:     
CD 1 - 2 MONTHS               -       -        
CD 3 MONTHS                   -       -
CD 4 - 5 MONTHS               -       -
CD 6 MONTHS                   -       -
CD 7 - 11 MONTHS              -       -
CD 12 MONTHS                 22       -
CD 13 - 17 MONTHS         4,875       -
CD 18 - 23 MONTHS           141       -
CD 24 MONTHS              1,596       -
CD 25 - 30 MONTHS           690     236
CD 31 - 59 MONTHS         7,865   1,031
CD 31 - 59 MONTHS            
  VARIABLE                   12       -
CD 60 MONTHS                854   2,593
CD 60 MONTHS VARIABLE        95     244
CD SWEET 16               4,693       -
CD 7 MONTH                    -       -
IRA-FLOATING                  -       -
IRA FIXED                 4,937   2,124
CHRISTMAS CLUB                -       -

TOTAL TIME               25,780   6,228

TOTAL DEPOSITS           25,780  42,567

FED FUNDS PURCHASED           -       -
TT&L                          -       -
SECURITIES SOLD-SWEEP         -       -
SECURITIES SOLD-FIXED       110       -
FHLB-SHORT TERM               -       -
FHLB-LIBOR INVESTMENT         -       -
FHLB-LONG TERM            1,852  19,490
NOTES PAYABLE-FINANCE       -       -
ESOP OBLIGATION               -   1,408

TOTAL BORROWINGS          1,962  20,898

OTHER LIABILITIES             -   2,645

TOTAL OTHER LIABILITIES       -   2,645

TOTAL LIABILITIES        27,742  66,110

CAPITAL:
STOCK, SURPLUS, P.I.C.      -  15,600
UNREALIZED GAIN (LOSSES)            481
UNDIVIDED PROFITS             -  23,200

TOTAL CAPITAL                 -  39,281

TOTAL LIAB'S & CAPITAL   27,742 105,391

GAP (SPREAD)             -1,159 141,729
GAP % TOTAL ASSETS        -0.28   33.65
CUMULATIVE GAP         -141,729       -
CUM. GAP % TOTAL ASSETS  -33.65       -


<PAGE>
      <PAGE>42

                    NOTES TO THE GAP REPORT

1.    The gap report reflects the interest sensitivity positions during a
      flat rate environment.  Time frames could change if rates rise or
      fall.

2.    Repricing over-rides maturities in various time frames.

3.    Demand deposits, considered to be core, are placed in the last time
      frame due to lack of interest sensitivity. 

4.    Savings accounts, also considered core, are placed into the +2 year
      time frame.  In a flat rate environment, saving accounts tend not to
      reprice or liquidate and become price sensitive only after a major
      increase in the 6 month CD rate.  These accounts are placed in this
      category instead of the variable position due to history and
      characteristics.  

5.    Simulations will be utilized to reflect the impact of multiple rate
      scenarios on net interest income. Decisions should be made that
      increase net interest income, while always considering the impact on
      interest rate risk. Overall, the bank will manage the gap between
      rate sensitive assets and rate sensitive liabilities to expand and
      contract with the rate cycle phase.  First Citizens will attempt to
      minimize interest rate risk by increasing the volume of variable
      rate loans within the portfolio. The bank will attempt to limit the
      net interest income exposure to a maximum of 2.00% of tier I
      capital. The bank's Asset/Liability Committee will attempt to
      improve net interest income through volume increases and better
      pricing techniques.  Long term fixed rate positions will be held to
      a minimum by increasing variable rate loans.  The over 5 year fixed
      rate loans should be held to less than 25% of assets, unless they
      are funded with Federal Home Loan Bank matched funds.  We will and
      are borrowing funds from the FHLB that have maturities ranging from
      3 to 10 years.  This will reduce our interest rate risk.  These 
      maximum limits are the high points and the ACLO will strive to keep
      the amount below this point.  The December 31, 1998 dynamic gap
      reports reflects an exposure less than our risk limits. (Examples:
      historical margins graphed and multiple scenarios reflecting income
      exposure and as a percent of tier I capital.

  Subsidiaries as well as the Parent Company will adhere to providing
  above average margins and reviewing the various material risks.  New
  products and services will be reviewed for risk by the Product
  Development Committee.

6.    Bancshares could benefit from a flat or declining rate environment. 
      If interest rates rise rapidly, net interest income could be
      adversely impacted. First Citizens Liquidity could be negatively
      impacted should interest rates drop prompting an increase in loan
      demand. Adequate lines of credit are available to handle liquidity
      needs should this occur. 

RETURN ON EQUITY AND ASSETS
FIRST CITIZENS BANCSHARES, INC.
                                    1998    1997    1996   1995    1994 
Percentage of Net Income to:
Average Total Assets                1.08%   1.32%   1.22%   1.00%  1.20%
Average Shareholders Equity        11.00%  13.54%  13.09%  10.60% 12.93%
Percentage of Dividends Declared
 Per Common Share to Net Income
 Per Common Share                  57.51%  35.78%  32.28%  35.56% 29.23%
Percentage of Average Shareholders'
 Equity to Average Total Assets     9.85%   9.71%   9.34%   9.32%  9.27%


      <PAGE>43

Return on assets is a measurement of the firms profitability in terms of
asset utilization.  Total assets at December 31, 1998 was $366,572,000
or 9.32% of total capital.  Return on assets at year end 1998 was 1.08%
compared to 1.32% at year end 1997.  The decline noted in the comparison
was caused by acquisition and non-recurring organization cost associated
with Bank of Troy totaling in excess of $1.3 million.  Performance
ratios at the bank level was less impacted as a result of acquisition
cost dealt with at the Holding Company level.  Adjustments were
recognized to strengthen future income potential and justify the capital
investment in Bank of Troy.  Efforts continue to focus on positioning
the company for future growth and profitability through improvements in
technology, solid growth in the deposit base and efficient utilization
of the branch distribution system.  Accelerated asset growth coupled
with rising interest rates paid on deposits had a significant impact on
earnings in 1995.  Management made a decision the second half of 1995 to
reduce cost of funds and improve net interest margins.  Results of
operations for 1997 and 1996 reflect improvement over previous years as
a result of the decision.

The primary source of earnings for Bancshares continues to be net
interest income.  A comparison generated from this source reflects
increases of 14.8%, 8.2%, and 13.35%.  Earnings for the most recent year
was a result of increased loan volume.  The yield on loans and
investments decreased from 8.97% in 1997 to 8.87% in 1998, while the
cost of funds increased slightly from 4.80% in 1997 to 4.83% in 1998. 
The rise in cost of funds is attributable to a significantly higher
yield on acquired deposits and is being addressed.     

The return on average assets of First Citizens National Bank was 1.29%,
1.31% and 1.23% respectively for 1998, 1997 and 1996.  Return on average
equity was also impacted as a result of the Bank of Troy acquisition. 
Return on average equity reported by the Bank was 14.34%, 14.21%, and
14.39% for the years ending December 31, 1998, 1997 and 1996.

The company's strategic plan addresses objectives to sustain improved
earnings, maintain a quality loan and investment portfolio, seek fee
income opportunities and to maintain market share by providing quality
customer service.  The Bank's management and employees are rewarded with
incentive compensation based on the level of ROA achieved at year end. 
The incentive program is in place that challenges the staff by offering
incrementally increased incentives based on a return on assets up to 2%.

Total Capital (excluding Reserve for Loan Losses) as a percentage of
total assets is presented in the following table for years indicated:

CAPITAL RESOURCES/TOTAL ASSETS - YEAR-END TOTALS 
FIRST CITIZENS BANCSHARES, INC. 

    1998    1997       1996       1995      1994

    9.32%   9.94%      9.46%      9.30%     9.30%

Dividends paid to shareholders in 1998 were enhanced by a special
dividend declared during fourth quarter.  This process utilized in the
past five years serves to raise payout ratios to levels targeted by the
bank's capital plan.  In addition a 4 for 1 stock split distributed the
number of shares outstanding to 3,194,544.  This action follows a 2.5
for 1 stock split October 15, 1993 and a 10% stock dividend December,
1992.  Dividend payouts per share adjusted for the 1998 split were .75
cents in 1998, .50 cents in 1997 and .40 cents in 1996.  






      <PAGE>44

A stock repurchase program continues to be in effect.  The purpose of
the program is to acquire shares on the open market to service the
Dividend Reinvestment Program.  The program has been ineffective since
adoption by the Board of Directors in 1994.  Shareholders continue to
express interest in buying additional stock rather than selling shares. 
Under terms of the Repurchase Program, the company will repurchase up to
$200,000 of Bancshares' stock on a first come, first served basis.  

In 1998, the Employee Stock Ownership Plan entered into a loan agreement
with SunTrust Bank in the amount of $2,000,000 to fund the purchase of
unissued stock.  The stock will be utilized to satisfy future
allocations to plan participants in accordance with the plan document
approved by the Board of Directors.  The balance remaining on the ESOP
loan is $1,407,762 at December 31, 1998.

The purchase of Bank of Troy in 1998 was funded in part by existing capital
totaling $5.5 million.

Risk-based capital focuses primarily on broad categories of credit risk
and incorporates elements of transfer, interest rate and market risks.
The calculation of risk-based capital ratio is accomplished by dividing
qualifying capital by weighted risk assets.  The minimum risk-based
capital ratio is 8.00%.  At least one-half or 4.00% must consist of core
capital (Tier 1), and the remaining 4.00% may be in the form of core
(Tier 1) or supplemental capital (Tier 2).  Tier 1 capital/core capital 
consists of common stockholders equity, qualified perpetual preferred
stock and minority interests in consolidated subsidiaries.  Tier 2
capital/supplementary capital consists of the allowance for loan and
lease losses, perpetual preferred stock, term subordinated debt, and
other debt and stock instruments.

Bancshares has historically maintained capital in excess of minimum
levels established by the Federal Reserve.  The risk-based capital ratio
for Bancshares as of December 31, 1998 and December 31, 1997 was 13.59%
and 15.13% respectively, significantly above the 8.0 percent level
required by regulation.  With the exception of the Reserve for Loan and
Lease Losses, all capital is Tier 1 level.  Growth in capital will be
maintained through retained earnings.  There is no reason to assume that
income levels will not be sufficient to maintain an adequate capital
ratio. Ten percent is used as a benchmark for a well defined capitalized
bank.

<PAGE>
      <PAGE>45

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                 CARMICHAEL, DUNN, CRESWELL & SPARKS PLLC

                       INDEPENDENT AUDITORS' REPORT


Board of Directors 
First Citizens Bancshares, Inc. 
Dyersburg, Tennessee 38024 


We have audited the accompanying consolidated balance sheets of First
Citizens Bancshares, Inc., and Subsidiary as of December 31, 1998 and
1997, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years ended December 31,
1998.  These financial statements are the responsibility of the
Corporation's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First
Citizens Bancshares, Inc., and Subsidiary as of December 31, 1998 and
1997, and their results of operations and cash flows for the three years
ended December 31, 1998, in conformity with generally accepted
accounting principles.



Dyersburg, Tennessee
January 22, 1999


<PAGE>
     <PAGE>46          
                       FIRST CITIZENS BANCSHARES, INC.,
                             AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
                        December 31, 1998 and 1997

                                                         1998          1997
                                  ASSETS

Cash and due from banks                              $ 14,222,681 $ 13,770,773
Federal funds sold                                      2,000,000    5,075,000  
Investment securities    
  Securities held-to-maturity (fair value of 
  $25,797,698 at December 31, 1998 and $21,609,775 
  at December 31, 1997)                                25,710,902   21,579,660
   Securities available-for-sale, at fair value        77,153,366   49,595,880
 Loans - (net of unearned income of 
   $2,215,909 in 1998 and $1,621,643 in 1997)         278,220,329  229,276,999
   Less:  Allowance for loan losses                     3,496,396    2,788,555 
     Net Loans                                        274,723,933  226,488,444
Premises and equipment, net                             9,880,076    8,177,113
Accrued interest receivable                             4,889,297    3,885,355
Other assets                                           12,640,409    4,715,468

     TOTAL ASSETS                                    $421,220,664 $333,287,693  

                   LIABILITIES AND STOCKHOLDERS' EQUITY


 Liabilities
 Deposits         
   Demand                                              36,338,698   32,734,353
   Time                                               170,174,949  152,238,858
   Savings                                            108,803,046   82,616,760
Total Deposits                                        315,316,693  267,589,971
Securities sold under agreement to repurchase          21,281,881   21,765,482
Long-term debt                                         24,342,348    7,813,023
Federal funds purchased and short-term borrowings      16,825,000     
Note payable of Employee Stock Ownership Plan           1,407,762
Other liabilities                                       2,766,371    2,993,865 
     Total Liabilities                                381,940,055  300,162,341 

Stockholders' Equity
 Common stock, no par value - 1998; 
  par value - $1 in 1997
  shares authorized 10,000,000
  in 1998, 2,000,000 in 1997 
  issued 3,244,899 in 1998
    750,718 shares in 1997(3,002,872
    as restated to reflect stock split)                 3,244,899      750,718
Surplus                                                13,892,002   10,669,349
Retained earnings                                      23,199,850   21,405,351
Accumulated other comprehensive income                    481,275      307,376
Less treasury stock, at cost 4,584 shares in 1998 
  and 158 shares in 1997                                 (129,655)      (7,442)
Obligation of Employee Stock Ownership Plan            (1,407,762)            
     Total Stockholders' Equity                        39,280,609   33,125,352 

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $421,220,664 $333,287,693 



    See accompanying notes to consolidated financial statements.

<PAGE>
     <PAGE>47

                                      FIRST CITIZENS BANCSHARES, INC.,
                                             AND SUBSIDIARY
                                     CONSOLIDATED STATEMENTS OF INCOME
                                 Years Ended December 31, 1998, 1997, 1996

                                           1998         *1997           *1996
    Interest Income   

Interest and fees on loans             $25,223,028   $21,421,663    $19,769,117
Interest and dividends on 
  investment securities:
    Taxable                              4,933,596     4,382,119     4,254,795
    Tax-exempt                             555,523       481,543       497,826
    Dividends                              231,491       211,022       180,794
Other interest income                      209,179       120,660        76,846
Lease financing income                                                     338
    Total Interest Income               31,152,817    26,617,007    24,779,716

    Interest Expense

Interest on deposits                    12,816,258    11,056,774    10,601,172
Interest on long-term debt               1,387,565       602,829       395,514
Other interest expense                   1,011,429     1,080,206       962,014
    Total Interest Expense              15,215,252    12,739,809    11,958,700
Net Interest Income                     15,937,565    13,877,198    12,821,016
Provision for loan losses                  957,604       699,485       608,505
Net interest income after provision 
 for loan losses                        14,979,961    13,177,713    12,212,511

    Other Income

Income from fiduciary activities           827,309       755,711       745,861
Service charges on deposit accounts      1,867,431     1,685,739     1,456,681
Other service charges, commissions,
 and fees                                1,112,749       835,470       605,305
Securities gains net                        41,931        92,594       211,233
Other income                               428,196       377,179       349,407
    Total Other Income                   4,277,616     3,746,693     3,368,487

   Other Expenses

Salaries and employee benefits           7,391,511     5,980,198     5,497,388
Net occupancy expense                      495,915       448,121       445,720
Furniture and equipment expense            270,589       196,208       146,388
Depreciation                               953,137       986,797     1,011,677
Data processing expense                    394,817       333,433       304,451
Legal and professional fees                162,994       131,833       161,261
Stationary and office supplies             196,592       194,704       238,000
Other expenses                           3,077,477     2,246,738     2,032,839
    Total Other Expenses               $12,943,032   $10,518,032    $9,837,724

Net income before income taxes         $ 6,314,545   $ 6,406,374    $5,743,274

Provision for income tax expense         2,091,571     2,160,456     2,033,370

Net Income                             $ 4,222,974   $ 4,245,918    $3,709,904 

Earnings Per Common Share:

  Net income                           $      1.34  *$      1.42   *$     1.26 

Weighted average shares outstanding      3,145,037  *  2,980,680   * 2,945,744

*Amounts restated to reflect four for one stock split in 1998.


    See accompanying notes to consolidated financial statements.
<PAGE>
      <PAGE>48 
<TABLE>
                                        FIRST CITIZENS BANCSHARES, INC.,
                                               AND SUBSIDIARY
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                  Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
  
                                               Common Stock 
                                           Shares      Amount     Surplus     Retained Earnings
<S>                                      <C>         <C>        <C>          <C>           
Balance, January 1, 1996                   733,399   $ 733,399  $ 9,719,956  $ 16,166,392  
Comprehensive income
Net income, year ended December 31, 1996                                        3,709,904
Adjustment of record unrealized gain(loss) 
 on securities available-for-sale, net of 
 applicable deferred income taxes ($252,447)
 during the year                           
Total Comprehensive Income                          
Cash dividends paid - $1.30 per share($.40 per share
 as restated to reflect stock split)                                            (1,197,420)
Sale of common stock                         8,117       8,117      376,926 
 
Treasury stock transactions-net       

Balance, December 31, 1996                 741,516     741,516   10,096,882     18,678,876

Comprehensive income
Net income, year ended December 31, 1997                                         4,245,918
Adjustment of unrealized gain (loss) on 
 securities available-for-sale, net of 
 applicable deferred income taxes ($141,850)
 during the year                                  
 
Total Comprehensive Income                         
 
Cash dividends paid - $1.60 per share($.50
 per share as restated to reflect stock split)                                 (1,519,443)

Sale of common stock                        9,202      9,202      572,467
 
Treasury stock transaction-net    
 
Balance, December 31, 1997                750,718  $ 750,718  $10,669,349     $21,405,351
Comprehensive income
Net income, year ended December 31, 1998                                        4,222,974
Adjustment of unrealized gain (loss) on
 securities available-for-sale, net of
 applicable deferred income taxes ($120,208)
 during the year                              
 Less: reclassification of gains included
  in net income net of taxes of $4,726    
 
Total Comprehensive Income                     
 
Cash dividends paid - $.75 per share                                           (2,428,475)
Sale of common stock                      348,503    348,503     5,354,145 
 
Treasury stock transaction-net                                      17,081
 
Adjustments to par value 
 of common stock                        2,145,678  2,145,678    (2,148,573) 
 
Loan proceeds - ESOP obligation       
 
Principal payments - ESOP          
 
Balance, December 31, 1998              3,244,899  3,244,899    13,892,002      23,199,850
</TABLE> 
   See accompanying notes to consolidated financial statements.
<PAGE>
      <PAGE>49
<TABLE>
                                     FIRST CITIZENS BANCSHARES, INC.,
                                            AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
                                                                          Obligation
                                             Accumulated                  Of Employer
                                                 Other                      Stock       Total
                                            Comprehensive                 Ownership Stockholders'
                                                Income     Treasury Stock    Plan      Equity
<S>                                           <C>          <C>           <C>         <C>
Balance, January 1, 1996                      $ 485,271    $  (1,781)    $   -0-     $27,103,237

Comprehensive income
Net income, year ended December 31, 1996                                               3,709,904
Adjustment of record unrealized gain(loss) 
 on securities available-for-sale, net of 
 applicable deferred income taxes ($252,447)
 during the year                               (390,671)                               (390,671)
Total Comprehensive Income                                                             3,319,233 
Cash dividends paid - $1.30 per share($.40 per share
 as restated to reflect stock split)                                                 (1,197,420)
Sale of common stock                                                                    385,043
Treasury stock transactions-net                                (6,887)                   (6,887)

Balance, December 31, 1996                       94,600        (8,668)    -0-       $29,603,206

Comprehensive income
Net income, year ended December 31, 1997                                              4,245,918
Adjustment of unrealized gain (loss) on 
 securities available-for-sale, net of 
 applicable deferred income taxes ($141,850)
 during the year                                212,776                                 212,776
Total Comprehensive Income                                                            4,458,694
Cash dividends paid - $1.60 per share($.50
 per share as restated to reflect stock split)                                       (1,519,443)
Sale of common stock                                                                    581,669
Treasury stock transaction-net                                 1,226                      1,226

Balance, December 31, 1997                     $307,376     $ (7,442)     -0-       $33,125,352

Comprehensive income
Net income, year ended December 31, 1998                                              4,222,974 
Adjustment of unrealized gain (loss) on
 securities available-for-sale, net of
 applicable deferred income taxes ($120,208)
 during the year                                180,312                                 180,312
 Less: reclassification of gains included
  in net income net of taxes of $4,726           (6,413)                                 (6,413)
Total Comprehensive Income                                                            4,396,873 
Cash dividends paid - $.75 per share                                                 (2,428,475)
Sale of common stock                                                                  5,702,648
Treasury stock transaction-net                              (119,319)    (102,238)
Adjustments to par value 
 of common stock                                              (2,894)      (5,789)
Loan proceeds - ESOP obligation                                        (1,999,991)   (1,999,991)
Principal payments - ESOP                                                 592,229       592,229 

Balance, December 31, 1998                      481,275     (129,655)  (1,407,762)   39,280,609
</TABLE>
   See accompanying notes to consolidated financial statements.






<PAGE>
     <PAGE>50 
<TABLE>
                           FIRST CITIZENS BANCSHARES, INC.,
                                AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                     Years Ended December 31, 1998, 1997, and 1996
<CAPTION>
                                                      1998           1997        1996
         Operating Activities
<S>                                               <C>           <C>         <C>     
Net income                                        $4,222,974    $4,245,918  $3,709,904
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Provision for loan losses                         957,604       699,485     608,505
   Provision for depreciation                        953,137       986,797   1,011,677
   Provision for amortization-intangibles            200,741
   Deferred income taxes                            (228,269)      147,765    (319,360)
   Realized investment 
     security (gains) losses                         (41,931)      (92,594)   (211,233)
   (Increase) decrease in accrued 
     interest receivable                          (1,003,942)     (187,716)    253,461
   Increase (decrease) in accrued 
     interest payable                                 83,705      (141,369)    (67,981)   
(Increase) decrease in other assets               (6,528,133)   (1,985,936) (1,053,334)
   Increase (decrease) in other liabilities         (318,574)      303,259     148,547 

        NET CASH PROVIDED (USED) BY
        OPERATING ACTIVITIES                      (1,702,688)    3,975,609   4,080,186

    Investing Activities

Proceeds of maturities of held-to-
  maturity investment securities                  15,625,313     6,985,000   6,335,363
Purchases of held-to-maturity investment 
  securities                                     (19,756,555)     (413,684) (1,500,000)          
   
Proceeds of sales and maturities of available-
  for-sale investment securities                   3,663,608    13,577,097  13,705,781
Purchases of available-for-sale investment 
  securities                                     (31,005,264)  (15,271,701)(20,576,139)
Increase in loans - net                          (49,193,093)  (18,081,064)(20,025,448)
Purchase of premises and equipment                (2,656,100)   (1,028,887)   (316,167)

       NET CASH USED BY 
       INVESTING ACTIVITIES                      (83,322,091)  (14,233,239)(22,376,610)


      Financing Activities

Net increase in demand deposits,
  NOW accounts and savings accounts              $29,790,631   $ 8,067,126 $10,061,195
Increase in time deposits-net                     17,936,091     3,108,822   9,192,447
Increase in long-term borrowing                   23,116,000     5,011,250
Payment of principal on long-term debt            (6,586,675)     (194,707) (1,655,423)
Proceeds from sale of common stock                 4,334,954       581,669     385,043
Cash dividends paid                               (2,428,475)   (1,519,443) (1,197,420)
Net increase in short-term
  borrowings                                      16,341,399       540,167   1,480,349
Treasury stock transactions-net                     (102,238)        1,226      (6,887)

     NET CASH PROVIDED BY
     FINANCING ACTIVITIES                         82,401,687    15,596,110  18,259,304

    INCREASE (DECREASE) IN CASH AND 
       CASH EQUIVALENTS                           (2,623,092)    5,338,480     (37,120)

Cash and cash equivalents at beginning of year    18,845,773    13,507,293  13,544,413

    CASH AND CASH EQUIVALENTS AT
         END OF YEAR                             $16,222,681   $18,845,773 $13,507,293
</TABLE>
Cash payments made for interest and income taxes during the years presented are
as follows:

                                         1998         1997         1996    
Interest                            $15,125,189   $12,884,178 $11,997,839
Income taxes                          2,190,364     2,355,181   1,972,000

    See accompanying notes to consolidated financial statements.









     <PAGE>51

                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
                 NOTES TO FINANCIAL STATEMENTS
                    December 31, 1998 & 1997

Note 1 - Summary of Significant Accounting and Reporting Policies

The accounting and reporting policies of First Citizens Bancshares,
Inc., and Subsidiary conform to generally accepted accounting
principles.  The significant policies are described as follows:

BASIS OF PRESENTATION

The consolidated financial statements include all accounts of First
Citizens Bancshares, Inc. and its subsidiaries First Citizens National
Bank and Bank of Troy.  First Citizens Bancshares, Inc,'s investments in
these subsidiaries are reflected on the Parent Company balance sheet
(Note 13) at the equity in the underlying assets.  Bank of Troy was
acquired on March 5, 1998, in a transaction accounted for as a purchase,
and therefore, operations of Bank of Troy from March 5, 1998 forward are
included in the consolidated financial statements.

All significant inter-company accounts are eliminated in consolidation.

NATURE OF OPERATIONS

The Company and its subsidiary provide commercial banking services of a
wide variety to individuals and corporate customers in the mid-southern
United States with a concentration in northwest Tennessee.  The
Company's primary products are checking and savings deposits and
residential, commercial, and consumer lending.

BASIS OF ACCOUNTING

The consolidated financial statements are presented using the accrual
basis of accounting.

USES OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.

Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for losses on loans
and the valuation of real estate acquired in connection with
foreclosures or in satisfaction of loans.  In connection with the
determination of the allowances for losses on loans and foreclosed real
estate, management obtains independent appraisals for significant
properties.

CASH EQUIVALENTS

Cash equivalents include amounts due from banks which do not bear
interest and federal funds sold. Generally, federal funds are purchased
and sold for one-day periods.






      <PAGE>52
                                      
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997


Note 1 - Summary of Significant Accounting and Reporting Policies (Continued)

SECURITIES

Investment securities are classified as follows:

       Held-to-maturity, which includes those investment securities which
       the Company has the intent and the ability to hold until maturity;
       Trading securities, which includes those investment securities which
       are held for short-term resale; and 
       Available-for-sale, which includes all other investment securities.

Securities, which are held-to-maturity, are reflected at cost, adjusted
for amortization of premiums and accretion of discounts using methods,
which approximate the interest method.  Securities, which are available-for-
sale, are carried at fair value, and unrealized gains and losses are
recognized as direct increases or decreases in stockholders' equity. 
Trading securities, where applicable, are carried at fair value, and
unrealized gains and losses on these securities are included in net
income.

Realized gains and losses on investment securities transactions are
determined based on the specific identification method and are included
in net income.

LOANS

Loans are reflected on the balance sheet at the unpaid principal amount
less the allowance for loan losses and unearned income.

Loans are generally placed on non-accrual status when, in the judgment of
management, the loans have become impaired.  Unpaid interest on loans
placed on non-accrual status are reversed from income and further accruals
of income are not usually recognized.  Subsequent collections related to
impaired loans are usually credited first to principal and then to
previously uncollected interest.

ALLOWANCE FOR LOAN LOSSES

The provision for loan losses which is charged to operations is based on
management's assessment of the quality of the loan portfolio, current
economic conditions, and other relevant factors.  In management's
judgment, the provision for loan losses will maintain the allowance for
loan losses at an adequate level to absorb potential loan losses, which
may exist in the portfolio.

PREMISES AND EQUIPMENT

Bank premises and equipment are stated at cost less accumulated
depreciation. The provision for depreciation is computed using straight-line
and accelerated methods for both financial reporting and income tax
purposes.  Expenditures for maintenance and repairs are charged against
income as incurred. Cost of major additions and improvements are
capitalized and depreciated over their estimated useful lives.




      <PAGE>53

                                      
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997


Note 1 - Summary of Significant Accounting and Reporting Policies (Continued)


REAL ESTATE ACQUIRED BY FORECLOSURE

Real estate acquired through foreclosure is reflected in other assets
and is recorded at the lower of fair value less estimated costs to sell
or cost.  Adjustments made at the date of foreclosure are charged to the
allowance for loan losses.  Expenses incurred in connection with
ownership, subsequent adjustments to book value, and gains and losses
upon disposition are included in other non-interest expenses.

Adjustments to net realizable value are made annually subsequent to
acquisition based on appraisal.

INCOME TAXES

First Citizens Bancshares, Inc., uses the accrual method of accounting
for federal income tax reporting.  Deferred tax assets or liabilities
are computed for significant differences in financial statement and tax
bases of assets and liabilities, which result from temporary differences
in financial statement and tax accounting.

INTEREST INCOME ON LOANS

Interest income on commercial and real estate loans is computed on the
basis of the daily principal balance outstanding using the accrual
method.  Interest on installment loans is credited to operations by the
rule of 78ths method, which does not represent a significant financial
deviation from the interest method.

NET INCOME PER SHARE OF COMMON STOCK

Net income per share of common stock is computed by dividing net income
by the weighted average number of shares of common stock outstanding
during the period, after giving retroactive effect to stock dividends
and stock splits.

INCOME FROM FIDUCIARY ACTIVITIES

Income from fiduciary activities is recorded on the accrual basis.
<PAGE>
     <PAGE>54

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1998 & 1997


Note 2 - Investment Securities

The following tables reflect amortized cost, unrealized gains,
unrealized losses and fair value of investment securities for the
balance sheet dates presented, segregated into held-to-maturity and
available-for-sale categories:
<TABLE>
                                                      December 31, 1998
                                                       Held-To-Maturity
<CAPTION>
                                                     Gross          Gross
                                                   Unrealized     Unrealized   
                                 Amortized Cost      Gains          Losses      Fair Value
<S>                                 <C>              <C>            <C>        <C>    
U.S. Treasury securities and 
 obligations of U.S. Government 
 corporations and agencies          $18,984,694      $111,790       $86,997    $19,009,487

Obligations of states and 
 political subdivisions               6,224,605        56,224           137      6,280,692

Mortgage-backed securities              501,603         5,916                      507,519
                                                                                            

  TOTAL SECURITIES INVESTMENTS      $25,710,902      $173,930       $ 87,134   $25,797,698

                                                      Available-for-Sale
                                                     Gross          Gross
                                                   Unrealized     Unrealized   
                                  Amortized Cost     Gains          Losses       Fair Value

U.S. Treasury securities and 
 obligations of U.S. Government 
 corporations and agencies          $51,228,472       $647,686      $108,024    $51,768,134

Obligations of states and 
 political subdivisions               8,463,791        151,983         9,716      8,606,058

Mortgage-backed securities           13,923,391         80,089        36,874     13,966,606

      Total Debt Securities          73,615,654        879,758       154,614     74,340,798

  Equity investments                  2,789,068         23,500                    2,812,568

  TOTAL SECURITY INVESTMENT         $76,404,722       $903,258      $154,614    $77,153,366
</TABLE>

<PAGE>
      <PAGE>55

                       FIRST CITIZENS BANCSHARES, INC.,
                               AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1998 & 1997

Note 2 - Investment Securities (Continued)
<TABLE>
                                                     December 31, 1997
                                                      Held-To-Maturity
<CAPTION>
                                                     Gross          Gross
                                                   Unrealized     Unrealized   
                                  Amortized Cost     Gains          Losses       Fair Value
<S>                                <C>               <C>          <C>           <C>
U.S. Treasury securities and 
 obligations of U.S. Government 
 corporations and agencies         $14,401,389       $ 98,371     $105,602      $14,394,158

Obligations of states and 
 political subdivisions              5,350,648         36,025          969        5,385,704

Mortgage-backed securities           1,827,623          9,870        7,580        1,829,913

    TOTAL SECURITIES INVESTMENTS   $21,579,660       $144,266     $114,151      $21,609,775

                                                   
                                                      Available-For-Sale
                                                     Gross          Gross
                                                   Unrealized     Unrealized   
                                  Amortized Cost     Gains          Losses       Fair Value

U.S. Treasury securities and 
 obligations  of U.S. Government 
 corporations and agencies          $34,392,501     $384,772      $ 25,113      $34,752,160

Obligations of states and 
 political subdivisions               5,208,219       72,908                      5,281,127

Mortgage-backed securities            7,091,365      120,608        44,380        7,167,593

        Total Debt Securities        46,692,085      578,288        69,493       47,200,880

    Equity investments                2,390,500        4,500                      2,395,000

     TOTAL SECURITIES INVESTMENT    $49,082,585     $582,788      $ 69 493      $49,595,880
</TABLE>
<PAGE>
      <PAGE>56
                       FIRST CITIZENS BANCSHARES, INC.,
                               AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1998 & 1997

Note 2 - Investment Securities (Continued)

The tables below summarize maturities of debt securities held-to-maturity
and available-for-sale  as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
                                                December 31, 1998

                                     Securities                    Securities
                                 Held-To-Maturity              Available-For-Sale
                          Amortized Cost    Fair Value   Amortized Cost   Fair Value
<S>                         <C>             <C>            <C>            <C> 
Amounts Maturing In:

One Year or less            $ 3,164,210     $ 3,182,703    $ 1,403,294    $ 1,413,154
After one year through 
  five years                 16,940,836      17,091,465     19,301,638     19,169,309
After five years through 
  ten years                   5,057,600       5,105,289     28,607,598     28,895,156
After ten years                 548,256         418,241     24,303,124     24,863,179 
                            $25,710,902     $25,797,698    $73,615,654    $74,340,798

                                                December 31, 1997

                                     Securities                    Securities
                                  Held-To-Maturity             Available-For-Sale
                           Amortized Cost   Fair Value   Amortized Cost   Fair Value
Amounts Maturing In:

One Year or less             $ 4,737,446    $ 4,740,214    $ 2,480,756    $ 2,497,500
After one year through 
 five years                   10,641,283     10,643,304      8,162,475      8,324,908
After five years through 
 ten years                     4,571,225      4,587,856     19,671,794     19,866,182
After ten years                1,629,706      1,638,401     16,377,060     16,512,290
                             $21,579,660    $21,609,775    $46,692,085    $47,200,880

</TABLE>
Securities gains (losses) presented in the consolidated statements 
of income consist of the following:


Year Ended December 31                 Gross Sales    Gains    Losses      Net


1998 - Securities held to maturity     $15,557,608  $ 81,570   $56,669  $ 24,901
1998 - Securities available-for-sale     4,000,000    17,030              17,030
1997 - Securities held-to-maturity       3,500,000    29,687              29,687
1997 - Securities available-for-sale     7,577,097    69,117     6,210    62,907
1996 - Trading securities                  150,000       750         -       750
1996 - Securities held-to-maturity       6,335,663    43,003              43,003
1996 - Securities available-for-sale    13,705,781   179,583    12,103   167,480

Sales of securities classified as held-to-maturity consist of securities
which were called resulting in a gain or loss or sold within ninety days
of maturity.

At December 31, 1998 and 1997, investment securities were pledged to
secure government, public and trust deposits as follows:

         December 31           Amortized Cost      Fair Value
            1998                 $72,834,985       $73,526,165
            1997                  63,790,012        64,306,841
                               
In accordance with provisions of the Implementation Guide of Statement
No. 115 issued by the Financial Accounting Standards Board, First
Citizens Bancshares, Inc. transferred securities with a book value of
$14,824,727 from the held-to-maturity category to available-for-sale
category during 1996.  An unrealized gain of $549,287 was recognized on
these securities.  According to FASB 115, 1996 was a transition year to
allow companies to re-classify investment portfolios into Held-For-Sale. 
For years after 1996 no transfers are permitted.

      <PAGE>57

                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    December 31, 1998 & 1997

Note 3 - Loans

Loans outstanding at December 31, 1998 and 1997 were comprised
of the following:
                                     1998              1997
                                         (In Thousands)
Commercial, financial and 
  agricultural                     $ 77,642         $ 41,929
Real estate - construction           27,048           22,697
Real estate - mortgage              143,097          136,333
Installment                          27,984           25,904
Other loans                           2,449            2,414
                                    278,220          229,277
Less:  Allowance for loan losses      3,496            2,789   
                                   $274,724         $226,488

In conformity with Statement No. 114 of the Financial
Accounting Standards Board, the Corporation has recognized
loans with carrying values of $1,244,000 at December 31, 1998,
and $614,000 at December 31, 1997, as being impaired. The
balance maintained in the Allowance for Loan Losses related to
these was $155,261 at December 31, 1998, and $123,527 at
December 31, 1997.  As of December 31, 1998, the specific
allowance for loan losses was related to impaired loans
totaling $708,000.

Note 4 - Allowance for Loan Losses

An analysis of the allowance for loan losses during the three
years ended December 31 is as follows:
                                        1998         1997       1996 
Balance, beginning of period        $2,788,555  $2,282,231  $2,216,511
Provision for loan losses charged 
  to operations                        957,604     699,485     608,505
Loans charged to allowance, 
  net of loan loss recoveries of 
  $324,513, $132,521, and $137,566    (620,074)   (193,161)   (542,785)
Addition incident to Mergers           370,311                        

Balance, end of period              $3,496,396  $2,788,555  $2,282,231 

For tax purposes, the Corporation deducts the maximum amount allowable. 
During the year ended December 31, 1998, the deduction taken was
$249,663.  The deductions for tax purposes in 1997 and 1996 were
$193,161 and $542,785 respectively.

Note 5 - Premises and Equipment

The fixed assets used in the ordinary course of business are summarized
as follows: 

                         Useful Lives
                           in Years        1998           1997 
Land                                    $1,514,537     $ 1,114,046
Buildings                  5 to 50       9,220,874       7,891,651
Furniture and equipment    3 to 20       8,332,648       7,407,589 
                                        19,068,059      16,413,286
Less:  Accumulated depreciation          9,187,983       8,236,173
     Net Fixed Assets                  $ 9,880,076     $ 8,177,113 

      <PAGE>58

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1998 & 1997

Note 6 - Repossessed Real Property

The carrying value of repossessed real property on the balance sheets of
the Corporation is $136,937 at December 31, 1998, and $-0- at December
31, 1997.  At December 31, 1995, First Citizens Bancshares, Inc., owned
certain real estate, which had been acquired by foreclosure by First
Citizens National Bank and subsequently sold to the parent company.  The
property, which had a basis of $650,000, was sold during the year ended
December 31, 1996 at a loss of $18,349.

When applicable, the value of repossessed real property is reflected on
the balance sheet in "other assets."


Note 7 - Deposits

Included in the deposits shown on the balance sheet are the following
time deposits and savings deposits in denominations of $100,000 or more:
                                            1998       1997
                                             (in thousands)

Time Deposits                            $45,419     $48,635
Savings Deposits                          57,321      30,523

NOW accounts, included in savings deposits on the balance sheet, totaled
$40,748,256 at December 31, 1998 and $25,851,753 at December 31, 1997.

First Citizens National Bank routinely enters into deposit relationships
with its directors, officers and employees in the normal course of
business.  These deposits bear the same terms and conditions as those
prevailing at the time for comparable transactions with unrelated
parties.  Balances of executive officers and directors on deposit as of
December 31, 1998 and 1997, were $4,469,852 and $4,113,170,
respectively.

Time deposits maturing in years subsequent to December 31, 1998 are as
follows:

                Year ended December 31       (In Thousands)

                    1999                    $138,167
                    2000                      25,780
                    2001                       1,960
                    2002                       2,342
                    2003                       1,882
                 Thereafter                       44
                   Total                    $170,175
                                                                    
Note 8 - Employee Stock Ownership Plan

First Citizens National Bank maintains the First Citizens National Bank
of Dyersburg Employee Stock Ownership Plan as an employee benefit.  The
plan provides for a contribution annually not to exceed twenty-five
percent of the total compensation of all participants and affords
eligibility for participation to all full-time employees who have
completed at least one year of service.  Contributions to the Employee
Stock Ownership Plan totaled $565,557 in 1998, $428,969 in 1997, and
$399,138 in 1996.




      <PAGE>59

                    FIRST CITIZENS BANCSHARES, INC.,
                             AND SUBSIDIARY
                     NOTES TO FINANCIAL STATEMENTS
                       December 31, 1998 and 1997


Note 9 - Income Taxes

Provision for income taxes is comprised of the following:
                                      1998        1997        1996
Federal income tax expense (benefit) 
  Current                           $1,905,904 $1,959,091  $1,712,398
  Deferred                            (194,029)  (167,797)    (22,344)

State income tax expense (benefit)
  Current                              413,936    393,606     347,259
  Deferred                             (34,240)   (24,444)     (3,943)

                                    $2,091,571  $2,160,456  $2,033,370

The ratio of applicable income taxes to net income before income taxes
differed from the statutory rates of 34%.  The reasons for these
differences are as follows:

                                        1998       1997        1996
Tax expense at statutory rate        $2,146,945 $2,178,167  $1,952,713
Increase (decrease) resulting from:                       
  State income taxes, net of federal
    income tax benefit                  250,056    253,128     226,589
Tax exempt income                      (190,160)  (232,749)   (172,142)
Effect of life insurance                (80,400)   
Other items                             (34,870)   (38,090)     26,210

                                     $2,091,571 $2,160,456  $2,033,370

Deferred tax liabilities have been provided for taxable temporary
differences related to depreciation, accretion of securities discounts,
and other minor items.  Deferred tax assets have been provided for
deductible temporary differences related primarily to the allowance for
loan losses and adjustments for loss on repossessed real estate. The net
deferred tax assets, which are included in "other assets" in the
accompanying consolidated balance sheets include the following
components:

                                                     December 31
                                                  1998          1997

Deferred tax liabilities                       $ (320,850)    $(204,917)
Deferred tax assets                               656,618       311,387

Net deferred tax assets                        $  335,768     $ 106,470








      <PAGE>60

                    FIRST CITIZENS BANCSHARES, INC.,
                             AND SUBSIDIARY
                     NOTES TO FINANCIAL STATEMENTS
                       December 31, 1998 and 1997

Note 10 - Regulatory Matters

First Citizens Bancshares, Inc. is subject to various regulatory capital
requirements administered by the federal banking agencies.  Failure to
meet minimum capital requirements can initiate certain mandatory, and
possibly additional discretionary actions by regulators that, if
undertaken, could have a direct material effect on the Company and the
consolidated financial statements.  The regulations require the Banks to
meet specific capital adequacy guidelines that involve quantitative
measures of the Banks' assets, liabilities, and certain off-balance
sheet items as calculated under regulatory accounting practices.  The
Banks' capital classifications are also subject to qualitative
judgements by the regulators about components, risk weightings, and
other factors.

Quantitative measures established by regulation to ensure capital
adequacy require the Banks to maintain minimum amounts and ratios (set
forth in the table below) of Tier I capital (as defined in the
regulations) to total average assets (as defined), and minimum ratios of
Tier I and total capital (as defined) to risk-weighted assets (as
defined).  To be considered adequately capitalized (as defined) under
the regulatory framework for prompt corrective action, the Banks must
maintain minimum Tier I leverage, Tier I risk-based, and total risk-based 
ratios as set forth in the table.  The Banks' actual capital
amounts and ratios are also presented in the table.

As of December 31, 1998, the most recent notification from the Banks'
primary regulatory authorities categorized the Banks as well capitalized
under the regulatory framework for prompt corrective action.  To be
categorized as well capitalized, the Banks must maintain minimum total
risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth
in the Table.  There are no conditions or events since that notification
that management believes have changed the institution's category.  
<PAGE>
      <PAGE>61
                              
             
                                                    
        
                                                                For Capital
    First Citizens National Bank              Actual         Adequacy Purposes
Amount                                    Amount    Ratio   Amount       Ratio
As of December 31, 1998:
Total Capital (To Risk Weighted Assets) $30,371,879 12.03%  $20,204,400 > 8.0 %
Tier I Capital (To Risk Weighted Assets) 29,893,041 11.83%   10,102,200 > 4.0 %
Tier I Capital (To Average Assets)       29,893,041  8.37%   14,284,840 > 4.0 %

As of December 31, 1997:
Total Capital (To Risk Weighted Assets) $31,574,878 13.5 %  $18,754,720 > 8.0 %
Tier I Capital (To Risk Weighted Assets) 31,155,029 13.3 %    9,377,360 > 4.0 %
Tier I Capital (To Average Assets)       31,155,029  9.5 %   13,021,200 > 4.0 %

Bank of Troy
Amount                                   Amount     Ratio  Amount        Ratio
As of December 31, 1998:
Total Capital (To Risk Weighted Assets) $9,463,074  26.90%   $2,814,160 > 8.0 %
Tier I Capital (To Risk Weighted Assets) 6,173,943  17.55%    1,407,080 > 4.0 %
Tier I Capital (To Average Assets)       6,173,943  11.04%    2,238,240 > 4.0 %

  

     

                                    
                                     

<PAGE>
      <PAGE>62

                                              To Be Well
                                           Capitalized Under
                                           Prompt Corrective
                                            Action Provisions

First Citizens National Bank
Amount                                     Amount           Ratio
As of December 31, 1998:
 Total Capital (To Risk Weighted Assets) $25,255,500 >      10.0%
 Tier I Capital (To Risk Weighted Assets) 15,153,300 >       6.0%
 Tier I Capital (To Average Assets)       17,856,050 >       5.0%

As of December 31, 1997:
 Total Capital (To Risk Weighted Assets) $23,443,400 >      10.0%
 Tier I Capital (To Risk Weighted Assets) 14,066,040 >       6.0%
 Tier I Capital (To Average Assets)       16,357,750 >       5.0% 


Bank of Troy
Amount                                     Amount           Ratio
As of December 31, 1998:
 Total Capital (To Risk Weighted Assets) $ 3,517,700 >      10.0%
 Tier I Capital (To Risk Weighted Assets)  2,110 662 >       6.0%
 Tier I Capital (To Average Assets)        2,797 800 >       5.0%


<PAGE>
      <PAGE>63

                         FIRST CITIZENS BANCSHARES, INC.,
                                  AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1998 & 1997

Note 11 - Restrictions on Cash and Due From Bank Accounts

The Corporation's bank subsidiary maintains cash reserve balances as 
required by the Federal Reserve Bank.  Average required balances during 
1998 and 1997 were $337,000 and $152,000, respectively.


Note 12 - Restrictions on Capital and Payment of Dividends

The Corporation is subject to capital adequacy requirements imposed by the
Federal Reserve Bank.  In addition, the Corporation's National Bank Subsidiary
is restricted by the Office of the Comptroller of the Currency from paying
dividends in any years which exceed the net earnings of the current year plus
retained profits of the preceding two years.  As of December 31, 1998,
approximately $12 million of retained earnings was available for future
dividends from the subsidiary to the parent corporation.


Note 13 - Condensed Financial Information

                           First Citizens Bancshares, Inc.
                                (Parent Company Only)
                                                        December 31
                                                     1998          1997
                            BALANCE SHEETS

ASSETS
Cash                                              $   985,782   $ 1,271,900
    Investment in subsidiaries                     40,154,724    31,574,878
    Real estate owned                                               164,181
    Other assets                                      242,397       117,619
    TOTAL ASSETS                                  $41,382,903   $33,128,578

LIABILITIES AND STOCKHOLDERS' EQUITY
   LIABILITIES
    Long-term debt                                $   682,295   $
    Note payable of ESOP                            1,407,762 
    Accrued expenses                                   12,237         3,226
TOTAL LIABILITIES                                   2,102,294         3,226

STOCKHOLDERS' EQUITY                               39,280,609    33,125,352
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $41,382,903   $33,128,578


                          STATEMENTS OF INCOME
                                                        December 31
                                                     1998          1997
INCOME
  Dividends from bank subsidiary                  $ 5,661,600  $    598,126
  Other income                                         39,079        79,954
TOTAL INCOME                                        5,700,679       678,080

EXPENSES
  Interest expense                                    119,305 
  Other expenses                                      159,446        90,829

TOTAL EXPENSES                                        278,751        90,829

Income before income taxes and equity 
 in undistributed net income of bank subsidiary     5,421,928       587,251

Income tax expense (benefit)                          (87,935)       (3,899)
                                                    5,509,863       591,150
Equity in undistributed net income of 
 bank subsidiary                                   (1,286,889)    3,654,768

  NET INCOME                                       $4,222,974   $ 4,245,918
<PAGE>
      <PAGE>64

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1998 & 1997

Note 13 - Condensed Financial Information (continued)

                           First Citizens Bancshares, Inc.
                                (Parent Company Only)

                     STATEMENTS OF CASH FLOW
                                                          December 31
                                                      1998           1997      
Operating Activities
Net income                                         $4,222,974    $4,245,918
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation   
    Undistributed income of subsidiary              1,286,889    (3,654,768)
    Investment in subsidiary
    Gain on sale of other real estate
    (Increase) in other assets                       (124,778)      (14,230)
    (Decrease) in other liabilities                     9,011       (19,633)

     NET CASH PROVIDED BY OPERATING ACTIVITIES      5,394,096       557,287

Investing Activities
Proceeds of sale of other real estate              $  164,181   $
Investment in subsidiary                           (9,692,836)
Investment in securities                                           (500,000)
Proceeds of sale of securities                                      700,000 

NET CASH PROVIDED (USED)BY INVESTING ACTIVITIES    (9,528,655)      200,000 

Financing Activities
Proceeds of note payable                            4,116,000
Payment of principal on note                       (3,433,705)
Payment of dividends and payments in lieu of 
  fractional shares                                (2,428,475)   (1,519,443)
Sale of Common Stock                                5,696,859       581,669 
Treasury Stock transactions - net                    (102,238)        1,226 

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES    3,848,441      (936,548)

 INCREASE (DECREASE) IN CASH                         (286,118)     (179,261)

Cash at beginning of year                           1,271,900     1,451,161

  CASH AT END OF YEAR                              $  985,782    $1,271,900


<PAGE>
      <PAGE>65

                         FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           December 31, 1998 & 1997


Note 14 - Long Term Debt

At December 31, 1998, First Citizens Bancshares, Inc. is obligated to
another financial institution on a revolving term note with a maximum
available credit limit of ten million dollars, ($10,000,000).  The note
matures on January 2, 2008 and bears interest at one and one-fifth of
one percentage point (1.2%) above the London Interbank Offered Rate for
one-month periods which is published monthly.  The note is secured by
all of the outstanding capital stock of the Corporation's subsidiary,
First Citizens National Bank.  The note was incurred in order to acquire
the Corporation's subsidiary Bank of Troy, and at December 31, 1998, the
outstanding principal balance is $682,295. 

First Citizens National Bank has secured advances from the Federal Home
Loan Bank in the amounts of $35,010,053 at December 31, 1998 and
$6,812,023 at December 31, 1997.  At December 31, 1998, $20,660,053 is
considered long-term in nature.  These advances bear interest at rates
which vary from 4.8% to 6.0% and mature in the years 2008 through 2009. 
The obligations are secured by the Bank's entire portfolio of fully
disbursed, one to four family residential mortgages.

Bank of Troy is indebted to the Federal Home Loan Bank on similar
advances totaling $2,000,000 as of December 31, 1998.  These loans are
also secured by Bank of Troy's fully disbursed one to four family
mortgages.  The obligations bear interest at rates which vary from 4.8%
to 5.08% and matures in 2008.

Delta Finance Company, a subsidiary of First Citizens National Bank, is
obligated to General Appliance and Furniture Company, Inc. on an
unsecured note payable in the amount of $1,000,000, which bears interest
at the rate of six and one-half percent (6.5%) per annum and matures
February 18, 1998.  The Company has the intent and ability to renew the
loan for another five years.

Averages for the years 1998 and 1997 are as follows:

                                          Average      Average       Average
                                          Volume    Interest Rate    Maturity


1998
First Citizens Bancshares, Inc.        $2,303,000       6.89%         2 years
First Citizens National Bank           13,728,000       5.8%          7 years
Bank of Troy                            2,000,000       5.8%          7 years
Delta Finance Company                   1,000,000       6.5%          5 years
                   
1997               
First Citizens Nat'l Bank               6,216,000       5.79%         9 years
Delta Finance Company                   1,010,000       6.5%          5 years




<PAGE>
      <PAGE>66

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997


Note 14 - Long Term Debt (continued)

Maturities of principal on the above referenced long-term debt for the
following five years is shown:

           Year Ending December 31
                   1999                             $     900,934
                   2000                                   231,152
                   2001                                   244,380
                   2002                                   258,366
                   2003                                   268,156
                 Thereafter                            22,439,360
                                                     $ 24,342,348

Note 15 - Securities Sold Under Agreement to Repurchase

At December 31, 1998 and 1997, First Citizens National Bank had out-standing 
balances in short-term borrowings as follows:

         1998                                         1997

Outstanding balance                          $38,106,881     $21,765,482
Weighted average interest rate                  4.40%            4.73%
Average balances outstanding during the year  27,777,314      21,066,187
Average weighted average interest rate          4.46%            4.67%

Note 16 - Non-Cash Investing and Financing Activities

During the periods presented, the Corporation engaged in the following
non-cash investing and financing activities:

Investing                                     1998         1997        1996 
Other real estate acquired in  
 satisfaction of loans                      $249,331     $87,082      $67,302
Investment in White & Associates/
 First Citizens Insurance, L.L.C.          1,361,905

Note 17 - Financial Instruments with Off-Balance Sheet Risk

First Citizens National Bank is a party to financial instruments with
off-balance sheet risk in the normal course of business to meet the
financing needs of its customers.  These financial instruments include
commitments to extend credit and standby letters of credit.  These
instruments involve, to varying degrees, elements of credit risk, which
are not recognized in the statement of financial position.

The Bank's exposure to credit loss in the event of non-performance by
the other party to the financial instrument for commitments to extend
credit and standby letters of credit is represented by the contractual
amount of those instruments.  The same policies are utilized in making
commitments and conditional obligations as are used for creating on-balance 
sheet instruments.  Ordinarily, collateral or other security is
not required to support financial instruments with off-balance sheet
risk.





      <PAGE>67
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997

Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the
contract.  Loan commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee.  Since many
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash
requirements.  Each customer's credit-worthiness is evaluated on a case-by-
case basis, and collateral required, if deemed necessary by the Bank
upon extension of credit, is based on management's credit evaluation of
the counter party.  At December 31, 1998 and 1997, First Citizens
National Bank had outstanding loan commitments of $45,128,221 and
$34,328,000, respectively.  Of these commitments, none had an original
maturity in excess of one year.

Standby letters of credit and financial guarantees are conditional
commitments issued by the Bank to guarantee the performance of a
customer to a third party.  Those guarantees are issued primarily to
support public and private borrowing arrangements, and the credit risk
involved is essentially the same as that involved in extending loans to
customers.  The bank requires collateral to secure these commitments
when it is deemed necessary.  At December 31, 1998 and 1997, outstanding
standby letters of credit totaled $1,727,426 and $3,550,000.

In the normal course of business, First Citizens National Bank extends
loans, which are subsequently sold to other lenders, including agencies
of the U. S. government.  Certain of these loans are conveyed with
recourse creating off-balance sheet risk with regard to the
collectibility of the loan.  At December 31, 1998 and 1997, however, the
Bank had no loans sold.
      
Note 18 - Significant Concentrations of Credit Risk

First Citizens National Bank grants agribusiness, commercial,
residential, and personal loans to customers throughout a wide area of
the mid-southern United States.  A large majority of the Bank's loans,
however, are concentrated in the immediate vicinity of the Bank or
northwest Tennessee.  Although, the Bank has a diversified loan
portfolio, a substantial portion of its debtors' ability to honor their
obligations is dependent upon the agribusiness and industrial economic
sectors of that geographic area.

Note 19 - Disclosure of Fair Value of Financial Instruments

The following assumptions were made and methods applied to estimate the
fair value of each class of financial instruments reflected on the
balance sheet of the Corporation:

CASH AND CASH EQUIVALENTS

For instruments, which qualify as cash equivalents, as described in Note
1 of Notes to Financial Statements, the carrying amount is assumed to be
fair value.

INVESTMENT SECURITIES

Fair value for investment securities is based on quoted market price, if
available.  If quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.



      <PAGE>68
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997


Note 19 - Disclosure of Fair Value of Financial Instruments (continued)

LOANS RECEIVABLE

Fair value of variable-rate loans with no significant change in credit
risk subsequent to loan origination is based on carrying amounts.  For
other loans, such as fixed rate loans, fair values are estimated
utilizing discounted cash flow analyses, applying interest rates
currently offered for new loans with similar terms to borrowers of
similar credit quality.  Fair values of loans which have experienced
significant changes in credit risk have been adjusted to reflect such
changes.

The fair value of accrued interest receivable is assumed to be its
carrying value.

DEPOSIT LIABILITIES

Demand Deposits

The fair values of deposits which are payable on demand, such as
interest-bearing and non-interest-bearing checking accounts, passbook
savings, and certain money market accounts are equal to the carrying
amount of the deposits.

Variable-Rate Deposits

The fair value of variable-rate money market accounts and certificates
of deposit approximate their carrying value at the balance sheet date.

Fixed-Rate Deposits

For fixed-rate certificates of deposit, fair values are estimated using
discounted cash flow analyses which apply interest rates currently being
offered on certificates to a schedule of aggregated monthly maturities
on time deposits.

SHORT-TERM BORROWINGS

Carrying amounts of short-term borrowings, which include securities sold
under agreement to repurchase, approximate their fair values at December
31, 1998 and 1997.

Long-Term Debt

The fair value of the Corporation's long-term debt is estimated using
the discounted cash flow approach, based on the institution's current
incremental borrowing rates for similar types of borrowing arrangements.

Other Liabilities

Other liabilities consist primarily of accounts payable, accrued
interest payable and accrued taxes.  These liabilities are short-term
and their carrying values approximate their fair values.

Unrecognized Financial Instruments are generally extended for short
periods of time, and as a result, the fair value is estimated to
approximate the face or carrying amount.

      <PAGE>69
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997

Note 19 - Disclosure of Fair Value of Financial Instruments (continued)

The estimated fair values of the Corporation's financial instruments are
as follows:

                                      1998                      1997      
                             Carrying        Fair     Carrying        Fair
                             Amount         Value     Amount          Value
Financial Assets
      
Cash and cash equivalents $ 16,222,681 $ 16,222,681 $ 18,845,773 $ 18,845,773

Investment securities      102,864,268  102,951,064   71,175,540   71,205,655

 Loans                     278,220,329               229,276,999
Less:  Allowance for 
       loan losses          (3,496,396)               (2,788,555)              
Loans, net of allowance    274,723,933  275,378,060  226,488,444  226,197,131 

Accrued interest 
  receivable                 4,889,297    4,889,297    3,885,355    3,885,355


Financial Liabilities

  Deposits                 315,316,693  315,316,693  267,589,971  267,459,421
                                                     
  Short-term borrowings     38,106,881   38,106,881   21,765,482  217,562,223
                                                     
  Long-term debt            25,750,110   24,852,110    7,813,023    7,807,023
                                                     
  Other liabilities          2,766,371    2,766,371    2,993,865    2,993,865
                                                     
Unrecognized Financial
  Instruments                                        
                                                     
  Commitments to extend                            
   credit                   45,128,221   45,128,221   34,328,161   34,328,161
  Standby letter of                                
   credit                    1,727,426    1,727,426    3,550,142    3,550,142


Note 20 - Commitments and Contingencies

During the year ended December 31, 1995, the Board of Directors approved
a stock repurchase plan whereby the Company is authorized to acquire up
to a maximum of $200,000 of its outstanding capital stock per calendar
quarter.  The stock repurchase plan is designed to enable First Citizens
Bancshares, Inc. to meet the requirements of the Employee Stock
Ownership Plan and the Dividend Reinvestment Plan in place.

Note 21   Mergers and Acquisitions

During the year ended December 31, 1997, First Citizens Bancshares, Inc.
entered into a stock purchase agreement to buy all of the outstanding
capital stock of Bank of Troy, Troy, Tennessee, at a price of two (2)
times book value of the capital stock acquired.  The acquisition was
consummated on March 5, 1998, at a price of $9,692,835 in a transaction
accounted for as a purchase.  Accordingly, the financial records of Bank
of Troy were closed, and the assets and liabilities were adjusted to
fair market value as of the date that the purchase took place.  The
operations of the Bank of Troy are included in the consolidated
financial statements from March 5, 1998 through December 31, 1998.  The
transactions resulted in goodwill in the amount of $3,290,977, which is
being amortized over a period of fifteen (15) years.


      <PAGE>70
                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997

Note 21   Mergers and Acquisitions (continued)

Pro forma results of operations of First Citizens Bancshares, Inc.
computed as though Bank of Troy had been acquired at the beginning of
the year ended December 31, 1997, are as follows:

                                      (in thousands)
                                       1998          1997
    Interest income                $   31,625   $   29,433
    Interest expense                   15,493       14,415
    Net interest income                16,132       15,018
    Provision for loan losses           1,028        1,117
    Net interest income after
      Provision for loan losses        15,104       13,901
    Other income                        4,326        4,024
    Other expenses                     13,103       11,482
    Net income before income taxes      6,327        6,443
    Provision for income taxes          2,090        2,154
    Net income                          4,237        4,289
    Earnings per share                   1.35         1.44
    Weighted average shares
      Outstanding                   3,145,037    2,980,680

Also, on February 11, 1998, First Citizens Bancshares, Inc. executed a
transaction whereby the Corporation acquired a fifty percent (50%)
interest in White & Associates/First Citizens Insurance, L.L.C., an
insurance agency operating in Dyersburg, Tennessee.  The Corporation
issued 13,779 shares of common stock and paid $216,000 in cash for a
total value of $1,469,905 in cash.  The investment is recorded using the
equity method and has a book value of $1,625,441 at year-end.  The
transaction created $1,361,905 of goodwill on the books of First
Citizens National Bank associated with the investment in this Company.

First Citizens National Bank and White & Associates began the process of
forming a credit life insurance company during 1998.  At December 31,
1998, the Company had not been chartered and no activity had taken place
in the credit life insurance company.  The Bank's investment was
$53,901.

Note 22 - Subsequent Events

During the year ended December 31, 1998, First Citizens Bancshares, Inc.
entered into an agreement to acquire all of the outstanding capital
stock of First Volunteer Corporation, a one-bank holding company which
owns First Volunteer Bank located in Union City, Tennessee.  The
agreement sets forth a transaction to be accomplished  entirely as an
exchange of common stock in an exchange ratio to be determined according
to a formula described in the agreement.  The transaction was
consummated on February 12, 1999, requiring the issuance of 445,251
shares of First Citizens Bancshares, Inc. capital stock.

Note 23 -  Common Capital Stock

On April 16, 1998, First Citizens Bancshares, Inc. filed Articles of
Amendment to its Charter increasing the total authorized number of
common shares of stock from 2,000,000 to 10,000,000 and changing the par
value from $1 to no par value.  The Corporation then declared a four for
one stock split, according to which all shareholders received three (3)
additional shares of common stock for each share owned.  The split
resulted in the issuance of 2,145,678 new shares.  The shares are
recorded at one dollar ($1) per share requiring the transfer of an equal
amount form paid-in capital to capital stock.

      <PAGE>71


                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS
                        December 31, 1998 and 1997
<TABLE>
Note 24 - Amounts Receivable From Certain Persons
<CAPTION>
                                               Year Ended December 31, 1998
                                                        (In Thousands)


Column A                        Column B     Column C     Column D          Column E
                                Balance at                                 Balance at
                                Beginning                                    End of
                                of Period    Additions   Deductions         Period  
                                                                Amounts            
                                                       Amounts  Written            Not
                                                      Collected   Off     Current Current
<S>                              <C>        <C>       <C>         <C>     <C>      <C>
Aggregate indebtedness 
  to First Citizens 
  National Bank of 
  Directors and Executive 
  Officers of First 
  Citizens Bancshares,
    Inc. (23)                    $4,933     $7,563    $4,262      $-0-    $8,234   $-0-    

Aggregate indebtedness 
  to First Citizens 
  National Bank of 
  Directors and Executive      
  Officers of First 
  Citizens National
  Bank  (23)                     $4,986      $7,563    $4,315      $-0-    $8,234  $-0-


                                              Year Ended December 31, 1997

Aggregate indebtedness 
  to First Citizens 
  National Bank of 
  Directors and Executive      
  Officers of First 
  Citizens Bancshares,
    Inc. (25)                    $4,328     $4,146    $3,541      $-0-    $4,933   $-0-

Aggregate indebtedness 
  to First Citizens 
  National Bank of 
  Directors and Executive      
  Officers of First 
  Citizens National
  Bank  (25)                     $4,448      $4,166    $3,628      $-0-   $4,986  $-0-

</TABLE>



Indebtedness shown represents amounts owed by directors and
executive officers of First Citizens Bancshares, Inc., and
First Citizens National Bank and by businesses in which such
persons are general partners or have at least 10% or greater
interest and trust and estates in which they have a
substantial beneficial interest.  All loans have been made on
substantially the same terms, including interest rates and
collateral as those prevailing at the time for comparable
transactions with others and do not involve other than normal
risks of collectibility.








     <PAGE>72

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Bancshares had no disagreements regarding accounting
procedures.

                        PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information appearing in Bancshares' 1998 Proxy Statement
regarding directors and officers is incorporated herein by
reference in response to this Item. 

ITEM 11.  EXECUTIVE COMPENSATION

The information required under this Item is set forth in the
1998 Proxy Statement, and is incorporated by reference.  

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT 

Ownership of Bancshares' common stock by certain beneficial
owners and by management is set forth in Bancshares' 1998
Proxy Statement for the Annual Meeting of Shareholders to be
held April 21, 1999, in the sections entitled Voting
Securities and Election of Directors and is incorporated
herein by reference. 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Officers, Directors and principal shareholders of the holding
company (and their associates) have deposit accounts and other
transactions with First Citizens National Bank. These
relationships are covered in detail on page 13 of the Proxy
Statement under "Certain Relationships and Related
Transactions" and incorporated herein by reference. 
Additional information concerning indebtedness to Bancshares
and First Citizens by Directors and/or their affiliates is
included herein under Part III, Page 71 "Amounts Receivable
from Certain Persons".
<PAGE>
      <PAGE>73

                                    SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                            FIRST CITIZENS BANCSHARES, INC.


                                            By /s/Stallings Lipford
                                               Stallings Lipford
                                               Chairman 


                                            By /s/Jeff Agee
                                               Jeff Agee
                                               Vice President & Principal
                                               Financial Officer

     Dated:   03/15/99

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of 
the Registrant and in the capacities indicated on March 12, 1999.

/s/ Eddie Anderson                          /s/Mary Frances McCauley
Eddie Anderson                              Mary Frances McCauley      
Director                                    Director
                                            
                                            /s/L. D. Pennington
/s J. Walter Bradshaw                       L. D. Pennington
J. Walter Bradshaw                          Director
Director

/s/James Daniel Carpenter                   /s/G. W. Smitheal, III
James Daniel Carpenter                      G. W. Smitheal, III
Director                                    Director


/s/William C. Cloar                         /s/David R. Taylor
William C. Cloar                            David R. Taylor
Director                                    Director

                                            /s/Larry S. White
/s/Richard Donner                           Larry S. White
Richard W. Donner                           Director                 
Director                                   
                                            /s/P. H. White, Jr.
/s/Bentley F. Edwards                       P. H. White, Jr.
Bentley F. Edwards                          Director
Director
                                            /s/Dwight Steven Williams
/s/Ralph E. Henson                          Dwight Steven Williams
Ralph E. Henson                             Director
Director
                                            /s/Katie S. Winchester   
/s/Larry W. Gibson                          Katie S. Winchester
Larry W. Gibson                             Director
Director                                    

/s/Barry T. Ladd                            /s/Billy S. Yates
Barry T. Ladd                               Billy S. Yates
Director                                    Director

/s/Stallings Lipford                                  
Stallings Lipford                                                            
Director                                    

/s/ Milton E. Magee                         
Milton E. Magee                             
Director