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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, 1997 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, 1997 was $68,315,000.

Of the registrant's only class of common stock ($1.00 par value) there 
were 750,718 shares outstanding as of December 31, 1997.

                       DOCUMENTS INCORPORATED BY REFERENCE

                               Portions of the                  
                 Proxy Statement dated March 17, 1997 (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 and Dyer 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)             
                            1997      1996         1995      

Total Assets            $333,288   $313,069      $291,412    
Total Deposits           267,590      256,413       237,160    
Total Net Loans          226,488      209,107       189,690    
Total Equity Capital      33,125       29,603        27,103    

    
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 with peer group banks.  Presented in
the following chart are comparisons of First Citizens with
peer group banks for the periods indicated:

                  12/31/97         12/31/96       12/31/95     
              FCNB  PEER GRP   FCNB  PEER GRP  FCNB PEER GRP

Average Assets/
Net Interest 
  Income       4.35%   4.38%   4.27%   4.34%   4.07%   4.40%   

Average Assets/
Net Operating 
   Income      1.45%   1.31%   1.23%   1.27%    .94%   1.29%   

Net loan losses/
Average total 
   loans        .02%    .15%    .26%    .19%    .11%    .14%   

Primary Capital/  
Average Assets 9.61%   8.33%   8.83%   8.30%   8.41%   9.04%   

Cash Dividends/
Net Income **     0%  34.80%   4.42%  45.09%   8.29%  43.28%  

*Performance as of 12/31/97 is compared to peer group totals
as of 09/30/97

**First Citizens Bank paid no dividends through 9/30/97.
Dividends were paid by Bancshares.

 (Most recent UBPR available)

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.  On July 28, 1997 Bancshares announced the
signing of a letter of intent with The Board of Directors of
Bank of Troy, Troy, Tennessee to purchase assets of the Bank
of Troy totaling approximately $57 million as of June 30,
1997.  The acquisition agreement was executed on March 5, 

      <PAGE>4

1997.  First Citizens plans to continue operating Bank of Troy
as a separate bank under its current name and charter with
independent Board of Directors. Chairman of the Board and
President of Bank of Troy announced in the July 28, 1997 press
release that the current customers of the Bank of Troy will
benefit from the strength of combined resources of the two
institutions especially in light of the expansion of large,
regional banks into our market area.

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 sub-sidiary 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 operations and 

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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 

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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 8.34% 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.

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, 1997

Name                Age       Position and Office
                                        
Stallings Lipford   67        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     57       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.
                    
H. Hughes Clardy     55       Vice President of Bancshares; 
                              Senior Vice President and Senior
                              Trust Officer of First Citizens.
                              Employed by First Citizens in 1993. 
                              Mr. Clardy was employed as Vice
                              President and Senior Trust Officer
                              at Crestar Bank from January, 1987
                              to January, 1991 and as a Vice
                              President of Dominion Trust Company
                              of Tennessee from 1991 to 1993.







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Ralph Henson       56        Vice President of Bancshares;
                             Executive Vice President of Loan
                             Administration of First Citizens.
                             Employed by First Citizens in 1964. 
                             Mr. Henson served the 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     37          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       57          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.           

Bennett Ragan, Jr.  49       Executive Vice President and Senior
                             Lending Officer of First Citizens.
                             Senior Vice President and Senior
                             Lending Officer from April 20, 1994
                             to January 17, 1996. Employed by
                             First Citizens in 1970.  Mr. Ragan
                             served First Citizens as Vice
                             President and Lending Officer since
                             1986.  

Judy Long           43       Senior Vice President and Chief 
                             Operations Officer and Secretary to
                             the Board of First Citizens. Ms.
                             Long also serves as 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).
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BANKING BUSINESS

First Citizens operates a general retail banking business in
Dyer County, Tennessee.  The bank expanded its banking
operations into Lauderdale County with the purchase of a
branch bank in Ripley, Tennessee in January, 1995.  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.

First Citizens is located in a community supported by a well
diversified economy.  Dyer County is home for over 393 full
time farm operators of 603 farms with a total land acreage of
230,906. Total Farm operators and farm laborers represent a
small percentage of the Dyer County population (Dyer County
Statistical Information, 1997).  At 12/31/97 agriculture loans
outstanding totaled $27.5 million representing 11.98% of total
loans.  $16.2 million was well secured with farmland,
including farms, residential and other improvements, while
$11.3 million were secured loans to finance agricultural
production and equipment purchases. Approximately $3.5 million
of agricultural loans were 90% FmHA guaranteed.  Dyer County
is also the home base for over 45 manufacturing firms
employing in excess of 40% of the population.  Distribution of
employment in other areas consist of 14.9% services, 14.8%
government, and 19.3% trade.  While First Citizens is
dependent upon the debtors ability to honor their obligations,
there are no concentrations of credit in any one borrower,
type of loan or industry that would represent a material
affect to the net income of the Bank.

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, 1997 were in excess of $149,131,000. 
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.  


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On February 9, 1998,  White and Associates/First Citizens
Insurance LLC was charted 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.

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, 1997. 

                                Dyer County Market       
                                  (Bank's Only)
                                  (in thousands)
                          Total Deposits   % of Market Share
Bank Name                    06/30/97           06/30/97

First Citizens
National Bank                $250,975*            52.27%

First Tennessee
 Bank                         107,847             22.46%

Security Bank                  67,096             13.97%

Union Planters, FSB            54,249             11.30%

       Total                 $480,167            100.00%

*Does not include deposits of $21,765,482 categorized as
Overnight and fixed term Repurchase Agreements.

At December 31, 1997 Bancshares and its subsidiary, First
Citizens, employed a total of 155 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 

      <PAGE>10

Federal Reserve, or twenty-four percent (24%), whichever 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.

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.  Change in the law for securities
underwriting will have no impact on First Citizens since the
bank does not engage in this practice.  

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 

      <PAGE>11

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 date formats will be
posed with the Year 2000 challenge.  It is our desire to make
the transition to the Year 2000 as effortless as possible. 
First Citizens has developed an intensive Action Plan for
addressing the concerns and risks associated with the coming
millennium. The comprehensive plan was written based on
guidelines established by the Federal Financial Institutions
Examination Council's Interagency Statement entitled "Year
2000 Project Management Awareness" and was approved by the
Office of the Comptroller of the Currency in February 1998. 
The Year 2000 Action Plan includes defined phases for
Awareness, Assessment, Renovation, Validation, and
Implementation.  As part of the awareness phase, a year 2000
Team was organized and an overall strategy developed to
encompass systems, vendors, customers, and correspondents.  In
addition, the assessment of the size and complexity of the
problems were identified.  First Citizens has set December 31,
1998 as the target date for full compliance to Year 2000.

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
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.

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.


      <PAGE>12

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, of which approximately 3,508 square feet is
rented to various tenants.  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 and
placed in ORE to accommodate future growth and expansion.  The
1.747 acres is valued at $164,000. The Board made a decision
to construct a new facility due to the level of business in
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.

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.

      <PAGE>13

In November, 1993 First Citizens leased space in the Wal-Mart
Store #677 located at 2650 Lake Road in Dyersburg, Tennessee
to locate an Automatic Teller Machine (ATM).  The ATM was
installed in December, 1993.  In January, 1995 the ATM was
relocated in the newly constructed Super Wal-Mart Store at the
same address.  

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. 
Construction of a new banking facility has been planned for
and approved in the 1998 strategic plan.

On March 1, 1998, White and Associates and First Citizens
insurance Agency was opened for the purpose of providing
general insurance products/services to the community.  The
general insurance agency is located at 104 North Monroe Street
in space leased at the Newbern Branch of First Citizens
National Bank.

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,
1997, 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>14

                         PART II

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

     As of December 31, 1997 there were 669 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, 1997               $58.00      $55.00
              June 30, 1997                $69.56      $55.00
              September 30, 1997           $70.00      $65.00
              December 31, 1997            $91.00      $72.00

              March 31, 1996               $44.00      $44.00
              June 30, 1996                $49.10      $44.00
              September 30, 1996           $49.10      $44.00
              December 31, 1996            $55.00      $49.10

Dividends paid each quarter of 1997 were 40 cents per share. 
In addition a special dividend of 40 cents per share was paid
during the fourth quarter, bringing total dividends paid per
share during 1997 to $2.00.  Dividends paid per share during
1996 were 32.5 cents per share.  A special dividend of 30
cents per share was declared during the fourth quarter of
1996.

                        Dividends - 1997
              Dividend                   Quarter
              Per Share                  Declared
                 .40                        1st
                 .40                        2nd
                 .40                        3rd
                 .40                        4th
                 .40*                       4th
         Total $2.00

*Special dividend paid in fourth quarter, 1997.

Future dividends will depend on Bancshares' earnings and
financial condition and other factors which the Board of
Directors of Bancshares considers relevant.
<PAGE>
      <PAGE>15

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)

                    1997      1996     1995     1994      1993 
    
Net Interest &  
 Fee Income      $ 13,887 $ 12,822 $ 11,283  $ 10,444 $ 10,220 
Gross Interest 
  Income         $ 26,617 $ 24,781 $ 22,465  $ 18,415 $ 17,481 

Income From
 Continuing 
  Operations     $ 4,246  $ 3,709  $  2,706  $  2,946 $  2,638 

Long Term 
 Obligations(3)  $ 7,813  $ 2,997  $  4,652  $  4,125 $      0 

Income Per Share 
 from Continuing 
  Operation(1)   $  5.70  $  5.04  $   3.72  $   4.15 $   3.76 

Net Income per  
Common Share
 (2)             $  5.70  $  5.04  $   3.72  $   4.15 $   3.94 

Cash Dividends 
Declared
per Common 
Share(2)         $ 2.00   $  1.60   $   1.30  $  1.19  $   .99 

Total Assets at 
Year End         $333,288 $313,069  $291,412 $256,687 $234,892 

Allowance for 
 Loan Losses 
 as a % Loans       1.22%    1.08%    1.16%    1.22%    1.13%  
Allowance for 
 Loan Losses as 
 a % of Non-
 Performing Loans 461.76%  176.08%  707.99%  196.75%  520.50%  

Loans 90 Days 
 Past Due as a 
 % of Loans          .00%     .09%     .17%     .62%     .22%  
   

(1)Restated to reflect 2.5 for 1 Stock Split on October 15,    
   1993.
(2)The $2.00 dividend for 1997 reflects $.40 x 4 plus a        
   special dividend of $.40. 
(3)Long Term Obligations mainly consist of FHLB Borrowings     
   matched with Loans & Investments.
<PAGE>
      <PAGE>16

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

To understand the following analysis, reference should be made
to the consolidated financial statements and other selected
financial data presented elsewhere in this report.  For
purposes of the following discussion, net interest income and
net interest margins are presented on a fully taxable
equivalent basis.  Per share data is adjusted to reflect all
stock dividends declared through December 31, 1997.

Results of Operations:

A comparison of total assets for the five years ending
December 31, 1997 reflects growth of 42%. This gain is
inclusive of the acquisition of a branch banking facility
located in Ripley, Tennessee in January 1995, having assets of
approximately $8,400,000.  For the period ending 12/31/97,
assets grew at an annual rate of 6.46%, compared to 7.44% at
12/31/96.

Net loan growth over the five year period has been consistent,
reflecting an aggregate increase of 53.4%.  For the year
ending 12/31/97, loan growth of 8.32% follows three years of
double digit increases.  A decrease in loan demand coupled
with intense competition for quality loans served to suppress
growth in both commercial and consumer loans. The one segment
of the portfolio in which growth in 1997 was evident is in
real estate.  The low interest rate environment has generated
a wave of refinancing or residential real estate loans.  Many
were longer term, fixed rate loans that were subsequently sold
into the secondary market. 

Increased loan demand during 1995 reflects results of our
entry into the Ripley market and the opportunities made
available through the acquisition.  An increase of 10.2% for
the year ended 12/31/96 reflects a slowing which continued
into 1997 when growth of 8.3% was realized.  The quality of
the loan portfolio remains high as reflected by the consistent
decline in non-performing assets since 1994 when a five year
high of $2,137,000 was reached.  During 1995 and 1996 the
level of non-performing assets remained flat at slightly more
than $1,200,000.  At year-end ninety-seven a record low was
achieved when this segment of the portfolio reflected
$604,000.

Attracting and retaining deposits continues to be a challenge
for banks in all markets.  Deposit growth over the five year
period being compared has been consistent.  However, results
of operations from the year just ended reflects a much slower
rate of increase when compared to the prior periods under
comparison.  The 13.2% growth reflected in 1995 is a result of
the acquisition of the Ripley branch facility.  The slowing in
deposit growth is attributable to the low interest rate
environment and the large number of non-deposit alternative
products available to customers in the marketplace. 
Management has made a conscious decision to grow deposits at
an interest cost that would assure the maintenance of net
interest margins consistent with the bank's capital plan.


<PAGE>
      <PAGE>17

Shareholder's equity has grown steadily in each of the five
years contained in the summary data, reflecting growth of 53%
over this period.  The lowest growth level was in 1995, a
result of the acquisition of the Ripley Branch having
$8,400,000 in assets and no capital. The highest rate of
growth was in 1994 when capital levels increased 13.5%.  For
the year just ended, capital levels were up 11.9%.  Bancshares
has historically maintained capital levels sufficient to be
categorized as a "well-capitalized" company.  In accordance
with Strategic Plan objectives, deployment of capital into
revenue producing investments is a priority.

Net income for the period ending 12/31/97 was $4,245,918, a
14.4% increase compared to $3,709,904 for the same period in
the prior year.  A 36.7% increase is noted when comparing 1996
results to 1995.  For comparison purposes consideration should
be given to an after tax profit in 1994 of $178,000 derived
from the sale of other real estate in Madison County and legal
and other non-recurring expenses of $261,000 experienced in
1995.

Return on average assets has reflected growth for the five
years under review, with the exception of 1995.  A 1.32% ROA
in 1997 was an all time high for First Citizens, breaking the
record of 1.22% in 1996.  This performance ratio was impacted
in 1995 by non-recurring legal and settlement fees discussed
previously in this analysis.  Earnings per share were up in
1997, reflecting $5.70 as compared to $5.03 in 1996 and $3.72
in 1995.

Cash dividends paid to shareholders have more than doubled
since 1993.  This gain is reflective of increased earnings
generated by the bank and its subsidiaries.  Dividends per
share paid to shareholders in 1997 of $2.00 per share
increased 21% when comparing to the $1.60 per share paid in
1996 and 60% from the per share dividend of $1.20 in 1995. 
Special dividends paid the fourth quarter for each of the past
four years served to raise payout ratios to levels targeted by
the bank's capital plan.

Net interest income is the principal source of earnings for
the Company.  It is the income generated by earning assets
reduced by the interest cost of funding those assets.  A
comparison of new interest income for the three years ending
12/31/97 reflects consistent solid growth of 8.2% in 1997,
13.35% in 1996, and 7.98% in 1995.  An increase in funding
costs from 3.80% in 1993 to 4.02% in 1994 served to decrease
net interest income by 3.8%.  A gain in net interest income in
1994 of 1.6% was eliminated by a 9.8% increase in funding
costs.  In 1995, improved pricing on loans and a shift in the
source of funding from CDS to Federal Home Loan Bank restored
net interest income to more acceptable levels.

The Company has also maintained a consistent and disciplined
asset/liability management policy during each of the years
under comparison. This policy focuses on interest rate risk
and rate sensitivity.  The primary objective of rate
sensitivity management is to maintain net interest income
growth while reducing exposure to adverse fluctuations in
interest rates. The Company has an executive level
Asset/Liability Management Committee which performs an
analysis of the bank's pricing, maturity, growth, and mix
strategies in an effort to make informed decisions that will
increase income and limit interest rate risk.




      <PAGE>18

The provision for loan losses represents a charge to earnings
necessary to establish an allowance for possible loan losses
that, in management's evaluation, is adequate to provide
coverage for estimated potential losses on outstanding loans
and to provide for uncertainties in the economy.  The level of
the allowance is determined using procedures which include an
evaluation of the past due loan levels and trends, charge-off
experience on comparable portfolio segments, current economic
environment, credit concentrations as well as other
considerations. The 1997 provision for loan losses was
$699,000, an increase of $90,000 or 14.8% from the 1996
provision of $609,000.  The higher provision for loan losses
resulted primarily from an increase in volume in the loan
portfolio. The provision for 1995 was $364,000, an amount
determined to be adequate based on a review of the adequacy of
the Loan Loss Reserve Account and a review by the Board of
First Citizens.  At year-end 1997, the reserve for loan losses
totaled $2,788,555, an increase of $506,324 from year end
1996.

Every industry which interprets or stores date formats will be
posed with the Year 2000 challenge.  It is our desire to make
the transition to the Year 2000 as effortless as possible. 
First Citizens has developed an intensive Action Plan for
addressing the concerns and risks associated with the coming
millennium. The comprehensive plan was written based on
guidelines established by the Federal Financial Institutions
Examination Council's Interagency Statement entitled "Year
2000 Project Management Awareness" and was approved by the
Office of the Comptroller of the Currency in February 1998. 
The Year 2000 Action Plan includes defined phases for
Awareness, Assessment, Renovation, Validation, and
Implementation.  As part of the awareness phase, a year 2000
Team was organized and an overall strategy developed to
encompass systems, vendors, customers, and correspondents.  In
addition, the assessment of the size and complexity of the
problems were identified.  First Citizens has set December 31,
1998 as the target date for full compliance to Year 2000.

Changes in Financial Accounting Standards

FASB NO. 125 (Accounting for transfers and servicing of
financial assets and extinguishments of liabilities).  This
statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring
after December 31, 1996 and is to be applied prospectively. 
We do not foresee any material adjustments due to this FASB.

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.


      <PAGE>19

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

The following table reflects non-interest income for the years
ending December 31, 1997, 1996, and 1995: 

<TABLE>
                                                 December 31
                                               Change from prior year
                                                 (in thousands)
<S>                    <C>      <C>      <C>       <C>      <C>      <C>       <C>    
                               Increase                    Increase 
                        Total (Decrease)            Total (Decrease)            Total
                         1997   Amount  Percentage  1996    Amount  Percentage   1995
Service Charges on
 Deposit Accounts      $1,686   $ 229    15.72%    $1,457   $  152   11.65%    $1,305
Other Service Charges,
 Commissions & Fees    $ 851    $ 177    26.27%    $  674   $  181   36.72%    $  493
Other Income           $1,210   $ (28)   (2.27%)   $1,238   $  288   30.32%    $  950
TOTAL NON-INTEREST
 INCOME                $3,747   $ 378    11.22%    $3,369   $  621   22.60%    $2,748
</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 interchange fees,
brokerage fee income and other income.  Total non-interest
income in 1997 was $3,746,693 compared with $3,368,487 in
1996, an increase of $378,206 or 11.23%.  These charges
consist primarily of analysis fees and other deposit account
assessments as well as overdraft and non-sufficient funds
charges.  Service charges on deposit accounts increased
$229,058 or 15.7% during the twelve months ending December 31,
1997.  An increase in per item overdraft fees from $20.00 to
$22.00 in first quarter 1997 is a primary contributor to this
increase.   An increase of $230,165 in Other Service Charges,
Commissions and Fees was driven by growth of $113,000 in gross
income of First Citizens Financial Plus, Inc., the bank's
brokerage subsidiary.  Securities gains were down 56% from the
prior year, totaling $92,594 and $211,233 for 1997 and 1996
respectively.  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,
Inc. and security gains realized from the sale of Securities
from the banks' investment portfolio.  The Southeast refund
partially reimbursed the bank for settlement made to trust
customers by the bank in December 1989.  Trust income improved
in excess of 25 percent in 1996.  Fees charged for services
rendered were restructured in 1995. Other service charges,
commissions & fees were restated for prior years to eliminate
overdraft and annual fees on the credit cards.  Other income
was restated to include those fees.

NON-INTEREST EXPENSE
<TABLE>
                                                  December 31
                                             Change from prior year
                                               (in thousands)
<S>                         <C>     <C>       <C>    <C>    <C>      <C>      <C>
                                    Increase                  Increase
                            Total  (Decrease)          Total (Decrease)          Total
                             1997   Amount  Percentage 1996    Amount Percentage 1995
Salaries & Employee
 Benefits                   $5,780  $ 483     8.79%  $5,497  $ 325     6.29%  $5,172
Net Occupancy Expense        1,964     56     2.94%  $1,908  $ 254    15.36%  $1,654
Other Operating Expense      2,574     90     3.63%  $2,484  $ 318   (11.35%) $2,802
TOTAL NON-INTEREST EXPENSE $10,518  $ 629     6.36%  $9,889  $ 261     2.71%  $9,628
      <PAGE>20
</TABLE>

Total non-interest expense in 1997 was $10,518,032 up 6.9% from
$9,837,724 in 1996.  Salaries and employee benefits represented 56.8% of
total non-interest expense in 1997 compared to 55.9% in 1996. The
increase is attributable to ordinary salary increases, increased
staffing to meet marketing and fee income goals and an increase in
incentive bonuses resulting from achieving a higher ROA.

Exclusive of personnel - related expenses, non-interest expense
increased $197,498 or 4.6% from 1996.  The increase is not concentrated
in any one particular area, but represents increased expenses associated
with software system updates and related data processing expense.

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
an insurance agency, 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.

Growth in the Company's income tax expense generally parallels income
gains.  The Company attempts to add high quality, tax-free municipal
bonds to its portfolio when the opportunity arises; however, the ability
to significantly reduce income tax is limited by the Alternative Minimum
Tax Provision.  Fulltime equivalent at 12/31/97 was 155 compared to 145
at 12/31/96 and 12/31/95.   Fulltime employees increased in 1997 is
primarily attributed to (1) The formation of a sales and marketing
department (2) fulltime employees and Delta Finance Company (3 fulltime
employees); the addition of loan services to the Midtown Branch (1 loan
officer); (3) addition of Information System Support Staff required to
service the Lan/WAN (1 IS staff member); and (4) various other staff
members added to support increased transaction volume in customer
service areas.  Assets per employee at 12/31/97 was 2.1 million compared
to peer group banks at 2.4 million.  Increased operating expense of
16.84% in 1995 is attributed to settlement and professional fees of
$261,000 incurred as a result of arbitration between Financial Plus,
Inc. and William M. Boehmler and Hilliard Lyons, Inc.  


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

   1997               $2,151                      $2,400
   1996               $2,159                      $2,300
   1995               $1,969                      $1,900
   1994               $1,695                      $1,900
   1993               $1,563                      $1,900

<PAGE>
      <PAGE>21

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)     
                         1997                1996              1995
   
                  Average   Average  Average   Average  Average   Average  
                  Balance    Rate    Balance    Rate    Balance    Rate 
Non-Interest
Bearing Demand
Deposits         $ 27,868     -      $ 26,641      -   $ 25,375     -    

Savings Deposits $81,562    3.37%    $ 73,908   3.19%  $ 65,996   3.05%

Time Deposits    $149,655   5.54%    $146,562   5.63%  $136,631   5.91%

TOTAL DEPOSITS   $259,085   4.26%    $247,111   8.39%  $228,002   4.43%

Growth in total deposits continues to be a challenge for First
Citizens. The company's marketplace is described as highly
competitive, with a fairly sophisticated customer base. 
Competition is aggressive for both loans and deposits. 
According to a market share analysis, Bancshares holds
approximately 51% (excluding overnight and fixed term
repurchase agreements) of the bank deposits domiciled in Dyer
County.  The bank competes with First Tennessee Bank, N.A.
(22% of total county deposits), and Security (13%),  Union
Planters, another regional bank also hold market share of 13
percent.  First Citizens also competes with Dyersburg City
Employees Credit Union, seven or more consumer finance
companies, and other types of financial service providers in
the area.  In spite of aggressive competition, total deposits
increased $11.9 million and $19.1 million when comparing
12/31/97 to 12/31/96 and 12/31/95.  A review of the
composition of deposits in 1997 reflects growth of $7.6
million in savings deposits and approximately $3 million in
time deposits.  Approximately $32 million of total deposit
growth in 1995 was centered in time deposits.  The slowing in
deposit growth is attributed to low interest rate environment
and the large number of non-deposit alternative products
available to customers.  Management made a conscious decision
to grow deposits at an interest cost that would assure the
maintenance of net interest margins considered with the bank's
capital plan.  Growth in deposits totals in 1995 is a result
of the Ripley branch acquisition, $8 million in deposits. 
Demand deposits have remained relatively flat when reviewing
the years under comparison. However, sweep account funds
totaling $13,927,000 are not included in the average balances
for non-interest bearing demand deposits.  The "Sweep" total
is included in the balance sheet category of Securities Sold
Under Agreement to Repurchase totaling $21.7 million. The
average rate paid on interest bearing liabilities at 12/31/97
was 4.80% compared to 4.81% at 12/31/96 and 4.98% at 12/31/95. 
Pricing of deposits is based on local market competition and
Treasury Bill rates.  

SHORT TERM BORROWINGS
                                       12/31/97       12/31/96 
Amount outstanding-end of Period       $21,766         $21,225
Weighted Average Rate of Outstanding     4.35%           4.31% 
 Maximum Amount of Borrowings at 
  Month End                             36,585          32,902
Average Amounts Outstanding for 
  Period                                26,585          20,883
Weighted Average Rate of Average 
  Amounts                                4.64%           4.48% 

      <PAGE>22
                               Average  Average    Average
Long Term Borrowings         Volume      Rate      Maturity
FHLB Borrowings - Libor      2,247  5.75%    10 years
FHLB Borrowings - Loans      2,223  5.86%     7 years
FHLB Borrowings - Prime Rate 1,746  5.77%     2 years
Finance Company Debt           1,000     6.50%   1.5 years


Management is continuously monitoring and enhancing the bank's
product line in order to retain existing customers and to
attract new customer relationships.  Among new products
offered in 1996 and 1997 was a "Visa Check Card"  and "The
Nest Egg Certificate of Deposit".  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.  The Nest Egg Certificate of Deposit was
introduced as  a college savings fund for parents requiring a
savings instrument with a low opening balance and as often as
weekly deposits made to the account.  Imaged deposit accounts
statements offered to the market in 1996, continue to be a
success with 99.9 percent acceptance.

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, 1997.  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)
                                   1997                   1996              
                            Amount       Percent  Amount       Percent
 Maturing in:
3 months or less           $13,778       28.33%  $13,960       36.57%  
Over 3 through 12 months   $29,237       60.12%  $16,902       44.26%  
Over 12 months             $ 5,620       11.55%  $ 7,319       19.17%  

     TOTAL                 $48,635      100.00%  $38,181      100.00%  


<PAGE>
      <PAGE>23

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)
                          1997                     1996             1995
FUNDING USES       Average  Increase        Average  Increase      Average    
                   Balance (Decrease)       Balance (Decrease)     Balance    
                         Amount         %        Amount          %   Amount
INTEREST-EARNING
ASSETS:     

Loans (Net of 
Unearned Discounts    
& Reserve)       $220,985  $ 17,322  8.51%  $203,663  $ 20,645  11.28% $183,018 
Taxable Investment
Securities       $ 66,037  $  1,645  4.79%  $ 64,392  $  5,032   8.48% $ 59,360 

Non-Taxable 
Investment
Securities       $  10,535 $  (290) (2.68%)$  10,825  $    358   3.42% $ 10,467 
Federal Funds 
Sold             $     975 $  (191)(16.38%)$   1,166  $ (1,437)(55.21%)$  2,603 
Interest Earning
Deposits In 
Banks            $     295 $    99   50.51% $    196   $    83  73.46%  $   113 
TOTAL INTEREST-
EARNING ASSETS   $ 298,827 $15,585    6.64% $280,242  $ 24,681   9.66% $255,561
Other Uses       $  26,703 $ 3,225   13.74% $ 23,478  $  2,540  12.14% $ 20,938
TOTAL FUNDING 
  USES           $325,530  $21,810    7.18% $303,720  $ 27,221   9.85% $276,499 
INTEREST-BEARING 
  LIABILITIES:
Savings 
 Deposits        $ 81,562  $ 7,654   10.36% $ 73,908  $  7,912  11.99% $ 65,996 
Time Deposits    $149,655  $ 3,093    2.11% $146,562  $  9,931   7.27% $136,631 
Federal Funds
Purchased and 
Other Interest 
Bearing 
Liabilities      $ 34,399  $ 5,929   20.83% $ 28,470  $  4,857  20.57% $ 23,613 

TOTAL INTEREST-
BEARING 
LIABILITIES      $265,616  $16,676    6.70% $248,940  $ 22,700  10.04%  $226,240
Demand Deposits  $ 27,812  $ 1,171    4.40% $ 26,641  $  1,266   4.99%  $ 25,375
Other Sources    $ 32,102  $ 3,963   14.09% $ 28,139  $  3,255  13.08%  $ 24,884
TOTAL FUNDING
 SOURCES:        $325,530  $21,810    7.18% $303,720  $ 27,221   9.85%  $276,499
<PAGE>
      <PAGE>24

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

                                     (FIRST CITIZENS NATIONAL BANK)

                               Monthly Average Balances and Interest Rates
                                              (in thousands)
                           1997                    1996                       1995
                 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)       $220,985 $21,422  9.70% $203,658 $ 19,768  9.71% $182,997 $ 17,718  9.69%

Investment 
Securities:

  Taxable         $ 66,037 $ 4,563  6.91% $ 64,392 $ 4,353  6.76% $ 59,360 $  3,948  6.65% 
  Tax Exempt (4)  $ 10,535 $   741  7.04% $ 10,825 $   755  6.98% $ 10,467 $    730  6.98%

Interest Earning  
  Deposits        $    295 $    11  3.73% $    196 $     7  3.58% $    113 $      7  6.20%

Federal Funds       
Sold              $    975 $    59  6.06% $  1,166 $    69  5.92% $  2,603 $    158  6.07%

                  
Lease Financing   $      0 $     0     0% $      5 $     1 20.00% $     21 $      2  9.53%

Total Interest
  Earning Assets  $298,827 $ 26,796 8.97% $280,242 $24,953  8.91% $255,561 $ 22,563  8.83%

NON-INTEREST
  EARNING ASSETS:
Cash and Due From
  Banks           $ 10,009 $    -     -   $ 10,048 $    -     -   $  9,457 $ -       - 

Bank Premises and
  Equipment       $  8,181 $    -     -   $  8,499 $    -     -   $  8,699 $ -       -

Other Assets      $  8,513 $    -     -   $  4,931 $    -     -   $  2,782 $ -       -     

Total Assets      $325,530 $    -     -   $303,720 $    -     -   $276,499 $ -       -     

LIABILITIES AND
 SHAREHOLDERS'
  EQUITY:

INTEREST BEARING
  LIABILITIES:
Savings Deposits  $ 81,562 $ 2,747 3.37%  $ 73,908 $ 2,355  3.19% $ 65,996 $  2,009 3.05%
 (5)

Time Deposits     $149,655 $ 8,280 5.54%  $146,562 $ 8,246  5.63% $136,631 $  8,063 5.91%

Federal Funds
  Purchased and
  Other Interest
  Bearing
  Liabilities     $ 34,399 $ 1,713 4.98%  $ 28,470 $ 1,358  4.77% $ 23,613 $  1,184 5.02%
Total Interest
  Bearing
  Liabilities     $265,616 $12,740 4.80%  $248,940 $11,959  4.81% $226,240 $ 11,256 4.98%

NON-INTEREST
  BEARING
  LIABILITIES:

Demand Deposits   $ 27,812 $    -     -   $ 26,641 $     -   -    $ 25,375 $ -        -

Other                                      
  Liabilities     $ 2,177  $    -     -   $  2,213 $     -   -    $  1,972 $ -        -

Total 
  Liabilities     $295,605 $    -     -   $277,794 $     -   -    $253,587 $ -        -

SHAREHOLDERS'
  EQUITY          $ 29,925 $    -     -   $ 25,926 $     -   -    $ 22,912 $ -        -



      <PAGE>25

TOTAL LIABILITIES
  AND SHAREHOLDERS'
  EQUITY          $325,530 $     -   -    $303,720 $    -    -    $276,499 $ -       -

NET INTEREST
  INCOME          $    -   $ 14,056  -    $   -    $12,994   -    $   -    $11,307   -

NET YIELD ON 
  AVERAGE EARNING
  ASSETS          $    -   $      - 4.71% $   -    $ -      4.64% $   -    $ -      4.43%
</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            1997 Compared to 1996           1996 Compared to 1995
 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                 $ 1,682 $   (28)   $1,654      $ 2,002 $    48 $ 2,050
     
   Taxable Investments       111      99       210          335      70     405
           
   Tax Exempt Investment
     Securities              (20)      6       (14)          25      -       25
          
   Interest Bearing
    Deposits with Other
     Banks                     3       0         3            5      (5)      0
            

   Federal Funds Sold and
     Securities purchased
     under agreements to 
     resell                  (11)       1       (10)       (87)     (2)     (89)
           

   Lease Financing             0        0         0        (1)      -        (1)

TOTAL INTEREST EARNING        
     ASSETS               $1,765   $   78     $1,843   $ 2,279  $   111  $ 2,390
    

Interest Paid On: 
   Savings Deposits          244      148        392       241      105      346
      
   Time Deposits             174     (140)        34       587     (404)     183
        
   Federal Funds Purchased
     and Securities Sold
     Under Agreement to
     Repurchase              282       73        355       244      (70)     174
         
TOTAL INTEREST BEARING
     LIABILITIES          $  700  $    81      $  781    $ 1,072 $  (369) $  703
  
    INTEREST EARNINGS     $1,065  $   (3)      $1,062    $ 1,207 $   480  $1,687

  
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 6.63% and 9.66% when comparing 1997
to 1996 and 1995.  Total interest bearing liabilities 

      <PAGE>26

increased 10.35% and 10.04% when comparing 1997, 1996 and 1995
respectively.  Total interest earning assets averaged
$298,827,000 at an average rate of 8.97% while total interest
bearing liabilities averaged $265,616,000 at an average rate
of 4.80%.  Net yield on average earning assets (annualized)
was 4.71%, 4.64%, and 4.43% for the years 1997, 1996, and
1995.  Maintaining interest rate margins achieved in prior
years proved more difficult in 1995 due to higher rates paid
on deposits.  However, 1996 and 1997 cost of funds was
reduced, 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)
                          1997       1996     1995      1994     1993
Real Estate Loans:   
Construction            $ 22,697  $ 17,130  $ 12,954  $ 10,511  $  7,675  
Mortgage                $136,333  $127,080  $107,844  $ 97,310  $ 87,314  

Commercial, Financial
and Agricultural Loans  $ 41,929  $ 42,067  $ 45,061  $ 38,843  $ 35,626  
Installment Loans to
Individuals             $ 25,904  $ 22,743  $ 23,718  $ 19,117  $ 15,901  

Other Loans             $ 2,414   $  2,369  $  2,329  $  3,000  $  2,806  

TOTAL LOANS             $229,277  $211,389  $191,906  $168,781  $149,322  

CHANGES IN LOAN CATEGORIES

             December 31, 1997 as compared to December 31, 1996
                               (in thousands)

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

Real Estate                  $14,820                      10.28%          
       

Commercial, Financial   
  and Agricultural           $  (138)                      (.33%)         
           

Installment Loans to
 Individuals                 $ 3,161                      13.90%          


Other Loans                  $    45                       1.90%         

TOTAL LOANS                  $17,888                       8.47%          
          
Total loans at 12/31/97 were $229,277,000 compared to $211,387,000 for
the same time period in 1996.  A comparison of growth in the portfolio
indicates the largest percentage of growth is centered in Real Estate. 
Mortgage and construction loans increased approximately $14 million in
1997 and $23 million in 1996.  Growth in this category in 1995 exceeded
19 percent.  The upward trend is attributed to substantial growth in both
population and number of households recorded in Dyer county over the past
decade.  Commercial, financial, and agriculture loan growth remained flat
when comparing 1997 and 1996. 

      <PAGE>27


Agriculture resources comprise a significant portion of the Dyer County
Market.  Total land in farms is approximately 230,906 acres with an
average value of $449,501.00.  Average machinery value per farm is
$76,449.00.  First Citizens investment in agriculture real estate loans
totals $16.2 million while crop production and equipment loans total
$11.3 million.  Total gross agriculture income posted in 1997 from the
sale of agriculture products was $79,203,850.  Dyer County ranks as the
number one producer of soybeans, grain sorghum, commercial vegetables and
rice in the state of Tennessee.  Agriculture credits listed on the bank's
problem list total $1,549,047 as of 12/31/97 including FmHA guaranteed
portion of $738,449.

First Citizens is located in the Dyersburg/Dyer County Trade Area, having
a population of 40,000.  The entire trade area has out paced both the
state and the nation in per capita personal income growth since the early
1980's.  The State of Tennessee projects that per capita income in the
area will be greater than the national average by the year 2000.  Per
capital income in Dyersburg/Dyer County was $18,512 at year end 1994, up
from $6,739 at year end 1979.  The mix of industry in the local economy
has provided stable, growing employment opportunities for residents under
all economic conditions.  The Dyer County distribution of employment
consists primarily of service employers 14.9%, government 14.7%, trade
19.3%, and manufacturing 40.5%.  Dyer County's unemployment rate at year
end was 4.8% down from November's rate of 5.2%. The loan portfolio is
made up of quality loans, and is well diversified with no concentrations
of credit in any one industry.  Problem loans totaled $4,038,229 (1.76%
of total loans) at 12/31/97 compared to $2,856,235 (1.35% of total loans
at 12/31/96. ) Total non-performing loans were .25% of total portfolio,
at 12/31/96 compared to .65% for peer group banks.  Bennett Funding
reported in 1996 and 1997 as a problem loan (starting balance of $991,000
in 1996) was paid in full in February 1997.  A partial recovery of the
chargeoff amount of $300,000 is also expected.  Experience of the lending
staff and adherence to policy lends a comfort level to the portfolio that
supports the Loan Loss Allowance at the present level.    

The book value of repossessed real property held by Bancshares at year
end was $0 compared to $194,000 at 1996 and $935,000 at 12/31/95. The
balance was significantly reduced as a result of the sale of the  Strip
Shopping Center (at a loss of $18,000) in November, 1996.  The remaining
balance in 1996 represents property purchased for expansion of the branch
located on Highway 51 Bypass valued at $164,000.  In 4th quarter of 1997,
the property was reclassified from ORE to bank premises and equipment. 
Expansion of the Midtown branch is planned for in the year 1999. 
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.

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 collateral-ization, 
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)

      <PAGE>28


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

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:



<PAGE>
      <PAGE>29

 . 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 

 . 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:

         1997 -  9.70%
         1996 -  9.71%
         1995 -  9.69%
         1994 -  9.12%
         1993 -  9.46%

The aggregate amount of unused guarantees, commitments to extend credit
and standby letters of credit was $37,878,000 at 12/31/97.

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                 $38,812           $114,944            $ 5,274

Commercial, Financial
 and Agricultural           $23,144            $16,216            $ 2,569

All Other Loans             $ 6,600            $21,589            $   129

  TOTALS                    $68,556           $152,749            $ 7,972

Loans with Maturities After One Year for which:
                                                (in thousands)
Interest Rates are Fixed or Predetermined             $125,933
Interest Rates are Floating or Adjustable             $ 16,097

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 
      <PAGE>30

variable rate loans.  Loans totaling $84,653,000 or 36.92% 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 $152,749,000 at 12/31/97 from $125,165,000 at 12/31/96 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 1998.

NON-PERFORMING LOANS

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

                        1997      1996      1995     1994     1993      
Nonaccrual Loans        $ 440    $1,118    $  836    $  945    $1,079  
Restructured Loans          0         0         0         0         0
Foreclosed Property
  Other Real Estate,        0        50       111       148        98     
  Other Repossessed 
    Assets                  0         0         0         0         0      
Loans and leases 90 days 
  Past due and still 
  accruing interest       164       177       313     1,044       322
Total Nonperforming 
  Assets                $ 604    $1,295    $1,260    $2,137    $1,499  
Nonperforming assets 
 as a percent of 
 loans and leases 
 plus foreclosed  
 property at end 
 of year                  .27%     .62%      .66%     1.27%     1.01%   

Allowance as a percent of:                  
 Nonperforming 
   assets              461.76%  176.22%   175.88%    96.12%   111.81%  
Gross Loans              1.22%    1.08%     1.16%     1.22%     1.12%  
Addition to Reserve as a 
  percent of Net 
  Charge-Offs          364.07%  112.16%   180.20% 1,675.00%    93.69%  
Loans and leases 90 days
  past due as a percent of
  loans and leases at year
  end                     .08%     .09%     .17%       .62%      .22%    
Recoveries as a 
  percent of Gross 
  Charge-Offs           41.11%   20.15%   44.66%     87.10%    28.79% 

Total Non Performing Assets were $604,000 as of 12/31/97 compared to
$1,295,000 at year end in 1996.  Non performing Assets as a percent of
loans was .27% compared to .62% in 1996 and .66% in 1995.  Allowance for
Loan Losses as a percent of Nonperforming assets and total loans was
461.76% and 176.22% respectively.  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 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 
      <PAGE>31

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 12/31/97 if all loans
reported as non-accrual had been current in accordance with their original
terms and had been outstanding throughout the period is $42,000.  Interest
income on loans reported as ninety days past due and on interest accrual
status was $16,000 for 1997.  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)

                           1997      1996      1995      1994      1993      
Average Net Loans
Outstanding            $ 220,985  $203,663   $183,018  $160,254  $141,664   
Balance of Reserve
for Loan Losses
at Beginning of
Period                 $  2,282   $  2,216   $  2,054  $  1,676  $  1,703   
Loan Charge-Offs       $   (326)  $   (680)  $   (365) $   (186) $   (601)  
Recovery of Loans
Previously Charged Off $    134   $    137   $    163  $    162  $    173   

Net Loans Charged Off  $   (192)  $   (543)  $   (202) $    (24) $   (428)  
Additions to Reserve
Charged to Operating
Expense                $    699   $    609   $    364  $    402   $   401  
Balance at End of
Period                 $  2,789   $  2,282   $  2,216  $  2,054   $ 1,676  

Ratio of Net Charge-
Offs to Average Net
Loans Outstanding          .09%       .27%      .11%      .01%       .30%      

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 $326,000 (2) Recovery of loans previously charged off $134,000 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 
     <PAGE>32

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.

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.
<PAGE>
      <PAGE>33

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 $



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.
<PAGE>
      <PAGE>34

Management estimates the approximate amount of charge-offs for the 12 month
period ending 12/31/98 to be as follows:

Domestic                                            Amount
  Commercial, Financial & Agricultural            $150,000
  Real Estate-Construction                               0
  Real Estate-Mortgage                              80,000
  Installment Loans to individuals & credit cards  120,000
  Lease financing                                        0

            01/01/98 through 12/31/98   Total     $350,000

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

                                                  Year Ending December 31
                                                      (in thousands)
                                         1997      1996         1995        1994
Charge-offs:
 Domestic:
  Commercial, Financial & Agricultural $   23     $ 432         $   54    $   32
Real Estate-Construction                    0         0              0         0
  Real Estate-Mortgage                      0        20            113        22
  Installment Loans to individuals 
   & credit cards                         303       228            198       132
  Lease financing                           0         0              0         0
                Total                  $  326     $ 680         $  365    $  186


Recoveries:
 Domestic:
  Commercial, Financial & Agricultural $   43     $  32         $   38    $  30
  Real Estate-Construction                  0         0              0        0
  Real Estate-Mortgage                      2         3             19       12
  
Installment Loans to individuals 
   & credit cards                          89       102            106      120
 
  Lease financing                           0         0              0        0
 
                               Total   $ 134      $ 137        $   163    $ 162

Net Charge-offs                        $(192)     $(543)       $  (202)   $ (24)


COMPOSITION OF INVESTMENT SECURITIES
                                              December 31 
                                             (in thousands)

                               1997     1996     1995     1994     1993      
U. S. Treasury & 
 Government Agencies         $58,148  $62,194  $59,462  $47,042  $42,502  

State & Political 
 Subdivisions                $10,633  $10,569  $10,776  $10,883  $12,774  

All Others                   $ 2,395  $ 2,984  $ 3,654  $ 4,801  $ 5,471  

                  TOTALS     $71,176  $75,747  $73,892  $62,726  $60,747  

<PAGE>
      <PAGE>35

MATURITY AND YIELD ON SECURITIES - DECEMBER 31, 1997
                                   (in thousands)

                                  Maturing          Maturing        Maturing
                 Maturing      After One Year    After Five Years     After
              Within One Year Within Five Years Within Ten Years    Ten Years
              Amount Yield    Amount   Yield     Amount   Yield  Amount Yield
U. S. Treasury 
and Government 
Agencies      $ 7,889   6.43%  $15,323   6.67%  $25,404 7.17%  $ 9,532 7.33%

State and 
Political
Subdivisions* $   951   6.48%  $ 6,209   6.75%  $ 1,532 7.58%  $ 1,941 7.64%

All Others    $   ---    ---%  $   ---     ---  $ 2,395 6.69%  $  ----   ---

TOTALS        $ 8,840   6.44%  $21,532   6.70%  $29,331 7.15%  $11,473 7.39%

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

HELD TO MATURITY & AVAILABLE FOR SALE SECURITIES - DECEMBER 31, 1997

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

U.S. Treasury Securities                    500       499     5,507     5,588
U.S. Government Agency 
  obligations (exclude mortgage-backed
  securities):
  Issued by U.S. Govt. Agencies (2)           0         0          0        0
  Issued by U.S. Govt.-Sponsored
      Agencies (3)                       13,902    13,895     28,886   29,165
Securities issued by states & political
  subdivisions in the U.S.:
  General Obligations                     2,320     2,334      4,285    4,335
  Revenue Obligations                     3,030     3,052        923      946
  Industrial development & 
   similar obligations                        0         0          0        0
Mortgage-backed Securities (MBS):
  Pass-through securities:
   Guaranteed by GNMA                       209       214      3,293    3,345
   Issued by FNMA & FHLMC                   582       586        304      302
   Other pass-through securities              0         0          0        0
  Other mortgage-backed securities
   (include CMOs, REMICs and stripped
   MBS):
   Issued or guaranteed by FNMA & FHLMC 
    or GNMA                               1,037     1,030      3,494    3,520
   Collateralized by MBS
    issued or guaranteed by 
    FNMA, FHLMC or GNMA                       0         0          0        0
   All other mortgage-backed securities       0         0          0        0
Other Debt Securities:                 
  Other domestic debt securities              0         0          0        0
  Foreign debt securities                     0         0          0        0
Equity Securities:
  Investments in Mutual Funds and             0         0          0        0
  other equity securities with readily
    determinable fair values                  0         0        300      304
  All other equity securities (1)             0         0      2,091    2,091
Total                                    21,580    21,610     49,083   49,596

(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.


      <PAGE>36

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 1997
was driven by strong loan demand and Financial Accounting Standard No.
115 (further explanation is contained within this section as well as
footnotes included in the Auditors Report) which addresses Accounting in
Certain Investments in Debt and Equity Securities.  The investment
portfolio, which currently totals $70,258,870, is comprised of U. S.
Treasury and U. S. Agency Obligations of $58,148,000, Municipal
Obligations of $10,633,000, and all other investments totaling
$2,395,000.  Fixed rate holdings comprise 90% of the portfolio, while
adjustable rates comprise the remaining 10%.  

The fixed rate holdings currently have an expected average life of 2.4
years.  It is estimated that this average life would extend to 5.3 years
should rates go up by 100 basis points and 6.0 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 1.6 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 3.4%, while rates
up 200 basis points would impact the market value by a negative 8.0%.
This is equal to the price sensitivity of the 4-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 1.7%.

The adjustable rate holdings reprice on an annual or more frequent basis
and currently have an average life of 6.2 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 12/31/97 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 $512,293 as
reflected on the 12/31/97 balance sheet.  Mark to market impact to
capital on 12/31/96 was a positive $159,542.  All purchase and sale
transactions in 1997 were made in accordance with specifications set
forth in FASB 115.  The trading account at 12/31/97 maintained a zero
balance.  First Citizens has not engaged in Derivative activities as
defined by paragraphs 5 thru 7 of FASB 119.




<PAGE>
      <PAGE>37

Maturities in the portfolio are made up of 16.00% within one year, and
43.3% 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

     1997      $    0.00    $    0.00     $     0.00
     1996      $    0.00    $    0.00     $     0.00
     1995      $    0.00    $    0.00     $     0.00
     1994      $    0.00    $    0.00     $     0.00

The following table allocates by category unrealized Gains/Losses within
the portfolio as of December 31, 1997 (in thousands):
    
                                  Unrealized              Net
                              Gains        Losses     Gains/Losses

U.S. Treasury                                              
  Securities                $    81        $   0       $    81 

Obligations of U.S.
  Government Agencies
  and Corporations          $   464        $ 115       $   349

Obligations of States
  and Political 
  Subdivisions              $   109        $    1      $   108 

Federal Reserve and
  Corporate Stock           $     5        $    0      $     5 

TOTALS                      $   659        $ 116       $   543 


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.

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.

Liquidity, which is determined by a comparison of net liquid assets to
net liabilities, remains between 10% and 15%.  The stability of our
deposit base, sound asset/liability management, a strong capital base
and quality assets assure adequate liquidity.  Loan to deposit ratio at
12/31/97 was 85.68%.  Two factors primarily affecting liquidity in 1997,
were loan demand in excess of budget projections and customer demand to
lock in low interest rates for longer periods of time.  Solid deposit
growth centered primarily in time deposits provided a steady source of
funds to meet liquidity needs.  Other sources available to meet
liquidity needs were (1) approved lines of credit with Federal Home Loan
Bank and correspondent banks totaling $54 million (2) Loans and
investments in excess of $77,396,000 maturing within one year and (3)
approximately 63% of the banks' total investments placed in the held-for-
sale account.


      <PAGE>38

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.

<PAGE>
      <PAGE>39
<TABLE>
                                                  CONDENSED GAP REPORT
12/31/97                                            CURRENT BALANCES
                                                    (in thousands)
<S>                      <C>        <C>      <C>        <C>      <C>      <C>     <C>
                                    DAILY     0-1        1-2      2-3      3-6     6-12
                         TOTAL    FLOATING   MONTHS     MONTHS   MONTHS   MONTHS  MONTHS
CASH AND DUE FROM:
CASH AND DUE FROM        12,217       -          -          -         -        -       -
MONEY MARKET                295     295          -          -         -        -       -

TOTAL CASH & DUE FROM    12,512     295          -          -         -        -       -

INVESTMENTS
US TREASURIES             6,087       -          -          -     1,080    1,981       -
US AGENCIES              38,694       -          -         93     1,000    2,619   1,192 
VARIABLE AGENCIES        13,368       -      1,618      1,000     2,500    2,500   5,750
MUNICIPALS               10,632       -          -          -         -      951       -
EQUITIES                  2,395       -          -          -         -        -       -
TOTAL INVESTMENTS        71,176       -      1,618      1,093     4,580    8,051   6,942

LOANS:
COMMERCIAL FIXED         28,217       -      3,074      2,230     1,414    4,137   3,373
COMMERCIAL VARIABLE      11,717       -     11,717          -         -        -       -
REAL ESTATE VARIABLE     15,887       -     14,799          -         -    1,088       -
REAL ESTATE FIXED       138,965       -      9,942      1,693     3,789    7,722  14,719
HOME EQUITY LOANS         4,864       -      4,147          -        51      414     252
SEC MORTGAGE              1,112       -      1,112          -         -        -       -
INSTALLMENT LOANS        24,526       -        728        231       268      859   1,765
INSTALLMENT VARIABLE         11       -         11          -         -        -       -
FINANCE COMPANY           1,121       -          -          -         -      500     621
FLOOR PLAN                  453     453          -          -         -        -       -
CREDIT CARDS              1,757       -          -          -         -        -   1,757
FACTORING REC                50       -         50          -         -        -       -
OVERDRAFTS                  597       -        597          -         -        -       -
TOTAL LOANS             229,277     453     46,177      4,154     5,522   14,720  22,487
LOAN LOSS RESERVE         2,789       -          -          -         -        -       -

NET LOANS               226,488     453     46,177      4,154     5,522   14,720  22,487

FED FUNDS SOLD            5,075   5,075          -          -         -        -       -
TOTAL FED FUNDS SOLD      5,075   5,075          -          -         -        -       -

TOTAL EARNING ASSETS    302,739   5,528     47,795      5,247    10,102   22,771  29,429   

OTHER ASSETS:                  
BUILDING, F&F & LAND      8,012       -          -          -         -        -       -
OTHER ASSETS              8,690       -          -          -         -        -       - 
TOTAL OTHER ASSETS       16,702       -          -          -         -        -       -

TOTAL ASSETS            331,953   5,823     47,795      5,247    10,102   22,771  29,429

DEMAND DEPOSITS:
DEMAND DEPOSITS          32,748       -          -          -         -        -       -

TOTAL DEMAND             32,748       -          -          -         -        -       -

SAVINGS ACCOUNTS:
REGULAR SAVINGS          16,641  16,641          -          -         -        -       -
NOW ACCOUNT              25,852  25,852          -          -         -        -       -
BUSINESS CHECKING           262     262          -          -         -        -       -
IMF-MMDA                  9,818   9,818          -          -         -        -       -
FIRST RATE ACCOUNT       25,015  25,015          -          -         -        -       -
DOGWOOD CLUB              5,030   5,030          -          -         -        -       -

TOTAL SAVINGS            82,618  82,618          -          -         -        -       -
</TABLE>
<PAGE>
      <PAGE>40

                     CONDENSED GAP REPORT
12/31/97                       CURRENT BALANCES
                        (in thousands)
                          1-2      2+
                         YEARS    YEARS
CASH AND DUE FROM:
CASH AND DUE FROM             -  12,217
MONEY MARKET                  -       -

TOTAL CASH & DUE FROM         -  12,217

INVESTMENTS
US TREASURIES               500   2,526
US AGENCIES               2,207  31,583
VARIABLE AGENCIES             -       -
MUNICIPALS                2,290   7,391
EQUITIES                      -   2,395
TOTAL INVESTMENTS         4,997  43,895

LOANS
COMMERCIAL FIXED          2,312  11,677
COMMERCIAL VARIABLE           -       -
REAL ESTATE VARIABLE          -       -
REAL ESTATE FIXED        12,302  88,798
HOME EQUITY LOANS             -       -
SEC MORTGAGE                  -       -
INSTALLMENT LOANS         4,405  16,270
INSTALLMENT VARIABLE          -       -
FINANCE COMPANY            -      -
FLOOR PLAN                    -       -
CREDIT CARDS                  -       -
FACTORING REC                 -       -  
OVERDRAFTS                    -       -
TOTAL LOANS              19,019 116,745
LOAN LOSS RESERVE             -   2,789

NET LOANS                19,019 113,956

FED FUNDS SOLD                -       -

TOTAL FED FUNDS SOLD          -       -

TOTAL EARNING ASSETS     24,016 157,851

OTHER ASSETS:                  
BUILDING, F&F & LAND          -   8,012
OTHER ASSETS                  -   8,690

TOTAL OTHER ASSETS            -  16,702

TOTAL ASSETS             24,016 186,770

DEMAND DEPOSITS:
DEMAND DEPOSITS               -  32,748

TOTAL DEMAND                  -  32,748

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

TOTAL SAVINGS                 -       -

<PAGE>
      <PAGE>41              
<TABLE>
                                            CONDENSED GAP REPORT
12/31/95                                     CURRENT BALANCES
                                              (in thousands)
<S>                     <C>       <C>       <C>       <C>       <C>       <C>     <C>
                                    DAILY     0-1        1-2      2-3       3-6    6-12
                         TOTAL    FLOATING   MONTHS     MONTHS   MONTHS    MONTHS  MONTHS

TIME DEPOSITS:     
CD 1 - 2 MONTHS           7,353       -      5,311      2,029        13        -       -
CD 3 MONTHS                 782       -        406        149       227        -       -
CD 4 - 5 MONTHS          10,309       -        203      2,055     2,000    6,051       -
CD 6 MONTHS              18,353       -      3,936      2,542     2,884    8,978      13
CD 7 - 11 MONTHS          3,095       -         46        467       126      442   2,014
CD 12 MONTHS             14,576       -        748        521       858    3,159   9,290
CD 13 - 17 MONTHS        17,306       -          9          -         -    4,794  11,535
CD 18 - 23 MONTHS           547       -          -          -         -       50     209
CD 24 MONTHS              6,428       -         42        124       232      964     761
CD 25 - 30 MONTHS         7,953       -          -          4        52      861   3,206
CD 31 - 59 MONTHS        12,736       -        340          1        22    3,175     426
CD 31 - 59 MONTHS            
  VARIABLE                   87       -          -         15         -       60       -
CD 60 MONTHS              5,722       -        110         71       168      533     947
CD 60 MONTHS VARIABLE       973       -          -          -        63       60     180  
CD SWEET 16              23,140       -      1,074      1,421     2,293    6,343   8,657
CD 7 MONTH                1,807       -        340        608       390      229     240
IRA-FLOATING                148       -        148          -         -        -       -
IRA FIXED                20,590       -        741      1,063       667    2,221   4,036
CHRISTMAS CLUB              165       -          -          -         -        -      82

TOTAL TIME              152,070       -     13,454     11,070     9,995   37,920  41,596

TOTAL DEPOSITS          267,436  82,618     13,454     11,070     9,995   37,920  41,596

SHORT TERM BORROWINGS:
TT&L                      1,000       -          -          -         -        -       -
SECURITIES SOLD-SWEEP    13,927  13,927          -          -         -        -       -
SECURITIES SOLD-FIXED     7,838       -      2,442      1,340     1,850      891   1,099
FHLB-LIBOR INVESTMENT     3,947   3,947          -          -         -        -       -
FHLB-LONG TERM            1,866       -          -          -         -        -       -
NOTES PAYABLE-FINANCE   1,000   1,000      -          -         -        -       -
TOTAL SHORT TERM BORR.   29,578  18,874      2,442      1,340     1,850      891   1,099

OTHER LIABILITIES:
OTHER LIABILITIES         3,364       -          -          -         -        -       -

TOTAL OTHER LIABILITIES   3,364       -          -          -         -        -       -

TOTAL LIABILITIES       300,378 101,492     15,896     12,410    11,845   38,811  42,695

CAPITAL:
STOCK, SURPLUS, P.I.C.    6,000       -          -          -         -        -       -
UNREALIZED GAIN (LOSSES)    307       -          -          -         -        -       -
UNDIVIDED PROFITS        25,268       -          -          -         -        -       -

TOTAL CAPITAL            31,575       -          -          -         -        -       -

TOTAL LIAB'S & CAPITAL 331,953  101,492     15,896     12,410    11,845   38,811  42,695

GAP (SPREAD)                  - -95,669     31,899     -7,163    -1,743  -16,040 -13,266
GAP % TOTAL ASSETS            -  -28.82       9.61      -2.16     -0.53    -4.83   -4.00
CUMULATIVE GAP                - -95,669    -63,770    -70,933   -72,676  -88,716-101,982
CUM. GAP % TOTAL ASSETS       -  -28.82     -19.21     -21.37    -21.89   -26.73  -30.72
SENSITIVITY RATIO             -    0.06       0.46       0.45      0.49     0.51    0.54
</TABLE>
<PAGE>
      <PAGE>42
                          CONDENSED GAP REPORT
12/31/97                   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                  -       -
CD 13 - 17 MONTHS           968       -
CD 18 - 23 MONTHS           288       -
CD 24 MONTHS              4,291      14
CD 25 - 30 MONTHS         3,699     131
CD 31 - 59 MONTHS           404   8,368
CD 31 - 59 MONTHS            
  VARIABLE                    -      12
CD 60 MONTHS              1,633   2,260
CD 60 MONTHS VARIABLE       427     243
CD SWEET 16               3,352       -
CD 7 MONTH                    -       -
IRA-FLOATING                  -       -
IRA FIXED                 8,543   3,319
CHRISTMAS CLUB                -      83

TOTAL TIME               23,605  14,430

TOTAL DEPOSITS           23,605  47,178

SHORT TERM BORROWINGS:
TT&L                          -   1,000
SECURITIES SOLD-SWEEP         -       -
SECURITIES SOLD-FIXED       112     104
FHLB-LIBOR INVESTMENT         -       -
FHLB-LONG TERM                -   1,866
NOTES PAYABLE-FINANCE         -       -
TOTAL SHORT TERM BORR.      112   2,970

OTHER LIABILITIES:
OTHER LIABILITIES             -   3,364

TOTAL OTHER LIABILITIES       -   3,364

TOTAL LIABILITIES        23,717  53,512

CAPITAL:
STOCK, SURPLUS, P.I.C.        -   6,000
UNREALIZED GAIN (LOSSES)            307
UNDIVIDED PROFITS             -  25,268

TOTAL CAPITAL                 -  31,575

TOTAL LIAB'S & CAPITAL   23,717  85,087

GAP (SPREAD)                299 101,683
GAP % TOTAL ASSETS         0.09   30.63
CUMULATIVE GAP         -101,683       -
CUM. GAP % TOTAL ASSETS  -30.63       -
SENSITIVITY RATIO          0.59    1.00

                     NOTES TO THE GAP REPORT

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

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

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

4.    Savings accounts are placed in the +2 year time frame.  In a flat
      rate environment, savings accounts generally do not reprice or
      liquidate. Savings deposits tend to be price sensitive, after a
      major increase in the 6 month CD rate.  These accounts are placed in 


      <PAGE>43

  the +2 year time frame as opposed to variable based on past
  historical trends. Savings accounts are considered core deposits.

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

6.    Effective GAP management ensures minimal impact to net interest
      income in a volatile interest rate environment.  Financial markets
      are strained by rapid changes in rates, whether up or down.  When
      rates rise rapidly, net interest margins are squeezed. Rapidly
      decreasing rates have the potential to excessively stimulate loan
      demand, placing pressure on the bank's liquidity position.

RETURN ON EQUITY AND ASSETS
FIRST CITIZENS BANCSHARES, INC.
                                    1997    1996     1995  1994    1993 
Percentage of Net Income to:
Average Total Assets                1.32%   1.22%   1.00%  1.20%  1.17%
Average Shareholders Equity        13.54%  13.09%  10.60% 12.93% 13.48%
Percentage of Dividends Declared
 Per Common Share to Net Income
 Per Common Share                  35.78%  32.28%  35.56% 29.23% 25.62% 
Percentage of Average Shareholders'
 Equity to Average Total Assets     9.71%   9.34%   9.32%  9.27%  8.71% 

Return on assets is a measurement of the firms profitability in terms of
asset utilization.  Total assets at 12/31/97 were $333,288,000. 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 rates paid on
interest bearing deposits had a significant impact on earnings the first
half of 1995.  Results of operations for 1997 & 1996 reflected
significant improvement over previous years. 

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%.

Percentage of dividends declared per common share to net income per
common share increased 3.5% in 1997, the result of significantly
improved earnings.  Numbers of shares outstanding continues to increase
as a result of stock issued on a quarterly basis to service the Dividend
Reinvestment Program.  A stock repurchase program, approved by the Board
of Directors in 1994 for the purpose of acquiring shares on the open
market to service the Dividend Reinvestment Program continues to be
ineffective.  Shareholders continue to express an interest in buying
additional stock rather than selling shares.  Under the terms of the
repurchase program, the company will repurchase up to $200,000 of
Bancshares' stock in a calendar quarter on a first come, first served
basis. In January 1998, the cash option program was made available to
shareholders.  Under this program, existing shareholders are afforded
the opportunity to purchase common stock having a monetary value up to
$5,000 in any calendar quarter.


<PAGE>
      <PAGE>44

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. 

    1997    1996       1995       1994      1993      

    9.94%   9.46%      9.30%      9.30%      9.24%

Cash Dividends to Shareholders for 1997, 1996, and 1995 respectively
were $2.00, $1.60 and $1.30. Total shares outstanding were 750,718,
741,516, and 733,399 at 12/31/97, 1996 and 1995.  An Amendment to the
Articles of Association ratified by Shareholders in April, 1993 approved
an increase in number of shares authorized from 750,000 to 2,000,000. 
In September, 1993 a 2.5 for l stock split on the Common Capital Stock
of Bancshares was declared to holders of record as of October 15, 1993. 
The number of shares outstanding increased proportionately with changes
to the capital account.  In addition, a 10% stock dividend was declared
payable December 15, 1992 which provided for issuance of one share of
stock for each 10 shares owned, with payment of fractional shares being
made in cash.  Twenty-five thousand one hundred fifty-eight shares were
issued as a result of the dividend.

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 12/31/97 and 12/31/96 was 15.13% and 14.72%
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. 

<PAGE>
      <PAGE>45


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                           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, 1997 and
1996, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years ended December 31,
1997.  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, 1997 and
1996, and their results of operations and cash flows for the three years
ended December 31, 1997, in conformity with generally accepted
accounting principles.



Dyersburg, Tennessee
January 23, 1998


                     Carmichael, Dunn, Creswell & Sparks CPAs
<PAGE>
     <PAGE>46          
                       FIRST CITIZENS BANCSHARES, INC.,
                             AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
                        December 31, 1997 and 1996

                                                          1997          1996
    ASSETS
Cash and due from banks                              $  13,770,773 $ 12,507,293
Federal funds sold                                       5,075,000    1,000,000
Investment securities    
  Securities held-to-maturity (fair value 
  of $21,609,775 at December 31, 1997 and 
  $28,097,406 at December 31, 1996)                     21,579,660   28,059,382
   Securities available-for-sale, at fair value         49,595,880   47,687,500
 Loans - (net of unearned income of 
   $1,621,643 in 1997 and $1,520,885 in 1996)          229,276,999  211,389,096
   Less:  Allowance for loan losses                      2,788,555    2,282,231
     Net Loans                                         226,488,444  209,106,865
Premises and equipment                                   8,177,113    8,135,023
Accrued interest receivable                              3,885,355    3,697,639
Other assets                                             4,715,468    2,877,297

     TOTAL ASSETS                                     $333,287,693 $313,070,999


LIABILITIES AND STOCKHOLDERS' EQUITY

 Liabilities
 Deposits         
   Demand                                               32,734,353   27,882,403
   Time                                                152,238,858  149,023,682
   Savings                                              82,616,760   79,507,938
Total Deposits                                         267,589,971  256,414,023
Securities sold under agreement to repurchase           21,765,482   21,225,315
Long-term debt                                           7,813,023    2,996,480
Other liabilities                                        2,993,865    2,831,975
     Total Liabilities                                 300,162,341  283,467,793

Stockholders' Equity
 Common stock, par value $1; 
  shares authorized 2,000,000
 Issued and outstanding - 
 750,718 shares in 1997
 741,516 shares in 1996                                    750,718      741,516
Surplus                                                 10,669,349   10,096,882
Retained earnings                                       21,405,351   18,678,876
Unrealized gain on securities 
   available-for-sale, net of applicable 
   deferred income taxes                                   307,376       94,600
   Less treasury stock, at cost 158 shares in 1997; 
   40 shares in 1996                                        (7,442)      (8,668)
     Total Stockholders' Equity                         33,125,352   29,603,206

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $333,287,693 $313,070,999



    See accompanying notes to consolidated financial statements.

<PAGE>
     <PAGE>47

                                      FIRST CITIZENS BANCSHARES, INC.,
                                             AND SUBSIDIARY
                                     CONSOLIDATED STATEMENTS OF INCOME
                                 Years ended December 31, 1997, 1996, 1995

                                            1997         *1996           *1995
    Interest Income   

Interest and fees on loans            $21,421,663   $19,769,117    $17,720,050
Interest and dividends on 
  investment securities:
    Taxable                             4,382,119     4,254,795      4,029,277
    Tax-exempt                            481,543       497,826        482,209
    Dividends                             211,022       180,794         61,928
Other interest income                     120,660        76,846        197,635
Lease financing income                                        338          1,487
    Total Interest Income              26,617,007    24,779,716     22,492,586

    Interest Expense

Interest on deposits                   11,056,774    10,601,172     10,039,401
Interest on long-term debt                602,829       395,514        347,683
Other interest expense                  1,080,206       962,014        794,169
    Total Interest Expense             12,739,809    11,958,700     11,181,253
Net Interest Income                    13,877,198    12,821,016     11,311,333
Provision for loan losses                 699,485       608,505        364,449
Net interest income after provision 
 for loan losses                       13,177,713    12,212,511     10,946,884

    Other Income

Income from fiduciary activities          755,711       745,861        704,726
Service charges on deposit accounts     1,685,739     1,456,681      1,304,523
Other service charges, commissions, 
 and fees                                 835,470       605,305        464,879
Securities gains net                       92,594       211,233         59,644
Other income                              377,179       349,407        186,137
    Total Other Income                  3,746,693     3,368,487      2,719,909

   Other Expenses

Salaries and employee benefits          5,980,198     5,497,388      5,171,955
Net occupancy expense                     448,121       445,720        340,663
Furniture and equipment expense           196,208       146,388        154,680
Depreciation                              986,797     1,011,677        930,292
Data processing expense                   333,433       304,451        227,812
Legal and professional fees               131,833       161,261        280,155
Stationary and office supplies            194,704       238,000        204,794
Other expenses                          2,246,738     2,032,839      2,317,900
    Total Other Expenses              $10,518,032    $9,837,724     $9,628,251

Net income before income taxes         $6,406,374    $5,743,274     $4,038,542

Provision for income tax expense        2,160,456     2,033,370      1,332,886

Net Income                             $4,245,918    $3,709,904     $2,705,656

Earnings Per Common Share:

  Net income                                 5.70          5.03           3.72

Weighted average shares outstanding       745,170       736,436        726,489

*Certain items have been reclassified to conform to current years format.


    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, 1997, 1996 and 1995

<S>                                          <C>             <C>      <C>             <C>              <C>          <C>
                                                                                                         Unrealized 
                                                                                                       Gain(Loss) on
                                                                                                     Securities Available
                                                                                                  For Sale Net of Applicable
                                                   Common Stock                                      Deferred Income 
                                              Shares          Amount    Surplus      Retained Earnings   Taxes       Treasury Stock
Balance, January 1, 1995                      714,824        $714,824  $9,000,485     $ 14,423,084     $ (259,543)  $  (102)

Net income, year ended December 31, 1995                                                                2,705,656
Cash dividends paid - $1.30 per share                                                                    (962,348)
Sale of common stock                           18,575          18,575    719,315
Adjustment to record unrealized gain(loss)
 on securities available-for-sale, net of 
 applicable deferred income taxes during 
 the year                                                                                                 744,814

Treasury stock transactions-net                                              156                                      (1,679)

Balance, December 31, 1995                    733,399         733,399  9,719,956    16,166,392            485,271     (1,781)

Net income, year ended December 31, 1996                                             3,709,904
Cash dividends paid - $1.60 per share                                               (1,197,420)
Sale of common stock                            8,117           8,117    376,926
Adjustment of record unrealized gain(loss) 
 on securities available-for-sale, net of 
 applicable deferred income taxes during the year                                                        (390,671)
Treasury stock transactions-net                                                                                       (6,887) 

Balance, December 31, 1996                    741,516         741,516 10,096,882    18,678,876             94,600     (8,668)

Net income, year ended December 31, 1997                                             4,245,918
Cash dividends paid - $2.00 per share                                               (1,519,443)
Sale of common stock                            9,202           9,202    572,467
Adjustment of unrealized gain (loss) on securities
  available-for-sale, net of applicable deferred
  income taxes during the year                                                                            212,776 
Treasury stock transaction-net                                                                                         1,226 

Balance, December 31, 1997                   $750,718        $750,718 $10,669,349   $21,405,351         $ 307,376    $(7,442) 

   See accompanying notes to consolidated financial statements.<PAGE>
</TABLE>
     <PAGE>49    

                           FIRST CITIZENS BANCSHARES, INC.,
                                AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                     Years ended December 31, 1997, 1996, and 1995

                                               1997           1996        1995
         Operating Activities

Net income                                 $4,245,918    $3,709,904  $2,705,656
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Provision for loan losses                  699,485       608,505     364,449
   Provision for losses on other real estate                             53,404
   Provision for depreciation                 986,797     1,011,677     930,292
   Amortization of investment security discounts                         (3,000)
   Deferred income taxes                      147,765      (319,360)    (61,538)
   (Gains) losses on sale of other real estate                           36,004
   Realized and unrealized investment 
     security (gains) losses                  (92,594)     (211,233)    (59,644)
   (Increase) decrease in accrued 
     interest receivable                     (187,716)      253,461    (949,763)
   Increase (decrease) in accrued 
     interest payable                        (141,369)      (67,981)    732,857
        
   (Increase) decrease in other assets     (1,985,936)   (1,053,334)    118,877
   Increase (decrease) in other 
     liabilities                              303,259       148,547    (169,629)

        NET CASH PROVIDED BY 
        OPERATING ACTIVITIES                3,975,609     4,080,186   3,697,965

    Investing Activities

Proceeds of maturities of held-to-
  maturity investment securities            6,985,000     6,335,363   7,160,748
Purchases of held-to-maturity investment 
  securities                                 (413,684)   (1,500,000)
Proceeds of sales and maturities of available-
  for-sale investment securities           13,577,097    13,705,781  11,639,381
Purchases of available-for-sale investment 
  securities                              (15,271,701)  (20,576,139)(27,718,689)
Increase in loans - net                   (18,081,064)  (20,025,448)(23,326,723)
Purchase of premises and equipment         (1,028,887)     (316,167) (1,368,626)

       NET CASH PROVIDED USED
       BY INVESTING ACTIVITIES            (14,233,239)  (22,376,610)(33,613,909)


      Financing Activities

Net increase in demand deposits,
  NOW accounts and savings accounts       $ 8,067,126   $10,061,195 $ 3,557,638
Increase in time deposits-net               3,108,822     9,192,447  24,122,492
Increase in long-term borrowing             5,011,250                   527,173
Payment of principal on long-term debt       (194,707)   (1,655,423)
Proceeds from sale of common stock            581,669       385,043     737,890 
Cash dividends paid                        (1,519,443)   (1,197,420)   (962,348)
Net increase in short-term
  borrowings                                  540,167     1,480,349   2,794,880
Treasury stock transactions-net                 1,226        (6,887)     (1,523)

     NET CASH PROVIDED BY
     FINANCING ACTIVITIES                  15,596,110    18,259,304  30,776,202

    INCREASE (DECREASE) IN CASH AND 
       CASH EQUIVALENTS                     5,338,480       (37,120)    860,258 

Cash and cash equivalents at beginning 
   of year                                 13,507,293    13,544,413  12,684,155

    CASH AND CASH EQUIVALENTS AT
         END OF YEAR                      $18,845,773   $13,507,293 $13,544,413

Cash payments made for interest and income taxes during the years presented are
 as follows:

                                               1997        1996         1995    
Interest                                  $12,884,178   $11,997,839  $10,448,396
     Income taxes                           2,355,181     1,972,000    1,567,316

    See accompanying notes to consolidated financial statements.



     <PAGE>50
                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
                 NOTES TO FINANCIAL STATEMENTS
                    December 31, 1997 & 1996

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 First Citizens National
Bank.  First Citizens Bancshares, Inc.'s, investment in its
Subsidiary shown on the Parent Company Balance Sheet (Note
13), is stated at equity in the underlying assets.  All
significant inter-company items 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 requires 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.

SECURITIES
Effective January 1, 1995, the Company adopted Statement No.
115 of the Financial Accounting Standards Board according to
which 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;

      <PAGE>51

                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    December 31, 1997 & 1996

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

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 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.

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.  



      <PAGE>52

                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    December 31, 1997 & 1996

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

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 basis 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>53
                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    December 31, 1997 & 1996


Note 2 - Investment Securities

At January 1 1995, First Citizens Bancshares, Inc. adopted
Statement No. 115 of the Financial Accounting Standards Board
which sets forth criteria for classification of investment
securities for financial statement purposes.  The following
tables reflect amortized cost, unrealized gains, unrealized
losses and fair value investment securities for the balance
sheet dates presented, segregated into held-to-maturity and
available-for-sale categories:

                                               December 31, 1997
                                                Held-To-Maturity
                                              Gross        Gross
                                            Unrealized   Unrealized    Fair
                            Amortized Cost    Gains        Losses     Value

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     Fair
                            Amortized Cost     Gains          Losses      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 SECURITY INVESTMENT  $49,082,585       $582,788   $ 69,493   $49,595,880


<PAGE>
      <PAGE>54

                       FIRST CITIZENS BANCSHARES, INC.,
                               AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1997 & 1996

Note 2 - Investment Securities (Continued)

                                              December 31, 1996
                                               Held-To-Maturity
                                               Gross       Gross
                                            Unrealized  Unrealized      Fair
                           Amortized Cost     Gains        Losses      Value

U.S. Treasury securities and 
 obligations of U.S. 
 Government corporations 
 and agencies               $19,032,226      $127,208    $115,164    $19,044,270

Obligations of states and 
 political subdivisions       6,248,290        19,858      13,123      6,255,025

Mortgage-backed securities    2,278,566        26,277       8,027      2,296,816

Corporate debt securities       500,300           995                    501,295

  TOTAL SECURITIES 
     INVESTMENTS            $28,059,382      $174,338    $136,314    $28,097,406

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

U.S. Treasury securities and 
 obligations  of U.S. 
 Government corporations 
 and agencies               $33,730,315     $342,752     $203,894    $33,869,173

Obligations of states and 
 political subdivisions       4,312,448       20,757       12,038      4,321,167

Mortgage-backed securities    7,011,620       52,274       50,434      7,013,460

     Total Debt Securities   45,054,383      415,783      266,366     45,203,800

    Equity investments        2,475,450        8,250                   2,483,700

  TOTAL SECURITIES 
    INVESTMENT              $47,529,833     $424,033      $266,366   $47,687,500

<PAGE>
      <PAGE>55
                       FIRST CITIZENS BANCSHARES, INC.,
                               AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1997 & 1996

Note 2 - Investment Securities (Continued)

The tables below summarize maturities of debt securities held-to-maturity
and available-for-sale  as of December 31, 1997 and 1996:

                                              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


                                            December 31, 1996

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

One Year or less       $ 8,410,816     $ 8,582,245    $ 3,494,077    $ 3,499,555
After one year through 
  five years            14,674,677      14,710,573     12,124,981     12,275,220
After five years through 
  ten years              3,726,901       3,692,240     14,983,046     15,125,707
After ten years          1,246,988       1,112,348     14,452,279     14,303,318
                       $28,059,382     $28,097,406    $45,054,383    $45,203,800

Securities gains (losses) presented in the consolidated statements of income 
consist of the following:


Year Ended December 31               Gross Sales      Gains    Losses        Net

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
1995 - Securities held to maturity    2,150,000       7,261     5,189      2,072
1995 - Securities available-for-sale  9,379,381      57,604        32     57,572

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, 1997 and 1996, investment securities were pledged to secure 
government, public and trust deposits as follows:

         December 31                           Amortized Cost    Fair Value
            1997                               $63,790,012        $64,306,841
            1996                                24,657,408         24,695,742
                                


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.

<PAGE>
      <PAGE>56
                FIRST CITIZENS BANCSHARES, INC.,
                         AND SUBSIDIARY
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    December 31, 1997 & 1996

Note 3 - Loans

Loans outstanding at December 31, 1997 and 1996 were comprised of the
following:
                                               1997              1996
                                                   (In Thousands)
Commercial, financial and agricultural       $   41,929         $ 42,067    
Real estate - construction                       22,697           17,130    
Real estate - mortgage                          136,333          127,080
Installment                                      25,904           22,743
Other loans                                       2,414            2,369    
                                                229,277          211,389
Less:  Allowance for loan losses                  2,789            2,282    
                                            $   226,488         $209,107


In conformity with Statement No. 114 of the Financial
Accounting Standards Board, the Corporation has recognized
loans with carrying values of $614,000 at December 31, 1997,
and $1,539,000 at December 31, 1996, as being impaired. The
balance maintained in the Allowance for Loan Losses related to
these was $123,527 at December 31, 1997, and $132,230 at
December 31, 1996.

Note 4 - Allowance for Loan Losses

An analysis of the allowance for loan losses during the three
years ended December 31 is as follows:
 
                                        1997         1996       1995  
Balance, beginning of period        $2,282,231  $2,216,511  $2,053,843  
Provision for loan losses charged 
  to operations                        699,485     608,505     364,449
Loans charged to allowance, 
  net of loan loss recoveries of 
  $132,521, $137,566, and $164,148    (193,161)   (542,785)   (201,781)

Balance, end of period              $2,788,555  $2,282,231  $2,216,511

For tax purposes, the Corporation deducts the maximum amount allowable. 
During the year ended December 31, 1997, the deduction taken was
$193,161.  The deductions for tax purposes in 1996 and 1995 were
$542,785 and $235,791, respectively.

Note 5 - Premises and Equipment

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

                         Useful Lives
                           in Years        1997           1996 
Land                                    $1,114,046     $ 1,114,046
Buildings                  5 to 50       7,891,651       7,839,273
Furniture and equipment    3 to 20       7,407,589       7,115,619
                                        16,413,286      16,068,938
Less:  Accumulated depreciation          8,236,173       7,933,915
     Net Fixed Assets                  $ 8,177,113     $ 8,135,023
 



<PAGE>
      <PAGE>57

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1997 & 1996


Note 6 - Repossessed Real Property

The carrying value of repossessed real property on the balance sheets of
the Corporation is $0 at December 31, 1997 and $50,000 at December 31,
1996.  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:

                                 1997                 1996
                                       (In Thousands)

Time Deposits                   $48,635               $38,181            
Savings Deposits                 30,523                44,396            
 
NOW accounts, included in savings deposits on the balance sheet, totaled
$25,851,753 at December 31, 1997 and $26,809,062 at December 31, 1996.

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, 1997 and 1996, were $4,113,170 and $3,895,000,
respectively. 

Time deposits maturing in years subsequent to December 31, 1997 are as
follows:

          Year ended December 31              (In Thousands)

                   1998                           $114,287
                   1999                             23,605
                   2000                             11,767
                   2001                                524
                   2002                              1,994
                Thereafter                              62

                   Total                          $152,239

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 $428,969 in 1997, $399,138 in 1996, and
$390,252 in 1995.

      <PAGE>58

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1997 & 1996


Note 9 - Income Taxes

Provision for income taxes is comprised of the following:

                                       1997         1996       1995
Federal income tax expense(benefit)          
  Current                           $1,959,091  $ 1,712,398 $1,144,344  
  Deferred                            (167,797)     (22,344)   (52,308)
                                                             
State income tax expense(benefit)                           
  Current                              393,606      347,259    250,090
  Deferred                             (24,444)      (3,943)    (9,240)
                                                                         
                                    $ 2,160,456  $2,033,370 $1,332,886

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:

                                       1997         1996       1995  
Tax expense at statutory rate       $2,178,167   $1,952,713  $1,373,104
Increase (decrease) resulting from:
 State income taxes, net of 
  federal income tax benefit           253,128      226,589     158,968
Tax exempt income                     (232,749)    (172,142)   (219,247) 
Other differences                      (38,090)      26,210      20,061 
                                    $2,160,456   $2,033,370  $1,332,886


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 in the accompanying consolidated balance sheets
include the following components:
                                                 December 31     

                                           1997              1996
Deferred tax liabilities                $(204,917)         $( 63,817)
Deferred tax assets                       311,387            318,052

Net deferred tax assets                 $ 106,470          $ 254,235
    
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 Bank to
meet specific capital adequacy guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain off-balance-sheet 
items as calculated under regulatory accounting practices. The
Bank's capital classification is also subject to qualitative judgements
by the regulators about components, risk weightings, and other factors.



      <PAGE>59

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1997 & 1996

Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios (set
forth in the table below) of Tier 1 capital (as defined in the
regulations) to total average assets (as defined), and minimum ratios of
Tier 1 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 Bank must
maintain minimum Tier 1 leverage, Tier 1 risk-based, total risk-based
ratios as set forth in the table. The Bank's actual capital amounts and
ratios are also presented in the table.

                                                          To Be Well
                                                       Capitalized Under
                                     For Capital       Prompt Corrective
                     Actual       Adequacy  Purposes   Action Provisions
Amount          Amount    Ratio    Amount      Ratio    Amount     Ratio
As of 12/31/97:
Total Capital $31,574,878 13.5%  $18,754,720 > 8.0% $23,443,400 > 10.0%
(To Risk Weighted Assets)
Tier 1 Capital 31,155,029 13.3%    9,377,360 > 4.0%  14,066,040 >  6.0%
(To Risk Weighted Assets)
Tier 1 Capital 31,155,029  9.5%   13,021,200 > 4.0%  16,357,750 >  5.0%
(To Average Assets)

As of 12/31/96:
Total Capital $27,708,459 13.0% $17,063,040 > 8.0% $21,328,800 > 10.0%
(To Risk Weighted Assets)
Tier 1 Capital 27,486,916 12.9%   8,531,520 > 4.0%  12,797,280 >  6.0%
(To Risk Weighted Assets)
Tier 1 Capital 27,486,916  8.8%  12,445,400 > 4.0%  15,556,750 >  5.0%
(To Average Assets)

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
1997 and 1996 were $152,000 and $173,000, 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, 1997, approximately $17 million of retained
earnings was available for future dividends from the subsidiary to the
parent corporation.
<PAGE>
      <PAGE>60


                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                         December 31, 1997 & 1996
     

Note 13 - Condensed Financial Information

                           First Citizens Bancshares, Inc.
                                (Parent Company Only)
                                                        December 31
                                                     1997          1996
                            BALANCE SHEETS

ASSETS
Cash                                              $ 1,271,900   $ 1,451,161   
 Investment securities, available-for-sale-at  
   fair value                                                       198,125
    Investment in subsidiary                       31,574,878    27,708,459
    Real estate owned                                 164,181       164,181
    Other assets                                      117,619       103,389
    TOTAL ASSETS                                  $33,128,578   $29,625,315

LIABILITIES AND STOCKHOLDERS' EQUITY
   LIABILITIES
Accrued expenses                                  $     3,226    $    22,109
TOTAL LIABILITIES                                       3,226         22,109

STOCKHOLDERS' EQUITY                               33,125,352     29,603,206
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $33,128,578    $29,625,315

                          STATEMENTS OF INCOME
                                                        December 31
                                                     1997          1996
INCOME
Dividends from bank subsidiary                    $   598,126   $    165,000
  Other income                                         79,954        188,865
TOTAL INCOME                                          678,080        353,865

EXPENSES
  Other expenses                                       90,829        192,489
TOTAL EXPENSES                                         90,829        192,489

Income before income taxes and equity 
 in undistributed net income of bank subsidiary       587,251        161,376

Income tax expense (benefit)                           (3,899)        18,100
                                                      591,150        143,276
Equity in undistributed net income of 
 bank subsidiary                                    3,654,768      3,566,628

  NET INCOME                                       $4,245,918    $ 3,709,904


<PAGE>
      <PAGE>61
                         FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           December 31, 1997 & 1996


Note 13 - Condensed Financial Information (Continued)
    (Parent Company Only)

                     STATEMENTS OF CASH FLOW
                                                       December 31
                                                   1997           1996
      Operating Activities
Net income                                       $4,245,918    $3,709,904
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation                                                   27,415
    Undistributed income of subsidiary           (3,654,768)   (3,566,628)
    Gain on sale of other real estate                              18,349
    (Increase) in other assets                      (14,230)      (98,186)
    (Decrease) in other liabilities                 (19,633)      (88,021)

     NET CASH PROVIDED BY OPERATING ACTIVITIES      557,287         2,833

     Investing Activities
Proceeds of sale of other real estate                             639,563    
Investment in securities                           (500,000)     (200,000)
Proceeds of sale of securities                      700,000     1,099,190 

NET CASH PROVIDED BY INVESTING ACTIVITIES           200,000     1,538,753 

    Financing Activities
Payment of dividends and payments in lieu of 
  fractional shares                              (1,519,443)   (1,197,420)
Sale of Common Stock                                581,669       385,043 
Treasury Stock transactions - net                     1,226        (6,887)

NET CASH PROVIDED BY FINANCING ACTIVITIES          (936,548)     (819,264)

 INCREASE (DECREASE) IN CASH                       (179,261)      722,322

Cash at beginning of year                         1,451,161       728,839

  CASH AT END OF YEAR                            $1,271,900    $1,451,161

Note 14 - Long Term Debt

At December 31, 1997 and 1996, long-term debt consists of advances from
the Federal Home Loan Bank in the amounts of $6,813,023 and $2,996,480
respectively.  These advances are secured by all of the fully disbursed,
1-4 family residential mortgage loans held by First Citizens National
Bank and mature in the years 2004 through 2010. The averages for 1997
and 1996 are as follows:

                  Year   Average Volume   Average Rate  Average Maturity

FHLB Borrowings   1997    $6,216,000         5.79%           9 years

FHLB Borrowings   1996    $4,084,025         5.64%           7 years


Delta Finance Company, Inc., a subsidiary of First Citizens National
Bank, also is obligated on a note payable in the amount of $1,000,000
which bears interest at a rate of six and one-half percent (6.5%) per
annum and is unsecured.  The average outstanding balance on this
obligation during 1997 was $1,010,000.








      <PAGE>62
                           FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           December 31, 1997 and 1996


Note 15 - Securities Sold Under Agreement to Repurchase

At December 31, 1997 and 1996, First Citizens National Bank had
outstanding balances in securities sold under agreement to repurchase as
follows:
                                           1997           1996

Outstanding balance                     $21,765,482     $21,225,315
Weighted average interest rate              4.73%           4.31%
Average balances outstanding 
  during the year                        21,066,187      20,883,000
Average weighted average interest rate      4.67%           4.48%


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                       1997      1996       1995 

Other real estate acquired in  
 satisfaction of loans         $87,082  $67,302   $368,000

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.

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, 1997 and 1996, First Citizens
National Bank had outstanding loan commitments of $34,328,000 and
$32,540,000 respectively.  Of these commitments, none had an original
maturity in excess of one year.






      <PAGE>63


                          FIRST CITIZENS BANCSHARES, INC.,
                                  AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                            December 31, 1997 and 1996

Note 17 - Financial Instruments with Off-Balance Sheet Risk (continued)

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, 1997 and 1996, outstanding
standby letters of credit totaled $3,550,000 and $1,483,000.

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
collectability of the loan.  At December 31, 1997 and 1996, 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.

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.

      <PAGE>64
                          FIRST CITIZENS BANCSHARES, INC.,
                                  AND SUBSIDIARY
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                            December 31, 1997 and 1996

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

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, 1997 and 1996.

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>
      <PAGE>65

                          FIRST CITIZENS BANCSHARES, INC.,
                                  AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                            December 31, 1997 and 1996

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

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

                                      1997                      1996      
                             Carrying        Fair     Carrying        Fair
                             Amount         Value     Amount          Value
Financial Assets
     
Cash and cash equivalents $ 18,845,773 $ 18,845,773 $ 13,507,293 $ 13,507,293 

Investment securities       71,175,540   71,205,655   75,746,882   75,784,906 

 Loans                     229,276,999               211,389,096               
Less:  Allowance for 
       loan losses          (2,788,555)               (2,282,231)              
Loans, net of allowance    226,488,444  226,197,131  209,106,865  206,282,461

Accrued interest 
  receivable                 3,885,355    3,885,355    3,697,639    3,697,639


Financial Liabilities

  Deposits                 267,589,971  267,459,421  256,414,023  258,355,315  
                                                     
  Short-term borrowings     21,765,482  217,562,223   21,225,315   21,240,136  
                                                     
  Long-term debt             7,813,023    7,807,023    2,996,480    2,985,417   
                                                     
  Other liabilities          2,993,865    2,993,865    2,831,975    2,831,975 
                                                     
Unrecognized Financial
  Instruments                                        
                                                     
  Commitments to extend                            
   credit                   34,328,161   34,328,161   32,540,000   32,540,000  
  Standby letter of                                
   credit                    3,550,142    3,550,142    1,483,000    1,483,000  


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 - Branch Acquisition

During the year ended December 31, 1995, First Citizens National Bank
acquired a branch of another financial institution in Ripley, Tennessee. 
In the transaction, the Bank acquired fixed assets and loans with a
value of approximately $242,749 and assumed deposits totaling
approximately $8,400,000.  First Citizens National Bank paid a premium
of $124,382 for the deposits acquired which had been recorded as
goodwill and is being amortized over fifteen years.










     <PAGE>66

                       FIRST CITIZENS BANCSHARES, INC.,
                                AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           December 31, 1997 & 1996



Note 22 - Subsequent Events

On September 17, 1997, First Citizens Bancshares, Inc. executed a stock
purchase agreement according to which the Corporation committed to buy all of
the outstanding capital stock of the Bank of Troy, Troy, Tennessee.  The
purchase price of the Bank of Troy is to be calculated at a multiple of two
(2) times total book value of the outstanding capital stock acquired. The
total projected price stated in the contract is approximately $9,000,000,
subject to adjustments concerning the fair value of certain assets of the
Bank of Troy, particularly outstanding loans.  Any adjustments to the
financial statements of the Bank of Troy in order to cause them to conform to
generally accepted accounting principles as of the purchase date will also be
made.  The contract stated that the effective date would be January 1, 1998. 
This date has been set back at the agreement of both parties, however, and is
now set for approximately March 15, 1998.

Also, during 1997, First Citizens Bancshares, entered into an agreement to
acquire a fifty percent (50%) interest in a local insurance agency.  The
investment will be owned by the Corporation's subsidiary, First Citizens
National Bank and the Company has plans to place agencies in one or more of
its branches.  The transaction will be consummated by the issuance of 13,779
shares of common stock of First Citizens Bancshares, Inc. at a value of
ninety-one dollars ($91) per share and the payment of $216,000 in cash.  The
investment, in the amount of $1,469,905 will then be transferred to First
Citizens National Bank in exchange for cash, at no gain or loss.

Note 23 - Amounts Receivable From Certain Persons

                                               Year Ended December 31, 1997
                                                        (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   Amounts  Written            Not
                                    Collected Collected   Off   Current Current

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  (27)             $4,448     $4,166    $3,628      $-0-    $4,986   $-0-












     <PAGE>67

                       FIRST CITIZENS BANCSHARES, INC.,
                                AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                           December 31, 1997 & 1996

Note 23 - Amounts Receivable From Certain Persons

                                           Year Ended December 31, 1996
                                                (In Thousands)

Aggregate indebtedness 
  to First Citizens
  National Bank of
  Directors and Executive       
  Officers of First
  Citizens Bancshares,
  Inc. (25)                $4,044    $3,004    $2,720      $-0-    $4,328   $-0-

Aggregate indebtedness 
  to First Citizens
  National Bank of
  Directors and Executive       
  Officers of First
  Citizens National
  Bank  (21)               $4,146    $3,054    $2,752      $-0-    $4,448   $-0-


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>
     <PAGE>68

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' 1996 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
1996 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' 1996
Proxy Statement for the Annual Meeting of Shareholders to be
held April 17, 1996, in the sections entitled Voting
Securities and Election of Directors and is incorporated
herein by reference.  (See pages 3 through 5 of the Proxy
Statement).

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 9 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 53 "Amounts Receivable
from Certain Persons".
<PAGE>
      <PAGE>69

                                    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:   03/17/97

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 15, 1997.

/s/ Eddie Anderson                          /s/Stallings Lipford              
Eddie Anderson                              Stallings Lipford               
Director                                    Director
                                            
                                            /s/Milton E. Magee 
/s J. Walter Bradshaw                       Milton E. Magee
J. Walter Bradshaw                          Director
Director

/s/James Daniel Carpenter                   /s/Mary Frances McCauley
James Daniel Carpenter                      Mary Frances McCauley 
Director                                    Director


/s/William C. Cloar                         /s/L. D. Pennington 
William C. Cloar                            L. D. Pennington
Director                                    Director

                                            /s/G. W. Smitheal, III        
/s/Richard Donner                           G. W. Smitheal, III
Richard W. Donner                           Director          
Director                                   
                                            /s/David R. Taylor
/s/Bentley F. Edwards                       David R. Taylor
Bentley F. Edwards                          Director
Director
                                            /s/Larry S. White
/s/J.E. Heckethorn                          Larry S. White
John E. Heckethorn                          Director
Director

/s/Ralph E. Henson                          /s/P. H. White, Jr. 
Ralph E. Henson                             P. H. White, Jr.
Director                                    Director

/s/Larry W. Gibson                          /s/Dwight Steven Williams
Larry W. Gibson                             Dwight Steven Williams
Director                                    Director  

/s/ E.H. Lannom, Jr.                        /s/Katie Winchester
E.H. Lannom, Jr.                            Katie Winchester
Director                                    Director

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



                                             
                                             
                                           
<PAGE>