<PAGE>1
                       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, 1999 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, 1999 was $111,154,950.

  Of the  registrant's  only  class of common  stock (no par  value)  there were
  3,698,358 shares outstanding as of December 31, 1999 (net of Treasury Stock).

                       DOCUMENTS INCORPORATED BY REFERENCE

                               Portions of the
                 Proxy Statement dated March 15, 2000 (Part III)
                         Filed by Electronic Submission



      <PAGE>2
                           PART I
ITEM 1.  BUSINESS

GENERAL

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

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

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

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

                                      December 31
                                    (in thousands)
                            1999            1998              1997

Total Assets            $472,670       $472,153  $384,184
Total Deposits           366,819       360,699   309,975
Total Net Loans          321,659       303,459   259,253
Total Equity Capital      43,680        43,082    36,706


Individual  bank   performance  is  compared  to  industry   standards   through
utilization of the Uniform Bank Performance Report (UBPR),  published  quarterly
by the Federal Financial Institution's Examination Council.








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This  report  provides  comparisons  of  significant  operating  ratios of First
Citizens Bancshares with peer group banks.  Presented in the following chart are
comparisons of First Citizens with peer group banks for the periods indicated:

                        *12/31/99         12/31/98            12/31/97
               BANCSHARES PEER GRP BANCSHARES  PEER GRP  BANCSHARES PEER GRP

Average Assets/
Net Interest
  Income        4.15%      4.18%     4.05%      4.20%      4.36%      4.31%

Average Assets/
Net Operating
  Income        1.26%      1.13%     1.05%      1.16%      1.31%      1.20%

Net loan losses/
Average total
   loans         .22%       .18%      .23%       .22%       .09%       .21%

Primary Capital/
Average Assets  9.29%      9.06%     9.32%      9.23%      9.94%      9.46%
Cash Dividends/
Net Income **  58.35%     23.49%    57.51%     26.22%     35.77%     25.84%

*Performance as of 12/31/99 is compared to peer group ratios as of 09/30/99

(Most recent Federal Reserve Report)

EXPANSION

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

First Citizens through its strategic planning process has stated its
intention to seek profitable opportunities that would utilize excess capital and
maximize  income 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.




        <PAGE>4

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

  Beginning  in 1997 First  Citizens  started to expand  financial  services  to
  include a finance company and insurance agency. Delta Finance,  located on St.
  John  Avenue,  Dyersburg,  TN was  opened in early  1997 and a second  finance
  company was opened 4th quarter 1998 in Milan,  TN. White and  Associates/First
  Citizens Insurance, LLC was opened in early 1998. Insurance services include a
  full  line  of  insurance  products  as well as  financial  services.  In 1998
  insurance  products  were expanded to include a credit  insurance  company and
  crop insurance.  A second  Insurance  Agency was opened in Obion County second
  quarter of 1998. In 1999, a title insurance company was established and a full
  time insurance agent was placed in the Ripley office.

  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."

  On November 12, 1999 the  Gramm-Leach-Bliley  Act was signed into law. The act
  contains  seven  titles,  each of which  focuses on a different  aspect of the
  financial services industry. This new law will significantly change the way we
  do business and still pave the way for a new era in banking.

  SUPERVISION AND REGULATION

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

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

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

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

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




        <PAGE>5

  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  consolidation,  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  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
  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% may be in the form of core (Tier 1)




       <PAGE>6

or supplemental capital (Tier 2). Tier 1 capital/core capital consists of common
stockholders  equity,  qualified  perpetual  stock  and  minority  interests  in
consolidated subsidiaries.  Tier 2 capital/supplementary capital consists of the
allowance for loan and lease loses, perpetual preferred stock, term subordinated
debt,  and  other  debt  and  stock  instruments.  Bancshares  has  historically
maintained  capital  in excess of  minimum  levels  established  by the  Federal
Reserve.  A risked based capital  analysis is performed on a quarterly  basis to
test for  compliance  with  Federal  Reserve and bank policy  guidelines  before
declaring a dividend or  increasing a dividend.  First  Citizens'  policy states
that before  declaring a dividend the  following  ratios will be  achieved:  (1)
Risked  Based  Capital  Tier 1 will be 8.25% or above;  Return  on  year-to-date
average  equity  9.00%;  Asset growth and projected one year future asset growth
less than  20.00%;  and non  performing  assets to  capital  less than 30%.  Non
performing assets include 90 day past due and non accrual loans.

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, 1999

Name                               Age    Position and Office

Stallings Lipford                  69     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                   59     President and CEO of Bancshares and
                                          First Citizens; employed by First
                                          Citizens in 1961; served as Executive
                                          Vice President and Secretary of the
                                          Board from 1986 to 1992.  She was
                                          appointed CEO of Bancshares and First
                                          Citizens in 1996; and President of
                                          Bancshares and First Citizens in 1992.
                                          Ms. Winchester was elected to the
                                          Board of both First Citizens and
                                          Bancshares in 1990.

Ralph Henson                       58     Vice President of Bancshares;
                                          Executive Vice President of Loan
                                          Administration of First Citizens.
                                          Employed by First Citizens in 1964.
                                          Mr. Henson served First Citizens as
                                          Senior Vice President and Senior
                                          Lending Officer until his appointment
                                          as Executive Vice President of Loan
                                          Administration in February, 1993.


<PAGE>7



Jeffrey Agee                       39     Vice President and Chief Financial
                                          Officer of Bancshares.  Appointed
                                          Executive Vice President and CFO of
                                          First Citizens National Bank in
                                          August 1999.  Mr. Agee served as
                                          Senior Vice President and CFO of First
                                          Citizens prior to this appointment.
                                          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                         59     Appointed Executive Vice President
                                          and Chief Administrative Officer of
                                          First Citizens and Bancshares in 1996.
                                          Senior Vice President and Senior
                                          Lending Officer of First Citizens
                                          from April 20, 1994 to January 17,
                                          1996. Employed by First Citizens in
                                          1972.  Mr. Ladd served First Citizens
                                          as Vice President and Lending Officer
                                          previous to his appointment as Senior
                                          Vice President.

Judy Long                          45     Vice President and Secretary to the
                                          Board of First Citizens Bancshares.
                                          Appointed Executive Vice President
                                          and Chief Operations Officer and
                                          Secretary to First Citizens National
                                          Bank in August 1999. Ms. Long served
                                          as Senior Vice President and Chief
                                          Operations Officer and Secretary to
                                          First Citizens prior to this
                                          appointment. She served as Senior Vice
                                          President and Administrative Officer
                                          previous to November 1997; Vice
                                          President and Loan Operations Manager
                                          (1992-1996). Employed by First
                                          Citizens on July 19, 1974.

BANKING BUSINESS

First Citizens operates a general retail banking business in Dyer  County,
Tennessee.  The bank expanded its banking operations into Lauderdale  County in
1995 with the purchase of $8 million in assets and Obion County in 1997 and
1998, purchasing approximately $104 million in assets. All persons who live in
either community or who work in or have a business or economic interest in
either county are considered as forming a part of the area serviced by First
Citizens.  First Citizens provides customary banking services, such as checking
and savings accounts, funds transfers, various types of time deposits, and safe
deposit facilities.  It also finances commercial transactions and makes and
services  both secured and unsecured loans to individuals, firms, and
corporations.  Commercial lending operations include various types of credit
services for its customers.  Agricultural services  are provided  that include
operating  loans as well as financing  for the purchase of  equipment  and farm
land. The installment lending  department makes direct loans to individuals for
personal,  automobile, real estate,  home improvement, business and collateral
needs.  Mortgage lending makes available long term fixed and variable rate loans
to finance the purchase of residential real estate.


      <PAGE>8

These loans are sold in the secondary market without retaining servicing rights.
Credit  cards and  open-ended  credit  lines are  available  to both  commercial
customers and consumers.

Corporate Offices for First Citizens Bancshares and First Citizens National Bank
are  located  in  Dyersburg/Dyer  County,  Tennessee.  Dyersburg/Dyer  County is
located in northwest  Tennessee and sits on the banks of the Mississippi  River.
It is 78 miles northeast of Memphis,  Tennessee, 165 miles west of Nashville and
230 miles  south of St.  Louis,  Missouri.  Dyer County is  equidistant  between
Chicago and New Orleans with direct rail, Amtrak, highway and interstate service
to major industrial and consumer markets.  Dyersburg/Dyer County is an anchor in
the region that blends  education,  transportation,  industry  agribusiness  and
retail  trade to serve the  tristate  and  service  the  encompassing  Northwest
Tennessee,  Northwest Arkansas, and the Missouri Bootheel area. Dyer County is a
mix of agriculture and industry. Fifty-six percent of the land in Dyer County is
in agricultural  production and farming is a $79 million industry in the county.
Dyer County is  Tennessee's  number one  producer of  soybeans,  grain  sorghum,
commercial  vegetables and rice.  Other important crops are wheat,  cotton,  and
corn.  The  county's  509 farm  operations  average 435 acres as of December 31,
1998. Agriculture loans outstanding on the books of First Citizens National Bank
totaled  $27,491,929  or 18 percent of total loans.  Agriculture  loans totaling
$13,307,617 are well secured with real estate,  including farmland,  residential
property, and other improvements, while $11,489,254 are secured loans to finance
crop  production  and the purchase of equipment.  Approximately  $2.7 million in
agriculture  loans are 90%  guaranteed  by Farm Credit  Services  (a  government
agency).  There are 61 manufacturers and processors  distributed  throughout the
county  employing  approximately  7,500 people.  The local economy appears to be
solid and growing.  In December  1999,  Dyer County  unemployment  rate was 3.7%
compared to the State of Tennessee  unemployment  rate of 3.8%.  The labor force
increased  18.4%  from  1980 to 1995.  (Statistics  Source:  Economic  Overview,
Council for Urban Economic Development, July 28, 1998).

First Citizens  National Bank expanded its base of operations  into Obion County
in 1998.  Obion County is located  approximately 27 miles north of Dyersburg and
is adjacent to Dyer County.  Economic  conditions  in Obion County  appear to be
solid and  growing.  The  unemployment  rate as of  December  31,  1999 was 4.1%
compared to the State of Tennessee  Unemployment  rate of 3.8%.  The County is a
mix of industry, service and retail business. Goodyear Manufacturing,  a builder
of tires, is the largest employer in the county,  employing  approximately  3700
workers at year end 1999.  Total Assets of First Citizens  National Bank - Obion
County offices in Troy and Union City are approximately  $95 million  consisting
primarily of consumer and retail business loans.  Total assets of the Lauderdale
County office in Ripley have increased to approximately  $15 million  consisting
primarily  of  commercial,  business  and  agriculture  loans.  Unemployment  in
Lauderdale  County as of  December  31,  1999 was 6.1%  compared to 4.1% for the
state.

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, 1999 were in excess
of  $174,000,000.  Services  offered  by the  Investment  Management  and  Trust
Services Division include but are not limited to estate  settlement,  trustee of
living trusts,




      <PAGE>9

testamentary  trustee,  court  appointed  conservator  and  guardian,  agent for
investment accounts, and trustee of pension and profit sharing trusts.

Delta Finance,  a finance  company wholly owned by First Citizens  National Bank
offers financial service to the retail market. Services offered by Delta Finance
and Delta Finance II consists  primarily of consumer and residential real estate
loans.

On February 9, 1998,  White and  Associates/First  Citizens  Insurance,  LLC was
chartered  by the  State  of  Tennessee.  The  principal  office  of  White  and
Associates/First  Citizens,  originally  located  at 104  North  Monroe  Street,
Newbern,  Tennessee,  has  relocated  to the Main  Office of First  Citizens  in
Dyersburg, with one full-time agent remaining at the Newbern location. White and
Associates/First  Citizens is a general insurance agency offering a full line of
insurance products including casualty, Life and Health, and crop insurance.

A second location of White and Associates/First Citizens Insurance was opened in
Bank of Troy on July 1, 1998 with the purchase of Durham Insurance,  Union City,
Tennessee.  On December 28, 1998 a credit insurance  company was formed and will
be known as First  Citizens/White and Associates  Insurance Company.  In January
1999,  First  Citizens  merged with First  Volunteer  Bank of Union City and the
primary  office for Obion County was  relocated to the Union City Branch.  Halls
Insurance  Agency,  a  primary  provider  of  Crop  Insurance  in the  state  of
Tennessee, was acquired by White & Associates/First Citizens Insurance LLC and a
full time  agent was  placed in the  Agricultural  Department  at the Main Bank.
Another full time insurance agent was placed in the Ripley Office.  In addition,
a Title Insurance Company  established in 1999, is two-thirds owned by White and
Associates/First Citizens, LLC.

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, 1999.

                                Dyer County Market
                                  (Bank's Only)
                                  (in thousands)
                          Total Deposits   % of Market Share
Bank Name                    06/30/99           06/30/99

First Citizens
National Bank                $264,220             53.75%

First Tennessee
 Bank                         102,513             20.87%

Security Bank                  76,142             15.49%

City State Bank                                 11,727              2.38%

Union Planters, FSB            36,909              7.51%
                             --------

       Total                 $491,511            100.00%

*Does not include  deposits of  $22,390,000  categorized  as Overnight and fixed
term Repurchase Agreements.




      <PAGE>10

At December 31, 1999 Bancshares and its subsidiary,  First Citizens,  employed a
total of 203 full time  equivalent  employees.  Having  been a part of the local
community in excess of 100 years,  First Citizens has been privileged to enjoy a
major share of the  financial  services  market.  Dyersburg  and Dyer County are
growing  and with this  growth come  demands  for more  sophisticated  financial
products  and  services.  Strategic  planning  has afforded the Company both the
physical  resources  and  data  processing  technology  necessary  to  meet  the
financial needs generated by this growth.

USURY, RECENT LEGISLATION AND ECONOMIC ENVIRONMENT

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

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

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

Pursuant to the Act,  interstate  branching took effect on June 1, 1997,  except
under  certain  circumstances.  Once a bank has  established  branches in a host
state (a state other than its headquarters  state) through an interstate  merger
transaction,  the bank may  establish  and  acquire  additional  branches at any
location in the host state  where any bank  involved  in the  interstate  merger
transaction could have established or acquired branches under applicable federal
or state law.

The Act further  provides  that  individual  states might opt out of  interstate
branching,  prior to May 31, 1997. A bank in that state may merge with a bank in
another state provided that neither of the states have opted out.





      <PAGE>11

The Federal Reserve in September,  1996 gave bank holding companies the right to
exclude  some  securities  earnings  from  the 10% cap on  underwriting  revenue
through  "Section 20 Units".  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.
Legislation  being  considered  would  possibly  limit this action to  operating
Subsidiaries of the Holding Company only.

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

The Gramm-Leach-Bliley Act, referred to as " Financial Modernization" was signed
into law November 12, 1999. The Act is the most significant piece of legislation
to be enacted in the last 50 years and is  expected to  dramatically  change the
landscape  of  the  financial  services  industry.  In  essence,  the  Act  is a
conglomeration of numerous provisions that impact a broad range of issues within
the banking industry. Financial Modernization will pave the way for a new era in
banking.

The Act contains  seven titles,  each of which focuses on a different  aspect of
the financial services industry.  An overview of the Act can be summarized using
the following points:

o     Removes barriers between insurance, banks, and securities by allowing
      these  entities to merge and sell each other's products under a holding
      company structure with some exceptions.
o     Reasserts the supremacy of state regulation of the business of insurance
      with specific exceptions.
o     Prohibits companies outside the financial  services industry to purchase
      (merge/affiliate) with insurers, banks, and/or securities firms.
o     Allows banks to sell insurance  and  securities  products  as long as it
      discloses to the purchasers that these products are not guaranteed by the
      Federal Deposit Insurance System.
o     Prohibits banks from tying the purchase of insurance and securities
      products as conditions for loan approvals.
o     Permits affiliated companies to share customers' personal data with each
      other but gives the customer the right to prohibit the sharing of this
      data with companies outside the holding company structure.
o     Allows states to preempt federal laws that offer greater privacy
      protections  than those included in the Financial Services Modernization
      Act.
o     Requires  states  to enact  uniform  laws and  regulations governing the
      licensure of individuals and entities authorized to sell and solicit the
      purchases of insurance within and outside a state.



      <PAGE>12

What does this mean for First Citizens?  The primary  impact will be increased
competition as large-scale independent investment  bankers (brokerage firms,
insurance companies, mutual funds) are likely to begin offering banking services
in offices nationwide. The good news is, our focus on diversification has placed
the Company in a position to compete by offering the same  products and services
at  convenient  locations by a staff  our customers  know and  trust.  Through
utilization of technology,  we offer the same sophisticated services as larger
banks with offices nationwide. One example is our Internet Banking Account that
has drawn rave  reviews from existing  and new  customers.  Customers of First
Citizens   Financial  Plus have  access  to  on-line   trading  and  White  and
Associates/First  Citizens Insurance has  established  a web presence  that is
progressing toward on-line insurance sales.

Overall, opportunities available as a result of the new legislation are a plus
for community  banks. Increased competition that is sure to develop from giant
financial  services organizations simply means we will work harder to earn the
business of our customers. As community bankers,  we recognize that bigger does
not always  mean  better, and knowing our customers  affords us a  tremendous
advantage as we strive to identify and serve their financial needs.

First  Citizens intends to pursue challenges  and  opportunities  presented by
"Financial Modernization". We have made the choice to compete and will do so in
an aggressive  manner.  We intend to maximize our potential for success as we
focus on the following:

o     Market  Awareness  -  Business   decisions  will  be  driven  by  a clear
      understanding of the financial needs of existing and potential customers,
      a focus on enhancing our ability to serve those needs and an awareness of
      changes which might impact either or both.
o     Strategic  Planning - Establishing  a clear  direction  for the future of
      First Citizens, understanding what must be done to accomplish established
      goals and  recognizing signs  that might  indicate a need to rethink  the
      strategy are key components of the Plan. The management team, acting under
      guidance of a diverse and  committed Board of Directors is  positioned to
      execute a well thought out Strategic Plan.
o     Technology   Utilization  -  Automated  customer   information  systems,
      electronic banking and remote distribution of services are as available to
      First  Citizens as to the largest bank in America.  We are  committed to
      investing resources in a manner that will allow us to remain  competitive
      as the information age continues to grow and mature.
o     Staff  Development - There is no one element within an organization  more
      important to success than is the quality of staff.  In spite of automation
      and the efficiencies of outsourcing, community banks still need people. In
      response,  a formalized Staff Development program was introduced in 1999,
      which  will  support  and enhance the quality  of  current  and  future
      management of First Citizens at all levels. Recognizing leadership skills,
      enhancing abilities through training and supporting realistic career goals
      are primary objectives of this ongoing process.

The likely focus of the immediate  future in this industry is the convergence of
financial  services.  Our emphasis on diversification in recent years has placed
First Citizens in the enviable position of being able to effectively compete in
this new environment.


      <PAGE>13

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 numerous  banks located within markets served by
First Citizens who compete 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
and maximizing the use of  technology.  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 thinking bank offering products and services required to
maintain satisfactory customer relationships as we move into the twenty-first
century.

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

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

ITEM 2. PROPERTIES

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

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




      <PAGE>14

The Midtown Branch of First Citizens is located at 620 U.S. 51 By-Pass  adjacent
to the Green Village  Shopping Center.  The building  contains 1,920 square feet
and has been owned by First Citizens since construction.  The land on which this
Branch is located,  having previously been leased, was purchased during 1987. In
June of 1992 an additional 1.747 acres adjoining the Midtown Branch property was
purchased to accommodate  future growth and expansion.  Construction of a larger
facility  at this  location  commenced  during the third  quarter of 1999 with a
completion date of June 30, 2000. In addition to financial services,  the branch
will house a U.S.  Postal Service  location which will be available  twenty-four
hours a day, seven days a week.

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.  This location will be combined with
the full service branch location now under  construction  and will be identified
as the Green Village Office.

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.

Construction of the new branch office in Lauderdale  County was completed during
the second quarter of 1999.  The building  contains  approximately  3,500 square
feet and was built on 1.151  acres of land  located at 316  Cleveland  Street in
Ripley,  providing  a  larger,  more  efficient  facility  to  better  serve our
customers in Lauderdale  County.  The Ripley Office offers full serving  banking
with drive up teller lanes,  twenty-four  hour drive up ATM as well as Mortgage,
Trust,  Brokerage and Insurance services.  Customers and staff celebrated a move
to the new location on July 1, 1999. First Citizens continues to retain title to
the original building. The building contains approximately 1,450 square feet and
was built in 1984 on a quarter acre of land located at 292 Washington  Street in
Ripley.  This location  offers  twenty-four  hour ATM access,  with exception to
accepting deposits. The building will be considered in terms of future expansion
of the  Ripley  franchise,  or  will be sold  if no  future  utilization  can be
identified.

The Bank of Troy was  purchased by First  Citizens  National Bank in early 1998.
The Troy  Branch is  located on Harper  Street  just west of Highway 51 in Troy,
Tennessee.  The  building is two story brick and  siding.  The site  consists of
three lots with maximum dimensions on each side being 272 feet and 260 feet. The
first floor in the main  building  contains  5,896 square feet and houses a full
service  branch  facility.  Most of the  building was  constructed  in 1970 with
additions  and  renovations  being made since that time.  The Troy  Branch  also
offered  limited  drive-through  services  at a location on Highway 51 which was
closed May 1, 1999.  Permission  to close this  location  was granted by the OCC
based on the limited volume of business  conducted by customers  compared to the
cost of operations.




      <PAGE>15


First  Volunteer  Bank in Union City was  purchased by First  Citizens  early in
January  1999.  The Union City branch  operates two full service  facilities,  a
motor  branch and two ATM's in Obion  County.  The main office is located at 100
Washington  Avenue in Union City. The brick  building  consists of 52,500 square
feet on three floors and is a combination  of two  buildings.  The bank occupies
10,000 square feet of the ground floor. An additional 3,750 square feet are used
for storage space. The other 3,750 square feet of the ground floor are leased to
Snappy  Tomato  Pizza  Company.  A motor branch is located at First and Harrison
Streets  across  from the main  office.  The East  branch  facility  and ATM are
located at 1509 East Reelfoot  Avenue in Union City. The other ATM is located in
the Goodyear Manufacturing facility in Union City.

As a result of the Union  City  acquisition,  First  Citizens  acquired  a 5,123
square  foot  building  having a  street  address  of 500  South  First  Street,
currently  leased by Radio Shack.  This  building will be considered in terms of
future  expansion  of the  Union  City  franchise,  or will be sold if no future
utilization can be identified.

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, 1999,  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.

                         PART II

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

As of  December  31,  1999 there were 978  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, 1999               $30.00      $30.00
              June 30, 1999                $30.00      $30.00
              September 30, 1999           $30.00      $30.00
              December 31, 1999            $30.00      $30.00


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




      <PAGE>16

Dividend payouts per share adjusted for the split were .90 cents in 1999, .75
cents in 1998 and .50 cents in 1997.

                        Dividends - 1999
              Dividend                   Quarter
              Per Share                  Declared
                 .1875                       1st
                 .1875                       2nd
                 .1875                       3rd
                 .3375                       4th
         Total $ .9000

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

*Special dividend paid in fourth quarter, 1999 and 1998.

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

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)

                       1999     1998     1997     1996     1995
Net Interest &
 Fee Income         $ 19,305  $ 17,964 $ 16,021 $ 14,956 $ 13,417

Gross Interest
  Income            $ 36,085  $ 35,252 $ 30,698 $ 28,862 $ 26,546

Income From
 Continuing
  Operations        $  5,799  $  4,474 $  4,730 $  4,254 $  3,024

Long Term
 Obligations(1)     $ 11,264  $ 25,486 $ 12,146 $  6,997 $  8,652

Income Per Share
 from Continuing
  Operation(2)      $   1.58  $   1.25 $   1.38 $   1.22 $    .89

Net Income per
Common Share (2)
                    $   1.58  $   1.25 $   1.38 $   1.22 $    .89
Cash Dividends
Declared
per Common
Share(2)            $    .90  $    .75 $    .50 $    .40 $    .33

Total Assets at
Year End            $472,670  $472,153 $384,183 $357,269 $332,778

Allowance for
 Loan Losses
 as a % Loans           1.14%    1.25%    1.21%    1.07%    1.15%

Allowance for
 Loan Losses as
 a % of Non-
 Performing Loans     445.26%   509.62% 461.76%  176.08%  707.99%

Loans 90 Days
 Past Due as a
 % of Loans              .10%     .14%    .00%     .09%     .17%



      <PAGE>17

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

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

Significant  events  highlighted  1999  as a  record  year  for  First  Citizens
Bancshares,  Inc. First Citizens National Bank was declared Year 2000 compliant;
Bank of Troy and First  Volunteer  were  successfully  converted as full service
offices;  First  Citizens/White and Associates Insurance chartered both a Credit
Insurance  Company and a Title  Insurance  Company.  Construction  of the Ripley
Office facility was completed, while construction was commenced on a 6400 square
foot facility at our Green Village location.  The Electronic  Banking Department
and Call Center were  established to support  electronic  delivery  channels and
enhance customer service.

Assets:
Total  assets  ended the year at  $472,670,000  up 30% when  compared  to totals
previous to the  acquisition of First Volunteer  Bank.  First Citizens  acquired
First Volunteer Bank, Union City, Tennessee, with assets totaling $49 million as
of January 1, 1999.  The  acquisition  was  consummated  February 12, 1999, in a
transaction  recorded as a  pooling-of-interests  which involved the issuance of
445,251 shares of First Citizens Bancshares, Inc. common stock. Accordingly, the
Financial Accounting Standards Board required a restatement of the prior year(s)
financial  reports to reflect  assets  acquired from First  Volunteer  Bank. The
restated   balance  sheet   reflects  total  assets  at  December  31,  1999  of
$472,670,000  compared to $472,153,000 as of December 31, 1998, up less than one
percent. Traditionally,  banks which move into new markets through acquisitions,
lose market share in the first year,  gain back some of the loss the second year
and by the end of the third  year,  regain  lost market  share.  First  Citizens
marketing  efforts  are  and  will  continue  to  be  directed  toward  business
development and growth in market share. Officers,  Employees,  and Directors are
charged with the  implementation of a business  development  program designed to
improve  service  to  existing   customers,   identify  the  potential  for  new
relationships and cross sell a wide array of products and services to customers,
based on a needs assessment.  As evidence of the success of these efforts market
share in Dyer County  increased to 53.75  percent in 1999 from 52.33  percent in
1998.  Both Obion and  Lauderdale  County lost  market  share in 1999 as certain
competitors  offered  above market rates on deposits in an effort to gain market
share.

Loans:
The loan portfolio is First Citizens  largest  earning asset.  Total loans as of
December 31, 1999 increased  approximately  6%, exclusive of acquisitions,  when
compared  to  December  31,  1998.  Loans  acquired  in  acquisition  and merger
activities added approximately $58 million in volume. The portfolio is comprised
primarily of commercial,  agricultural  and real estate loans,  with real estate
comprising  in excess of 56% of total loan volume.  New building  starts in Dyer
and surrounding  counties  presented growth  opportunities for First Citizens in
areas of one-to-four  family  residential loans as well as commercial and retail
business  expansions.  Competition  for loans continues to place pressure on the
yield and term customers are willing to accept.  Loan Administration has taken a
conservative  position in dealing with situations which deviate from established
underwriting  standards,  while  recognizing  the need to maintain  quality loan
growth.




      <PAGE>18

First Citizens is the largest  agricultural lender in the State of Tennessee and
is an approved Farm Credit Services lender. The Ag segment of the West Tennessee
economy was dealt a major blow two years  running  when every  primary  crop was
subjected to some form of natural disaster.  In addition,  reduced export demand
forced  down  commodity  prices  to levels  not seen in more  than a decade.  At
December 31, 1999, First Citizens' loan portfolio  contained  approximately  $29
million in  agriculturally  related loans with only 1.35%  reported as past due.
Some of these loans presented a challenge to our customers and to First Citizens
as  lender.  Recognizing  that  the  situation  is  temporary  in  nature,  Loan
Administration  is committed to working  with our farm and  agriculture  related
customers to minimize  exposure to the bank's loan portfolio as well as the long
term effect of this vital segment of our economy. An adequate loan loss reserve,
strong underwriting standards and a 90% guaranty of Farm Credit services on many
loans should minimize the impact to future earnings of the company.

Asset quality  within the loan  portfolio  remains strong with the provision for
loan losses at a level which  management  believes  adequate to absorb potential
losses.  Non-Performing  loans at  year-end  were  .27  percent  of total  loans
compared to peer bank ratio of .78 percent.  Problem  loans at December 31, 1999
increased  to 1.53  percent of total loans  compared to 1.06 percent at year-end
1998.  Problem  loan  totals  as well as loans  charged-off  are  reflective  of
variations in underwriting  standards associated with the merged banks and First
Citizens  National  Bank.  The ratio of net  charge-offs  to  average  net loans
outstanding for 1999 and 1998 are .13 percent, .09 percent respectively.

Deposits:
One of the most critical issues facing banks today is the ability to attract and
retain deposits.  The exaggerated  returns  investors have enjoyed from equities
and mutual  funds have  resulted in  stripping  funds from lower  yielding  bank
certificate  of  deposits.  Conversely,  the  competitive  nature of the lending
market  forces  down the rate of  return,  placing  pressure  on the  ability to
maintain  acceptable net interest  margins.  As a result,  community  banks have
turned to the Federal Home Loan Bank as a liquidity source.

Deposit  growth,  of 34.85 percent is reflective of deposits  acquired in merger
and  acquisition  activities  in 1999.  However,  a  comparison  of the restated
balance  sheet for the periods  ending 1999 and 1998  reflects  actual growth of
1.7%. The restated  balance sheet accounts for deposits of First  Volunteer Bank
as if those deposit were booked on the balance sheet of First Citizens  National
Bank as of December 31, 1998. Deposits acquired from First Volunteer and Bank of
Troy and remaining on the books at year-end total $77 million.

Sweep accounts  balances totaling $ 14,685,000 are excluded from deposit totals.
The "Sweep"  product is offered to large  balance  customers,  and  provides for
funds to  automatically  sweep  daily  from a  demand  deposit  account  into an
overnight  repurchase  agreement.  This product affords commercial customers the
opportunity  to  earn  interest  on  excess   collected  funds  while  providing
availability of adequate funds to clear large  denomination  checks as presented
for payment.

Earnings:
Return on average assets is a measure of  Bancshares'  ability to maximize asset
utilization.  Return on average  assets was  impacted in both 1999 and 1998 as a
result  of  non-recurring   organizational  costs  associated  with  merger  and
acquisition  activities.  Return  on  average  assets in 1999 and 1998 were 1.26
percent and 1.29 percent.  Net Interest  Income is the primary  source of income
for Bancshares.  Interest  income for the years under  comparison in Bancshares'
income statement is $36,085,000, $35,252,000, and $30,698,000. Improved interest
income levels for 1998 and 1999 is primarily




      <PAGE>19

reflective of an increased loan volume.  Yields on interest  earning assets i.e.
loans and investments,  decreased from 9.08% in 1997 to 8.48% in 1999, while the
cost on interest  bearing  liabilities  decreased  from 4.80% to 4.36%.  Reduced
funding  cost is  attributable  to  utilization  of Federal Home Loan Bank as an
alternative  source of funds. As a result, we are better able to manage the cost
of funds and restore net interest margins to a more acceptable level.

Growth in non-interest income makes a substantial contribution to Bank earnings.
Components in this category  include service charges on deposit  accounts,  loan
fees  and  other  service  charges,   and  income  received  from  Subsidiaries.
Non-interest  income  improved from $ 4 million or 13.56 percent in 1998 to $5.7
million or 23.57 percent in 1999.

Non-interest  expense  increased  approximately 5 percent in 1999 compared to 23
percent in 1998.  Salaries and benefits  increased  less than 5% in 1999 after a
24% increase in 1998, a result of added staff created by the acquisition of Bank
of  Troy  and a buy out of an  executive  contract.  The  previous  years  total
reflected  additional  employees of Bank of Troy, Delta Finance,  and in support
positions at First Citizens National Bank, while 1999 increase can be attributed
to the  addition of First  Volunteer  and annual  payroll  increases.  Occupancy
expense,  up13  percent  in  '99,  reflects  additional   depreciation  expenses
associated  with  acquired  facilities;  construction  of  new  facilities;  and
computer cost associated with Bank of Troy and First Volunteer conversions. Data
processing  expense increased 15% in 1998 as a result of software  enhancements,
the installation of a Wide Area Network and cost of addressing year 2000 issues.

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

Shareholder Return and Equity Capital:
Stockholder  equity has grown  consistently,  supported  by strong  earnings and
quality assets.  Total equity capital  increased to $43,680,000 at year end 1999
from  $36,786,000  in 1998.  The  purchase  of the Bank of Troy was funded  with
equity capital totaling $5.5 million and a loan from SunTrust Bank in the amount
of $4.1 million. The Sun Trust loan was repaid in full in 1999. In June 1998 the
Employee  Stock  Ownership Plan entered into a loan agreement with SunTrust Bank
in the amount of $2,000,000 to fund the purchase of  previously  authorized  and
unissued stock. The stock will be utilized to satisfy future allocations to ESOP
participants  in  accordance  with the plan  document  approved  by the Board of
Directors in December  1985.  The balance  remaining on the ESOP loan,  which is
fully guaranteed by Bancshares, was $1,117,000 as of December 31, 1999.

Net  income of  $5,799,000  at  year-end  1999 was up $1.3  million  or 30% when
compared to 1998. A comparison of 1998 net income to 1997 reflects a decrease of
$256,000 or 6 percent.  Earnings  per share for the same time period were $1.58,
$1.25,  and $1.38  respectively.  Earnings  decrease  in 1998 is  reflective  of
one-time  costs  associated  with the purchase and  conversion  of Bank of Troy.
Increased net income for 1999 reflects both merger activity as well as growth in
total loans.  Management will continue to invest excess capital in a manner that
compliments earnings and enhances the potential increase to shareholder return.



      <PAGE>20

Cash dividends paid for the years of 1999, 1998 and 1997 were $.90,  $.75, $.50.
Shareholder  dividends paid in 1999  consisted of quarterly  dividends of $.1875
per share and a special  dividend of $.15 per share.  1998 dividend was enhanced
by a 4 for 1 stock split  distributed to shareholders June 15, 1998. As a result
of the split,  the number of shares  outstanding  increased to  3,194,544.  This
action  followed a 2.5 for 1 split  October  15,  1993 and a 10% stock  dividend
December 15, 1992.

During  1999,  per share price of banks stocks came under  tremendous  pressure.
Because  Bancshares  stock is not publicly  traded,  it has thus far escaped the
level of volatility  that has impacted stock prices of even the best  performing
banks.  Uncertainty  of the future  direction of interest  rates,  a decrease in
merger and acquisition  activity and a leveling off of earnings have combined to
dampen  the  enthusiasm  of  investors  and  create an  unstable  stock  market.
Bancshares stock traded at $30.00 per share through December 31, 1999.  However,
first quarter 2000, market value declined to a per share price of $24.00.

Book value per share fell from $12.12 at year-end  1998 to $11.81 as of December
31,  1999,  as a direct  result  of  Mark-to-Market  requirements  of FASB  115.
Mark-to-Market  dictates that  investment  securities  held in the Available for
Sale  portion of the  securities  portfolio  be marked up or down to account for
fluctuations  in  market  value  created  by  changes  in  interest  rates.  The
adjustment  derived from the market evaluation is then marked against the banks'
capital.  Changes to the capital  account as a result of FASB 115 are classified
as book entry and  write-downs are temporary if securities are held to maturity.
Write downs in 1999 as a result of Mark to Market  Accounting was  approximately
$3.4 million First  Citizens has no plans to sell  securities  held in Available
for Sale prior to the maturity of the investment.

Changes in Financial Accounting Standards

FASB Statements 135 through 137 - Pooling of Interests Method
The pooling of  interests  method  accounts  for a business  combination  as the
uniting of the  ownership  interests  of two or more  companies  by  exchange of
equity  securities.  No  acquisition  is recognized  because the  combination is
accomplished  without  disbursing  resources  of  the  constituents.   Ownership
interests continue and the former bases of accounting are retained. The recorded
assets  and the  liabilities  of the  constituents  are  carried  forward to the
combined  corporation  at  their  recorded  amounts.   Income  of  the  combined
corporation  includes income of the constituents for the entire fiscal period in
which the combination  occurs. The reported income of the constituents for prior
periods is combined and restated as income of the combined corporation.

NON-INTEREST INCOME

The following table reflects restated  non-interest  income for the years ending
December 31, 1999, 1998, and 1997:
<TABLE>
<CAPTION>
                                                 December 31
                                               Change from prior year
                                                 (in thousands)

                               Increase                    Increase
                        Total (Decrease)            Total (Decrease)            Total
                        1999   Amount  Percentage  1998    Amount  Percentage   1997
<S>                    <C>      <C>      <C>      <C>      <C>       <C>      <C>
Service Charges on
 Deposit Accounts      $2,408   $  331   15.93%   $2,077   $ 160      8.34%   $1,917
Other Service Charges,
 Commissions & Fees    $1,657   $  544   48.87%   $1,113   $ 278     33.29%   $  835
Other Income           $1,606   $  207   14.79%   $1,399   $ 110       8.53   $1,289
TOTAL NON-INTEREST
 INCOME                $5,671   $1,082   23.57%   $4,589   $ 548     13.56%   $4,041
</TABLE>



      <PAGE>21

Growth in  non-interest  income is key to  sustaining  increases  in overall net
income as net interest margins continue to be squeezed.  The components of First
Citizens non-interest income include service charges on deposit accounts,  other
fees and service charges,  fiduciary income, ATM/POS interchange fees, and other
income from subsidiaries  (Financial Plus, White and  Associates/First  Citizens
Insurance,  Delta Finance, Trust Department).  Total non-interest income in 1999
increased  23.6% to  $5,671,000  compared to a 13.6%  increase in 1998.  Service
charges on deposit  accounts  increased  16% from 1998 to 1999  primarily due to
increased overdraft fee income. A strong focus on fee income and diversification
of the income stream is reflected in the increased percentages in 1999 of 49% in
other service  charges and fees and 15% in other income.  Improved  earnings are
attributed to continued  growth in income  received from Financial  Plus,  Inc.;
First  Citizens  Insurance;  and the Trust  Department.  These  numbers are also
reflective of income  received from the sale of a branch office located in Troy,
TN at a net profit of approximately $100,000.
<TABLE>
<CAPTION>


NON-INTEREST EXPENSE
                                                  December 31
                                             Change from prior year
                                               (in thousands)
                                     Increase                 Increase
                             Total  (Decrease)         Total (Decrease)        Total
                             1999   Amount Percentage 1998    Amount Percentage 1997
<S>                         <C>     <C>      <C>     <C>      <C>     <C>    <C>
Salaries & Employee
 Benefits                   $ 8,672 $  384    4.63%  $ 8,288  $1,580  23.55%  $6,708
Occupancy Expense           $ 2,726 $  311   12.87%  $ 2,415     113    .49%  $2,302
Other Operating Expense     $ 4,011 $   71    1.80%  $ 3,940     998  33.92%  $2,942
TOTAL NON-INTEREST EXPENSE  $15,409 $  766    5.23%  $14,643  $2,691  22.51% $11,952
</TABLE>

Total  non-interest  expense increased  approximately 5% in 1999 and 23% in 1998
reflecting  growth in salaries  and  benefits of  additional  employees at First
Volunteer Bank, Bank of Troy,  Mortgage  Lending,  Financial Plus, Delta Finance
and in support  positions at First  Citizens  National  Bank.  The Bank of Troy,
Troy, TN and First Volunteer Bank, Union City, TN were converted to the books of
First Citizens  National Bank in 1999 as branches of the bank. These conversions
allowed for a reduction in number of employees as well as provide for  economies
of scale in information systems.  Non-recurring expense incurred at Bank of Troy
in 1998 exceeded $1.3 million and included  benefit plans,  additional loan loss
reserves  and  buy out of an  employment  contract  of the  Bank's  former  CEO.
Full-time  equivalent employees were 203 at December 31, 1999 compared to 172 at
December  31, 1998.  Assets per employee at December 31, 1999 was $2.3  million,
remaining  stable when  compared to $2.3 at December 31, 1998.  Data  processing
expense  increased  in 1998 and 1999 as a result of software  enhancements,  the
installations  of a Wide Area  Network,  cost of  addressing  year 2000  issues,
associated  merger  costs,  and  the  introduction  of  Online  Banking  to  our
customers.  The  increase  does not reflect the time and  attention of key staff
members to ensure that systems were  compliant and would deal  efficiently  with
the new millennium date change.  Increase in occupancy expense from 1998 to 1999
was greatly  influenced by the  construction of the new branch office in Ripley,
early  construction  stages  of the new  Green  Village  Office,  and  increased
depreciation 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 insurance  agencies,  consumer
finance companies,  and our brokerage business. In addition, we will concentrate
on internal  income  growth in the bank's  mortgage  lending and trust  services
departments.



      <PAGE>22

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

   1999               $2,328                      $2,540
  *1998               $2,354                      $2,400
   1997               $2,151                      $2,400
   1996               $2,159                      $2,300
   1995               $1,969                      $1,900

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

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)
                         1999                1998              1997

                  Average   Average  Average   Average  Average   Average
                  Balance    Rate    Balance    Rate    Balance    Rate
Non-Interest
Bearing Demand
Deposits         $ 39,805    -       $ 37,742     -    $ 32,368     -

Savings Deposits $111,278   2.99%    $106,259   3.20%  $ 92,562   3.37%

Time Deposits    $208,908   4.91%    $202,370   5.62%  $176,155   5.51%

TOTAL DEPOSITS   $359,991   3.77%    $346,371   4.27%  $301,085   4.25%

Deposits increased 3.9% in 1999 in comparison to 15% in 1998 which included Bank
of Troy deposits.  A comparison of the composition of deposits for 1999 and 1998
reflects  deposit  growth of only 3.9% in 1999 as compared to 15% when comparing
1998 to 1997.  Total deposits have been restated as required by FASB  Accounting
Standards for pooling-of-interests,  triggered by the First Volunteer merger, as
discussed in the MDA on page 17 in the section  titled  Assets.  Actual  deposit
growth in 1999 including  deposits acquired from mergers and  acquisitions,  was
34.85 percent.  The company's  marketplace  is described as highly  competitive,
with a fairly  sophisticated  customer base.  Competition is aggressive for both
loans and  deposits.  Retention of savings and time  deposits  continues to be a
challenge with increased competition by brokerage firms, insurance companies and
other financial service providers.  Competitor marketing programs are aggressive
in seeking new deposit  dollars with  advertising  programs  that offer rates on
certificates  of  deposits  in  excess  of 6% and  above in some  market  areas.
According to a recent survey First Citizens maintains  approximately 54% of Dyer
County  market  share;  16% of Obion County  market  share and 4% of  Lauderdale
County  market  share.  In the Dyer County  market the bank  competes with Union
Planters (7.5%),  First Tennessee Bank (20.9%),  Security Bank (15.5%), and City
State Bank (2.4%). The bank's largest competitor in Lauderdale County is Bank of
Ripley (36.2%).  Competition in Obion County ranks First State Bank 42.1% market
share,  Commercial Bank and Trust 17.1%,  Union Planters 9.7%, and Reelfoot Bank
12.8%.



         <PAGE>23

Deposit growth, without acquired deposits, remained relatively flat in 1999. The
average rate paid on total  deposits  continued to decline from 4.27% in 1998 to
3.77% in 1999.  However,  an increase in rates by the Federal Reserve prompted a
reversal of this trend during the fourth  quarter of 1999.  The  utilization  of
deposits to fund loan  growth is no longer an option for the  banking  industry.
Returns  generated on  investments  in stocks and mutual funds,  combined with a
high level of customer confidence in the national economy have negated the value
of FDIC Insurance as a tool for attracting and holding deposits.  First Citizens
has  turned to other  sources  provided  by  approved  lines of  credit  through
Correspondent Banks and Federal Home Loan Bank. As a result we have more control
on maintaining acceptable interest rate margins.  Deposit growth is projected at
2% to 3% by the 2000 budget. Management is continuously monitoring and enhancing
the bank's product line in order to retain existing customers and to attract new
customer relationships.  First Citizens introduced Internet based banking to the
market place  September 1, 1999. The service allows  customers to access account
information,  statement  activity,  apply for a deposit or loan and pay bills by
signing on to  firstcitizens-bank.com.  The cost of Internet  banking is free to
customers, while bill pay is offered at a competitive price. A Call Center is in
the early planning stages and will provide more efficient  customer support from
account inquiry to electronic  banking products and services.  An Internet based
cash  management  product for small  businesses  will be announced to the market
during the first half of 2000.

SHORT TERM BORROWINGS
                                     12/31/99       12/31/98
Amount outstanding-end of Period     $46,090         $38,107
Weighted Average Rate of Outstanding   4.56%           4.38%
 Maximum Amount of Borrowings at
  Month End                           47,470          38,107
Average Amounts Outstanding for
  Period                              32,759          27,777
Weighted Average Rate of Average
  Amounts                              4.46%           4.46%

Long term  debt for 1999 is  comprised  of  Federal  Home  Loan Bank  borrowings
totaling  $33,963,571 and Delta Finance Company obligation of $1,000,000.  Other
long term obligations consist of a note payable of Employee Stock Ownership Plan
to  Suntrust  Bank,  balance  at  12/31/99  of  $1,117,000.  1998 long term debt
included Federal Home Loan Bank borrowings  totaling  $35,010,053,  Debt for the
purchase  of Troy Bank,  balance at  year-end  of  $682,295,  and Delta  Finance
Company debt.  The Employee  Stock  Ownership  Plan loan balance at 12/31/98 was
$1,408.000.

                        Average   Average  Average    Variable
                         Volume   Rate    Maturity
FHLB Borrowings-Loans     2,264   5.86%    5 years
FHLB Borrowings-Other    10,264   5.12%   1-5 years   Monthly, Yearly
Finance Company Debt      1,000   6.00%    5 years
ESOP Obligation           1,117   6.89%    6 years    Monthly

The following table sets forth the maturity distribution of Certificates
of Deposit and other time deposits of $100,000 or more outstanding on the books
of First Citizens on December 31, 1999. The overall total increased in excess of
$25 million when compared to the prior year.

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

                                          December 31
                                        (in thousands)
                                   1999                  1998
                           Amount       Percent  Amount       Percent
 Maturing in:
3 months or less           $44,946       63.42%  $18,719       41.22%
Over 3 through 12 months   $22,980       32.43%  $22,525       49.60%
Over 12 months             $ 2,936        4.15%  $ 4,170        9.18%

     TOTAL                 $70,862      100.00%  $45,414      100.00%


<PAGE>


      <PAGE>24

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)
                            1999                     1998                 1997
FUNDING USES         Average  Increase        Average  Increase         Average
                     Balance (Decrease)       Balance  (Decrease)       Balance
                       Amount          %          Amount          %      Amount

INTEREST-EARNING
ASSETS:

Loans (Net of
Unearned Discounts
& Reserve)          $323,047  $33,631 11.62% $289,416  $37,431  14.85% $251,985

Taxable Investment
Securities          $ 89,368  $ 5,449  6.49% $ 83,919  $12,682  17.80% $ 71,237

Non-Taxable
Investment
Securities          $ 13,072 ($ 1,127)(7.93%)$ 14,199  $ 2,664  23.09% $ 11,535

Federal Funds
Sold                $  2,690 ($ 6,060)69.25% $  8,750  $ 1,750  25.00% $  7,000

Interest Earning
Deposits In
Banks               $  1,031  $    51  5.20% $    980  $   685 232.20% $    295

TOTAL INTEREST-
EARNING ASSETS      $429,208  $31,944  8.04% $397,264  $55,212  16.14% $342,052

Other Uses          $ 43,376  $ 5,218 13.67% $ 38,158  $ 5,580  17.12% $ 32,578

TOTAL FUNDING
  USES              $472,584  $37,162  8.53% $435,422  $60,792  16.22% $374,630

INTEREST-BEARING
  LIABILITIES:

Savings
 Deposits           $111,278  $ 5,019  4.72% $106,259  $13,697  14.79% $ 92,562

Time Deposits       $208,908  $ 6,538  3.23% $202,370  $26,215  14.88% $176,155

Federal Funds
Purchased and
Other Interest
Bearing
Liabilities         $ 64,918  $18,418 39.60% $ 46,500  $ 8,601  22.69% $ 37,899

TOTAL INTEREST-
BEARING
LIABILITIES         $385,104  $29,975  8.44% $355,129  $48,513  15.82% $306,616

Demand Deposits     $ 39,805  $ 2,063  5.46% $ 37,742  $ 5,374  16.60% $ 32,368

Other Sources       $ 47,675  $ 5,124 12.04% $ 42,551  $ 6,905  19.37% $ 35,646

TOTAL FUNDING
 SOURCES:           $472,584  $37,162  8.53% $435,422  $60,792  16.22% $374,630




      <PAGE>25

<TABLE>
<CAPTION>
SUMMARY - AVERAGE BALANCE SHEET AND NET INTEREST INCOME ANALYSIS
                                  (FIRST CITIZENS NATIONAL BANK)

                               Monthly Average Balances and Interest Rates
                                              (in thousands)
                            1999                    1998                       1997
                 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)      $323,047  $29,382  9.10%   $289,416  $28,502  9.84%   $251,985  $24,907  9.88%

Investment
Securities:

  Taxable        $ 89,368  $ 5,903  6.61%   $ 83,919  $ 5,405  6.44%   $ 71,237  $ 4,957  6.95%
  Tax Exempt (4) $ 13,072  $   938  7.18%   $ 14,199  $ 1,085  7.64%   $ 11,535  $   903  7.82%

Interest Earning
  Deposits       $  1,031  $    42  4.07%   $    980  $    55  5.61%   $    295  $    11  3.73%

Federal Funds
Sold             $  2,690  $   148  5.50%   $  8,751  $   639  7.30%   $  7,000  $   281  4.01%


Lease Financing  $      0  $     0     0%   $      0  $     0     0%   $      0  $     0     0%

Total Interest
  Earning Assets $429,208  $36,413  8.48%   $397,264  $35,686  8.98%   $342,052  $31,059  9.08%

NON-INTEREST
  EARNING ASSETS:
Cash and Due From
  Banks          $ 13,531  $     0     0%   $ 12,005  $    0      0%   $ 11,210 $     0      0%

Bank Premises and
  Equipment      $ 13,035  $     0     0%   $ 10,180  $    0      0%   $  9,131  $     0     0%

Other Assets     $ 16,810  $     0     0%   $ 15,973  $    0      0%   $ 12,237  $     0     0%

Total Assets     $472,584  $     0     0%   $435,422  $    0      0%   $374,630  $     0     0%

LIABILITIES AND
 SHAREHOLDERS'
  EQUITY:

INTEREST BEARING
  LIABILITIES:
Savings Deposits $111,278  $ 3,324  2.99%  $106,259  $ 3,400   3.20%   $ 92,562  $ 3,119  3.37%
 (5)

Time Deposits    $208,908  $10,262  4.91%  $202,370  $11,391   5.62%   $176,155  $ 9,690  5.50%

Federal Funds
  Purchased and
  Other Interest
  Bearing
  Liabilities    $ 64,918  $ 3,194  4.92%  $ 46,500  $ 2,497   5.36%   $ 37,899  $ 1,868  4.92%
Total Interest
  Bearing
  Liabilities    $385,104  $16,780  4.36%  $355,129  $17,288   4.86%   $306,616  $14,677  4.80%

NON-INTEREST
  BEARING
  LIABILITIES:

Demand Deposits  $ 39,805  $     0     0%  $ 37,742  $     0      0%   $ 32,368  $0         0%

Other
  Liabilities    $  3,993  $     0     0%  $  2,688  $     0      0%   $  2,221  $0         0%

Total
  Liabilities    $427,762  $     0     0%  $395,559  $     0      0%   $341,205  $0         0%

SHAREHOLDERS'
  EQUITY         $ 43,682  $     0     0%  $ 39,863  $     0      0%   $ 33,425  $0         0%






     <PAGE>26

TOTAL LIABILITIES
  AND SHAREHOLDERS'
  EQUITY         $472,584  $     0     0%  $435,422  $     0      0%   $374,630  $0         0%

NET INTEREST
  INCOME         $      0  $19,633     0%  $      0  $18,398      0%   $      0  $16,382    0%

NET YIELD ON
  AVERAGE EARNING
  ASSETS         $      0  $     0  4.57%  $      0  $     0   4.63%   $      0  $0      4.78%
 </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          1999 Compared to 1998        1998 Compared to 1997
   National Bank)           Due to Changes in:          Due to Changes in:
                                           Total                      Total
                         Average Average Increase  Average Average Increase
                         Volume   Rate  (Decrease) Volume   Rate (Decrease)
  Interest Earned On:                     (in thousands)

    Loans                 $3,309  $(2,429) $  880   $3,698 $  (103)  $3,595

    Taxable Investments    351      147     498    8,814  (8,366)     448

    Tax Exempt Investment
     Securities            (86)     (61)   (147)     208     (26)     182

    Interest Bearing
     Deposits with Other
     Banks                   3      (16)    (13)      26      18       44

    Federal Funds Sold and
     Securities purchased
     under agreements to
     resell               (442)     (49)   (491)      70     288      358

    Lease Financing          0        0       0        0       0        0

  TOTAL INTEREST EARNING
   ASSETS                $3,135 $(2,408)  $ 727  $12,816  (8,189)  $4,627

  Interest Paid On:
    Savings Deposits        161    (237)    (76)     462    (181)     281

    Time Deposits           367  (1,496) (1,129)   1,441     260    1,701

    Federal Funds Purchased
      and Securities Sold
      Under Agreement to
      Repurchase            987    (290)    697      423     206      629

  TOTAL INTEREST BEARING
     LIABILITIES         $1,515 $(2,023) $ (508) $ 2,326   $ 285   $2,611

  INTEREST EARNINGS      $1,620 $  (385)  $1,235 $10,490  (8,474)  $2,016



        <PAGE>27

  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 8.04% and 16.14% when comparing 1999 to 1998
  and 1997. Total interest bearing  liabilities  increased 8.44% and 15.82% when
  comparing  1999,  1998 and 1997  respectively.  Total interest  earning assets
  averaged $429,208,000 at an average rate of 8.48% while total interest bearing
  liabilities  averaged  $385,104,000 at an average rate of 4.36%.  Net yield on
  average earning assets  (annualized) was 4.57%, 4.63%, and 4.78% for the years
  1999, 1998, and 1997.  Strategic  planning efforts dictate a reduction in cost
  of funds,  thereby improving interest rate margins.  Asset/Liability  policies
  are in place to protect  the  company  from the  negative  effects of volatile
  swings in  interest  rates.  Interest  margins  are well  managed  to  achieve
  acceptable profits and a return on equity within policy guidelines.

  LOAN PORTFOLIO ANALYSIS
  COMPOSITION OF LOANS
                                            December 31
                                             (in thousands)
                            1999     1998       1997     1996      1995
  Real Estate Loans:

  Construction           $ 34,431  $ 28,048  $ 23,378  $ 21,564  $ 19,618

  Mortgage               $189,787  $159,637  $151,333  $142,079  $122,944

  Commercial, Financial
  and Agricultural Loans $ 60,446  $ 87,927  $ 52,212  $ 46,581  $ 45,402

  Installment Loans to
  Individuals            $ 37,595  $ 29,197  $ 26,904  $ 23,743  $ 24,718

  Other Loans            $  3,118  $  2,522  $  2,512  $  2,479  $  2,425

  TOTAL LOANS            $325,377  $307,331  $256,339  $236,446  $215,107

  CHANGES IN LOAN CATEGORIES

               December 31, 1999 as compared to December 31, 1998
                                 (in thousands)

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

  Real Estate                  $36,533                      19.46%
  Commercial, Financial
    and Agricultural          ($27,481)                    (31.25%)

  Installment Loans to
   Individuals                 $ 8,398                      28.76%

  Other Loans                  $   596                      23.63%

  TOTAL LOANS                  $18,046                       5.87%

Outstanding  loans at year-end  increased  5.87% when compared to year-end 1998.
The 1998 total loan balance has been  restated to include  loans  acquired  from
First  Volunteer  totaling  $28.7  million.  Loan growth  consisted of increased
volume in  Installment  and Real Estate  categories.  Commercial,  Financial and
Agricultural  Loans  reflected a 31.25% decrease from 1998 to 1999 primarily due
to paydowns in commercial  loans.  The expansion  into Obion County  affords new
lending opportunities,  which would support future growth projections,  while at
the same time building on existing customer  relationships.  Net loan growth for
the five years ending December,  1999 was approximately 51 percent.  Competition
for quality loans  continues to place pressure on the yield and terms  customers
are willing to accept. Loan Administration has taken a conservative  position in
dealing with situations which deviate from established  underwriting procedures,
while at the same time recognizing the need to maintain loan growth.




            <PAGE>28

Growth  in 1996 of  9.9%  and  1997  of  8.4%  is an  indicator  of  increased
competition  for high  quality  loans.  An increase of 22% for the year ending
December 31, 1998 reflects loans acquired as a result of the Troy acquisition.
The agricultural segment of the West Tennessee economy(statistics discussed in
the Banking  Business section of this report) was dealt a major blow two years
running  when  every  primary  crop  was  subjected  to some  form of  natural
disaster.  In addition,  reduced export demand forced down commodity prices to
levels not seen in more than a decade.  At December  31,  1999 First  Citizens
loan portfolio contained more than $27 million in agricultural  related loans.
Some of these  loans  presented  a  challenge  to our  customers  and to First
Citizens. An adequate loan loss reserve,  strong underwriting  standards and a
90% guaranty  from farm credit  services on many of the loans should  minimize
the impact to future earnings.

Mortgage loans have experienced  continued growth of more than 57% since 1995,
with a 19.5%  increase  from 1998 to 1999.  The upward trend is  attributed to
substantial  growth  in Dyer  County  population  as well  and the  number  of
households recorded in Dyer county in the past decade.  Market information and
employment  rates are published in this report in the section  titled  Banking
Business.

The First Citizens loan portfolio is made up of quality  credits,  and is well
diversified with a concentration of credit in real estate related loans.  Real
estate  related  loans  total  over  $224  million.  Problem  loans  increased
$2,140,149  when compared to December 31, 1998.  Problem loans at December 31,
1999 was $7.1 million or 2.18% of total loans.  The  provision for loan losses
increased in proportion to loan growth as required by loan policy.

The book  value of  repossessed  real  property  held by  First  Citizens  was
$390,458 at December  31,1999  compared  to  $136,937  at December  31,  1998.
Accounting  for  adjustments  to the value of Other Real Estate when  recorded
subsequent  to  foreclosure  is  accomplished  on  the  basis  of  independent
appraisal.  The asset is recorded at the lesser of its appraised  value or the
loan balance.

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

  Collateral                        Max. Amortization          Max. LTV
  ----------                        -----------------          --------

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

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



      <PAGE>29

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

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

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

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

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

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

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

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

     Loan Category                              LTV Limit

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

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

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

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

 .       The loan, if approved, is designated in the Bank's records and reported
        as an aggregate  number with all other such loans  approved by the full
        Board of Directors on at least a quarterly basis;

 .       The aggregate total of all loans so approved, including the extension
        of credit then under consideration,  shall not exceed 50%
        of the Bank's total capital; and



      <PAGE>30

  .      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:

                  1999 -  9.10%
                  1998 -  9.72%
                  1997 -  9.70%
                  1996 -  9.71%
                  1995 -  9.69%

The aggregate amount of unused guarantees, commitments to extend credit and
standby letters of credit was $56,803,000 at December 31, 1999.

     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                 $46,854           $118,621            $58,743

Commercial, Financial
 and Agricultural           $29,577            $19,733            $11,136

All Other Loans             $ 7,989            $31,527            $ 1,197

  TOTALS                    $84,420           $169,881            $71,076

Loans with Maturities After One Year for which:
                                                (in thousands)
Interest Rates are Fixed or Predetermined             $223,711
Interest Rates are Floating or Adjustable             $ 17,246

The  degree of  interest  rate to which a bank is subjected  can be  controlled
through  a well  managed  asset/liability  management program.  First  Citizens
controls  interest rate risk by matching assets and liabilities,  (by employing
interest-sensitive funds in assets that are also interest sensitive).  One tool
used to ensure market  rate  return is  variable  rate  loans.  Loans  totaling
$101,666,000 or 31.24% 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  $169,881,000  at  December  31,  1999  from
$153,923,000  at December 31,  1998 as a result of  customer  demand to lock in
fixed rates for a longer period of time.



      <PAGE>31

NON-PERFORMING LOANS

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

                          1999      1998      1997      1996      1995
Nonaccrual Loans        $ 500     $ 303     $ 440    $1,118    $  836

Restructured Loans          0         0         0         0         0

Foreclosed Property
  Other Real Estate,      390       177         0        50       111

Other Repossessed
  Assets                    0         0         0         0         0

Loans and leases 90 days
  Past due and still
  accruing interest       335       425       164       177       313

Total Nonperforming
  Assets               $1,225     $ 905     $ 604    $1,295    $1,260

Nonperforming assets
 as a percent of
 loans and leases
 plus foreclosed
 property at end
 of year                 .37%      .33%      .27%      .62%      .66%

Allowance as a percent of:

Nonperforming
  assets              303.51%   386.30%   461.76%   176.22%   175.88%

Gross Loans             1.14%     1.26%     1.22%     1.08%     1.16%

Addition to Reserve as a
  percent of Net
  Charge-Offs          59.30%   154.27%   364.07%   112.16%   180.20%

Loans and leases 90 days
  past due as a percent of
  loans and leases at year
  end                    .10%      .15%      .08%      .09%      .17%

Recoveries as a
  percent of Gross
  Charge-Offs          27.92%    34.77%    41.11%    20.15%    44.66%

Total Non Performing Assets were $1,225,000 as of December 31, 1999 compared to
$905,000 at year end in 1998.  Non performing  Assets as a percent of loans was
 .37% compared to .33% in 1998 and .27% in 1997.  Allowance for Loan Losses as a
percent of  Nonperforming  assets and total  loans were  303.51%,  386.30%  and
461.76% for each year ending December 31, 1999, 1998 and 1997. 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




      <PAGE>32

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 its contractual term. A debt is well secured
if it is secured  (1) by  collateral in the form of liens or pledges or real or
personal property, including securities that have a realizable value sufficient
to discharge the debt (including  accrued  interest) in full,  considered to be
proceeding  in due course either  through  legal  action,  including  judgement
enforcement  procedures, or, in appropriate  circumstances,  through collection
efforts not involving legal action which are  reasonably  expected to result in
repayment  of the debt or in its restoration  to a current  status.  Loans that
represent a potential loss to First Citizens are adequately reserved for in the
provision for loan losses.

Interest  income on loans is  recorded  on an  accrual  basis.  The  accrual of
interest is  discontinued on all loans,  except consumer loans, which become 90
days past due, unless the loan is well secured and in the process of collection.
Consumer loans which become past due 90 to 120 days are charged to the allowance
for loan losses. The gross interest income that would have been recorded for the
twelve months ending  December 31, 1999 if all loans reported as non-accrual had
been current in accordance  with their original  terms and had been  outstanding
throughout  the period is $46,000.  Interest  income on loans reported as ninety
days past due and on interest  accrual  status was  $30,000  for 1999.  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)

                        1999       1998      1997      1996      1995
Average Net Loans
Outstanding          $323,047   $259,416  $ 220,985  $203,663  $183,018

Balance of Reserve
for Loan Losses
at Beginning of
Period               $  3,496   $  2,789  $   2,282  $  2,216  $  2,054

Loan Charge-Offs     $ (1,214)  $   (952) $    (326) $   (680) $   (365)

Recovery of Loans
Previously Charged
Off                  $    339   $    331  $     134  $    137  $    163

Net Loans Charged
Off                  $   (875)  $   (621) $    (192) $   (543) $   (202)

Additions to Reserve
Charged to Expense   $    720   $    958  $     699  $    609  $    364


<PAGE>


      <PAGE>33

Changes Incident
to Mergers           $    377  $    370  $       0  $      0   $      0

Balance at End of
Period               $  3,718  $  3,496  $   2,789  $  2,282   $  2,216

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

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 Loans  charged  off of  $1,214,000  (2)  Recovery  of loans
previously charged off $339,000 and (3) Additions to reserves totaling $720,000.

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

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

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

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

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

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

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



      <PAGE>33

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

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

LOAN LOSS ALLOWANCE ANALYSIS

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

  I. CREDIT      $         GROSS  $             %     $          $
     CARDS

 II. INSTALL.    $         NET    $             %     $          $
     LOANS

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

     TOTAL LOANS                                      $

  V. LETTERS OF CREDIT                       .75%     $          $

 VI. OTHER REAL ESTATE OWNED                                     $

     RESERVE REQUIRED                                            $

     RESERVE BALANCE                                             $

     EXCESS (DEFICIT)                                            $

     RESERVE AS % OF TOTAL LOANS %
     PEER GROUP %

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



      <PAGE>34

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

Management  estimates the  approximate  amount of  charge-offs  for the 12 month
period ending December 31, 2000 to be as follows:

Domestic                                            Amount
  Commercial, Financial & Agricultural            $300,000
  Real Estate-Construction                               0
  Real Estate-Mortgage                             100,000
  Installment Loans to individuals & credit cards  200,000
  Lease financing                                        0

            01/01/00 through 12/31/00   Total     $600,000

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

                                    Year Ending December 31
                                        (in thousands)
                               1999      1998     1997   1996
Charge-offs:
 Domestic:
  Commercial, Financial &
      Agricultural           $  236    $ 228     $  23   $ 432
Real Estate-Construction          0        0         0       0
  Real Estate-Mortgage          142      158         0      20
  Installment Loans to
   individuals & credit cards   836      566       303     228
  Lease financing                 0        0         0       0

         Total               $1,214    $ 952     $ 326   $ 680

Recoveries:
 Domestic:
  Commercial, Financial &
     Agricultural            $   89    $ 165     $  43   $  32
  Real Estate-Construction        0        0         0       0
  Real Estate-Mortgage            6        9         2       3
Installment Loans to
   individuals & credit cards   244      157        89     102
  Lease financing                 0        0         0       0

          Total              $  339    $ 331     $ 134   $ 137

Net Charge-offs              $ (875)   $(621)    $(192)  $(543)



      <PAGE>35


COMPOSITION OF INVESTMENT SECURITIES
                                              December 31
                                             (in thousands)

                             1999     1998     1997     1996     1995

U. S. Treasury &
 Government Agencies       $83,372 $ 89,410   $62,976   $66,194  $63,462

State & Political
 Subdivisions              $12,515 $ 17,113   $11,799   $11,729  $11,776

All Others                 $ 3,250 $  3,207   $ 2,740   $ 3,649  $ 3,964

            TOTALS         $99,137 $109,730   $77,515   $81,572  $79,202


MATURITY AND YIELD ON SECURITIES - DECEMBER 31, 1999
                                   (in thousands)

                           Maturing        Maturing
                Maturing   After One      After Five     Maturing
               Within One  Year Within    Years Within   After Ten
                  Year     Five Years      Ten Years      Years
             Amount Yield Amount  Yield  Amount  Yield  Amount Yield
U. S. Treasury
and Government
Agencies    $ 1,251 6.36% $36,373 6.40% $33,184 6.80% $12,564 7.40%

State and
Political   $ 1,605 6.30% $ 3,764 6.41% $ 3,933 6.57% $ 3,213 7.04%
Subdivisions*

All Others  $     0    0% $     0    0% $ 3,250 6.40% $     0    0%
            ------- ----- ------- ----- ------- ----- ------- -----

TOTALS      $ 2,856 6.33% $40,137 6.40% $40,367 6.74% $15,777 7.32%

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

HELD TO MATURITY & AVAILABLE FOR SALE SECURITIES - DECEMBER 31, 1999

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

U.S. Treasury Securities                      0         0      2,029    1,969
U.S. Government Agency and
 corporation obligations                 17,063    16,588     67,376   64,340
Securities issued by states & political
  subdivisions in the U.S.:
  Taxable Securities                          0         0          0        0
  Tax-exempt Securities                   3,282     3,265      9,557    9,233
U. S. Securities:
   Debt Securities                            0         0          0        0
   Equity Securities
    (Including Federal Reserve Stock)                          3,223    3,250
Foreign Securities:
   Debt Securities                            0         0          0        0
  Equity Securities                                                0        0
Total (sum of column A items 1 through
 5.a must equal Schedule HC, item 2.a and
 sum of column D, items 1 through
 5.b must equal Schedule HC, item 2.b)    20,345   19,853      82,185  78,792



      <PAGE>36

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

A major  goal of the  bank's  investment  portfolio  management  is to  maximize
returns from  investments  while  controlling  the basic  elements of risk.  The
second goal is to provide  liquidity and meet financial  needs of the community.
Investment  Securities  also serve as collateral for government and public funds
deposits.  Investment  activity for 1999 was greatly  influenced  by strong loan
demand.  The  investment  portfolio,  which  currently  totals  $99,137,000,  is
comprised  of U.  S.  Treasury  and U. S.  Agency  Obligations  of  $83,372,000,
Municipal  Obligations  of  $12,515,000,  and  all  other  investments  totaling
$3,250,000.  Fixed rate holdings comprise 90% of the portfolio, while adjustable
rate holding comprise the remaining 10%.

The fixed rate holdings currently have an expected average life of 5.9 years. It
is estimated that this average life would extend to 6.5 years should rates go up
by 100 basis points and 6.7 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 3.4 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 3.7%,  while rates up 200 basis
points would impact the market  value by a negative  8.3%.  This is equal to the
price  sensitivity of the four to five 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 5.4%.

The  adjustable  rate holdings  reprice on an annual or more frequent  basis and
currently  have an average  life of 5.4  years.  Due to the  structure  of these
holdings,  we would expect very little extension to occur in average life should
interest  rates  rise,  but could see some  shortening  should  rates  fall.  We
estimate  that the  adjustable  rate holdings  have the price  sensitivity  of a
3-year  Treasury,  although this is more difficult to project on adjustable rate
holdings than on fixed rate holdings.

FASB  115  required  banks  to  maintain  separate  investment   portfolios  for
Held-to-Maturity,  Available for Sale, and Trading  Account  Investments.  As of
December 31, 1999  approximately  75 percent of the bank's total  portfolio  was
placed in the Held For Sale Account  while the remaining 25 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 negative  capital entry
of  $2,036,000  as reflected on the  December  31, 1999 balance  sheet.  Mark to
market  impact to capital on  December  31,  1998 was a positive  $455,000.  All
purchase  and  sale   transactions   in  1999  were  made  in  accordance   with
specifications  set forth in FASB 115. The trading  account at December 31, 1999
maintained  a zero  balance.  First  Citizens  has  not  engaged  in  Derivative
activities as defined by paragraphs 5 thru 7 of FASB 119.


      <PAGE>37

Maturities in the portfolio  are made up of 2.9%  within  one year,  and 40.5%
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

     1999      $    0.00    $    0.00     $     0.00
     1998      $    0.00    $    0.00     $     0.00
     1997      $    0.00    $    0.00     $     0.00
     1996      $    0.00    $    0.00     $     0.00

The following table allocates by category  unrealized  Gains/Losses  within the
total portfolio as of December 31, 1999 (in thousands):

                                  Unrealized              Net
                            Gains        Losses       Gains/Losses

U.S. Treasury Securities
 and Obligatioins of U.S.
 Government Agencies
  and Corporations          $    83        $3,640      $(3,557)

Obligations of States
  and Political
  Subdivisions              $    11        $  437      $  (426)

Federal Reserve and
  Corporate Stock           $    27        $    0      $    27

TOTALS                      $   121        $4,077      $(3,956)

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.

Lines  of  Credit  made  available  through  Federal  Home  Loan  Bank  totaling
$74,000,000  provide a fixed level of funds at a predetermined rate. Other lines
of credit established with Correspondent banks total $26,000,000.  Correspondent
Bank lines provide  additional  liquidity  required for daily  settlement of the
banks books.  It is anticipated  that these sources of funds will continue to be
utilized as a tool in managing liquidity.

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


      <PAGE>38

Liquidity ratio,  which was 8.80% at  December  31, 1999  indicates  the degree
short-term and marketable  assets are available to fund short term  liabilities
and deposit outflows.  The liquidity ratio is calculated by comparing net liquid
assets to net liabilities.  The stability of our deposit base, approved lines of
credit, sound  asset/liability  management,  quality assets and a strong capital
base  assure adequate  liquidity.  A major  swing in the bond market has caused
basically all of our callable  investments  to become long term holdings and our
FHLB borrowings to become short term. Other sources  available to meet liquidity
needs are loans and  investments  totaling over $87 million  maturing within one
year and  approximately  $79  million  of the bank's  investments  placed in the
held-for-sale-account.  Loan to deposit  ratio at  December  31, 1999 was 88.69%
compared to 92.21% at December 31, 1998. The dependency ratio was 21.73% at year
end, reflecting volatile liabilities relied upon to fund longer term assets.

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

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

The  following  condensed  gap report  provides an  analysis  of  interest  rate
sensitivity   of  earning  assets  and  costing   liabilities.   First  Citizens
Asset/Liability Management Policy provides that the net interest income exposure
to Tier I Capital  shall not exceed  2.00%.  Interest rate risk is separated and
analyzed according to the following  categories of risk: (1) repricing (2) yield
curve (3) option  risk (4) price  risk and (5) basis  risk.  Trading  assets are
utilized   infrequently  and  are  addressed  in  the  investment   policy.  Any
unfavorable  trends  reflected in interest  rate margins will cause an immediate
adjustment to the bank's gap position or asset/liability  management strategies.
The following data schedule reflects a summary of First Citizens'  interest rate
risk using simulations.  The projected 12 month exposure is based on 5 different
rate movements (flat, rising, or declining). Three different rate scenarios were
used for rising rates since First Citizens is liability sensitive.


      <PAGE>39

                              CONDENSED GAP REPORT
                      ------------------------------------
                                CURRENT BALANCES
                       -----------------------------------
                                    12/31/99
                                 (in thousands)

                                    DAILY         0-1        1-2         2-3
                        TOTAL      FLOATING       MONTH      MONTHS      MONTHS
-------------------------------------------------------------------------------

CASH AND DUE FROM
CASH AND DUE FROM       17,410            0           0          0            0
TOTAL CASH & DUE FROM   17,410            0           0          0            0

INVESTMENTS
US TREASURIES            1,969            0           0          0            0
US AGENCIES             81,403            0         540        500            0
MUNICIPALS              12,515            0         120          0          545
EQUITIES                 3,250            0           0          0            0

TOTAL INVESTMENTS       99,137            0         660        500          545

LOANS
COMMERCIAL FIXED        48,573            0       6,853      2,192        2,294
COMMERCIAL VARIABLE     10,410            0       9,190         41           39
REAL ESTATE-VARIABLE    18,660            0      14,565        189          357
REAL ESTATE FIXED      195,574            0      11,228      2,796        5,936
HOME EQUITY LOANS        8,911            0       7,080        199           44
SEC MORTGAGE             1,073            0       1,073          0            0
INSTALLMENT LOANS       39,058            0       1,524        568          724
FLOOR PLAN                 146            0           0          0            0
CREDIT CARDS             2,452            0           0          0            0
FACTORING REC               58            0           0          0            0
OVERDRAFTS                 462            0           0          0            0
TOTAL LOANS            325,377            0      51,513      5,985        9,394
LOAN LOSS RESERVE        3,718            0           0          0            0

NET LOANS              321,659            0      51,513      5,985        9,394
FED FUNDS SOLD

TOTAL EARNING ASSETS   420,796            0      52,173      6,485        9,939

OTHER ASSETS
BUILDING, F&F & LAND    13,417            0           0          0            0
OTHER REAL ESTATE          390            0           0          0            0
OTHER ASSETS            20,657            0           0          0            0

TOTAL OTHER ASSETS      34,464            0           0          0            0

TOTAL ASSETS           472,670            0      52,173      6,485        9,939

DEMAND DEPOSITS              0            0           0          0            0

TOTAL DEMAND            42,513            0           0          0            0



      <PAGE>40


                              CONDENSED GAP REPORT
                       ------------------------------------
                                CURRENT BALANCES
                        -----------------------------------
                                    12/31/99
                                 (in thousands)

                               3-6          6-12             1-2           2+
                              MONTHS       MONTHS           YEARS        YEARS
-------------------------------------------------------------------------------

CASH AND DUE FROM
CASH AND DUE FROM                0             0              0          17,410

TOTAL CASH & DUE FROM            0             0              0          17,410

INVESTMENTS
US TREASURIES                    0             0          1,503             466
US AGENCIES                     50           161          1,000          79,152
MUNICIPALS                     240           700          1,766           9,144
EQUITIES                         0             0              0           3,250

TOTAL INVESTMENTS              290           861          4,269          92,012

LOANS
COMMERCIAL FIXED             6,401         5,893          3,125          21,815
COMMERCIAL VARIABLE             98           493             57             492
REAL ESTATE-VARIABLE         1,049           324            807           1,369
REAL ESTATE FIXED            7,329        12,683         17,293         138,309
HOME EQUITY LOANS              466         1,122              0               0
SEC MORTGAGE                     0             0              0               0
INSTALLMENT LOANS            1,823         3,350          7,751          23,318
FLOOR PLAN                       0             0              0             146
CREDIT CARDS                     0             0              0           2,452
FACTORING REC                    0             0              0              58
OVERDRAFTS                       0             0              0             462
TOTAL LOANS                 17,166        23,865         29,033         188,421
LOAN LOSS RESERVE                0             0              0           3,718

NET LOANS                   17,166        23,865         29,033         184,703

FED FUNDS SOLD


TOTAL EARNING ASSETS        17,456        24,726         33,302         276,715

OTHER ASSETS
BUILDING, F&F & LAND             0             0              0          13,417
OTHER REAL ESTATE                0             0              0             390
OTHER ASSETS                     0             0              0          20,657

TOTAL OTHER ASSETS               0             0              0          34,464

TOTAL ASSETS                17,456        24,726         33,302         328,589

DEMAND DEPOSITS                  0             0              0               0

TOTAL DEMAND                     0             0              0          42,513




    <PAGE>41

                              CONDENSED GAP REPORT
                       ------------------------------------
                                CURRENT BALANCES
                        -----------------------------------
                                    12/31/99
                                 (in thousands)

                                             DAILY      0-1    1-2         2-3
                               TOTAL       FLOATING    MONTH  MONTHS     MONTHS
-------------------------------------------------------------------------------
SAVINGS ACCOUNTS
REGULAR SAVINGS              24,336             0         0       0           0
NOW ACCOUNT                  28,365             0         0       0           0
SPECIAL NOW                  12,000        12,000         0       0           0
BUSINESS CHECKING               308             0         0       0           0
IMF-MMDA                      8,398             0         0       0           0
FIRST RATE ACCOUNT           29,194             0         0       0           0
DOGWOOD CLUB                 11,870             0         0       0           0

TOTAL SAVINGS               114,471        12,000         0       0           0

TIME DEPOSITS
CD 1-2 MONTHS                27,284             0     8,811  13,470       5,000
CD 3 MONTHS                     820             0       251     345         222
CD 4-5 MONTHS                10,878             0     8,623      20         146
CD 6 MONTHS                  30,764             0     5,615   3,174       7,641
CD 7-11 MONTHS               11,985             0        78   2,681       2,058
CD 12 MONTHS                 33,095             0     2,403   2,793       2,294
CD 13-17 MONTHS              29,053             0     1,392   2,285       2,025
CD 18-23 MONTHS                 446             0        54      30           2
CD 24 MONTHS                  6,017             0       389     148         148
CD 25-30 MONTHS               1,124             0         4      10          52
CD 31-59 MONTHS               9,064             0       253     192          26
CD 31-59 MONTHS VAR.             12             0         0      12           0
CD 60 MONTHS                  3,723             0         2      71         152
CD 60 MONTH VAR.                500             0        40       0           0
CD SWEET 16                  14,339             0       793     972       1,349
CD 7 MONTH                      856             0       185      31           0
TROY CD'S                     6,008             0     3,691   1,482         163
IRA FLOATING                    103             0       103       0           0
IRA FIXED                    23,644             0     1,564   2,262       2,249
CHRISTMAS CLUB                  120             0         0       0           0

TOTAL TIME                  209,835             0    34,251  29,978      23,527


TOTAL DEPOSITS              366,819        12,000    34,251  29,978      23,527

TT&L                          1,000             0         0       0           0
SECURITIES SOLD-SWEEP        14,685             0    14,685       0           0
SECURITIES SOLD-FIXED         7,705             0     2,559       0       1,848
FHLB-SHORT TERM              22,700         7,700         0       0           0
FHLB-LONG TERM               11,264             0         0   5,000           0
NOTES PAYABLE ESOP            1,117             0         0       0           0
                             -------       ------    ------  ------     -------
TOTAL SHORT TERM
  BORR.                      58,471         7,700    17,244   5,000       1,848

OTHER LIABILITIES             3,700             0         0       0           0

TOTAL OTHER LIAB.             3,700             0         0       0           0

TOTAL LIABILITIES           428,990        19,700    51,495 342,978      25,375

CAPITAL
STOCK, SURPLUS, P.I.C        18,739             0         0       0           0
UNREALIZED GAIN
  (LOSSES)                   -2,240             0         0       0           0
UNDIVIDED PROFITS            27,181             0         0       0           0
TOTAL CAPITAL                43,680             0         0       0           0

TOTAL LIAB'S & CAPITAL      472,670        19,700    51,495  34,978      25,375

GAP (SPREAD)                      0       -19,700       678  -28,493    -15,436
GAP % TOTAL ASSETS                0         -4.17       .14    -6.03      -3.27
CUMULATIVE GAP                    0       -19,700   -19,022  -47,515    -62,951
CUM GAP % TOTAL ASSETS            0         -4.17     -4.02   -10.05     -13.32
SENSITIVITY RATIO                 0             0      0.74     0.56       0.52



     <PAGE>42
                              CONDENSED GAP REPORT
                       ------------------------------------
                                CURRENT BALANCES
                        -----------------------------------
                                    12/31/99
                                 (in thousands)

                                 3-6       6-12        1-2         2+
                                MONTHS     MONTHS       YEARS     YEARS
--------------------------------------------------------------------------

SAVINGS ACCOUNTS
REGULAR SAVINGS                    0             0           0      24,336
NOW ACCOUNT                        0             0           0      28,365
SPECIAL NOW                        0             0           0           0
BUSINESS CHECKING                  0             0           0         308
IMF-MMDA                           0             0           0       8,398
FIRST RATE ACCOUNT                 0             0           0      29,194
DOGWOOD CLUB                       0             0           0      11,870

TOTAL SAVINGS                      0             0           0     102,471

TIME DEPOSITS
CD 1-2 MONTHS                      3             0           0           0
CD 3 MONTHS                        2             0           0           0
CD 4-5 MONTHS                  2,089             0           0           0
CD 6 MONTHS                   14,147           187           0           0
CD 7-11 MONTHS                 6,800           368           0           0
CD 12 MONTHS                   8,194        17,307         104           0
CD 13-17 MONTHS                5,072        15,516       2,763           0
CD 18-23 MONTHS                   32           302          26           0
CD 24 MONTHS                   1,301           985       3,027          19
CD 25-30 MONTHS                  150           401         497          10
CD 31-59 MONTHS                2,815         4,394         997         387
CD 31-59 MONTHS VAR.               0             0           0           0
CD 60 MONTHS                     294           290         123       2,791
CD 60 MONTH VAR.                  20            35         120         285
CD SWEET 16                    2,898         5,177       3,150           0
CD 7 MONTH                       396           244           0           0
TROY CD'S                        115           306         239          12
IRA FLOATING                       0             0           0           0
IRA FIXED                      5,262         6,096       2,860       3,351
CHRISTMAS CLUB                     0           120           0           0

TOTAL TIME                    49,590        51,728      13,906       6,855


TOTAL DEPOSITS                49,590        51,728      13,906     151,839

TT&L                               0             0           0       1,000
SECURITIES SOLD-SWEEP              0             0           0           0
SECURITIES SOLD-FIXED          2,567           331         400           0
FHLB-SHORT TERM                5,000         5,000           0           0
FHLB-LONG TERM                     0         1,000       4,000       6,264
NOTES PAYABLE ESOP                 0             0           0       1,117

TOTAL SHORT TERM BORR.         7,567         6,331       4,440       8,381

OTHER LIABILITIES                  0             0           0       3,700

TOTAL OTHER LIAB.                  0             0           0       3,700

TOTAL LIABILITIES             57,157        58,059      18,306     163,920

CAPITAL
STOCK, SURPLUS, P.I.C              0             0           0      18,739
UNREALIZED GAIN
  (LOSSES)                         0             0           0      -2,240
UNDIVIDED PROFITS                  0             0           0      27,181

TOTAL CAPITAL                      0             0           0      43,680

TOTAL LIAB'S &
  CAPITAL                     57,157        58,059      18,306     207,600

GAP (SPREAD)                 -39,701       -33,333      14,996     120,989
GAP % TOTAL ASSETS             -8.40         -7.05        3.17      -25.60
CUMULATIVE GAP              -102,652      -135,985    -120,989           0
CUM GAP % TOTAL ASSETS        -21.72        -28.77      -25.60           0
SENSITIVITY RATIO               0.45          0.44        0.52        1.00


<PAGE>



      <PAGE>43

                    NOTES TO THE GAP REPORT

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

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

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

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

5.      Simulations will be utilized to reflect the impact of multiple rate
        scenarios on net interest income.  Decisions should be made that
        increase net interest income,  while always  considering the impact on
        interest rate risk.  Overall, the bank will manage the gap between rate
        sensitive assets and rate sensitive liabilities to expand and contract
        with the rate cycle phase.  First Citizens will attempt to minimize
        interest rate risk by increasing the volume of variable rate loans
        within the portfolio.  The bank will attempt to limit the net interest
        income exposure to a  maximum  of  2.00%  of tier I  capital.  The
        bank's Asset/Liability Committee will attempt to improve net interest
        income through volume increases and better pricing  techniques.
        Long term fixed rate  positions will be held to a minimum by increasing
        variable rate loans.  The over 5 year fixed rate loans should be held
        to less than 25% of assets,  unless they are funded with Federal Home
        Loan Bank matched  funds.  We will and are borrowing funds from the
        FHLB that have maturities ranging from 1 to 10 years.  This will reduce
        our interest rate risk.  These maximum limits are the high points and
        the ALCO will strive to keep the amount below this point.  The December
        31, 1999 dynamic gap reports reflects an  exposure  less than our risk
        limits.  (Examples:  historical margins graphed and multiple scenarios
        reflecting income exposure and as a percent of tier I capital.

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

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

RETURN ON EQUITY AND ASSETS
FIRST CITIZENS BANCSHARES, INC.
                                    1999    1998    1997    1996   1995
Percentage of Net Income to:
Average Total Assets                1.22%   1.02%   1.26%   1.16%    .95%
Average Shareholders Equity        13.27   11.22%  14.15%  13.39%  10.99%
Percentage of Dividends Declared
 Per Common Share to Net Income
 Per Common Share                  58.35%  57.51%  35.78%  32.28%  35.56%
Percentage of Average Shareholders'
 Equity to Average Total Assets     9.24%   9.85%   9.71%   9.34%   9.32%


      <PAGE>44

Return on assets is a measurement of the firms  profitability  in terms of asset
utilization.  Total  assets at December  31, 1999 was  $472,670,000  up 30% when
compared to totals  previous to the  acquisition  of First  Volunteer  Bank. The
balance  sheet,  however,  was restated as required by the Financial  Accounting
Standards Board to reflect a more accurate comparison of prior year(s) financial
information.  The restated balance sheet reflected asset growth of less than one
percent.  Return on assets at year end 1999 was 1.22%  compared to 1.02% at year
end 1998. The return on assets calculation for 1998 is reflective of acquisition
and non-recurring  organization  cost in excess of $1.3 million  associated with
the Bank of Troy.  Performance  ratios at the bank level were less impacted as a
result of acquisition cost dealt with at the Holding Company level.  Adjustments
were  recognized to strengthen  future income  potential and justify the capital
investment  in Bank of Troy and First  Volunteer.  Efforts  continue to focus on
positioning the company for future growth and profitability through improvements
in technology, solid growth in the deposit base and efficient utilization of the
branch  distribution  system.  Accelerated  asset  growth  coupled  with  rising
interest  rates paid on deposits had a  significant  impact on earnings in 1995.
Management  made a decision  the second half of 1995 to reduce cost of funds and
improve net interest  margins.  Results of operations  for 1997 and 1996 reflect
improvement over previous years as a result of the decision.

The primary  source of earnings  for  Bancshares  continues  to be net  interest
income. A comparison generated from this source reflects increases of 11.03% and
11.02% for 1999 and 1998  respectively.  Earnings for the prior two years were a
result of increased loan volume.  Yields on interest earning assets,  i.e. loans
and  investments,  decreased from 9.08% in 1997 to 8.48% in 1999, while the cost
on interest bearing liabilities  decreased from 4.80% to 4.36%.  Reduced funding
cost is  attributable to utilization of Federal Home Loan Bank as an alternative
source of funds. As a result, we are better able to manage the cost of funds and
restore net interest margins to a more acceptable level.

The return on average  assets of First Citizens  National Bank was 1.22%,  1.02%
and 1.26%  respectively  for 1999,  1998 and 1997.  Return on average equity was
also impacted as a result of the Bank of Troy and First Volunteer  acquisitions.
Return on average equity reported by the Bank was 13.27%, 11.22%, and 14.15% for
the years ending December 31, 1999, 1998 and 1997.

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

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

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

    1999       1998       1997       1996       1995

    9.24%      9.12%      9.74%      9.26%      9.10%



      <PAGE>45

Quarterly  dividends  of $.1875  per  share  paid to  shareholders  in 1999 were
enhanced by a special dividend of $.15 per share declared during fourth quarter.
This process  utilized in the past five years  serves to raise payout  ratios to
levels  targeted  by the bank's  capital  plan.  In 1998,  a 4 for 1 stock split
distributed the number of shares outstanding to 3,194,544. This action follows a
2.5 for 1 stock split October 15, 1993 and a 10% stock dividend December,  1992.
Dividend  payouts per share  adjusted for the 1998 split were .75 cents in 1998,
 .50 cents in 1997 and .40 cents in 1996.

In 1999, per share price of banks stocks came under tremendous pressure. Because
Bancshares stock is not publicly traded,  it has initially  escaped the level of
volatility  that  impacted  stock  prices  of even  the best  performing  banks.
Uncertainty of the future  direction of interest rates, a decrease in merger and
acquisition  activity and a leveling off of earnings have combined to dampen the
enthusiasm of investors and create an unstable  stock market.  Bancshares  stock
traded at $30.00 per share  through  December 31, 1999.  However,  first quarter
2000,  the common  stock  traded at a per share price of $24.00  reflecting  the
trend in bank stocks industry wide. Book value fell from $12.12 at year-end 1998
to $11.81 as of December 31,  1999,  as a direct  result of FASB 115.  FASB 115,
Mark to Market is discussed within the Investment section of the report.

A stock  repurchase  program,  in  effect  since  1994,  allows  First  Citizens
Bancshares to acquire  shares  through the Optional  Stock  Repurchase  Program.
Under  terms of the  program,  the  Company  may  repurchase  up to  $200,000 of
Bancshares'  stock in any calendar  quarter on a first come, first served basis.
However, a limitation of 27,000 shares per quarter is in effect for each quarter
of  2000.   The   limitation   is  a  result  of  FASB   Accounting   rules  for
pooling-of-interest  that  states  Bancshares  is  limited  to the  purchase  of
Bancshares  stock  equal  to 10% of  the  original  issued  quantity  of  shares
(445,251) for the purchase of First Volunteer Bank.

In 1998,  the Employee  Stock  Ownership Plan entered into a loan agreement with
SunTrust  Bank in the amount of  $2,000,000  to fund the  purchase  of  unissued
stock.  The  stock  will be  utilized  to  satisfy  future  allocations  to plan
participants  in  accordance  with the plan  document  approved  by the Board of
Directors.  The balance remaining on the ESOP loan is $1,117,265 at December 31,
1999.

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

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

Bancshares  has  historically  maintained  capital in excess of  minimum  levels
established by the Federal Reserve.  The risk-based capital ratio for Bancshares
as  of  December   31,  1999  and  December  31,  1998  was  13.93%  and  13.59%
respectively,  significantly above the 8.0 percent level required by regulation.
With the exception of the Reserve for Loan and Lease Losses, all capital is Tier
1 level.  Growth in capital will be maintained through retained earnings.  There
is no reason to assume that income  levels will not be sufficient to maintain an
adequate  capital  ratio.  Ten percent is used as a benchmark for a well defined
capitalized bank.



      <PAGE>46

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                       CARMICHAEL, DUNN, CRESWELL & SPARKS PLLC

                              INDEPENDENT AUDITORS' REPORT


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


We have audited the accompanying  consolidated  balance sheets of First Citizens
Bancshares,  Inc.,  and  Subsidiary  as of December  31, 1999 and 1998,  and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the three years ended December 31, 1999. 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, 1999 and 1998,  and their  results of
operations  and cash flows for the three  years  ended  December  31,  1999,  in
conformity with generally accepted accounting principles.



Dyersburg, Tennessee
January 16, 2000




     <PAGE>47
                       FIRST CITIZENS BANCSHARES, INC.,
                             AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
                        December 31, 1999 and 1998

                                                       1999           1998
                             ASSETS                         (in thousands)

Cash and due from banks                               $ 17,410      $ 17,020
Federal funds sold                                                    12,700
Investment securities
  Securities held-to-maturity (fair value of
  $19,768 at December 31, 1999 and $25,798 at
  December 31, 1998)                                    20,345        25,710
   Securities available-for-sale, at fair value         78,792        84,019
 Loans - (net of unearned income of
   $2,131 in 1999 and $2,342 in 1998)                  325,377       307,331
   Less:  Allowance for loan losses                      3,718         3,872
                                                      --------      --------
     Net Loans                                         321,659       303,459
Premises and equipment, net                             13,417        11,228
Accrued interest receivable                              5,353         5,195
Other assets                                            10,471         9,374
                                                      --------      --------

     TOTAL ASSETS                                     $472,670      $472,153
                                                      ========      ========

                       LIABILITIES AND STOCKHOLDERS' EQUITY


 Liabilities
 Deposits
   Demand                                               42,513        40,889
   Time                                                209,835       198,950
   Savings                                             114,471       120,860
                                                       -------       -------
Total Deposits                                         366,819       360,699
Securities sold under agreement to repurchase           22,390        21,282
Long-term debt                                          11,264        25,486
Federal funds purchased and short-term borrowings       23,700        16,825
Note payable of Employee Stock Ownership Plan            1,117         1,408
Other liabilities                                        3,700         3,371
                                                       -------       -------
     Total Liabilities                                 428,990       429,071
                                                       =======       =======

Stockholders' Equity
Common stock, no par value
  shares authorized - 10,000,000;
  issued - 3,705,165 in 1999;
  3,244,899 in 1998                                      3,705         3,690
Surplus                                                 15,034        14,591
Retained earnings                                       28,298        25,883
Accumulated other comprehensive income                  (2,036)          455
Less treasury stock, at cost 6,807 shares in 1999
  and 4,584 shares in 1998                                (204)         (129)
Obligation of Employee Stock Ownership Plan             (1,117)       (1,408)
                                                     ---------        -------
     Total Stockholders' Equity                         43,680        43,082
                                                     ---------        ------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $472,670      $472,153
                                                      ========      ========



    See accompanying notes to consolidated financial statements.



     <PAGE>48

                                      FIRST CITIZENS BANCSHARES, INC.,
                                             AND SUBSIDIARY
                                     CONSOLIDATED STATEMENTS OF INCOME
                                 Years Ended December 31, 1999, 1998, 1997

                                           1999          1998           *1997
                                           ----          ----            ----
    Interest Income                       (in thousands except per share data)

Interest and fees on loans               $29,382        $28,502       $24,907
Interest and dividends on
  investment securities:
    Taxable                                5,582          5,149         4,728
    Tax-exempt                               610            651           542
    Dividends                                321            256           229
Other interest income                        190            694           292
                                         -------        -------       -------
    Total Interest Income                 36,085         35,252        30,698
                                         -------        -------       -------

    Interest Expense

Interest on deposits                      13,586         14,791        12,809
Interest on long-term debt                   672          1,486           788
Other interest expense                     2,522          1,011         1,080
                                         -------        -------       -------
    Total Interest Expense                16,780         17,288        14,677
                                         -------        -------       -------
Net Interest Income                       19,305         17,964        16,021
Provision for loan losses                    720          1,226           945
                                         -------        -------       -------
Net interest income after provision
 for loan losses                          18,585         16,738        15,076
                                         -------        -------       -------

    Other Income

Income from fiduciary activities             921            827           756
Service charges on deposit accounts        2,408          2,077         1,917
Other service charges, commissions,
  and fees                                 1,657          1,113           835
Securities gains net                          93             61            94
Other income                                 592            511           439
                                        --------        -------         -----
    Total Other Income                     5,671          4,589         4,041
                                        --------        -------         -----

   Other Expenses

Salaries and employee benefits             8,672           8,288         6,708
Net occupancy expense                      1,028             917           853
Depreciation                               1,262           1,103         1,116
Data processing expense                      436             395           333
Legal and professional fees                  139             272           132
Stationary and office supplies               291             243           195
Amortization of intangibles                  351             183            15
Other expenses                             3,230           3,242         2,600
                                          ------          ------        ------
    Total Other Expenses                 $15,409         $14,643       $11,952
                                         -------         -------       -------
Net income before income taxes           $ 8,847         $ 6,684       $ 7,165

Provision for income tax expense           3,048           2,210         2,435
                                         -------         -------       -------

Net Income                               $ 5,799         $ 4,474       $ 4,730
                                         =======         =======       =======

Earnings Per Common Share:

  Net income                             $  1.58         $  1.25     **$  1.38
                                         =======         =======       =======

Weighted average shares outstanding        3,664           3,590     **  3,426
                                         =======         =======       =======

*Certain items have been reclassified  to conform  to  current  year format.
**Amounts restated to reflect four for one stock split in 1998.


    See accompanying notes to consolidated financial statements.



<PAGE>


<PAGE>49

                                      FIRST CITIZENS BANCSHARES, INC.,
                                             AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 Years Ended December 31, 1999, 1998, 1997

                                           1999          1998           1997
                                           ----          ----           ----
                                                    (in thousands)

Net income for year                      $ 5,799        $ 4,474       $ 4,730

Other comprehensive income, net of tax
      Unrealized gains (losses) on
      available-     for-sale securities;
      Unrealized gains (losses) arising
      during the period                  ( 2,491)           174           213
                                         --------     ---------      --------

      Total Comprehensive Income        $  3,308       $ 4,648       $ 4,943
                                         ========       =======       =======

Required disclosures of related tax effects allocated to each component of
  other comprehensive income.

                                         Before-tax   Tax(Expense)  Net-of-tax
                                           Amount      or Benefit     Amount

Year ended December 31, 1999

Unrealized gains (losses) on
      available-for-sale securities;
Unrealized gains (losses) arising
      during the period                   $(3,912)     $ 1,555       $(2,357)
Less reclassification adjustments
      for gains included in net income       (223)          89          (134)
                                          --------     -------       --------
           Net Unrealized Gains(Losses)   $(4,135)     $ 1,644       $(2,491)
                                          ========     =======       ========


Year ended December 31, 1998

Unrealized gains (losses) on
      available-for-sale securities;
Unrealized gains (losses) arising
      during the period                   $   300     $   120        $   180
Less reclassification adjustments
      for gains included in net income        (11)          5             (6)
                                          --------     ------        --------
          Net Unrealized Gains(Losses)    $   289     $   125        $   174
                                          ========    =======         =======



See accompanying notes to consolidated financial statements.



      <PAGE>50
                            FIRST CITIZENS BANCSHARES, INC.,
                                     AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       Years Ended December 31, 1999, 1998 and 1997
                      --------------------------------------------
                          (in thousands except per share data)

                                           Common Stock
                                                                 Retained
                                         Shares     Amount   Surplus   Earnings
                                         ------     ------   -------   --------

Balance, January 1, 1997                 1,187   $  1,187    $ 10,797 $ 20,630

Net income, year ended December 31, 1997                                 4,730
Adjustment of unrealized gain (loss) on
 securities available-for-sale, net of
 applicable deferred income taxes ($142)
 during the year
Cash dividends paid - $1.60 per share
 ($.50 per share as restated to reflect
  stock split)                                                          (1,521)
Sale of common stock                         9          9        572
Treasury stock transaction-net
Balance, December 31, 1997               1,196      1,196     11,369    23,839

Net income, year ended December 31, 1998                                 4,474
Adjustment of unrealized gain (loss) on
 securities available-for-sale, net of
 applicable deferred income taxes ($120)
 during the year
Cash dividends paid - $.75 per share                                    (2,430)
Sale of common stock                       348        348      5,354
Treasury stock transactions - net                                 17
Adjustments to par value of common
  stock                                  2,146      2,146     (2,149)
Loan proceeds - ESOP obligation
Principal payments - ESOP
Balance, December 31, 1998               3,690      3,690     14,591   25,883

Net income, year ended December 31, 1999                                5,799

Adjustment of record unrealized
 gain(loss) on securities available-
 for-sale, net of applicable deferred
 income taxes ($1,644) during the year
Cash dividends paid - $.90 per share                                   (3,384)
Sale of common stock                        15         15        435
Treasury stock transactions-net                                    8
Principal payments - ESOP

Balance, December 31, 1999               3,705     $3,705    $15,034  $28,298
                                     =========   =========   ======== ========


     See accompanying notes to consolidated financial statements.




      <PAGE>51                       FIRST CITIZENS BANCSHARES, INC.,
                                     --------------------------------
                                            AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               Years Ended December 31, 1999, 1998 and 1997
                                                             Obligation
                                    Accumulated              Of Employee
                                       Other                 Stock Total
                                   Comprehensive        Ownership Shareholder's
                                Income   Treasury Stock   Plan         Equity
                                ------   --------------   ----          -----


Balance, January 1, 1997       $   68     $     (8)     $      0     $  32,674
Net income, year ended
  December 31, 1997                                                      4,730
Adjustment of unrealized
 gain(loss) on securities
 available-for-sale, net of
 applicable deferred income
 taxes ($142) during the year     213                                      213
Cash dividends paid - $1.60
 per share($.50 per share as
 restated to reflect stock split)                                       (1,521)
Sale of common stock                                                       581
Treasury stock transaction-net                   1                           1
                               -------   ---------     ---------     ---------
Balance, December 31, 1997        281           (7)            0        36,678

Net income, year ended
 December 31, 1998                                                       4,474
Adjustment of unrealized
 gain(loss) on securities
 available-for-sale, net of
 applicable deferred income
 taxes ($120) during the year     174                                     174
Cash dividends paid - $.75 per
 share                                                                 (2,430)
Sale of common stock                                                    5,702
Treasury stock transactions - net             (119)                      (102)
Adjustments to par value of
 common stock                                   (3)                        (6)
Loan proceeds - ESOP obligation                          (2,000)       (2,000)
Principal payments - ESOP                                   592           592
                             ---------    --------     ---------      --------
Balance, December 31, 1998        455        (129)      (1,408)        43,082

Net income, year ended
 December 31, 1999                                                      5,799
Adjustment of record
 unrealized gain(loss) on
 securities available-
 for-sale, net of applicable
 deferred income taxes
 ($1,644) during the year     (2,491)                                  (2,491)
Cash dividends paid -
  $.90 per share                                                       (3,384)
Sale of common stock                                                      435
Treasury stock
 transactions-net                            (75)                         (67)
Principal payments - ESOP                                  291            291
                             ---------   ---------    ---------     ----------
Balance, December 31, 1999  $ (2,036)   $   (204)     $ (1,117)     $  43,680
                              ========    ========    ========     ==========


   See accompanying notes to consolidated financial statements.



     <PAGE>52

                           FIRST CITIZENS BANCSHARES, INC.,
                                AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOW
                     Years Ended December 31, 1999, 1998, and 1997

                                                1999           1998       1997
         Operating Activities                            (in thousands)

Net income                                   $  5,799      $  4,474  $   4,730
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Provision for loan losses                      720         1,226        945
   Provision for depreciation                   1,262         1,103      1,116
   Provision for amortization-intangibles         351           201
   Deferred income taxes                       (1,032)         (230)        55
   Gain on sale of other real estate                             (3)        (2)
   Realized investment
     security (gains)                             (93)          (62)       (93)
   (Increase) decrease in accrued
     interest receivable                         (158)         (984)      (120)
   Increase (decrease) in accrued
     interest payable                            (365)          130       (225)
   Increase in other assets                    (2,192)       (6,594)    (1,930)
   Increase (decrease) in other liabilities       694          (353)       225
                                             ---------     ---------  --------

        NET CASH PROVIDED (USED) BY
        OPERATING ACTIVITIES                 $  4,986      $ (1,092)  $  4,701
                                             --------      ---------  --------

    Investing Activities

Proceeds of maturities of held-to-
  maturity investment securities             $  7,866      $ 15,625   $  6,985
Purchases of held-to-maturity investment
  securities                                   (2,500)      (19,757)      (414)
Proceeds of sales and maturities of available-
  for-sale investment securities               15,800        10,294     19,732
Purchases of available-for-sale investment
  securities                                  (12,971)      (38,188)   (19,385)
Increase in loans - net                       (18,920)      (45,432)   (19,233)
Purchase of premises and equipment             (3,451)       (2,736)    (1,167)
                                             --------     ---------   --------

       NET CASH USED BY
       INVESTING ACTIVITIES                  $(14,176)    $ (80,163)  $(13,382)
                                             --------     ---------   --------


      Financing Activities

Net increase in demand deposits,
  NOW accounts and savings accounts          $ (4,765)    $  30,608   $  9,116
Increase (decrease) in time deposits-net       10,885        20,116      3,688
Increase in long-term borrowing                              23,116      7,903
Payment of principal on long-term debt        (14,222)       (9,776)      (270)
Proceeds from sale of common stock                450         4,335        763
Cash dividends paid                            (3,384)       (2,430)    (1,521)
Net increase in short-term
  borrowings                                    7,983        16,341        540
Treasury stock transactions-net                   (67)         (102)         1
                                             ---------    ----------  --------

     NET CASH PROVIDED (USED) BY
     FINANCING ACTIVITIES                    $ (3,120)    $  82,208   $ 20,220
                                             ---------    ---------   --------

    INCREASE (DECREASE) IN CASH AND
       CASH EQUIVALENTS                      $(12,310)    $     953   $ 11,539

Cash and cash equivalents at beginning
  of year                                      29,720        28,767     17,228
                                             --------     ---------    -------

    CASH AND CASH EQUIVALENTS AT
         END OF YEAR                         $ 17,410     $  29,720   $ 28,767
                                             ========     =========   ========

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

                                                1999         1998       1997
                                                ----         ----       ----
Interest                                     $ 17,145     $  17,152   $12,884
Income taxes                                 $  2,400     $   2,428   $ 2,355

    See accompanying notes to consolidated financial statements.


<PAGE>53

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                            December 31, 1999 & 1998

Note 1 - Summary of Significant Accounting and Reporting Policies

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

BASIS OF PRESENTATION

The  consolidated  financial  statements  include all accounts of First Citizens
Bancshares,  Inc. and its subsidiaries  First Citizens National Bank and Bank of
Troy. First Citizens  Bancshares,  Inc,'s  investments in these subsidiaries are
reflected  on the Parent  Company  balance  sheet (Note 13) at the equity in the
underlying assets.

Bank of Troy was acquired on March 5, 1998, in a transaction  accounted for as a
purchase,  and therefore,  operations of Bank of Troy from March 5, 1998 forward
are included in the consolidated financial statements.

Effective January 1, 1999, First Citizens  Bancshares,  Inc. acquired First
Volunteer  Corporation and its subsidiary,  First Volunteer Bank, in a
transaction accounted for as a pooling-of-interests.

During the year ended December 31, 1999,  Bank of Troy and First  Volunteer Bank
were merged with First  Citizens  National  Bank  resulting in one  wholly-owned
subsidiary  of First  Citizens  Bancshares,  Inc.  operating  as First  Citizens
National Bank.

All significant inter-company accounts are eliminated in consolidation.

NATURE OF OPERATIONS

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

BASIS OF ACCOUNTING

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

USES OF ESTIMATES

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

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


<PAGE>


      <PAGE>54

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

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

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

 Investment securities are classified as follows:

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

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

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

LOANS

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

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

ALLOWANCE FOR LOAN LOSSES

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


<PAGE>



<PAGE>55

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


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


      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.  Expenses  incurred  in  connection  with  ownership,   subsequent
adjustments to book value, and gains and losses upon disposition are included in
other non-interest expenses.

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

INCOME TAXES

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

INTEREST INCOME ON LOANS

Interest  income on commercial and real estate loans is computed on the basis of
the daily principal balance  outstanding  using the accrual method.  Interest on
installment loans is credited to operations by the level-yield 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>56

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                            December 31, 1999 & 1998


Note 2 - Investment Securities

The following tables reflect amortized cost, unrealized gains, unrealized losses
and fair value of investment  securities for the balance sheet dates  presented,
segregated into held-to-maturity and available-for-sale categories:

<TABLE>
<CAPTION>                                             December 31, 1999
                                                      -----------------
                                                       Held-To-Maturity
                                                     Gross          Gross
                                                   Unrealized     Unrealized
                                 Amortized Cost      Gains          Losses      Fair Value
                                 --------------      -----          ------      ----------
                                                         (in thousands)
<S>                                 <C>              <C>            <C>        <C>
U.S. Treasury securities and
 obligations of U.S. Government
 corporations and agencies          $16,984          $              $   476       $16,508

Obligations of states and
 political subdivisions               3,282                 4           106         3,180

Mortgage-backed securities               79                 1                          80


  TOTAL SECURITIES INVESTMENTS      $20,345          $      5       $    582      $19,768
                                    =======          ========       ========      =======

                                                      Available-for-Sale
                                                     Gross          Gross
                                                   Unrealized     Unrealized
                                  Amortized Cost      Gains          Losses     Fair Value
                                  --------------      -----          ------     ----------
                                                           (in thousands)
U.S. Treasury securities and
 obligations of U.S. Government
 corporations and agencies          $57,880           $    61       $  2,775      $55,166

Obligations of states and
 political subdivisions               9,557                 7            331        9,233

Mortgage-backed securities           11,511                21            389       11,143
                                    -------          --------       --------   ----------

      Total Debt Securities         $78,948          $     89       $  3,495   $   75,542

  Equity investments                  3,223                27                       3,250
                                    -------          --------       --------   ----------

  TOTAL SECURITIES INVESTMENTS      $82,171          $    116      $   3,495   $   78,792
                                    =======          ========      =========   ==========
</TABLE>


<PAGE>


      <PAGE>57

                         FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                     NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                               December 31, 1999 & 1998

  Note 2 - Investment Securities (Continued)
  <TABLE>
  <CAPTION>
                                                       December 31, 1998
                                                        Held-To-Maturity
                                   Gross Gross
                              Unrealized Unrealized
                                    Amortized Cost     Gains          Losses       Fair Value
  <S>                                <C>               <C>          <C>           <C>
  U.S. Treasury securities and
   obligations of U.S. Government
   corporations and agencies         $18,985           $    112     $     87      $    19,010

  Obligations of states and
   political subdivisions              6,225                 56                         6,281

  Mortgage-backed securities             501                  6                           507
                                     -------           --------     --------      -----------

      TOTAL SECURITIES INVESTMENTS   $25,711           $    174     $     87      $    25,798
                                     =======           ========     ========      ===========


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

  U.S. Treasury securities and
   obligations  of U.S. Government
   corporations and agencies          $53,613         $    648      $    131      $    54,130

  Obligations of states and
   political subdivisions              10,771              162            31           10,902

  Mortgage-backed securities           15,773               81            49           15,805
                                      -------         --------       -------      -----------

          Total Debt Securities       $80,157         $    891       $   211      $    80,837

      Equity investments                3,159               23                          3,182
                                      -------         --------       -------      -----------

       TOTAL SECURITIES INVESTMENTS   $83,316         $    914      $    211      $    84,019
                                      =======         ========      ========      ===========
  </TABLE>


<PAGE>


      <PAGE>58
                       FIRST CITIZENS BANCSHARES, INC.,
                               AND SUBSIDIARY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                             December 31, 1999 & 1998

Note 2 - Investment Securities (Continued)

The tables below summarize  maturities of debt securities  held-to-maturity and
available- for-sale as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
                                                December 31, 1999

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

One Year or less            $16,233         $15,770        $43,152        $41,191
After one year through
  five years                  2,603           2,584         17,537         16,991
After five years through
  ten years                   1,334           1,239          9,579          9,225
After ten years                 175             175          8,680          8,135
                            -------         -------        -------        -------
                            $20,345         $19,768        $78,948        $75,542
                            =======         =======        =======        =======

                                                December 31, 1998

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

One Year or less             $ 3,164        $ 3,183        $ 5,867        $ 5,844
After one year through
 five years                   16,941         17,091         20,597         20,471
After five years through
 ten years                     5,058          5,105         29,389         29,659
After ten years                  548            419         24,304         24,863
                             -------        -------        -------        -------
                             $25,711        $25,798        $80,157        $80,837
                             =======        =======        =======        =======

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


Year Ended December 31                 Gross Sales    Gains    Losses      Net
----------------------                 -----------    -----    ------      ---
                                                     (in thousands)
1999 - Securities held-to-maturity     $   998        $    1   $   2     $ (1)
1999 - Securities available-for-sale     6,353            96       2       94
1998 - Securities held to maturity      15,558            82      57       25
1998 - Securities available-for-sale    10,425            36               36
1997 - Trading securities                3,500            31               31
1997 - Securities held-to-maturity       7,577            69       6       63


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, 1999 and 1998,  investment  securities  were  pledged to secure
government, public and trust deposits as follows:

         December 31           Amortized Cost      Fair Value
         -----------           --------------      ----------
                                       (in thousands)
            1999                 $86,762            $83,312
            1998                  74,078             74,779



      <PAGE>59
                           FIRST CITIZENS BANCSHARES, INC.,
                                    AND SUBSIDIARY
                        NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                December 31, 1999 & 1998

Note 3 - Loans
Loans outstanding at December 31, 1999 and 1998 were comprised of the following:
                                     1999              1998
                                     ----              ----
                                         (in thousands)
Commercial, financial and
  agricultural                     $ 60,446         $ 79,917
Real estate - construction           34,431           27,048
Real estate - mortgage              189,787          158,237
Installment                          37,595           33,328
Other loans                           3,118            8,801
                                   --------         --------
                                    325,377          307,331
Less:  Allowance for loan losses      3,718            3,872
                                   --------          -------
                                   $321,659         $303,459

In  conformity  with  Statement No. 114 of the  Financial  Accounting  Standards
Board,  the Corporation has recognized loans with carrying values of $872,000 at
December 31, 1999, and $1,422,000 at December 31, 1998, as being  impaired.  The
balance  maintained  in the  Allowance  for Loan  Losses  related  to these  was
$157,623 at December 31, 1999, and $190,785 at December 31, 1998. As of December
31,  1999,  loans  totaling  $445,000  were  directly  related  to the  specific
allowance for loan losses.

Note 4 - Allowance for Loan Losses
An  analysis  of the  allowance  for loan  losses  during the three  years ended
December 31 is as follows:
                                        1999         1998       1997
                                        ----         ----       ----
Balance, beginning of period          $3,872        $3,122     $2,585
Provision for loan losses charged
  to operations                          720         1,226        945
Loans charged to allowance,
  net of loan loss recoveries of
  $308,669, $324,521, and $132,521      (874)         (846)      (408)
Addition incident to Mergers                           370
                                    ---------       ------
Balance, end of period                $3,718        $3,872     $3,122
                                      ======        ======     ======

For tax purposes,  the Corporation deducts the maximum amount allowable.  During
the year  ended  December  31,  1999,  the  deduction  taken  was  681,653.  The
deductions  for tax  purposes  in 1998  and 1997  were  $479,396  and  $412,525,
respectively.

Note 5 - Premises and Equipment

The fixed  assets used in the  ordinary  course of business  are  summarized  as
follows:
                         Useful Lives
                           in Years        1999           1998
                           --------        ----           ----
                                              (in thousands)
Land                                    $ 1,653         $ 1,712
Buildings                  5 to 50       12,425          10,340
Furniture and equipment    3 to 20       10,341           9,187
                                        -------         -------
                                         24,419          21,239
Less:  Accumulated depreciation          11,002          10,011
                                        -------         -------
     Net Fixed Assets                   $13,417         $11,228
                                        =======         =======


<PAGE>


      <PAGE>60

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                            December 31, 1999 & 1998

Note 6 - Repossessed Real Property

The carrying  value of  repossessed  real property on the balance  sheets of the
Corporation is $390,458 at December 31, 1999, and $136,937 at December 31, 1998.
The value of  repossessed  real  property is reflected on the balance  sheets 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:

                                            1999       1998
                                            ----       ----
                                             (in thousands)

Time Deposits                            $70,862     $49,818
Savings Deposits                          53,516      57,321

NOW  accounts,  included  in savings  deposits  on the  balance  sheet,  totaled
$40,365,018 at December 31, 1999 and $40,748,256 at December 31, 1998.

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,  1999  and  1998,  were  $ and
$4,469,852, respectively.

Time deposits maturing in years subsequent to December 31, 1999 are as follows:

               Year ended December 31       (In Thousands)

                    2000                       $189,074
                    2001                         13,906
                    2002                          3,117
                    2003                          2,486
                    2004                          1,232
                 Thereafter                          20
                                               --------
                   Total                       $209,835
                                               ========

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  $610,718 in 1999,
$565,557 in 1998, and $428,969 in 1997.




      <PAGE>61

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

Note 9 - Income Taxes

Provision for income taxes is comprised of the following:

                                      1999        1998          1997
                                      ----        ----          ----
                                               (in thousands)
Federal income tax expense (benefit)
  Current                             $2,530     $2,002      $2,194
  Deferred                               (26)      (196)       (174)

State income tax expense (benefit)
  Current                                511        438         441
  Deferred                                33        (34)        (26)
                                      ------     -------     -------

                                      $3,048     $2,210      $2,435
                                      ======     ======      ======

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:

                                        1999        1998        1997
                                        ----        ----        ----
                                               (in thousands)
Tax expense at statutory rate         $3,008      $2,272     $2,436
Increase (decrease) resulting from:
  State income taxes, net of federal
    income tax benefit                   359         265        283
Tax exempt income                       (435)       (190)      (233)
Effect of life insurance                (168)        (80)
Amortization of goodwill                 124          75
Other items                              160        (132)       (51)
                                      ------      -------    -------

                                      $3,048      $2,210     $2,435
                                      ======      ======     ======

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

                                                     December 31
                                                 1999          1998
                                                 ----          ----
                                                    (in thousands)
Deferred tax liabilities                        $  (568)      $(381)
Deferred tax assets                               2,612         735
                                                -------        ----

Net deferred tax assets                          $2,044       $ 354
                                                 ======       =====





      <PAGE>62

                       FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                        NOTES TO FINANCIAL STATEMENTS
                         December 31, 1999 and 1998

Note 10 - Regulatory Matters

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

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

As of December 31, 1999,  the most recent  notification  from the Banks' primary
regulatory  authorities  categorized  the  Banks as well  capitalized  under the
regulatory  framework for prompt  corrective  action.  To be categorized as well
capitalized,   the  Banks  must  maintain  minimum  total  risk-based,   Tier  1
risk-based,  and Tier 1 leverage ratios as set forth in the Table.  There are no
conditions  or events since that  notification  that  management  believes  have
changed the institution's category.


      <PAGE>63
                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


Note 10 - Regulatory Matters (Continued)

                          (in thousands)
                                                      For Capital
 First Citizens National Bank      Actual          Adequacy Purposes
                                   ------          -----------------

  Amount                     Amount      Ratio    Amount          Ratio

  As of December 31, 1999:
   Total Capital (To Risk
    Weighted Assets)        $44,071      13.59%  $25,943     >    8.0 %
                                                             -
   Tier I Capital (To Risk
    Weighted Assets)         41,884      12.91%   12,972     >    4.0 %
                                                             -

   Tier I Capital (To
     Average Assets)         41,884       8.91%   18,803     >    4.0 %
                                                             -

   As of December 31, 1998:
    Total Capital (To Risk
     Weighted Assets)       $34,369      12.14%  $22,651     >    8.0 %
                                                             -

   Tier I Capital (To Risk
     Weighted Assets)        33,917      11.98%   11,326     >    4.0 %
                                                             -

   Tier I Capital (To
    Average Assets)          33,917       8.32%   16,298     >    4.0 %
                                                             -


  Bank of Troy
  Amount                     Amount      Ratio    Amount         Ratio

  As of December 31, 1998:
   Total Capital (To Risk
    Weighted Assets)         $9,463     26.90%    $2,814     >    8.0 %
                                                             -

  Tier I Capital (To Risk
    Weighted Assets)          6,174     17.55%     1,407     >    4.0 %
                                                             -

  Tier I Capital (To
   Average Assets)            6,174     11.04%     2,238     >    4.0 %
                                                             -

First Volunteer Bank
  Amount                    Amount      Ratio     Amount         Ratio

  As of December 31, 1998:
   Total Capital (To Risk
    Weighted Assets)         $3,997     13.07%    $2,447    >    8.0 %
                                                            -

  Tier I Capital (To Risk
    Weighted Assets)          4,024     13.15%     1,224    >    4.0 %
                                                            -

  Tier I Capital (To
    Average Assets)           4,024      8.00%     2,013    >    4.0 %
                                                            -

      <PAGE>64

                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998


Note 10 - Regulatory Matters (Continued)


                                               To Be Well
                                            Capitalized Under
                                            Prompt Corrective
                                            Action Provisions

First Citizens National Bank
Amount                                        Amount           Ratio
As of December 31, 1999:
 Total Capital (To Risk Weighted Assets)     $32,249     >      10.0%
                                                         -

 Tier I Capital (To Risk Weighted Assets)     19,457     >       6.0%
                                                         -
 Tier I Capital (To Average Assets)           23,504     >       5.0%
                                                         -

As of December 31, 1998:
 Total Capital (To Risk Weighted Assets)     $28,315     >      10.0%
                                                         -

 Tier I Capital (To Risk Weighted Assets)     16,988     >       6.0%
                                                         -
 Tier I Capital (To Average Assets)           20,372     >       5.0%
                                                         -
Bank of Troy
Amount                                        Amount           Ratio
As of December 31, 1998:
 Total Capital (To Risk Weighted Assets)     $ 3,518     >      10.0%
                                                         -
 Tier I Capital (To Risk Weighted Assets)      2,111     >       6.0%
                                                         -
 Tier I Capital (To Average Assets)            2,798     >       5.0%
                                                         -

First Volunteer Bank
Amount                                        Amount           Ratio
As of December 31, 1998:
 Total Capital (To Risk Weighted Assets)     $ 3,059     >      10.0%
                                                         -
 Tier I Capital (To Risk Weighted Assets)      1,835     >       6.0%
                                                         -
 Tier I Capital (To Average Assets)            2,516     >       5.0%
                                                         -



      <PAGE>65
                        FIRST CITIZENS BANCSHARES, INC.,
                                 AND SUBSIDIARY
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                              December 31, 1999 & 1998

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 1999 and 1998 were
$1,883,000 and $337,000, 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,  1999,
approximately $9 million of retained earnings was available for future dividends
from the subsidiary to the parent corporation.

Note 13 - Condensed Financial Information

                           First Citizens Bancshares, Inc.
                                (Parent Company Only)
                                                        December 31
                                                     1999        1998
                            BALANCE SHEETS              (in thousands)
                            ---------------

ASSETS
    Cash                                         $   497       $   987
    Investment in subsidiaries                    44,071        44,152
    Other assets                                     238           340
                                                 -------       -------
    TOTAL ASSETS                                 $44,806       $45,479
                                                 =======       =======

LIABILITIES AND STOCKHOLDERS' EQUITY
   LIABILITIES
   Long-term debt                                $             $   907
   Note payable of ESOP                            1,117         1,408
   Accrued expenses                                    9            82
                                                 -------       -------
TOTAL LIABILITIES                                  1,126         2,397
                                                 -------       -------

STOCKHOLDERS' EQUITY                              43,680        43,082
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $44,806       $45,479

                          STATEMENTS OF INCOME
                                                        December 31
                                                   1999          1998
                                                   ----          ----
INCOME                                                 (in thousands)
 Dividends from bank subsidiary                  $ 3,468       $ 5,774
 Other income                                         34            50
                                                 -------       -------
TOTAL INCOME                                       3,502         5,824
                                                 -------       -------

EXPENSES
  Interest expense                                    19           119
  Other expenses                                     160           240
                                                 -------       -------

TOTAL EXPENSES                                       179           359
                                                 -------       -------

Income before income taxes and equity
 in undistributed net income of bank subsidiary    3,323         5,465
Income tax expense (benefit)                         (65)         (117)
                                                --------       --------
3,388         5,582
Equity in undistributed net income of
 bank subsidiary                                   2,411        (1,108)
                                                   -----       --------
  NET INCOME                                      $5,799       $ 4,474
                                                  ======       =======


      <PAGE>66

                     FIRST CITIZENS BANCSHARES, INC.,
                              AND SUBSIDIARY
                NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                        December 31, 1999 & 1998

Note 13 - Condensed Financial Information (continued)

                           First Citizens Bancshares, Inc.
                                (Parent Company Only)

                               STATEMENTS OF CASH FLOW
                                                        December 31
                                                    1999           1998
                                                     (in thousands)
                                                    ----           ----
Operating Activities
Net income                                         $5,799       $4,474
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Undistributed income of subsidiary             (2,411)       1,108
    (Increase) decrease in other assets               102         (143)
    (Increase) decrease in other liabilities          (72)          31
                                                  --------      ------

     NET CASH PROVIDED BY OPERATING ACTIVITIES    $ 3,418       $5,470
                                                  -------       ------

Investing Activities
Proceeds of sale of other real estate             $             $  164
Investment in subsidiary                                        (9,692)

                                                  --------      -------
NET CASH PROVIDED (USED)BY INVESTING ACTIVITIES   $            $(9,528)
                                                  --------     --------

Financing Activities
Proceeds of note payable                          $            $ 4,116
Payment of principal on note                         (907)      (3,508)
Payment of dividends and payments in lieu of
  fractional shares                                (3,384)      (2,429)
Sale of Common Stock                                  450        5,696
Treasury Stock transactions - net                     (67)        (102)
                                                   -------     --------

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES  $(3,908)     $ 3,773
                                                  --------     -------

 INCREASE (DECREASE) IN CASH                         (490)        (285)

Cash at beginning of year                             987        1,272
                                                   ------      -------

  CASH AT END OF YEAR                              $  497      $   987
                                                   ======      =======


            <PAGE>67

                               FIRST CITIZENS BANCSHARES, INC.,
                                       AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                 December 31, 1999& 1998

      Note 14 - Long Term Debt

      At December  31, 1998,  First  Citizens  Bancshares,  Inc. is obligated to
      another  financial  institution  on a  revolving  term note with a maximum
      available  credit limit of ten million  dollars,  ($10,000,000).  The note
      matures on January 2, 2008 and bears  interest at one and one-fifth of one
      percentage  point  (1.2%)  above the  London  Interbank  Offered  Rate for
      one-month periods which is published  monthly.  The note is secured by all
      of the outstanding  capital stock of the Corporation's  subsidiary,  First
      Citizens  National  Bank.  The note was  incurred  in order to acquire the
      Corporation's  subsidiary  Bank of Troy,  and at December  31,  1998,  the
      outstanding  principal balance is $682,295.  The balance was paid entirely
      during the year ended December 31, 1999.

      First  Citizens  National Bank has secured  advances from the Federal Home
      Loan  Bank  in the  amounts  of  $33,963,571  at  December  31,  1999  and
      $35,010,053  at December 31, 1998.  At December 31, 1999,  $26,263,571  is
      considered  long-term in nature.  These  advances  bear  interest at rates
      which vary from 4.2% to 6.6% and mature in the years  2008  through  2009.
      The  obligations  are  secured by the  Bank's  entire  portfolio  of fully
      disbursed, one to four family residential mortgages.

      Bank of Troy is indebted to the Federal Home Loan Bank on similar advances
      totaling  $2,000,000 as of December 31, 1998. These loans are also secured
      by Bank of  Troy's  fully  disbursed  one to four  family  mortgages.  The
      obligations  bear  interest  at rates  which  vary  from 4.8% to 5.08% and
      matures in 2008. When Bank of Troy was merged with First Citizens National
      Bank in 1999,  these  obligations  became part of the obligations of First
      Citizens National Bank to the Federal Home Loan Bank.

      Delta Finance  Company,  a subsidiary of First Citizens  National Bank, is
      obligated to General Appliance and Furniture Company, Inc. on an unsecured
      note payable in the amount of $1,000,000, which bears interest at the rate
      of six and  one-half  percent  (6.5%) per annum and matures  February  18,
      2000. The Company has the intent and ability to renew the loan for another
      five years.

      Averages for the years 1999 and 1998 are as follows:

                                       Average   Average      Average
                                       Volume Interest Rate    Maturity
      1999                                    (in thousands)
      ----
      First Citizens Bancshares, Inc. $     913     6.89%       6 years
      First Citizens National Bank       12,528     5.36%       5 years
      Delta Finance Company               1,000     6.00%       5 years

      1998
      First Citizens Bancshares, Inc.       303     6.89%       2 years
      First Citizens National Bank       13,728     5.80%       7 years
      Bank of Troy                        2,000     5.80%       7 years
      Delta Finance Company               1,000     6.50%       5 years
      First Volunteer Corporation         1,190     5.80%       8 years



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

Note 14 - Long Term Debt (continued)

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

                    Year Ending December 31,
                                  2000                  $ 1,000
                                  2001                        0
                                  2002                    2,000
                                  2003                    1,000
                                  2004                    1,000
                              Thereafter                  6,264
                                                        $11,264

Note 15 - Securities Sold Under Agreement to Repurchase

At  December  31,  1999  and  1998,  First  Citizens   National  Bank  had
out-standing balances in short-term borrowings as follows:

                                            1999                       1998
                                            ----                       ----
                                                      (in thousands)
      Outstanding balance                 $46,090                     $38,107
      Weighted average interest rate         4.56%                       4.40%
      Average balances outstanding
        during the year                    32,759                      27,777
      Average weighted average
        interest rate                        4.46%                       4.46%

      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                          1999          1998             1997
      ---------                          ----          ----             ----
      Other real estate acquired in
       satisfaction of loans            $  824       $  249            $  87
      Investment in White & Associates/
       First Citizens Insurance, L.L.C.               1,362
      Investment in First Volunteer
       Corporation                       3,775

      Note 17 - Financial Instruments with Off-Balance Sheet Risk

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

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


            <PAGE>69
                             FIRST CITIZENS BANCSHARES, INC.,
                                      AND SUBSIDIARY
                              NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999 and 1998

      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,  1999  and  1998,  First  Citizens   National  Bank  had
      outstanding loan commitments of $55,042,000 and $51,610,695, respectively.
      Of these commitments, none had an original maturity in excess of one year.

      Standby  letters  of  credit  and  financial  guarantees  are  conditional
      commitments  issued by the Bank to guarantee the performance of a customer
      to a third party.  Those guarantees are issued primarily to support public
      and  private  borrowing  arrangements,  and the credit  risk  involved  is
      essentially the same as that involved in extending loans to customers. The
      bank  requires  collateral to secure these  commitments  when it is deemed
      necessary.  At December 31, 1999 and 1998,  outstanding standby letters of
      credit totaled $1,761,000 and $1,830,426, respectively.

      In the normal  course of business,  First  Citizens  National Bank extends
      loans, which are subsequently sold to other lenders, including agencies of
      the U. S.  government.  Certain of these loans are conveyed  with recourse
      creating  off-balance sheet risk with regard to the  collectibility of the
      loan. At December 31, 1999 and 1998, however, the Bank had no loans sold.

      Note 18 - Significant Concentrations of Credit Risk

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

      Note 19 - Disclosure of Fair Value of Financial Instruments

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

      CASH AND CASH EQUIVALENTS

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

      INVESTMENT SECURITIES

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


            <PAGE>70
                        FIRST CITIZENS BANCSHARES, INC.,
                                  AND SUBSIDIARY
                         NOTES TO FINANCIAL STATEMENTS
                           December 31, 1999 and 1998

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

    LOANS RECEIVABLE

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

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

    DEPOSIT LIABILITIES

    Demand Deposits

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

    Variable-Rate Deposits

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

    Fixed-Rate Deposits

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

    SHORT-TERM BORROWINGS

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

    Long-Term Debt

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

    Other Liabilities

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

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


          <PAGE>71
                            FIRST CITIZENS BANCSHARES, INC.,
                                     AND SUBSIDIARY
                              NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999 and 1998

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

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

                                        1999                1998
                                 -----------------   --------------
                                 Carrying   Fair     Carrying    Fair
                                 Amount    Value     Amount     Value
    Financial Assets                        (in thousands)
    ----------------

    Cash and cash equivalents   $ 17,410  $ 17,410  $ 29,720  $ 29,720

    Investment securities         99,137    98,560   109,730   109,817

     Loans                       325,377             307,331
    Less:  Allowance for
           loan losses            (3,718)            (3,872)
                               ---------  --------  -------
    Loans, net of allowance      321,659   317,218  303,459    304,113

    Accrued interest
      receivable                   5,353     5,353    5,195      5,195


    Financial Liabilities

      Deposits                   366,819   365,458  360,699    361,699


      Short-term borrowings       46,090    46,090   38,107     38,107

      Long-term debt              11,264    11,010   25,486     25,996

      Other liabilities            3,700     3,700    3,371     3,371
    Unrecognized Financial
      Instruments

      Commitments to extend       55,042    55,042   51,611     51,611
           credit
      Standby letter of            1,761     1,761    1,830      1,830
       credit

    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.


            <PAGE>72
                               FIRST CITIZENS BANCSHARES, INC.,
                                       AND SUBSIDIARY
                                  NOTES TO FINANCIAL STATEMENTS
                                    December 31, 1999 and 1998

      Note 21 - Mergers and Acquisitions

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

       During the year ended December 31, 1999, the Bank of Troy was merged with
       First Citizens National Bank and is operated as a branch bank.

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

                                             (in thousands)
                                              1998          1997
                                              ----          ----
         Interest income                    $   31,625   $   29,433
             Interest expense                   15,493       14,415
                                            ----------   ----------
             Net interest income                16,132       15,018
             Provision for loan losses           1,028        1,117
                                            ----------    ---------
             Net interest income after
               Provision for loan losses        15,104       13,901
             Other income                        4,326        4,024
             Other expenses                     13,103       11,482
                                            ----------    ---------
             Net income before income taxes      6,327        6,443
             Provision for income taxes          2,090        2,154
                                            ----------    ---------
             Net income                          4,237        4,289
                                            ==========    =========
             Earnings per share                   1.35         1.44
                                            ==========    =========
             Weighted average shares
               Outstanding                       3,145        2,981

       Also, on February 11, 1998, First Citizens  Bancshares,  Inc.  executed a
       transaction  whereby  the  Corporation  acquired  a fifty  percent  (50%)
       interest  in White &  Associates/First  Citizens  Insurance,  L.L.C.,  an
       insurance  agency  operating in  Dyersburg,  Tennessee.  The  Corporation
       issued  13,779  shares of common  stock and paid  $216,000  in cash for a
       total value of $1,469,905 in cash.  The  investment is recorded using the
       equity  method and has a book value of $781,542 at December  31, 1999 and
       $1,625,441 at December 31, 1998. The  transaction  created  $1,361,905 of
       goodwill on the books of First Citizens National Bank associated with the
       investment in this Company.

       First Citizens  National Bank and White & Associates began the process of
       forming a credit insurance company during 1998. At December 28, 1998, the
       Company had not been  chartered  and no  activity  had taken place in the
       credit insurance company.  The Bank's investment was $53,901.  During the
       year ended December 31, 1999, the credit insurance  company became active
       and experienced an operating profit of $19,039.



            <PAGE>73
                              FIRST CITIZENS BANCSHARES, INC.,
                                       AND SUBSIDIARY
                                NOTES TO FINANCIAL STATEMENTS
                                  December 31, 1999 and 1998

      Also,  during  1998,  First  Citizens  Bancshares,  Inc.  entered  into an
      agreement  to  acquire  all of the  outstanding  capital  stock  of  First
      Volunteer  Corporation,  a one-bank  holding  company  which  owned  First
      Volunteer  Bank  located in Union City,  Tennessee.  The  acquisition  was
      consummated  on  February  12,  1999,  in  a  transaction  recorded  as  a
      pooling-of-interests  which  involved  the  issuance of 445,251  shares of
      First Citizens Bancshares, Inc. common stock. Accordingly,  all historical
      financial  information of First Citizens Bancshares,  Inc. for all periods
      presented   has  been  restated  to  include  the   historical   financial
      information of First Volunteer Corporation.  Subsequently, First Volunteer
      Bank was merged  with First  Citizens  National  Bank and is operated as a
      branch bank.

      Note 22 -  Common Capital Stock

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

    Note 23 - Amounts Receivable From Certain Persons
       <TABLE>
     <CAPTION>                                   Year Ended December 31, 1999
                                                 ----------------------------
                                                        (In Thousands)

     Column A                   Column B     Column C     Column D          Column E
     --------                   --------     --------     --------          --------
                                Balance at                                 Balance at
                                Beginning                                    End of
                                of Period    Additions   Deductions         Period
                                     Amounts
                                                       Amounts  Written            Not
                                                      Collected   Off     Current Current
     <S>                         <C>        <C>        <C>         <C>     <C>      <C>
     Aggregate indebtedness
       to First Citizens
       National Bank of
       Directors and Executive
       Officers of First
       Citizens Bancshares,
       Inc. (27)                 $8,234     $6,984    $6,591      $-0-    $8,627   $-0-
                                 ======     ======    ======      ====    ======   ====
     Aggregate indebtedness
       to First Citizens
       National Bank of
       Directors and Executive
       Officers of First
       Citizens National
       Bank  (27)                $8,234      $6,984    $6,591     $-0-    $8,627  $-0-
                                 ======      ======    ======     ====    ======  ====

                                              Year Ended December 31, 1998
     Aggregate indebtedness
       to First Citizens
       National Bank of
       Directors and Executive
       Officers of First
       Citizens Bancshares,
       Inc. (23)                 $6,158     $8,114    $5,103      $-0-    $9,169   $-0-
                                 ======     ======    ======      ====    ======   ====
     Aggregate indebtedness
       to First Citizens
       National Bank of
       Directors and Executive
       Officers of First
       Citizens National
       Bank  (23)                $6,211      $8,114    $5,156      $-0-    $9,169  $-0-
                                 ======      ======    ======      ====    ======  ====
     </TABLE>


      <PAGE>74

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.


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' 1999 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  1999  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'  1999  Proxy  Statement  for the Annual
Meeting of  Shareholders  to be held April 19, 2000,  in the  sections  entitled
Voting  Securities  and  Election of  Directors  and is  incorporated  herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Officers, Directors and principal shareholders of the holding company (and their
associates)  have deposit  accounts and other  transactions  with First Citizens
National Bank. These relationships are covered in detail on page 12 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 73  "Amounts  Receivable  from  Certain
Persons".



      <PAGE>75

                                    SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
    Exchange  Act of 1934,  the  registrant  has duly  caused  this report to be
    signed on its behalf by the undersigned, hereunto duly authorized.

                                                FIRST CITIZENS BANCSHARES, INC.


                                                By /s/Stallings Lipford
                                                   Stallings Lipford
                                                   Chairman


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

         Dated:   03/15/00

    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, 2000.

    /s/ Eddie Anderson           /s/John M. Lannom    /s/Dwight Steven Williams
    Eddie Anderson               John M. Lannom       Dwight Steven Williams
    Director                     Director             Director

                                 /s/Stallings Lipford  /s/Katie Winchester
    /s J. Walter Bradshaw        Stallings Lipford     Katie Winchester
    J. Walter Bradshaw           Director              Director
    Director

    /s/James Daniel Carpenter   /s/Milton Magee       /s/Billy S. Yates
    James Daniel Carpenter      Milton Magee          Billy S. Yates
    Director                    Director              Director


    /s/William C. Cloar         /s/Mary Frances McCauley
    William C. Cloar            Mary Frances McCauley
    Director                    Director

                                /s/L. D. Pennington
    /s/Jon Michael Dickerson    L. D. Pennington
    Jon Michael Dickerson       Director
    Director

    /s/Richard Donner           /s/Allen Searcy
    Richard W. Donner           Allen Searcy
    Director                    Director

    /s/Bentley F. Edwards       /s/Green Smitheal III
    Bentley F. Edwards          Green Smitheal
    Director                    Director

    /s/Julius M. Falkoff       /s/William F. Sweat
    Julius M. Falkoff          William F. Sweat
    Director                   Director

    /s/Larry W. Gibson         /s/David R. Taylor
    Larry W. Gibson            David R. Taylor
    Director                   Director

    /s/Ralph E. Henson         /s/Larry S. White
    Ralph E. Henson            Larry S. White
    Director                   Director

    /s/Barry T. Ladd           /s/P. H. White, Jr.
    Barry T. Ladd              P. H. White, Jr.
    Director                   Director