CITIZENS COMMUNITY BANCORP INC, 424B3, 1998-05-06

CITIZENS COMMUNITY BANCORP INC
424B3, 1998-05-06
STATE COMMERCIAL BANKS

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SEC-DOCUMENT
SEC-HEADER
ACCESSION NUMBER:
CONFORMED SUBMISSION TYPE: 424B3
PUBLIC DOCUMENT COUNT:
FILED AS OF DATE: 19980504
SROS: NONE

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: CITIZENS COMMUNITY BANCORP, INC.
CENTRAL INDEX KEY:
STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS
[6711]
IRS NUMBER: 650614044
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 424B3
SEC ACT: 1933ACT
SEC FILE NUMBER: 333-47813
FILM NUMBER:

BUSINESS ADDRESS:
STREET 1: 650 EAST ELKCAM CIRCLE
CITY: MARCO ISLAND
STATE: FL
ZIP: 34145
BUSINESS PHONE: 9413891800

MAIL ADDRESS:
STREET 1: 650 EAST ELKCAM CIRCLE
CITY: MARCO ISLAND
STATE: FL
ZIP: 34145

/SEC-HEADER
DOCUMENT
TYPE 424B3
SEQUENCE 1
DESCRIPTION CITIZENS COMMUNITY BANCORP, INC. 424B3
TEXT

<PAGE>

PURSUANT TO RULE NO. 424(b)(3)
REGISTRATION NO. 333-4713

[Company

Logo]

CITIZENS COMMUNITY BANCORP, INC.
Up To 1,000,000 Shares
Common Stock

Citizens Community Bancorp, Inc., a Florida corporation ("CCBI", or the
"Company" when discussed collectively with Citizens Community Bank of Florida
["Citizens Bank"] and Citizens Financial Corporation ["Citizens Financial"]) is
offering, on a priority basis, up to 1,000,000 shares of common stock, par value
$.01 per share ("Common Stock"), to "Depositors" (existing depositors of
Citizens Bank who are Florida residents and have a "demand account" [defined
herein to be a checking account, NOW account, or money market account with a
minimum balance of $1,000)]), shareholders, employees and directors of the
Company for the first 100 days following the date of this Prospectus (the
"Initial Offering Period"). Each Depositor and shareholder as of the date of
this Prospectus (the "Record Date") will receive a non-transferable right
("Subscription Right") to subscribe for and purchase at $7.50 per share (the
"Subscription Price") a maximum of 3,000 shares individually, or together with
associates of, or persons acting in concert with, such persons (hereinafter
defined as "Related Party"); while each employee and director of the Company is
being given a Subscription Right to purchase, individually or together with a
Related Party, up to a maximum of 30,000 shares of Common Stock. See "Summary -
Employees and Directors Purchase Exception". The offering of Common Stock to
Depositors, shareholders, employees and directors is referred to herein as the
"Initial Offering". The Subscription Right is subject to the availability of
shares. See "Summary - Subscription Right". Immediately following the Initial
Offering, CCBI will offer shares not subscribed for in the Initial Offering to
members of the general public who are Florida residents to whom a copy of this
Prospectus has been delivered (the "Community Offering"). The maximum number of
shares that an individual or their Related Party may purchase in the Community
Offering is 15,000 shares in the aggregate. The Subscription Price in the
Community Offering is $7.50 per share. Individuals who purchase shares in the
Initial Offering will be permitted to subscribe for shares in the Community
Offering up to a maximum of 15,000 shares in the aggregate. The Initial Offering
and the Community Offering are collectively referred to as the "Offering". The
minimum number of shares that can be subscribed for in the Offering is 100
shares. No fractional shares will be issued. The Offering will be terminated,
and all subscription funds, together with any interest earned thereon will be
promptly returned if a minimum of 300,000 shares are not sold within 145 days of
the Record Date.

CCBI reserves the right to reject subscriptions received in the
Community Offering, in whole or in part. Once a subscription is accepted by
CCBI, it cannot be withdrawn. CCBI will not be required to issue shares of
Common Stock pursuant to the Offering to any person or Related Party, who in the
opinion of CCBI, would be required to obtain prior clearance or approval from
any state or federal regulatory authority to own or control such shares. See
"SUMMARY - Purchase Limitation". The Offering may be terminated by the Company
at any time without prior notice. The Offering will be made on a continuous
basis for approximately 12 months following the date of this Prospectus, with
multiple closings.

See "Risk Factors" beginning on page 9 for a discussion of certain
risks that should be carefully considered by prospective purchasers of the
Common Stock offered hereby.

THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION. NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>

------------------------------------------------ -------------------------- -------------------------- -------------------------

Subscription Estimated Fees and Proceeds to the
Price(1) Underwriting Expenses(2) Company(2)
------------------------------------------------ -------------------------- -------------------------- -------------------------
------------------------------------------------ -------------------------- -------------------------- -------------------------

<S> <C> <C> <C>
Per share in the Initial Offering $7.50 $0 $7.50
------------------------------------------------ -------------------------- -------------------------- -------------------------
------------------------------------------------ -------------------------- -------------------------- -------------------------

Per share in the Community Offering $7.50 $0 $7.50
------------------------------------------------ -------------------------- -------------------------- -------------------------
------------------------------------------------ -------------------------- -------------------------- -------------------------

Minimum Offering(3) $2,250,000 $0 $2,250,000
------------------------------------------------ -------------------------- -------------------------- -------------------------
------------------------------------------------ -------------------------- -------------------------- -------------------------

Maximum Offering(4) $7,500,000 $0 $7,500,000
------------------------------------------------ -------------------------- -------------------------- -------------------------
</TABLE>

(1)The securities offered hereby will be sold on a best-efforts 300,000 share
minimum basis, by certain directors and executive officers of the Company
and no commission will be paid on such sales.
(2) Before deducting Offering expenses estimated to be $100,000, including
registration fees, legal and accounting fees, printing and other
miscellaneous expenses.
(3) Amount based on the sale of 300,000 shares at $7.50 per share.
(4) Amount based on the sale of 1,000,000 shares at $7.50 per share.

The date of this Prospectus is April 14, 1998.

<PAGE>

The Common Stock of CCBI is not listed on any exchange and there
currently is not an active market for the shares. There can be no assurance that
an active and liquid trading market for the Common Stock will develop or, if
developed, will be maintained. Currently the price quotation of CCBI's Common
Stock appears on the National Quotation Bureau System "Pink Sheet," under the
symbol "CCBI". It is the intent of CCBI to apply to Nasdaq to have its
securities listed on the Nasdaq SmallCap Market as soon as CCBI is able to meet
the qualification requirements. At the completion of the Offering, the Company
should meet all of the requirements, except for the minimum of three market
makers making a market in its securities. The Company believes that it will
satisfy this requirement, but no assurance can be given that there will be three
active market makers in the Company's securities at the completion of the
Offering, or that the listing requirements for Nasdaq SmallCap Market will not
have changed at that time.

CCBI is offering a maximum of 1,000,000 shares of Common Stock (the
"Maximum Offering") and must sell, in the first 145 days of the Offering, a
minimum of 300,000 shares of Common Stock (the "Minimum Offering") or the
Offering will not be consummated and all funds submitted to the Escrow Agent (as
hereinafter defined) will be promptly returned with interest. See "THE OFFERING
- -- Conditions to Consummation of the Offering". All subscriptions are
irrevocable once accepted by the Company. The Company reserves the absolute
right to cancel all subscriptions and return all subscription funds, including
any income thereon, realized from the investment of such funds, for any reason
whatsoever, at any time prior to the time that the Company withdraws
subscription funds from the Escrow Account. See "TERMS OF THE OFFERING".

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance
therewith, files electronically with the Securities and Exchange Commission
("Commission") through the Commission's Electronic Data Gathering Analysis and
Retrieval ("EDGAR") system, reports, proxy statements and other information
which may also be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and 3475 Lenox Road, N.E., Suite 1000, Atlanta, GA 30326-1232. Copies of such
material may also be reviewed on the Commission's Web Site, http://www.sec.gov.

The Company has electronically filed with the Commission through EDGAR
a Registration Statement on Form SB-2 ("Registration Statement") under the
Securities Act of 1933 ("Securities Act"), with respect to the Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and in the exhibits thereto. Certain items
were omitted in accordance with the rules and regulations of the Commission. Any
interested party may inspect the Registration Statement without charge at the
public reference facilities of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and may obtain copies of all or any part of it from the
Commission upon payment of the fees prescribed by the Commission. Statements
contained herein which refer to a document filed as an exhibit to the
Registration Statement are qualified in their entirety by reference to the copy
of such document filed with the Commission. The Registration Statement may also
be reviewed on the Commission's Web Site.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The Company's 1997 Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, excluding the Company's financial statements which have
been included elsewhere herein, is incorporated herein by reference.

Any documents filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year ended December 31, 1997, shall be deemed to
be incorporated by reference in this Prospectus and shall be a part hereof from
the date of filing of such documents with the Commission. Any statement
contained herein or in a document incorporated by reference herein shall be
deemed to be modified or suspended for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document,
which also is incorporated herein by reference, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person (including any
beneficial owner) to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document incorporated
by reference herein (other than an exhibit to such a document unless such
exhibit is specifically incorporated by reference into such document). Requests
for such copies should be directed to: Citizens Community Bancorp, Inc., 650
East Elkcam Circle, Marco Island, Florida 34145, Attention: Stephen McLaughlin,
Senior Vice President-Shareholder Relations (941) 389-1800.

<PAGE>

[Florida map with Citizens Bank's locations in Marco Island and
Naples, Florida highlighted]

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements, including the Notes thereto,
appearing elsewhere or incorporated by reference in this Prospectus. All per
share amounts have been adjusted to reflect the December 15, 1997, two-for-one
stock split.

The Company

General. Citizens Community Bancorp, Inc. ("CCBI") is a one-bank holding company
organized under the laws of the State of Florida and headquartered in Marco
Island, Florida. CCBI operates primarily through its wholly-owned banking
subsidiary, Citizens Community Bank of Florida ("Citizens Bank"), a
Florida-chartered commercial bank. CCBI's non-bank subsidiary is Citizens
Financial Corp. ("Citizens Financial") which is inactive. CCBI, Citizens Bank
and Citizens Financial are collectively referred to as the "Company". The
Company operates from two full-service banking offices, the main office in Marco
Island, Florida, and the East Tamiami Trail Branch Office in Naples, Florida.
The Company's primary business is attracting deposits from the general public
and using those deposits, together with borrowings and other funds, to originate
loans and purchase investments. Citizens Bank is the only independent community
bank headquartered in Marco Island.

The Company operates a traditional community banking business through
strategically located banking facilities and a friendly, professional staff that
is committed to developing long-term relationships with customers by offering
personalized, quality service. The Company offers a broad range of retail and
commercial banking services, including various types of deposit accounts and
loans for consumers and businesses. As part of its community banking approach,
the Company encourages its officers to actively participate in community
organizations.

The Company actively engages in mortgage banking which includes the
origination and subsequent sale of residential mortgage loans. During 1997, the
Company originated $27.0 million and sold $4.7 million in residential mortgage
loans. This activity has provided and is expected to continue to provide
significant non-interest income to the Company.

The Company continues to increase its commercial and consumer lending
activities to further diversify its loan portfolio. As of December 31, 1997, the
Company's loan portfolio totaled $26.7 million, of which 27% consisted of
residential mortgage loans, 35% consisted of commercial real estate loans, 29%
consisted of commercial loans, and 9% consisted of consumer loans.

The Company's primary service area is Marco Island and Naples, Florida
(the "Primary Service Area") which have populations of approximately 13,000
people and 100,000 people, respectively. The major industries in the Primary
Service Area are tourism, retail trade, insurance and real estate. Marco Island
and Naples are located in Collier County, which is, geographically, the second
largest County in Florida. See "BUSINESS Primary Service Area".

As of December 31, 1997, the end of the first full year of operation,
the Company had total assets of $44.4 million, total deposits of $36.9 million
and total stockholders' equity of $6.8 million. The Company reported
consolidated net earnings of $110,000 or $.07 per basic and diluted share for
the year ended December 31, 1997.

Business Strategy. The Company's goal is to establish itself as the leading
community bank in its Primary Service Area and to expand its presence in
Southwest Florida through consistent growth and a prudent operating strategy. As
part of these strategies, the Company is continuing to focus on:

Growing by expansion and acquisition
Developing commercial lending relationships
Emphasizing mortgage banking activities
Maintaining high credit quality

Risk Factors

Prospective investors should consider the information discussed under "RISK
FACTORS" beginning on page 9 herein.

Use of Proceeds

The Company will use the proceeds of this Offering to enhance its capital levels
in order to support future growth, expansion of the Marco Island facility,
expansion in the Southwest Florida market through acquisition of existing small
financial institutions or establishment of de novo branch facilities, and for
general corporate purposes. See "USE OF PROCEEDS".

Dividends

CCBI has not paid a dividend (cash or stock) since its inception. The Company
expects that its earnings will be retained to support growth and expansion into
new business opportunities. The Company does not expect to pay a cash dividend
in the foreseeable future. See "MARKET FOR COMMON STOCK AND DIVIDENDS".

The Offering

Common Stock Offered by the Company. The Company is offering a minimum of
300,000 shares of Common Stock (the "Minimum Offering") and a maximum of
1,000,000 shares of Common Stock (the "Maximum Offering").

Common Stock Outstanding Immediately After the Offering. As of December 31,
1997, there were 1,571,624 shares of Common Stock outstanding. Had the Offering
closed on that date, at the Minimum Offering and the Maximum Offering, there
would be 1,871,624 shares and 2,571,624 shares of Common Stock outstanding,
respectively, excluding the 642,775 shares issuable pursuant to the Company's
outstanding Warrants, which as of December 31, 1997, had not been exercised.

Initial Offering. In the Initial Offering, each Depositor of Citizens Bank
(defined herein to be a depositor who, as of the Record Date, is a Florida
resident and who has a demand account [defined herein to be a checking account,
NOW account, money market account with a minimum balance of $1,000]), and each
shareholder, as of the Record Date, together with any "Related Party" of a
Depositor or shareholder (defined herein as individually or together with
associates or persons acting in concert with such persons) are being provided,
on a priority basis, a Subscription Right to purchase, at $7.50 per share, up to
3,000 shares of Common Stock; while each employee and director of the Company is
being given a Subscription Right to purchase, individually or together with a
Related Party, up to 30,000 shares of Common Stock. The Subscription Right is
subject to the availability of shares. Depositors, shareholders, employees and
directors, together with any Related Parties, will be permitted to purchase
their respective limits provided the aggregate number of shares owned at the
conclusion of the Offering does not result in the individual or Related Party's
beneficial ownership exceeding 9.9%. See "Purchase Limitation" and "RISK FACTORS
- - Voting Control".

Community Offering. Immediately following the Initial Offering Period, the
Company will offer shares not subscribed for in the Initial Offering to the
general public, at $7.50 per share, with a purchase minimum of 100 shares and a
maximum of 15,000 shares. Individuals who purchase shares in the Initial
Offering will be permitted to subscribe for shares in the Community Offering up
to a maximum of 15,000 shares in the aggregate. Shares purchased by Depositors
and shareholders in the Community Offering will not be on a priority basis. See
"Purchase Limitation".

Subscription Right. Depositors and shareholders, as of the Record Date, and
employees and directors of the Company are being given the right to purchase
("Subscription Right") shares of Common Stock in the Initial Offering. The
Subscription Right is subject to shares being available at the time the
subscription is delivered to and accepted by the Company. Subscriptions will be
honored in the order in which they are received (as of the logged in time and
date) by the Company, subject to the Order Form being determined by the Company
(in its sole discretion) to be valid and complete. See "THE OFFERING - Procedure
for Subscribing for Common Stock".

Employees and Directors Purchase Exception. Each employee and director of the
Company, together with their Related Parties, will be permitted to purchase up
to an aggregate of 50,000 shares during the Initial Offering, or in the
Community Offering. Purchases made in the Community Offering will not be on a
priority basis.

Conditions of the Offering. The Offering is being made on a best efforts basis
and will expire 12 months from the date of the Prospectus, unless terminated
beforehand at the sole discretion of the Board of Directors. Funds received by
the Company during the Initial Offering Period will be deposited with the Escrow
Agent. Funds so deposited may be released to the Company only in accordance with
the terms of the Escrow Agreement between the Company and the Escrow Agent. The
Offering will be terminated by the Company if, by 5:00 p.m., Local Time, on
September 6, 1998, subscriptions for a minimum of 300,000 shares have not been
received and forwarded to the Escrow Agent, or the Company has previously
canceled the Offering prior to withdrawing funds from the Escrow Account.

Subscription Price. The "Subscription Price" in the Offering is $7.50 per share.
The Common Stock is not publicly traded. The Board of Directors determined the
Subscription Price per share after considering, among other criteria, the
Company's assets, book value and the last three private trades reported to the
Company.

Expiration Date. The Initial Offering will expire at 5:00 p.m., Local Time, on
July 23, 1998. The Minimum Offering will expire on September 6, 1998. The
Community Offering will expire at 5:00 p.m. on April 13, 1999, collectively the
"Expiration Date".

Procedure for Subscribing for Common Stock. Individuals participating in the
Initial Offering or the Community Offering, must properly complete the Order
Form which accompanies this Prospectus. The Order Form must be forwarded, with
full payment of the aggregate Subscription Price, to the Company on or prior to
the respective Expiration Date. If the mail is used to forward Order Forms, it
is recommended that insured, registered mail, return receipt requested, be used.
See "THE OFFERING - Issuance of Common Stock".

Subscriptions for the Common Stock which are accepted by the Company from
Depositors, shareholders, employees and directors in the Initial Offering, or
from persons participating in the Community Offering, may not be revoked. The
Company will forward the accepted subscription funds to an escrow account
established with the Independent Bankers' Bank of Florida (the "Escrow Agent".
See "THE OFFERING - Procedure for Subscribing for Common Stock".

Procedure for Purchases by Foreign Depositors and Shareholders. Order Forms will
not be mailed to Depositors or shareholders whose addresses are outside the
United States or who have an APO or FPO address, but will be held by the Company
for their account. In order to purchase shares in the Initial Offering, such
Depositors or shareholders must notify the Company and take all other steps
necessary to affect the purchase of the shares subscribed for on or prior to the
Initial Offering Expiration Date. See "THE OFFERING - Foreign and Certain Other
Shareholders".

Blue Sky Considerations. CCBI has determined that its shareholders reside in 27
states, based upon the most current information available from its records. The
sale of the securities in this Offering are exempt or will be made exempt by
appropriate filings in 22 states. The securities being offered to shareholders,
Depositors, and the general public, in Florida, will be registered. None of the
securities in this Offering will be sold to shareholders residing in Kentucky
and New York, as CCBI has determined not to register in Kentucky and New York.

Persons Holding Shares of Common Stock, or Wishing to Exercise Subscription
Rights Through Nominees. Subscription rights of existing Depositors and
shareholders are non-transferable. Shareholders holding shares of Common Stock
through a broker, dealer, commercial bank, trust company or other nominee, as
well as persons holding certificates of Common Stock personally who would prefer
to have such entities effect transactions relating to the subscription rights on
their behalf, should contact the appropriate institution or nominee and request
it to effect the transactions for them. See "THE OFFERING - Procedure for
Subscribing for Common Stock".

Issuance of Common Stock. Provided that all conditions necessary to consummate
the Offering are satisfied, including the sale in the Offering of the minimum
number of shares of Common Stock, certificates representing shares of Common
Stock purchased pursuant to the Offering will be delivered to purchasers as soon
as practical after the Expiration Dates of the Minimum Offering and the
Community Offering and after all prorations and adjustments contemplated by the
Initial Offering and Community Offering have been effected. No fractional shares
will be issued in the Offering. See "THE OFFERING - Issuance of Common Stock".

Purchase Limitation. The Company will not be required to issue shares of Common
Stock pursuant to the Offering to any person who, in the opinion of the Company,
would be required to obtain prior clearance or approval from any state or
federal regulatory authority to own or control such shares. The minimum number
of shares of Common Stock any person may purchase in the Offering is 100 shares
and the maximum number any person may purchase individually or in the aggregate
(except for employees and directors who with their Related Parties may in the
aggregate purchase up to 30,000 shares) in the Initial Offering is 3,000 shares
and 15,000 shares in the Community Offering; provided, no person shall be
allowed to purchase (individually, or with their Related Party) shares of Common
Stock in the Offering which when aggregated with current holdings would exceed
9.9% of the total number of shares outstanding at the conclusion of the
Offering. See "RISK FACTORS - Voting Control".

Right to Amend or Terminate the Offering. CCBI expressly reserves the right to
amend the terms and conditions of the Offering, whether the terms and conditions
are more or less favorable to Depositors, shareholders and other participants.
In the event of any material change to the terms of the Offering, such as a
change in the Minimum Offering, the Subscription Price or an extension beyond
April 13, 1999, which changes would affect the investment decision of
subscribers, CCBI will file a post-effective amendment to its Registration
Statement, of which this Prospectus is a part, and re-solicit subscribers
through a Supplemental Prospectus to the extent required by the Commission.

Escrow Agent. The Independent Bankers' Bank of Florida, 109 East Church Street,
Orlando, Florida 32801 (the "Escrow Agent") will serve as the Escrow Agent for
the Offering. See "THE OFFERING - Procedure for Subscribing for Common Stock".

Transfer Agent and Registrar. Prior to the Offering, the Company served as
transfer agent for the Common Stock. The Company has engaged Registrar and
Transfer Company, Cranford, New Jersey, to handle stock transfers, stock record
keeping, and mailing of all proxy materials. See "THE OFFERING - Transfer Agent
and Registrar".

Intentions of Executive Officers and Directors. The executive officers and
directors of the Company have preliminarily indicated that collectively they
intend to purchase approximately 150,000 shares of Common Stock in the Offering.
See - "BENEFICIAL OWNERSHIP OF COMMON STOCK".

Information on the Offering. If you have questions concerning the Offering,
contact the Stock Sales Center at 1-800-895-0955, Voice Mail Box Number 275.

<PAGE>

SUMMARY OF FINANCIAL DATA
At or for the
Year Ended December 31,
-----------------------
1997 1996
----- ----
(In thousands except per
share data)
---------------------------

Selected Balance Sheet Data:
Total assets $ 44,422 $ 25,028
Cash and cash equivalents 12,211 8,042
Securities 2,499 2,240
Loans, net 26,420 12,116
Deposit accounts 36,938 17,885
Stockholders= equity 6,771 5,964

Selected Operating Data:
Total interest income $ 2,523 $740
Total interest expense 1,208 283
Net interest income 1,315 457
Net-interest income after
provisions for loan losses 1,162 312
Non-interest income 273 70
Non-interest expenses 1,260 915
Earning (loss) before
income taxes (benefit) 175 (533)
Income taxes (benefit) 65 (191)
Net earnings (loss) 110 (342)

Per Share Data(1):
Basic earnings (loss) per share $ .07 $ (.26)
======== ========
Diluted earnings (loss) per share $ .07 $ (.26)
======== ========
Book value per share(2) $ 4.31 $ 4.22
======== ========

Performance Ratios:
Return on average assets (R.O.A.) .30% (2.71)%
Return on average equity (R.O.E.) 1.72% (10.35)%
Interest-rate spread during the period 4.02% 2.33 %
Non-interest expense to average assets 3.45% 7.24 %

Other Ratios and Data:
Average equity to average assets 17.47% 26.16%
Allowance for credit losses as
a percentage of total loans outstanding 1.12% 1.18%
Nonperforming loans and foreclosed
real estate as a percentage of total *(3) *(3)
assets 2 1
Total number of full-service banking offices

Capital Adequacy Ratios(4):
Leverage capital ratio 10.67% 19.46%
Total risk-based capital ratio 17.67% 30.80%
Stockholders' equity to total assets 15.24% 23.83%

- ---------------------------
(1) Consolidated per share data has been presented to give retroactive effect to
the two-for-one stock split, effective December 15, 1997.
(2) The book value per share as of December 31, 1997, would have been $4.41
assuming the exercise of stock options and Warrants outstanding on that
date.
(3) The Company had no nonperforming loans or foreclosed real estate for the
periods indicated.
(4) Capital ratios are computed using the year-end regulatory capital of
Citizens Bank. See "CAPITAL RATIOS" for capital ratios relating to the
Company.

<PAGE>

RISK FACTORS

Before purchasing the Common Stock offered hereby, prospective
investors should consider carefully the following factors, in addition to other
information contained in this Prospectus.

Interest Rate Risk

CCBI's earnings depend, to a large extent, upon the level of Citizens
Bank's net interest income which is primarily influenced by the relationship
between its cost of funds (deposits and borrowings) and the yield on its
interest-earning assets (loans and investments). This relationship, known as the
net interest margin, is subject to fluctuation and is affected by regulatory,
economic and competitive factors which influence the level of interest rates,
the volume, rate and mix on interest-earning assets and interest-bearing
liabilities. As part of its interest rate risk management strategy, management
seeks to reduce its exposure to interest rate changes by matching the maturity
and repricing horizons of interest-earning assets, and interest-bearing
liabilities.

As of December 31, 1997, total interest-earning assets maturing or
repricing within one year were less than total interest-bearing liabilities
maturing or repricing in the same period by $8.3 million, representing a
cumulative one-year interest rate sensitivity gap as a percentage of total
interest-earning assets of negative 18.6%. As a result, the yield on the
Company's interest-earning assets should adjust to changes in market interest
rates at a slower rate than the cost of the Company's interest-bearing
liabilities. Consequently, the Company's net interest income could be adversely
affected during periods of rising interest rates. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Asset and
Liability Management".

Credit Risk

In originating loans, there is a substantial likelihood that credit
losses will occur. This risk of loss varies with, among other things, general
economic conditions, the type of loan made, the credit worthiness and debt
servicing capacity of the borrower over the term of the loan and, in the case of
a collateralized loan, the value and marketability of the collateral securing
the loan. Management maintains an allowance for loan losses based on, among
other things, historical loan loss experience, known inherent risks in the loan
portfolio, adverse situations that may affect the borrower's ability to repay,
the estimated value of any underlying collateral and an evaluation of current
economic conditions. Additional provision for loan losses may be required should
economic or other conditions change substantially in the future.

As of December 31, 1997, the Company's allowance for loan losses was
$298,000, which represented 1.12% of net loans. Approximately 27% of the loan
portfolio was comprised of permanent and construction-permanent mortgage loans
secured by residential properties and, the Company has not yet experienced a
loss. As of December 31, 1997, there were no nonperforming loans in the
portfolio. The Company actively monitors its asset quality to maintain an
adequate allowance for loan losses. Although management believes that its
allowance for loan losses is adequate, there can be no assurance that the
allowance will prove sufficient to cover future loan losses. Significant
additions to the Company's allowance for loan losses would have a material
adverse effect on the Company's results of operations and financial condition.
See "BUSINESS - Provision for Losses on Loans".

Growth by Expansion and Acquisitions

The Company's strategy to expand by establishing new branch offices is
dependent on its ability to identify and open advantageous branch office
locations and to generate new deposits and loans from those locations that will
create an acceptable level of net income for the Company. At the same time, the
Company's strategy to grow through selective acquisitions of financial
institutions or branches of such institutions is dependent on successfully
identifying, acquiring and integrating such institutions or branches. There can
be no assurance the Company will be successful in implementing its growth
strategy or in identifying attractive acquisition candidates, acquiring such
candidates on favorable terms or successfully integrating any acquired
institutions or branches into the Company. See "BUSINESS - Competition".

Competition

The banking and financial services industry is highly competitive. In
its Primary Service Area, the Company competes with other commercial banks,
savings and loan associations, credit unions, finance companies, mutual funds,
insurance companies and brokerage and investment banking firms operating locally
and elsewhere. Many of these competitors have substantially greater resources
and lending limits than the Company and may offer certain services that the
Company does not or cannot provide. The profitability of the Company depends
upon its continued ability to successfully compete in its market areas. See
"BUSINESS - Competition".

Local Economic Conditions

The success of the Company is dependent, to a certain extent, upon the
general economic conditions in the geographic market served by the Company.
Although the Company expects that economic conditions will continue to be
favorable in Collier County, no assurance can be given that these favorable
economic conditions will continue. Adverse changes in economic conditions in the
Company's geographic market would likely impair its ability to collect loans and
could otherwise have a material adverse effect on the results of operations and
financial condition of the Company. An example of potential unfavorable changes
in economic conditions which could affect the Company's geographic market
includes adverse weather conditions resulting from natural causes, such as a
hurricane.

Supervision and Regulation

Bank holding companies and banks operate in a highly regulated
environment and are subject to supervision and examination by several federal
and state regulatory agencies. CCBI is subject to the Bank Holding Company Act
of 1956 ("BHCA") and to regulation and supervision by the Board of Governors of
the Federal Reserve System ("Federal Reserve"). Citizens Bank is also subject to
the regulation and supervision of the FDIC and the Florida Department of Banking
and Finance ("Florida Department"). Federal and state laws and regulations
govern matters ranging from deposit insurance premiums to the regulation of
certain debt obligations, changes in control of bank holding companies, as well
as the maintenance of adequate capital for the general business operations and
financial condition of Citizens Bank, including permissible types, amounts and
terms of loans and investments, the amount of reserves against deposits,
restrictions on dividends, establishment of branch offices, and the maximum rate
of interest that may be charged by law. The Federal Reserve also possesses cease
and desist powers over bank holding companies to prevent or remedy unsafe or
unsound practices or violations of law. These and other restrictions limit the
manner by which the Company may conduct its business and obtain financing.
Furthermore, the commercial banking business is affected not only by general
economic conditions, but also by the monetary policies of the Federal Reserve.
These monetary policies have had, and are expected to continue to have,
significant effects on the operating results of commercial banks. Changes in
monetary or legislative policies may affect the ability of Citizens Bank to
attract deposits and make loans, and changes in applicable statutes and
regulations could, under certain circumstances, adversely affect the Company.

Anti-Takeover Provisions

The Company's Amended and Restated Articles of Incorporation ("Articles
of Incorporation") contain provisions requiring super-majority shareholder
approval to effect certain extraordinary corporate transactions which have not
been approved by the Board of Directors. The effect of these provisions is to
make it more difficult to effect a merger, sale of control or similar
transaction involving the Company even though a majority of the Company's
shareholders may vote in favor of such a transaction. In addition, the Company's
Articles of Incorporation provide for classes of Directors, whereby one-third of
the members of the Board of Directors shall be elected each year and each
Director of the Company will serve for a term of three years. Finally, the
Company's Articles of Incorporation provide that Florida's Control-Share
Acquisition Statute shall apply to acquisitions of control shares, as defined
therein, of the Company's Common Stock. The effect of these provisions is to
make it more difficult to effect a hostile change in control of the Company
through the acquisition of a large block of the Company's Common Stock. See
"DESCRIPTION OF CAPITAL STOCK".

Absence of Shareholder Preemptive Rights

No holders of the Common Stock of the Company have preemptive rights
with respect to the issuance of shares of any class of stock. The total number
of shares of all classes of capital stock which the Company has the authority to
issue is 10,000,000 shares, consisting of 2,000,000 shares of Preferred Stock,
par value $0.01 per share and 8,000,000 shares of Common Stock, par value $0.01
per share. Each share of Common Stock is entitled to one vote per share in all
matters requiring a vote of shareholders. The Board of Directors of the Company
could from time to time determine to issue additional shares of the authorized
Preferred Stock or Common Stock of the Company, in addition to the shares
offered hereby and in such event the ownership interest of the subscribers in
this Offering may be diluted.

Voting Control

As of December 31, 1997, Richard Storm, Jr., together with his wife,
beneficially owned approximately 25.9% of the Company's Common Stock (based upon
1,737,504 shares issued and outstanding in the event Mr. Storm exercised his
Warrants for 158,730 shares) and will beneficially own approximately 24.04% and
17.05% of the issued and outstanding Common Stock after the Minimum Offering and
the Maximum Offering, if they choose not to purchase shares in the Offering. Mr.
Storm is not subject to the aggregate 9.9% Purchase Limitation since his current
beneficial ownership exceeds this amount. Mr. Storm received regulatory approval
to own in excess of 25.0% of the Company's Common Stock as part of the original
stock offering. Mr. Storm and his family comprise the single largest voting
block of the Common Stock and after this Offering, it is anticipated that they
will continue to have a significant influence on the election of members of the
Board of Directors and other stockholder matters. See "BENEFICIAL OWNERSHIP OF
COMMON STOCK".

Dilutive Effect of Purchase Warrants and Stock Options

In connection with the company's initial public offering, Purchase
Warrants were issued which when adjusted for the two for one stock split and
fully exercised would result in an additional 1,340,000 shares being issued at
$4.50 per share (each Warrant entitles the holder to purchase one share of
Common Stock). As of December 31, 1997, there were 1,285,550 Purchase Warrants
(representing 1,285,550 shares authorized to be issued at $4.50 per share) that
had not been exercised.

Stock options have been granted periodically to officers and employees
of the Company at exercise prices equal to fair market value at the date of
grant. As of December 31, 1997, there were stock options to purchase 155,400
shares of Common Stock outstanding (at a weighted average exercise price of
$5.05 per share). The Board of Directors has approved, as an amendment to the
1996 Stock Option Plan ("Plan"), increasing the amount of shares covered under
the Plan by 75,000 shares. The increase in stock option shares is subject to
shareholder approval at the 1998 Annual Meeting of Shareholders. The exercise of
such options would have a dilutive effect on the Company's book value per share,
only if the Company's book value per share exceeded the option exercise price at
the time of exercise. See "SELECTED CONSOLIDATED FINANCIAL DATA".

Impact on Earnings Per Share

The issuance of up to 1,000,000 shares offered hereby may adversely
affect the Company's earnings per share until such time as the net proceeds of
this Offering are fully utilized to generate additional assets and deposits
through both internal and external means. See "Growth by Expansion and
Acquisition" and "USE OF PROCEEDS".

Limited Trading Market

The price of the Company's Common Stock is currently quoted on the
National Quotation Bureau System Pink Sheets under the symbol "CCBI". Prior to
this Offering, there has been only limited trading activity. Although the
Company expects that an active trading market will develop, there can be no
assurance that an active trading market will develop at the completion of this
Offering or that such a market, if developed, will continue. It is the Company's
intent to list the Common Stock on the Nasdaq - SmallCap Market sometime during
the fourth quarter of 1998 or the first quarter of 1999 depending on market
conditions and assuming the Company meets the Nasdaq SmallCap listing
requirements. See "MARKET FOR COMMON STOCK AND DIVIDENDS".

Shares Eligible for Future Sale

Sales of Common Stock in the public market following this Offering
could adversely affect the market price of the Common Stock. Following this
Offering, approximately 1,061,554 shares of Common Stock held by current
shareholders, as well as the 1,000,000 maximum shares offered hereby, will be
eligible for immediate sale without restriction in the public market. The
executive officers and directors of CCBI, and certain officers of Citizens Bank
own the remaining 510,070 shares of Common Stock in the aggregate. Shares held
by officers and directors are subject to the volume and other limitations of
Rule 144 adopted under the Securities Act. See "SHARES ELIGIBLE FOR FUTURE
SALE".

<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common Stock
offered hereby will be approximately $2,150,000 at the Minimum Offering, net of
estimated Offering expenses, and $7,400,000 at the Maximum Offering, net of
estimated Offering expenses of $100,000. The net proceeds to be raised in the
Offering will depend upon the number of shares of Common Stock sold in the
Offering and the actual amount of expenses incurred in the Offering, which may
differ from the estimates herein.

The Company intends to use the net proceeds to support future growth,
including the expansion of the Company's main office location, and for general
corporate purposes. Future growth is expected to occur both by establishing new
branch offices and through selective acquisitions of other financial
institutions or branch offices from such other institutions, primarily in the
Southwest Florida Market of Collier, Lee and Charlotte Counties. The Company
currently has no specific plans for, and has not entered into any agreement or
understanding concerning, any such acquisitions. Pending the application of
proceeds in the manner set forth above, the net proceeds will initially be
invested by the Company in short-term, interest-bearing securities.

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of December 31, 1997, and as adjusted to give effect to the sale of a
minimum of 300,000 shares and a maximum of 1,000,000 shares of Common Stock
offered hereby, at $7.50 per share, net of estimated Offering expenses.

As As
Adjusted Adjusted
for for
Minimum Maximum
Actual Offering Offering
------ -------- --------

(In thousands)
----------------------------------
$ 36,938 $ 36,938 $ 36,938
========== ======== ==========

Stockholders' equity:

Common Stock, $0.01 par value,
8,000,000 shares authorized,
1,571,624 issued and outstanding
(1,871,624 shares at the Minimum
Offering and 2,571,624 shares
at the Maximum Offering) $ 15 $ 19 $ 26

Additional paid-in capital 7,011 9,157 14,400

Accumulated deficit (255) (255) (255)
---------- ----- ------

Total stockholders' equity $ 6,771 8,$21 14,171
========== ===== ======
- -------------------------------
(1) Amount includes shares issued in the two-for-one stock split.
(2) Excludes 155,400 shares of Common Stock issuable pursuant to outstanding
stock options at an average exercise price of $5.05 per share.

DETERMINATION OF SUBSCRIPTION PRICE

The Common Stock of the Company is not publicly traded on any stock
exchange. The book value of the Company's shares at December 31, 1997, was $4.31
per share. The $7.50 Subscription Price per share in the Offering was set by the
Board of Directors after considering the Company's book value, assets, and the
last three private trades of the Common Stock, recent common stock offerings for
financial institutions, and the demand for the Company's Common Stock. The
Subscription Price is not, however, necessarily reflective of the value of the
Common Stock in that no independent appraisal was made to determine the value of
the Common Stock.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents selected consolidated financial data for
the Company for each of the two years ended December 31, 1997 and December 31,
1996. The data should be read in conjunction with the Company's consolidated
financial statements, including the related notes, included elsewhere herein,
and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS."

At or for the
Year Ended December 31,

1997 1996
----- ----

(In thousands
except per share data)
---------------------------

Selected Operating Data:
Total interest income $ 2,523 $ 740
Total interest expense 1,208 283
Net interest income 1,315 457
Net interest income
after provision for loan losses 1,162 312
Non-interest income 273 70
Non-interest expenses 1,260 915
Earnings (loss) before
income taxes (benefit) 175 (533)
Income taxes (benefit) 65 (191)
Net earnings (loss) 110 (342)

Other Ratios and Data:
Average equity to average assets 17.47% 26.16%
Allowance for credit losses
as a percentage of total loans 1.12% 1.18%
outstanding
Nonperforming loans and foreclosed
real estate as a percentage of *(3) *(3)
total assets 2 1
Total number of full-service banking offices

Capital Adequacy Ratios(4):
Leverage capital ratio 10.67% 19.46%
Total risk-based capital ratio 17.67% 30.80%
Stockholders' equity to total assets 15.24% 23.83%
- -------------------------
(1) Consolidated per share data has be en presented to give retroactive effect
to the two-for-one stock split, effective December 15, 1997.
(2) The book value per share as of December 31, 1997, would have been $4.41
assuming the exercise of stock options and Warrants outstanding on that
date.
(3) The Company had no nonperforming loans or foreclosed real estate for the
periods indicated.
(4) Capital ratios are computed using the year-end regulatory capital of
Citizens Bank. See "CAPITAL RATIOS" for capital ratios relating to the
Company.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

CCBI was incorporated on May 24, 1995. CCBI owns 100% of the
outstanding common stock of Citizens Bank, which commenced operations on March
8, 1996, and Citizens Financial Corp., a mortgage brokerage company which was
incorporated on March 27, 1997. Citizens Financial is currently inactive. CCBI
was organized simultaneously with Citizens Bank and its primary business is the
ownership and operation of Citizens Bank and Citizens Financial. Citizens Bank
is a Florida state-chartered commercial bank and its deposits are insured by the
FDIC. Citizens Bank provides community banking services to businesses and
individuals in Marco Island, Naples and to a lesser extent greater Collier
County, Florida.

Liquidity and Capital Resources

A state-chartered commercial bank is required under Florida Law and
FDIC regulations to maintain a liquidity reserve of at least 15% of its total
transaction accounts and 8% of its total non-transaction accounts subject to
certain restrictions. The reserve may consist of cash-on-hand, demand deposits
due from correspondent banks, and other investments and short-term marketable
securities.

The Company's primary source of funds during the year ended December
31, 1997, was from net deposit inflows of $19.1 million which were used
primarily to originate loans. At December 31, 1997, the Company had outstanding
commitments to originate loans totaling $1.0 million and commitments to
borrowers for available lines of credit totaling $5.1 million. At December 31,
1997, the Bank exceeded its regulatory liquidity requirements.

Year 2000 Compliance

Management has an ongoing program designed to ensure that its
operational and financial systems will not be adversely affected by year 2000
software failures due to processing errors arising from calculations using the
year 2000 date. Based on current estimates, the Company expects to incur between
$25,000 and $30,000 in costs to redevelop, replace, or repair its computer
applications to make them "year 2000 compliant." While management believes it is
doing everything technologically possible to assure year 2000 compliance, it is
to some extent dependent upon vendor cooperation. Management is requiring its
computer system and software vendors to represent to the Company that the
products provided are, or will be, year 2000 compliant, and has planned a
program of testing for compliance. It is recognized that any year 2000
compliance failures could result in additional expense to the Company.

<PAGE>

Credit Risk

The Company's primary business includes making commercial, business,
consumer, and real estate loans. This activity entails potential loan losses,
the magnitude of which depend on a variety of economic factors affecting
borrowers which are beyond the control of the Company. While underwriting
guidelines and credit review procedures have been instituted to protect the
Company from avoidable credit losses, some losses will inevitably occur. At
December 31, 1997, the Company had no nonperforming assets, no loans delinquent
90 days or more, and has had no charge-off experience.

The following table presents information regarding the Company's total
allowance for losses as well as the allocation of such amounts to the various
categories of loans (dollars in thousands):
<TABLE>
<CAPTION>

At December 31,
---------------------------------------------------
1997 1996
--------------------- -------------------

Loans Loans
to to
Total Total
Amount Loans Amount Loans
------ ----- ------ -----

<S> <C> <C> <C> <C>
Commercial real estate loans $ 94 35% $ 62 31%
Residential real estate loans 42 27 22 36
Commercial loans 117 29 55 31
Consumer loans 45 9 6 2
----- --- ----- ---

Total allowance for loans losses $ 298 100% $ 145 100%
===== === ===== ===

Allowance for credit losses as a
percentage of the total loans
outstanding 1.12% 1.18%
==== ====
</TABLE>

Loan Portfolio Composition

Commercial real estate loans and undeveloped land loans comprise the
largest group of loans in the Company's portfolio amounting to $9.4 million, or
35% of the total loan portfolio as of December 31, 1997. Commercial real estate
loans consist of $8.6 million of loans secured by non-residential property and
$800,000 of loans secured by undeveloped land.

Residential real estate loans comprise the second largest group of
loans in the Company's loan portfolio, amounting to $7.3 million or 27% of the
total loan portfolio as of December 31, 1997, of which approximately 98% are
first mortgage loans. As of December 31, 1997, consumer loans and savings
account loans, amounted to $2.3 million or 9% of the total loan portfolio.

<PAGE>

The following table sets forth the composition of the Company's loan
portfolio by type at the dates indicated:
<TABLE>
<CAPTION>
At December 31,
----------------------------------------------------
1997 1996
----- ----
% %
Amount of Total Amount of Total
------ -------- ------ --------
(In thousands)

<S> <C> <C> <C> <C>
Commercial real estate $ 9,423 35% $ 3,758 31%
Residential real estate 7,261 27 4,384 36
Commercial loans 7,710 29 3,815 31
Consumer loans 2,261 9 305 2

26,655 100% 12,262 100%
==== ====
Add (subtract):
Deferred costs (fees) net 63 (1)
Allowance for loan losses (298) (145)
---------- ---------

Loans, net $ 26,420 $ 12,116
========== =========
</TABLE>

Investments

The investment portfolio is comprised primarily of U.S. Treasury and
U.S. Government agency securities and mortgage-backed securities. According to
Financial Accounting Standards No. 115, investment portfolio is categorized as
either "held to maturity," "available for sale" or "trading". Investments held
to maturity represent those investments which the Company has the positive
intent and ability to hold to maturity. These investments are carried at
amortized cost and were comprised of U.S. Treasury and U.S. Government agency
securities at December 31, 1997. Investments available for sale represent those
investments which may be sold for various reasons including changes in interest
rates and liquidity considerations. These investments are reported at fair
market value with unrealized gains and losses being reported as a separate
component of stockholders equity, net of income taxes. Trading securities are
held primarily for resale and are recorded at their fair values. Unrealized
gains or losses on trading securities are included immediately in earnings. At
December 31, 1997, the Company had no securities categorized as available for
sale or trading.

[Intentionally Left Blank]

<PAGE>

Investment Portfolio. The following table sets forth the carrying value
of the Company's investment portfolio:

At December 31,
---------------
1997 1996
---- ----

(In thousands)

Securities held to maturity:

U.S. Treasury securities $ 250 $1,743
U.S. Government agency securities 2,249 497
------ ------

Total $2,499 $2,240
====== ======

Investment Maturities. The following table sets forth, by maturity
distribution, certain information pertaining to the securities held to maturity
portfolio as follows (dollars in thousands):
<TABLE>
<CAPTION>

After One Year
One Year or Less to Five Total
---------------- ------- -----

Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield
----- ----- ----- ----- ----- -----

December 31, 1997:
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury securities $ 250 6.04% $ -- --% $ 250 6.04%
U.S. Government agency
securities 749 5.80 1,500 6.00 $2,249 5.93
------ ---- ------ ---- ------ ----

Total $ 999 5.81% $1,500 6.00% $2,249 5.94%
====== ==== ====== ==== ====== ====

December 31, 1996:
U.S. Treasury securities $ 247 6.00% $1,496 5.78% $1,743 5.80%
U.S. Government agency
securities 497 5.80 -- -- 497 5.80
------ ---- ------ ---- ------ ----

Total 744 5.88% $1,496 5.78% $2,240 5.80%
====== ==== ====== ==== ====== ====
</TABLE>

Regulatory Capital Requirements

Under FDIC regulations, Citizens Bank is required to meet certain
minimum regulatory capital requirements. This is not a valuation allowance and
has not been created by charges against earnings. It represents a restriction on
stockholders' equity.

Quantitative measures established by regulation to ensure capital
adequacy require Citizens Bank to maintain minimum amounts and ratios (set forth
in the table below) of total and Tier I capital (as defined in the regulations)
to risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined).

<PAGE>

The following table sets forth Citizen Bank's regulatory capital
position.

<TABLE>
<CAPTION>
Well
Actual Minimum(1) Capitalized(2)
------ ---------- --------------
Amount & Amount % Amount %
--------- ----- --------- ---- -------- -----
(Dollars in thousands)
As of December 31, 1997:
<S> <C> <C> <C> <C> <C> <C>
Total capital (to Risk-Weighted Assets) $ 4,643 17.67% $ 2,102 8.00% $ 2,627 10.00%
Tier I Capital (to Risk-Weighted Assets) 4,354 16.57 1,051 4.00 1,576 6.00
Tier I Capital (to Average Assets) 4,354 10.67 1,633 4.00 2,041 5.00

As of December 31, 1996:
Total capital (to Risk-Weighted Assets) $ 3,890 30.80% $ 1,011 8.00% $ 1,264 10.00%
Tier I Capital (to Risk-Weighted Assets) 3,747 29.65 505 4.00 758 6.00
Tier I Capital (to Average Assets) 3,747 19.46 770 4.00 963 5.00
</TABLE>

- ----------------------------------

(1) The minimum required for adequately capitalized purposes.
(2) To be "well capitalized" under the FDIC's Prompt Corrective Action
regulations.

Market Risk

Market risk is the risk of loss from adverse changes in market prices
and rates. The Company's market risk arises primarily from interest-rate risk
inherent in its lending and deposit taking activities. To that end, management
actively monitors and manages its interest-rate risk exposure. The measurement
of market risk associated with financial instruments is meaningful only when all
related and offsetting on- and off-balance-sheet transactions are aggregated,
and the resulting net positions are identified. Disclosures about the fair value
of financial instruments, which reflect changes in market prices and rates, can
be found in Note 7 to Consolidated Financial Statements.

The Company's primary objective is managing interest-rate risk to
minimize the adverse impact of changes in interest rates on the Company's net
interest income and capital, while adjusting the asset-liability structure to
obtain the maximum yield-cost spread on that structure. The Company relies
primarily on its asset-liability structure to control interest-rate risk.
However, a sudden and substantial increase in interest rates may adversely
impact the Company's earnings, to the extent that the interest rate borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. The Company does not engage in trading activities.

Asset and Liability Management

As part of its asset and liability management, the Company has
emphasized establishing and implementing internal asset-liability decision
processes, as well as communications and control procedures to aid in managing
the Company's earnings. Management believes that these processes and procedures
provide the Company with better capital planning, asset mix and volume controls,
loan-pricing guidelines, and deposit interest-rate guidelines which should
result in tighter controls and less exposure to interest-rate risk.

The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest-rate sensitivity
gap is defined as the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within a given time period.
The gap ratio is computed as rate sensitive assets/rate sensitive liabilities. A
gap ratio of 1.0% represents perfect matching. A gap is considered positive when
the amount of interest-rate sensitive assets exceeds interest-rate sensitive
liabilities. A gap is considered negative when the amount of interest-rate
sensitive liabilities exceeds interest-rate sensitive assets. During a period of
rising interest rates, a negative gap would adversely affect net interest
income, while a positive gap would result in an increase in net interest income.
During a period of falling interest rates, a negative gap would result in an
increase in net interest income, while a positive gap would adversely affect net
interest income.

In order to minimize the potential for adverse effects of material and
prolonged increases in interest rates on the results of operations, management
continues to monitor asset and liability management policies to better match the
maturities and repricing terms of its interest-earning assets and
interest-bearing liabilities. Such policies have consisted primarily of: (i)
emphasizing the origination of adjustable-rate loans; (ii) maintaining a stable
core deposit base; and (iii) maintaining a significant portion of liquid assets
(cash and short-term securities).

<PAGE>

The following table sets forth certain information relating to the
Company's interest-earning asset and interest-bearing liabilities at December
31, 1997 that are estimated to mature or are scheduled to reprice within the
period shown (dollars in thousands):
<TABLE>
<CAPTION>

More
Than More More
Three Than Six Than One More
Months Months Year to Than
Three to Six to One Five Five Over Ten
Months Months Year Years Years Years Total
------ ------ ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Mortgage and commercial loans (1):
Variable rate $ 6,346 $ 1,069 $ 893 $ 1,904 $ 101 $ -- $10,313
Fixed rate 803 331 1,363 12,044 762 1,079 16,342
-------- -------- -------- -------- -------- -------- --------

Total loans 7,149 1,400 2,256 13,908 863 1,079 26,655

Federal funds sold 9,057
Securities(2) 500 -- 499 1,500 -- -- 2,499
-------- -------- -------- -------- -------- -------- --------

Total rate-sensitive assets 16,706 1,400 2,755 15,408 863 1,079 38,211
-------- -------- -------- -------- -------- -------- --------

Deposit accounts(3):
Money market deposits 1,302 -- -- -- -- -- 1,302
NOW deposits 15,462 -- -- -- -- -- 15,462
Savings deposits 839 -- -- -- -- -- 839
Certificates of deposit 3,440 2,800 5,293 4,547 102 16,182
-------- -------- -------- -------- -------- -------- --------

Total rate-sensitive liabilities 21,043 2,800 5,293 4,547 102 -- 33,785
-------- -------- -------- -------- -------- -------- --------

GAP repricing differences $ (4,337) $ (1,400) $ (2,538) $ 10,861 $ 761 $ 1,079 $ 4,426
====== ===== ===== ====== === ===== ======

Cumulative GAP $ (4,337) $ (5,737) $ (8,275) $ 2,586 $ 3,347 $ 4,426
====== ===== ===== ====== === =====

Cumulative GAP/total assets 9.8% 12.9% 18.6% 5.8% 7.5% 10.0%
====== ===== ===== ====== === =====

</TABLE>
- -------------------------------------
(1) In preparing the table above, adjustable-rate loans are included in the
period in which the interest rates are next scheduled to adjust rather than
in the period in which the loans mature. Fixed-rate loans are scheduled,
including repayment, according to their maturities.

(2) Securities are scheduled through the maturity dates.

(3) Money-Market, NOW, and savings deposits are regarded as readily accessible
withdrawable accounts Time deposits are scheduled through the maturity
dates.

The following table reflects the contractual principal repayments by
period of the Company's loan portfolio at December 31, 1997 (in thousands):
<TABLE>
<CAPTION>
Residential Commercial
Years Ending Commercial Mortgage Real Estate Consumer
December 31, Loans Loans Loans Loans Total
------------ ----- ----- ----- ----- -----

<S> <C> <C> <C> <C> <C>
1998 $ 2,466 $ 1,323 $ 3,013 $ 447 $ 7,249
1999 494 540 604 252 1,890
2000 1,140 1,095 1,393 221 3,849
2001-2002 1,233 482 2,207 214 4,136
2003-2004 1,481 489 1,810 255 4,035
2005 and beyond 896 3,332 396 872 5,496
- ---------------------------------- ------- ------- ------- ------- -------

Total $ 7,710 $ 7,261 $ 9,423 $ 2,261 $26,655
======= ======= ======= ======= =======
</TABLE>

Scheduled contractual principal repayments of loans do not reflect the
actual life of such assets. The average life of loans historically has been
substantially less than their average contractual terms due to prepayments. In
addition, due-on-sale clauses on mortgage loans generally give the Company the
right to declare a conventional loan immediately due and payable in the event,
among other things, that the borrower sells the real property subject to the
mortgage and the loan is not repaid. The average life of mortgage loans tends to
increase, however, when current mortgage loan rates are substantially higher
than rates on existing mortgage loans and, conversely, decrease when rates on
existing mortgage loans are substantially higher than current mortgage loan
rates. Of the $19.4 million in loans due after 1998, 71% of such loans have
fixed interest rates and 29% have adjustable interest rates.

Origination, Sale and Repayment of Loans. The Company generally
originates loans on real estate located in its "Primary Geographical Market",
defined as Collier County, Florida. Residential mortgage loan originations by
the Company are attributable to depositors, other existing customers,
advertising and referrals from real estate brokers and developers. The Company's
residential mortgage loans generally are originated to ensure compliance with
documentation and underwriting standards which permit their sale to the Federal
National Mortgage Association ("Fannie Mae") and other investors in the
secondary market.

The Company has, to a limited extent, engaged in the sale of whole
loans. The Company engages in the sale of fixed-rate loans and ARM loans to
provide liquidity and funding sources for higher yielding loans.

The following table sets forth total loans originated, repaid and sold
during the periods indicated.

Year Ended
December 31,
-----------------------
1997 1996
---- ----
(In thousands)

Originations:
Commercial loans $ 756 $ 3,855
Commercial real estate loans 9,426 3,797
Residential mortgage loans 13,897 4,384
Consumer loans 2,888 305
------- -------

Total loans originated 26,967 12,341

Less:
Principal reductions 7,887 79
Loans sold 4,687 --
------- -------

Increase in total loans $14,393 $12,262
======= =======

Deposits and Other Sources of Funds

General. In addition to deposits, the sources of funds available for
lending and other business purposes include loan repayments, loan sales, and
securities sold under agreements to repurchase. Loan repayments are a relatively
stable source of funds, while deposit inflows and outflows are influenced
significantly by general interest rates and money market conditions. Borrowings
may be used on a short-term basis to compensate for reductions in other sources,
such as deposits at less than projected levels and are also used to fund the
origination of mortgage loans designated to be sold in the secondary markets.
Deposits. Deposits are attracted principally from the Company's Primary
Service Area in Collier County, Florida. The Company offers a broad selection of
deposit instruments including demand deposit accounts, NOW accounts, money
market accounts, regular savings accounts, term certificate accounts and
retirement savings plans (such as IRA accounts). Certificate of deposit rates
are set to encourage longer maturities as cost and market conditions will allow.
Deposit account terms vary, with the primary differences being the minimum
balance required, the time period the funds must remain on deposit and the
interest rate offered.

The Company has emphasized commercial banking relationships in an
effort to increase demand deposits as a percentage of total deposits. The
Company's courier service began operations in February 1998. The courier service
will serve the Company's business customers in Marco Island and Naples.

Management sets the deposit interest rates weekly based on a review of
deposit flows for the previous week, and a survey of rates among direct
competitors and other financial institutions in Florida.

[Intentionally Left Blank]

<PAGE>

The following table shows the distribution of, and certain other
information relating to, the Company's deposit accounts by type at the date
indicated.

December 31,
------------
1997 1996
---- ----
Percent of Percent of
Amount Total Amount Total
------ ----- ------ -----
(Dollars in thousands)
<S> <C> <C> <C> <C>
Demand deposits $ 3,153 8.54% $ 2,366 13.23%
NOW deposits 15,462 41.86 8,311 46.47
Money-market deposits 1,302 3.52 418 2.34
Savings deposits 839 2.27 360 2.01
------ ----- ------ -----

Subtotal 20,756 56.19 11,455 64.05

Certificate of deposits:
4.00% - 4.99% 1,101 2.98 447 2.50
5.00% - 5.99% 8,221 22.26 4,966 27.77
6.00% - 6.99% 6,860 2.98 1,017 2.50
------ ----- ------ -----

Total certificates of deposits (1) 16,182 43.81 6,430 35.95
------ ----- ------ -----

Total deposits(2) $36,938 100.00% $17,885 100.00%
======= ====== ======= ======
</TABLE>
- ------------------------------

(1) Includes individual retirement accounts ( "IRA") totaling $611,000 and
$253,000 at December 31, 1997 and 1996, all of which are in the form of
certificates of deposit.
(2) The deposit portfolio does not contain a concentration from any one
depositor or related group of Depositors.

Jumbo certificates ($100,000 and over) mature as follows (in
thousands):

December 31,
-------------------------
1997 1996
---- ----

Due three months or less $ 872 $ --
Due over three months to six months 411 507
Due over six months to one year 1,831 260
Due over one year 905 700

Total $4,019 $1,467
====== ======

Borrowings. At December 31, 1997, the Company had no borrowings. To
date, the Company has been able to fund its lending activities through its
deposits.

<PAGE>

Results of Operations

The operating results of the Company depend primarily on its net
interest income, which is the difference between interest income on
interest-earning assets and interest expense on interest-bearing liabilities,
consisting primarily of deposits. Net interest income is determined by the
difference between yields earned on interest-earning assets and rates paid on
interest-bearing liabilities ("interest-rate spread") and the relative amounts
of interest-earning assets and interest-bearing liabilities. The Company's
interest-rate spread is affected by regulatory, economic, and competitive
factors that influence interest rates, loan demand, and deposit flows. In
addition, the Company's net earnings are also affected by the level of
nonperforming loans and foreclosed real estate, as well as the level of its
non-interest income, and its non-interest expenses, such as salaries and
employee benefits, occupancy and equipment costs and income taxes.

[Intentionally Left Blank]

<PAGE>

The following table sets forth, for the periods indicated, information
regarding: (i) the total dollar amount of interest and dividend income of the
Company from interest-earning assets and the resultant average yield; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average costs; (iii) net interest/dividend income; (iv) interest-rate
spread; and (v) net interest margin. Average balances are based on average daily
balances.
<TABLE>
<CAPTION>

For the Year Ended December 31,
------------------------------------------------------------------

1997 1996
-------------------------------- -------------------------------

Interest Interest Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Rate Balance Dividends Rate
------- --------- ---- ------- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $20,537 $ 1,914 9.32% $ 3,842 $ 323 8.39%
Securities 2,346 141 6.01 2,052 119 5.78
Other interest-earning assets(1) 8,516 468 5.50 5,306 298 5.62
------- ------- ------- -------

Total interest-earning assets 31,399 2,523 8.04 11,200 740 6.61
------- -------

Non-interest earning assets 5,157 1,443
----- -----

Total Assets $36,556 $12,643
======= =======

Interest-bearing liabilities:
Demand, money market and
NOW deposits $17,638 $ 517 2.93% $ 4,087 $ 148 3.62%
Savings 573 17 3.01 163 5 2.99
Certificates of deposit 11,704 664 5.67 2,296 124 5.39
Other 125 10 8.00 66 6 9.42
------- ------- ------- -------
Total interest-bearing
liabilities 30,040 1,208 4.02 6,612 283 4.28
----- ---

Non-interest bearing liabilities 128 2,724
Stockholders' equity 6,388 3,307
----- -----

Total liabilities and
stockholders' equity $36,556 $12,643
======= =======

Net interest dividend income $1,315 $ 457
====== =======

Interest-rate spread(2) 4.02% 2.33%
==== ====

Net interest margin(3) 4.20% 4.08%
==== ====

Ratio of average interest-earning
assets to average interest-bearing 1.05 1.69
==== ====
liabilities
</TABLE>

- -----------------------------------
(1) Includes interest-bearing deposits and federal funds sold.
(2) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities
(3) Net interest margin is net interest income divided by average
interest-earning assets.

Rate/Volume Analysis

The following table sets forth certain information regarding changes in
interest income and interest expenses for the periods indicated. For each
category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to: (i) changes in rate (change
in rate multiplied by prior volume); (ii) changes in volume (change in volume
multiplied by prior rate); and (iii) changes in rate-volume (change in rate
multiplied by change in volume).

Year Ended December 31, 1997
vs. Year Ended December 31, 1996
Increase (Decrease) Due to
--------------------------------

Rate/
Rate Volume Volume Total
---- ------ ------ -----
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest earning assets:
Loans $ 35 $1,401 $ 155 $1,591
Securities 5 17 -- 22
Other interest-earning assets (6) 180 (4) 170
------ ------ ------ ------

Total 34 1,598 151 1,783
------ ------ ------ ------

Interest-bearing liabilities:
Deposits:
Demand, money-market and NOW deposits (28) 491 (94) 369
Savings -- 12 -- 12
Certificates of deposit 7 507 26 540
Other (1) 6 (1) 4
------ ------ ------ ------

Total (22) 1,016 (69) 925
------ ------ ------ ------

Net change in net interest income $ 56 $ 582 $ 220 $ 858
====== ====== ====== ======
</TABLE>

Comparison of the Year Ended December 31, 1997 and 1996

General. Net earnings for the year ended December 31, 1997, were
$109,506 or $.07 per basic share ($.07 per diluted share) compared to a net loss
of $(342,295) or $(.26) for the year ended December 31, 1996. This improvement
in the Company's net operating results was primarily due to an increase in net
interest income partially offset by an increase in non-interest expenses.

Interest Income and Expense. Interest income increased by $1.8 million
from $740,000 for the year ended December 31, 1996, to $2.5 million for the year
ended December 31, 1997. Interest income on loans increased $1.6 million due to
an increase in the average loan portfolio balance from $3.8 million for the year
ended December 31, 1996, to $20.5 million for 1997, as well as an increase in
the weighted-average yield of 93 basis points. Interest on securities increased
$22,000 due to an increase in the average securities balance from $2.1 million
in 1996 to $2.3 million in 1997, as well as an increase in the average yield
from 5.78% in 1996, to 6.01% in 1997. Interest on other interest-earning assets
increased $170,000 primarily due to an increase from $5.3 million in average
other interest-earning assets in 1996, to $8.5 million in 1997.

Interest expense increased $925,000 in 1997 compared to 1996. Interest
expense increased due to an increase in average deposits from $6.5 million to
$29.9 million from 1996 to 1997.

Provision for Loan Losses. The provision for loan losses was charged to
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type of
lending conducted by Citizens Bank, industry standards, the amounts of
nonperforming loans, general economic conditions, particularly as they relate to
the Company's market areas, and other factors related to the collectibility of
the Company's loan portfolio. Management believes that the allowance for loan
losses of $298,000 is adequate at December 31, 1997.

Other Income. Other income increased from $70,000 in 1996 to $273,000
in 1997 primarily because of gains from the sale of loans of $68,000 in 1997,
with no corresponding amount in 1996, and increased service charges on deposit
accounts in 1997 compared to 1996.

Other Expense. Total other expense increased $345,000 for the year
ended December 31, 1997, compared to 1996, primarily due to an increase in
employee compensation and benefits of $310,000 due to additional employees. All
other operating expenses increased primarily due to the growth of the Company.

Income Taxes. The income tax provision was $66,000 (an effective rate
of 37.6%) for 1997 compared to a credit of $(191,000) (an effective rate of
[35.8%]) for 1996.

Impact of Inflation and Changing Prices

The consolidated financial statements and related data presented herein
have been prepared in accordance with Generally Accepted Accounting Principles
("GAAP"), which require the measurements of financial position and operating
results in terms of historical dollars, without considering changes in the
relative purchasing power of money over time due to inflation. Unlike most
industrial companies, substantially all of the assets and liabilities of the
Company are monetary in nature. As a result, interest rates have a more
significant impact on the Company's performance than the effects of general
levels of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services, since
such prices are affected by inflation to a larger extent than interest rates.

Future Accounting Requirements

Financial Accounting Standards 130 - Reporting Comprehensive Income,
establishes standards for reporting comprehensive income. The Standard defines
comprehensive income as the change in equity of an enterprise except those
resulting from stockholder transactions. All components of comprehensive income
are required to be reported in a new financial statement that is displayed with
equal prominence as existing financial statements. The Company will be required
to adopt this Standard effective January 1, 1998. As the Statement addresses
reporting and presentation issues only, there will be no impact on operating
results from the adoption of this Standard.

Financial Accounting Standards 131 - Disclosures about Segments of an
Enterprise and Related Information, establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The Company will be required to adopt this Standard effective January 1, 1998.
As the Standard addresses reporting and disclosure issues only, there will be no
impact on operating results from adoption of this Standard.

BUSINESS

The Company

CCBI is a one-bank holding company organized under the laws of the
State of Florida and headquartered in Marco Island, Florida. CCBI operates
primarily through its wholly-owned banking subsidiary, Citizens Bank, a
Florida-chartered commercial bank and Citizens Financial, a mortgage brokerage
company which became inactive in August 1997.

As of December 31, 1997, CCBI had total assets of $44.4 million, total
deposits of $36.9 million and total stockholders' equity of $6.8 million. CCBI
reported consolidated net earnings income of $110,000, or $.07 per basic and
diluted share for the year ended December 31, 1997.

The Bank

Citizens Bank, a Florida-chartered commercial bank, commenced its
operations on March 8, 1996. Citizens Bank has two full-service offices, its
main office in Marco Island, Florida, and its East Tamiami Trail Branch Office
in Naples, Florida. Citizens Bank's deposits are federally insured up to
applicable limits by the FDIC under the Bank Insurance Fund ("BIF").

The principal sources of funds for Citizens Bank's lending and
investing activities traditionally have been deposits, repayment of loans and
earnings from operations. Citizens Bank's primary sources of income are interest
and fees on loans, fees on transaction accounts and other activities, gains on
sales of mortgage loans in the secondary market, and interest and dividends on
mortgage-backed securities and investments. Citizens Bank's principal costs are
interest paid on deposit accounts and operating expenses.

Citizens Bank operates a traditional community banking business through
its retail banking facilities with a friendly and professional staff that is
committed to developing long-term relationships with customers by offering
personalized, quality service. Citizens Bank offers a broad range of retail and
commercial banking services, including various types of deposit accounts and
loan products for small businesses and consumers. As part of its "community
banking" approach, Citizens Bank encourages its Officers to actively participate
in community organizations.

As of December 31, 1997, Citizens Bank had total assets of $42.4
million, total deposits of $36.9 million and total stockholders' equity of $4.4
million. Citizens Bank is the only community bank headquartered in Marco Island.
Citizens Bank is considered a "well-capitalized" financial institution under
regulations adopted by the FDIC. See "REGULATION AND SUPERVISION - Prompt and
Corrective Action."

Primary Service Area

The Company is headquartered in Marco Island, Florida, which has a
population of approximately 13,000 residents in the Summer months and a seasonal
high of 30,000 residents in the Winter months. Marco Island is approximately six
miles long and four miles wide, and is located in Collier County, Florida. Marco
Island was originally developed as a retirement community, but the demographics
are changing as younger families move into the area. Tourism is the primary
industry of Marco Island, which is supported by three large resort properties.
There is no manufacturing activity on the island. Marco Island is approximately
16 miles South of downtown Naples, and 104 miles West of Miami, Florida.

The Company's East Tamiami Trail Branch is located in the southern part
of Naples, Florida. Naples has a population of approximately 100,000 residents
and is the county seat for Collier County, which is the Company's Primary
Geographic Market. The seasonal population of Collier County, based upon
statistical information provided by the Naples Chamber of Commerce, is
approximately 200,000 residents. Collier County is, in land mass, the
second-largest county in Florida, with a land area of 1,994 square miles. It has
more than 675 miles of coastline and is served by the Southwest Regional Airport
in Ft. Myers, the Naples Airport, and the Marco Island Airport which
accommodates private and chartered flights. Collier County is one of the fastest
growing areas in the State of Florida. The primary business sectors in greater
Collier County include the service industry, retail trade industry, finance
industry, insurance industry, real estate development and sales, and the
agriculture industry. Based upon the latest statistical data, the median family
income for Collier County is the highest in the State of Florida.

The Company views its Primary Service Area and Primary Geographic
Market to be a dynamic growing market.

Competition

The Company experiences competition for attracting deposits and making
loans from other financial institutions, including larger regional bank holding
companies, commercial banks, savings banks, and credit unions. Additional
competition for deposits comes from government securities, money market funds,
mutual fund and securities brokerage firms. The primary factors in competing for
deposits are interest rates, the range of financial services offered,
convenience of office locations, and the flexibility of office hours. The
primary factors in competing for loans include interest rates, loan fees,
flexible terms, and timely loan decisions.

The Company competes for deposits by offering a variety of deposit
programs geared to its potential customers. The Company responds to its
competition by developing strong ties in the local community and providing a
high quality of personal banking services to families, professionals, retirees,
and owner-operated businesses with an emphasis on flexibility and timely
responses to customer demands.

With respect to loans, since opening for business in March 1996, the
Company has placed an emphasis on originating commercial and consumer loans. The
Company has targeted small- to medium-sized businesses as its potential customer
base, as management believes that large out-of-state financial institutions
which have acquired several local banks have shifted the focus of the acquired
banks away from these business opportunities. The Company also originates
residential loans by offering various adjustable-rate and fixed-rate mortgage
loan products.

Geographic deregulation has also had a material impact on the financial
industry. Federally-chartered savings institutions have interstate banking
authority. As for commercial banks, to date, all but three states have enacted
some form of interstate banking legislation. The most common form of interstate
banking statutes have either regional limitations or reciprocity requirements. A
growing number of states, however, now provide for unrestricted entry. A bank
holding company is now permitted to acquire existing banks across state lines
and may consolidate its interstate subsidiary banks into branches and merge with
a bank in another state, depending upon state laws. Recent legislation in
Florida has removed most of the final barriers to interstate banking in Florida.

Lending Activities

General. The Company's primary business is making commercial business,
real estate and consumer loans. As of December 31, 1997, the loan portfolio
totaled $26.7 million, or 60% of total assets. See "MANAGEMENT DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Loan Portfolio
Composition".

Loan Underwriting. Loan activities are subject to underwriting
standards and loan origination procedures prescribed by the Board of Directors
and management. Loan applications are obtained to determine the borrower's
ability to repay, and the more significant items on these applications are
verified through the use of credit reports, financial statements and
confirmations. The Company's loan policy for real estate loans generally
requires that collateral be appraised by an independent, outside appraiser
approved by the Board of Directors.

Loans are approved at various management levels up to and including the
Board of Directors, depending on the amount of the loan. Loan approvals are made
in accordance with a Chart of Delegated Authority approved by the Board of
Directors. Generally, loans less than $250,000 are approve by authorized
officers or loan underwriters. Loans over $250,000 usually require approval by
the Loan Committee or Board of Directors.

General Loan Policies. The policy of the Company for real estate loans
is to have a valid mortgage lien on real estate securing a loan and to obtain a
title insurance policy which insures the validity and priority of the lien.
Borrowers must also obtain hazard insurance policies prior to closing, and when
the property is in a flood prone area, flood insurance is required. Most real
state loans also require the borrower to advance funds on a monthly basis,
together with each payment of principal and interest, to a mortgage escrow
account from which disbursements are made for items such as real estate taxes
and property insurance.

The Company is permitted to lend up to 100% of the appraised value of
the real property securing a mortgage loan. However, if the amount of a
conventional, residential loan (including a construction loan or a combination
construction and permanent loan) originated or refinanced exceeds 80% of the
appraised value or of the purchase price, whichever is less, the Company is
required by federal regulations to obtain private mortgage insurance on that
portion of the principal amount of the loan that exceeds 80% of the value of the
property. The Company will originate single-family residential mortgage loans
with up to a 90% loan-to-value ratio if the required private mortgage insurance
is obtained. Loans over 95% loan-to-value ratio are limited to special community
support programs or one of the FHA, VA, or Farmers Home Administration ("FmHA")
guarantee or insurance programs. The loan-to-value ratio on a home secured by a
junior lien generally does not exceed 85%, including the amount of the first
mortgage on the collateral. With respect to home loans granted for construction
or combination construction/permanent financing, Citizens Bank will lend up to
80% of the appraised value of the property on an "as completed" basis. The
Company generally limits the loan-to-value ratio on multi-family residential and
commercial real estate loans to 75% of value. Consumer loans are considered to
be loans to natural persons for personal, family or household purposes, and
these loans may be unsecured, secured by personal property or secured by liens
on real estate which, when aggregated with prior liens, equals or exceeds the
appraised value of the collateral property.

The maximum amount which the Company could have loaned to one borrower
and the borrower's related entities as of December 31, 1997, was approximately
$1.1 million. See "REGULATION AND SUPERVISION - Legislation and Regulation of
Citizens Bank".

Interest rates charged on loans are affected principally by competitive
factors, the demand for such loans and the supply of funds available for lending
purposes. These factors are, in turn, affected by general economic conditions,
monetary policies of the federal government, including the Federal Reserve
Board, legislative tax policies and government budgetary matters.

Residential Loans. The Company currently originates fixed-rate
residential mortgage loans and ARM loans for terms of up to 30 years. As of
December 31, 1997, $7.3 million or 27% of the Company's total loan portfolio
consisted of one-to-four family residential real state loans. As of such date,
approximately $6.8 million, or 93% of these loans were ARM loans.

The residential ARM loans currently being offered have interest rates
that are fixed for a period of one, three or five years and then after the
initial period the interest rate is adjusted annually based upon an index such
as the yield on treasury securities adjusted to a one-year maturity, plus a
margin. Most of the Company's ARM programs limit the amount of any increase or
decrease in the interest rate at each adjustment and over the life of the loan.
Typical limitations are 2% for each adjustment with a limit of 6% over the life
of the loan. The Company may offer ARM loans with different annual and
life-of-loan interest change limits, shorter or longer adjustment periods and
different base indices as may be appropriate to meet market demands, portfolio
needs, and the Company's interest rate risk management goals. While the Company
usually offers an initial rate on ARM loans below a fully indexed rate, the loan
is always underwritten based on the borrower's ability to pay at the interest
rate which would be in effect after adjustment of the loan. Some ARM loans
include features that allow the borrower, under special conditions, to convert
the loan to a fixed rate at the then prevailing market rates.

ARM loans reduce the risks to the Company concerning changes in
interest rates, but involve other risk because as interest rates increase, the
borrower's required payments increase, thus increasing the potential for
default. Marketability of real estate loans is also affected by the level of
interest rates.

Most of the Company's fixed rate home loans are originated for 30-year
amortization terms. Borrowers requesting a term of 15 years or less are usually
granted an interest rate slightly lower than is offered for a 30-year amortizing
loan. These loans are originated to ensure compliance with documentation and
underwriting standards which permit their sale in the secondary market to
institutional investors such as Fannie Mae. Fixed-rate home loans include a "Due
on Sale" clause which provides the bank with the contractual right to declare
the loan immediately due and payable in the event the borrower transfers
ownership of the property without the Company's consent. It is the Company's
policy to enforce "Due on Sale" provisions.

Construction Loans. The Company has and continues to offer adjustable
and fixed-rate residential construction loans to owners wishing to construct
their primary residence and to selected builders/developers to build one- to
four-family dwellings in the Company's Primary Geographic Market. As of December
31, 1997, construction loans amounted to $2.7 million, or 10.1% of the total
loan portfolio. Construction loans to individuals usually are originated in
connection with the permanent loan on the property ("construction-permanent
loans"). Construction-permanent loans typically provide for a construction term
of six months to one year followed by the permanent loan term of up to 30 years.
Loans to builders/developers are restricted to homes that are pre-sold or are
constructed on a speculative basis ("Spec Loans"). Loans to builders for the
construction of a home for which there is no immediate buyer at the time of
construction are considered Spec Loans. Speculative builder loans are typically
for one year and provide for interest only payments during the loan term. The
financial capacity of the builder, the builder's experience, and the credit
history of the builder, as well as present market conditions are reviewed when
considering Spec Loans. As of December 31, 1997, the Company had three Spec
Loans for an aggregate of $528,000. All of the Spec Loans are to the same
builder and are performing in accordance with their original terms.

Loan advances during construction are made on a percentage of
completion basis, and funds are typically disbursed in four to six draws, each
after an inspection is made by Company personnel and/or authorized independent
inspectors and after a written report of construction progress is received.
Construction financing is generally considered to involve a higher degree of
risk of loss than long-term financing on improved, owner-occupied real estate.
Risk of loss on a construction loan is dependent largely upon the accuracy of
the initial estimate of construction cost and of the initial estimate of the
property's value upon completion. During construction, a number of factors could
result in delays and cost overruns. If the estimate of construction costs proves
to be inaccurate, funds may be required to be advanced beyond the amount
originally committed to complete construction. If the estimate of value proves
to be high, the Company may be confronted with collateral having a value which
is insufficient to assure full payment. Repayment of Spec Loans usually depends
upon the builder successfully negotiating a sale for the property. Sales of
homes are affected by market conditions, interest rates, and the supply and
demand for such products.

Consumer Loans. The Company makes various types of consumer loans,
including automobile and boat loans, but primarily home equity loans. Consumer
loans are originated in order to provide a range of financial services to
customers and to create stronger ties to its customers and because the shorter
term and normally higher interest rates on such loans help maintain a profitable
spread between the Company's average loan yield and its cost of funds. The terms
of consumer loans generally range from one to five years. Underwriting standards
for consumer loans include an assessment of the applicant's repayment history on
other debts and ability to meet existing obligations and payments on the
proposed loans. Although the applicant's creditworthiness is a primary
consideration, the underwriting process also includes a comparison of the value
of the security, if any, to the proposed loan amount. Consumer loans generally
involve more credit risks than mortgage loans because of the type and nature of
the collateral or absence of collateral. Consumer loan repayments are dependent
on the borrower's continuing financial stability, and are likely to be adversely
affected by job loss, divorce and illness. Furthermore, the application of
various federal and state laws, including federal and state bankruptcy and
insolvency laws, may limit the amount which can be recovered on such loans. In
most cases, any repossessed collateral will not provide an adequate source of
repayment of the outstanding loan balance. Management believes that the yields
earned on consumer loans are commensurate with the credit risk associated with
such loans. The Company intends to continue to increase its investment in these
types of loans. As of December 31, 1997, consumer loans amounted to $2.3
million, or 9% of the total loan portfolio.

Commercial Real Estate Loans. Commercial real estate loans are secured
primarily by office and retail business properties located in the Primary
Geographic Market. These types of loans amounted to $9.4 million or 35% of the
total loan portfolio as of December 31, 1997. Commercial real estate loans may
be for an amortization term of up to 25 years, but frequently include a maturity
in three to six years. The Company generally does not offer fixed-rate
commercial real estate or multi-family loans.

Commercial and multi-family real estate loans are originated with a
loan-to-value ratio not exceeding 75%. Loans secured by this type of collateral
will continue to be a part of the Company's future loan program. Commercial and
multi-family real estate loans are generally larger and involve a greater degree
of risk than residential mortgage loans. Because payments on loans secured by
commercial property depend to a large degree on results of operations and
management of the properties, repayment of such loans may be subject to a
greater extent to adverse conditions in the real estate market or the economy.
At December 31, 1997, the largest commercial real estate loan was $1.2 million
secured by commercial rental property located in Marco Island, Florida, and was
current. The largest multi-family real estate loan was $478,000, secured by
three, four-plexes located in Naples, Florida, and was current.

Commercial Loans. The Company's commercial loans are business loans
that are not secured by real estate. At December 31, 1997, the largest
commercial loan was $750,000 secured by stock of a local bank. The Company has
made no Small Business Administration ("SBA") loans. The Company is not a
designated SBA underwriter. The Company would consider making SBA loans if the
demand for such loans arise in its Primary Geographic Market. SBA loans, which
are guaranteed in part by the SBA, typically include a higher loan balance
relative to the value of the collateral, as opposed to loans originated without
a government guarantee.

Income from Lending Activities. Fees are earned in connection with loan
commitments and originations, loan modifications, late payments, changes of
property ownership and for miscellaneous services related to loans. Income from
these activities varies from period to period with the volume and type of loans
originated, sold and purchased, which in turn is dependent upon prevailing
mortgage interest rates and their effect on the demand for loans in the Primary
Geographic Market.

Loan fees typically are charged at the time of loan origination and may
be a flat fee or a percentage of the amount of the loan. Under current
accounting standards the total amount of such fees cannot typically be
recognized as income and a portion of the fees are deferred and taken into
income over the contractual life of the loan, using a level yield method. If a
loan is prepaid or refinanced, all remaining deferred fees with respect to such
loan are taken into income at that time.

Nonperforming Loans and Real Estate Owned. When a borrower fails to
make a required payment on a loan, the Company attempts to collect the payment
by contacting the borrower. If a payment on a loan has not been received by the
end of a grace period (usually 10 days from the payment due date), notices are
sent at that time, with follow-up contacts made thereafter. In most cases,
delinquencies are cured promptly. If the delinquency exceeds 29 days and is not
cured through normal collection procedures, the Company will institute more
formal measures to remedy the default, including the commencement of foreclosure
proceedings. The Company will then attempt to negotiate with the delinquent
borrower to establish a satisfactory payment schedule.

If foreclosure is required, when completed, the property would be sold
at a public auction in which the Company may participate as a bidder. If the
Company is the successful bidder, the acquired real estate property is then
included in the other real estate owned "OREO" account until it is sold. The
Company is permitted under federal regulations to finance sales of real estate
owned by "loans to facilitate", which may involve more favorable interest rates
and terms than generally would be granted under normal underwriting guidelines.
As of December 31, 1997, the Company had no OREO properties, had no loans past
due 90 days or more, and had not been required to institute foreclosure on any
of its loans.

Asset Classification

Commercial banks are required to review and when appropriate classify
their assets on a regular basis. FDIC and state banking examiners have authority
to identify problem assets and, if appropriate, require them to be classified.
There are three classifications for problem assets: substandard, doubtful and
loss. Substandard assets have one or more defined weaknesses and are
characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss. An asset classified as loss is considered uncollectible and
of such little value that continuance as an asset of the institution is not
warranted. If an asset or portion thereof is classified as loss, the insured
institution establishes specific allowance for loan losses for the full amount
of the portion of the asset classified as loss. All or a portion of general loan
loss allowances established to cover possible losses related to assets
classified substandard or doubtful may be included in determining an
institution's regulatory capital, while specific valuation allowances for loan
losses generally do not qualify as regulatory capital. Assets that do not
warrant classification in one of the aforementioned categories, but possess
weaknesses, are classified as special mention and are monitored by the Company.

At December 31, 1997, the Company had no loans classified as
Substandard, Doubtful, or Loss.

Provision for Losses on Loans

The provision for loan losses is established through a provision for
loan losses charged against income. Loans are charged against the provision when
management believes that the collectibility of the principal is unlikely. The
provision is an estimated amount that management believes will be adequate to
absorb losses inherent in the loan portfolio based on evaluations of its
collectibility. The evaluations take into consideration such factors as changes
in the nature and volume of the portfolio, overall portfolio quality, specific
problem loans and commitments, and current anticipated economic conditions that
may affect the borrower's ability to pay. While management uses the best
information available to recognize losses on loans, future additions to the
provision may be necessary based on changes in economic conditions. At December
31, 1997, the Company had a total provision for loan losses of $298,000
representing 1.12% of total loans. See "MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Credit Risk" for the table
showing the Company's provision for loan losses.

Non-Bank Subsidiary

As of December 31, 1997, the Company had one wholly-owned non-bank
subsidiary, Citizens Financial. Citizens Financial was established on March 27,
1997, to be a mortgage brokerage company in Southwest Florida. As of December
31, 1997, the Company's aggregate investment in Citizens Financial was $100,000,
or 0.2% of consolidated assets. The operations of Citizens Financial were
suspended in August 1997.

Personnel

As of December 31, 1997, the Company had 19 full-time employees and 6
part-time employees. The employees are not represented by any collective
bargaining group. The Company believes its relations with its employees to be
good.

The Company currently maintains a comprehensive employee benefit
program providing, among other benefits, hospitalization and major medical
insurance, long-term disability insurance, life insurance, and education
assistance. Such employee benefits are considered by management to be generally
competitive with employee benefits provided by other major employers in the
Company's geographic market area.

Legal Proceedings

There are no material pending legal proceedings to which CCBI or
Citizens Bank is a party, or to which any of their property is subject.

Properties

The following table sets forth information with respect to the
Company's offices as of December 31, 1997.

Year Facility Facility Net Book
Location Opened Status Value
-------- ------ ------ -----

Main Office
Citizens Community Bank 1996 Owned(1) $1,701,000
650 E. Elkcam Circle
Marco Island, Florida 34145

Branches
East Tamiami Trail Office 1997 Owned(2) $ 785,000
5101 East Tamiami Trail
Naples, Florida 34113
-------------------------

(1) The main office facility is owned by Citizens Bank.
(2) The East Tamiami Trail Office is a 12,000 square foot two-story building
which is owned by CCBI. Citizens Bank leases 4,000 square feet on the first
floor of the building. The remaining 8,000 square feet is being leased to
non-affiliated third parties.

REGULATION AND SUPERVISION

General

As a one-bank holding company registered under the BHC Act, CCBI is
subject to regulation and supervision by the Federal Reserve. Under the BHC Act,
CCBI's activities and those of Citizens Bank are limited to banking, managing or
controlling banks, furnishing services to or performing services for its
subsidiaries or engaging in any other activity that the Federal Reserve
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto. As a Florida corporation, CCBI is also
subject to Chapter 607, Florida Business Corporation Act ("FBC Act") and the
regulations promulgated thereunder by the Florida Department of State. As a
state-chartered commercial bank, Citizens Bank is subject to extensive
regulation by the Florida Department and the FDIC.

CCBI and Citizens Bank are required to file reports with the Federal
Reserve, the Florida Department and the FDIC concerning their activities and
financial condition, in addition to obtaining regulatory approvals prior to
entering into certain transactions such as mergers with or acquisitions of other
financial institutions. Periodic examinations are performed by the Federal
Reserve, the Florida Department and the FDIC to monitor CCBI's compliance with
the various regulatory requirements. Citizens Bank's deposits are insured up to
the applicable limits by the FDIC under BIF. Citizens Bank is subject to
regulation by the Federal Reserve and the Florida Department with respect to
reserves required to be maintained against transaction deposit accounts and
certain other matters.

Regulation of CCBI

General. The BHC Act prohibits CCBI from acquiring direct or indirect
control of more than 5% of any class of outstanding voting stock or acquiring
substantially all of the assets of any bank or merging or consolidating with
another bank holding company without prior approval of the Federal Reserve. The
BHC Act also prohibits CCBI from acquiring control of any bank operating outside
the State of Florida, unless such action is specifically authorized by the
statutes of the state where the bank to be acquired is located. Additionally,
the BHC Act prohibits CCBI from engaging in or from acquiring ownership or
control of more than 5% of the outstanding voting stock of any company engaged
in a non-banking business, unless such business is determined by the Federal
Reserve to be so closely related to banking or managing or controlling banks as
to be properly incident thereto. The BHC Act generally does not place
territorial restrictions on the activities of such non-banking related
activities.

Transactions between CCBI and Citizens Bank. CCBI's authority to engage
in transactions with related parties or "affiliates," or to make loans to
certain insiders, is limited by Sections 23A and 23B of the Federal Reserve Act
which apply to all transactions by an insured-state non-member bank or a holding
company with any affiliate. Sections 23A and 23B generally define an "affiliate"
as any company that controls or is under common control with an institution.
Subsidiaries of a financial institution, however, are generally exempted from
the definition of "affiliate." Section 23A limits the aggregate amount of
transactions with any individual affiliate to 10% of the capital and surplus of
CCBI and also limits the aggregate amount of transactions with all affiliates to
24.1% of CCBI's capital and surplus. Certain transactions with affiliates, such
as loans to affiliates or guarantees, acceptances and letters of credit issued
on behalf of affiliates, are required to be collateralized by collateral in an
amount and of a type described in the statute. The purchase of low quality
assets from affiliates is generally prohibited. Section 23B provides that
certain transactions with affiliates, including loans and asset purchases, must
be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the institution as those
prevailing at the time for comparable transactions with non-affiliated
companies. In the absence of comparable transactions, such transactions may only
occur under terms and circumstances, including credit standards, that in good
faith would be offered to or would apply to non-affiliated companies.

Support of Subsidiary Depository Institutions. In accordance with
Federal Reserve policy, CCBI is expected to act as a source of financial
strength and to commit resources to support Citizens Bank. This support may be
required at times when CCBI might not be inclined to provide such support. Such
support would include the infusion of additional capital into an
undercapitalized bank subsidiary in situations where an additional investment in
a troubled bank might not ordinarily be made by a prudent investor. In addition,
any capital loans by a bank holding company to any of its subsidiary banks must
be subordinate in right of payment to depositors and to certain other
indebtedness of such subsidiary banks. In the event of bankruptcy, any
commitment by a bank holding company to a federal bank regulatory agency to
maintain the capital of its subsidiary bank will be assumed by the bankruptcy
trustee and will be entitled to a priority of payment.

Under the Federal Deposit Insurance Act ("FDIA") a subsidiary bank of a
bank holding company, can be held liable for any loss incurred by, or reasonably
expected to be incurred by the FDIC in connection with: (i) the default of a
commonly controlled FDIC-insured depository institution, or (ii) any assistance
provided by the FDIC to any commonly controlled FDIC insured depository
institution "in danger of default". "Default" is defined generally as the
appointment of a conservator or a receiver and "in danger of default" is defined
generally as the existence of certain conditions indicating that a default is
likely to occur in the absence of regulatory assistance.

Control of a Bank Holding Company. FRB Regulation Y, adopted pursuant
to Section 225.41 of 12 U.S.C. Section 1817(j), requires persons acting directly
or indirectly or in concert with one or more persons to give the Board of
Governors of the Federal Reserve 60 days advanced written notice before
acquiring control of a bank holding company. Under the Regulation, control is
defined as the ownership or control with the power to vote 25 % or more of any
class of voting securities of the bank holding company. The Regulation also
provides for a presumption of control if a person owns, controls, or holds with
the power to vote 10 % or more (but less than 25 %) of any class of voting
securities, and if: (i) the bank holding company's securities are registered
securities under Section 12 of the Securities and Exchange Act of 1934; or (ii)
no other person owns a greater percentage of that class of voting securities.
This Offering is subject to a Purchase Limitation which precludes a person
(individually, or together with associates of, or persons acting in concert
with, such person) from purchasing shares which when aggregated with current
holdings would exceed 9.9% of the total number of shares outstanding at the
conclusion of the Offering, with the exception of purchases to be made by Mr.
Storm who has already received approval to acquire more than 25% of the
Company's shares.

<PAGE>

Legislation and Regulation of Citizens Bank

General. From time to time, various bills are introduced in the United
States Congress with respect to the regulation of financial institutions. Recent
banking legislation, particularly the FIRREA and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), has broadened the regulatory
powers of the federal bank regulatory agencies and restructured the nation's
banking system. The following is a brief discussion of certain portions of these
laws and how they affect CCBI or Citizens Bank.

The FDICIA revised sections of the FDIA affecting bank regulation,
deposit insurance and provisions for funding of the BIF administered by the
FDIC. The FDICIA also revised bank regulatory structures embodied in several
other federal banking statutes, strengthened the bank regulators' authority to
intervene in cases of deterioration of a bank's capital level, placed limits on
real estate lending and imposes detailed audit requirements.

Prompt and Corrective Action. The FDICIA required the federal banking
regulatory agencies to set certain capital and other criteria which would define
the category under which a particular financial institution would be classified.
The FDICIA imposes progressively more restrictive constraints on operations,
management, and capital distributions depending on the category in which an
institution is classified. Pursuant to the FDICIA, undercapitalized institutions
must submit recapitalization plans to their respective federal banking
regulatory agencies, and a company controlling a failing institution must
guarantee such institution's compliance with its plan in order for the plan to
be accepted.

The FDIC's prompt and corrective action regulations define, among other
things, the relevant capital measures for the five capital categories. For
example, a bank is deemed to be "well capitalized" if it has a total risk-based
capital ratio (total capital to risk-weighted assets) of 10% or greater, a Tier
1 risk-based capital ratio (Tier 1 capital to risk-weighted assets) of 6% or
greater, and a Tier 1 leverage capital ratio (Tier 1 capital to adjusted total
assets) of 5% or greater, and is not subject to a regulatory order, agreement or
directive to meet and maintain a specific capital level for any capital measure.
A bank is deemed to be `adequately capitalized" if it has a total risk-based
capital ratio of 8% or greater, and (generally) a Tier 1 leverage capital ratio
of 4% or greater, and the bank does not meet the definition of a "well
capitalized" institution. A bank is deemed to be "critically undercapitalized"
if it has a ratio of tangible equity (as defined in the regulations) to total
assets that is equal to or less than 2%. In addition, the FDIC is authorized
effectively to downgrade a bank to a lower capital category than the bank's
capital ratios would otherwise indicate, based upon safety and soundness
considerations (such as when the bank has received a less than satisfactory
examination rating for any of the CAMELS rating categories other than capital:
i.e. Asset Quality, Management, Earnings or Liquidity). As a bank drops to lower
capital levels, the extent of action to be taken by the appropriate regulator
increases, restricting the types of transactions in which the bank may engage.
The regulatory capital standards are designed to bolster and protect the deposit
insurance fund. Citizens Bank is considered to be "well capitalized" based upon
its current capital.

Insurance on Deposit Accounts. In response to the requirements of the
FDICIA, the FDIC established a risk-based assessment system for insured
depository institutions that takes into account the risks attributable to
different categories and concentrations of assets and liabilities. The FDIC
assigns a financial institution to one of three capital categories based on the
institution's financial information, as of the reporting period ending seven
months before the assessment period. These categories consist of well
capitalized, adequately capitalized or undercapitalized, and one of three
supervisory subcategories within each capital group. The supervisory subgroup to
which an institution is assigned is based on a supervisory evaluation provided
to the FDIC by the financial institution's primary regulator, in Citizens Bank's
case the Florida Department, and information which the FDIC determines to be
relevant to the institution's financial condition and the risk posed to the
deposit insurance funds. A financial institution's assessment rate depends on
the capital category and supervisory category to which it is assigned. There are
nine assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied. BIF
assessment rates range from 0 basis points on deposits for a financial
institution in the highest category (i.e., well-capitalized and financially
sound with only a few minor weaknesses) to 31 basis points on deposits for an
institution in the lowest category (i.e., undercapitalized and posing a
substantial probability of loss to the BIF, unless effective corrective action
is taken). Citizens Bank has not been assessed a deposit insurance premium since
it began its operations in March, 1996.

Standards for Safety and Soundness. The FDICIA requires each federal
banking agency to prescribe for all insured depository institutions and their
holding companies standards relating to internal controls, information systems
and audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, compensation, fees and benefits and such other
operational and managerial standards as the agency deems appropriate. In
addition, the federal banking regulatory agencies are required to prescribe by
regulation standards specifying: (i) maximum classified assets to capital
ratios; (ii) minimum earnings sufficient to absorb losses without impairing
capital; (iii) to the extent feasible, a minimum ratio of market value to book
value for publicly traded shares of depository institutions or the depository
institution holding companies; and (iv) such other standards relating to asset
quality, earnings and valuation as the agency deems appropriate. Finally, each
federal banking agency is required to prescribe standards for employment
contracts and other compensation arrangements of executive officers, employees,
directors and principal shareholders of insured depository institutions that
would prohibit compensation and benefits and other arrangements that are
excessive or that could lead to a material financial loss for the institution.
If an insured depository institution or its holding company fails to meet any of
its standards described above, it will be required to submit to the appropriate
federal banking agency a plan specifying the steps that will be taken to cure
the deficiency. If an institution fails to submit an acceptable plan or fails to
implement the plan, the appropriate federal banking agency will require the
institution or holding company to correct the deficiency and, until corrected
may impose restrictions on the institution or the holding company including any
of the restrictions applicable under the prompt corrective action provisions of
the FDICIA.

Loans to One Borrower. Florida law generally allows a state bank such
as Citizens Bank to extend credit to any one borrower in an amount up to 25% of
its capital accounts, which are defined as unimpaired capital, surplus and
undivided profits, provided that the unsecured portion may not exceed 15% of the
capital accounts of the bank. The law permits exemptions for loans
collateralized by accounts maintained with Citizens Bank and for loans
guaranteed by the Small Business Administration, the Federal Housing
Administration and the Veterans Administration.

Payment of Dividends. While not the only source of income, a major
source of income to CCBI in the future will be dividends from Citizens Bank.
Since commencing operations in March, 1996, CCBI has not received any dividends
from Citizens Bank. A Florida chartered commercial bank may not pay cash
dividends that would cause the bank's capital to fall below the minimum amount
required by federal or Florida law. Otherwise, a commercial bank may pay a
dividend out of the total of current net profits plus retained net profits of
the preceding two years to the extent it deems expedient, except as described
below. Twenty percent of the net profits in the preceding two year period may
not be paid in dividends, but must be retained to increase capital surplus until
such surplus equals the amount of common and preferred stock issued and
outstanding. In addition, no bank may pay a dividend at any time that net income
in the current year when combined with retained net income from the preceding
two years produces a loss. The ability of Citizens Bank to pay dividends to CCBI
depends in part on the FDIC capital requirements in effect at such time and the
ability of Citizens Bank to comply with such requirements.

Brokered Deposits. In accordance with the FDICIA, the FDIC has
implemented restrictions on the acceptance of brokered deposits. In general, an
"undercapitalized" institution may not accept, renew or roll over any brokered
deposits. "Adequately capitalized" institutions may request a waiver from the
FDIC to do so, while "well capitalized" institutions may accept, renew or roll
over such deposits without restriction. The rule requires registration of
deposit brokers and imposes certain record keeping requirements. Institutions
that are not "well capitalized" (even if meeting minimum capital requirements)
are subject to limits on rates of interest they may pay on brokered and other
deposits. Citizens Bank does not have any brokered deposits.

Deposit Insurance Funds Act of 1996. On September 30, 1996, Congress
passed and the President signed into law the Deposit Insurance Funds Act of 1996
("DIFA"). Among other things, the DIFA, and rules promulgated thereunder by the
FDIC, provide for banks and thrifts to share the annual interest expense for the
Finance Corp. Bonds which were issued in the late 1980s to help pay the costs of
the savings and loan industry restructuring. The approximate annual interest
expense is $780 million of which BIF insured banks are expected to pay
approximately $322 million or 41%, while SAIF insured thrifts will pay
approximately $458 million or 59% of the interest expense. It is estimated that
the annual assessment for BIF insured institutions will be approximately 1.2
cents per $100 of deposits, while SAIF insured institutions will pay 6.5 cents
per $100 of deposits. These payments begin in 1997 and run through 1999.
Beginning in the year 2000 and continuing through the year 2017, banks and
thrifts will each pay 2.43 cents per $100 of deposits. These assessments will be
in addition to any regular deposit insurance assessments imposed by the FDIC
under FDICIA. See "Insurance on Deposit Accounts".

Interstate Banking. Under the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994, restrictions on interstate acquisitions of
banks by bank holding companies were repealed on September 29, 1995, such that
any out-of-state bank holding company would be able to acquire and consolidate
any Florida-based bank, subject to certain deposit percentage and other
restrictions on or after the effective date of the Act. The legislation also
provided that, unless an individual state elected beforehand either (i) to
accelerate the effective date or (ii) to prohibit out-of-state banks from
operating interstate branches within its territory, on or after June 1, 1997,
adequately capitalized and managed bank holding companies will be able to
consolidate multiple interstate banks. De novo branching by an out-of-state bank
would be permitted only if it is expressly permitted by the laws of the host
state. The authority of a bank to establish and operate branches within a state
will continue to be subject to applicable state branching laws. Florida has
adopted legislation which permits interstate acquisitions and interstate
branching effective June 1, 1997. Florida law prohibits de novo branching by out
of state banks.

State Assessment. State-chartered commercial banks are required by the
Florida Department regulation to pay assessments to the Florida Department to
fund the operations of the Florida Department. The general assessment, to be
paid semiannually, is computed upon a bank's total assets, including
consolidated subsidiaries, as reported in the bank's latest quarterly call
report. Citizens Bank's assessment for 1997 was $8,435.

The Federal Reserve System

Federal Reserve regulations require banks to maintain
non-interest-earning reserves against their transaction accounts (primarily NOW
and regular checking accounts). The Federal Reserve regulations generally
require that reserves of 3% must be maintained against aggregate transaction
accounts of $49.3 million or less (subject to adjustment by the Federal Reserve)
plus 10% (subject to adjustment by the Federal Reserve between 8% and 14%)
against that portion of total transaction accounts in excess of $49.3 million.
The first $4.4 million of otherwise reservable balances (subject to adjustments
by the Federal Reserve) are exempted from the reserve requirements. The balances
maintained to meet the reserve requirements imposed by the Federal Reserve may
be used to satisfy liquidity requirements. Because required reserves must be
maintained in the form of either vault cash, a non-interest-bearing account at a
Federal Reserve Bank or a pass-through account as defined by the Federal
Reserve, interest-earning assets of Citizens Bank are reduced.

Federal Securities Laws

CCBI, in connection with this Offering, filed with the Commission a
registration statement under the Securities Act for the registration of CCBI's
Common Stock. The registration under the Securities Act of shares of the Common
Stock issued in this Offering does not cover the resale of such shares. Shares
of the Common Stock purchased by persons who are not affiliates of CCBI may be
resold without further registration. Shares purchased by an affiliate of CCBI
will be subject to the resale restrictions of Rule 144 under the Securities Act.
If CCBI meets the current public information requirements of Rule 144 under the
Securities Act, each affiliate of CCBI who complies with the other conditions of
Rule 144 (including the holding period and those that require the affiliate's
sale to be aggregated with those of certain other persons) may be able to sell
in the public market, without registration, a number of shares not to exceed, in
any three-month period, the greater of: (i) 1% of the outstanding shares of
CCBI; or (ii) the average weekly volume of trading in such shares during the
preceding four calendar weeks. Provision may be made in the future by CCBI to
permit affiliates to have their shares registered for sale under the Securities
Act under certain circumstances.

The scope of regulation, supervision and permissible activities of CCBI
is subject to change by future federal and state legislation.

MANAGEMENT

Directors and Executive Officers

The Board of Directors of CCBI and Citizens Bank currently consist of
13 directors and 6 executive officers, respectively. The Board of Directors of
CCBI is currently divided into three classes, with the members of each class
serving three-year terms.

The following sets forth information regarding the directors and
executive officers of CCBI and Citizens Bank.

Diane M. Beyer, age 58, is a Director and Assistant Secretary of CCBI,
and is a member of its Audit Committee. She also serves as a Director of
Citizens Bank and as Chairman of the Board's Compensation and Personnel and CRA
Committees and member of the Executive Committee. Mrs. Beyer has extensive
business experience in the areas of administration and human resources, and is a
member of the National Association of Women in Construction and was Chairman of
its Public Relations/Marketing Committee for 1990-91. She has been a resident of
Naples, Florida, and a Human Resources Consultant since 1993, and serves in a
policy-making role in several non-profit organizations.

Joel M. Cox, Sr., age 59, has 37 years of experience in banking and
insurance. Mr. Cox is a Director of CCBI, serves as Chairman of the Executive
Committee, and is a member of the Audit Committee. Mr. Cox is Chairman of the
Board of Citizens Bank and serves as an ad hoc member of all Board committees of
Citizens Bank. Mr. Cox has been Vice President and Director of Cox Insurance
Agency, Inc., on Marco Island, Florida, since 1985. He currently serves as
Membership Chairman of the Kiwanis Club of Marco Island and serves on the Marco
Island Fair Water Committee.

Thomas B. Garrison, age 52, has over 30 years of experience in the
design and development of major software projects. Mr. Garrison is a Director of
CCBI and serves as Chairman of the Audit Committee. He is also a Director of
Citizens Bank and serves as Chairman of the EDP Committee, Vice Chairman of the
Audit Committee, and is a member of the CRA Committee. Mr. Garrison is employed
by the Barron-Collier Companies, where he has served as the Management
Information Systems Director, Chief Information Officer, and currently as the
Network Technology Manager. Mr. Garrison has been a Collier County resident,
residing in Naples, Florida, since 1988, and has been an active member of
several Collier County civic organizations, including Toastmaster, Naples
Investment Club, Small CAP Investment Club, Naples Computer Club, and the Latin
American Business Association.

Jamie B. Greusel, age 36, is Assistant Secretary to, and a member of,
the Board of Directors of Citizens Bank. Mrs. Greusel serves as a member of the
Audit Committee and the Loan Committee. She is a member of the Florida Bar,
licensed in all State Courts; member of the New Jersey Bar, licensed in all
State Courts and the United State District Court for the District of New Jersey;
member of the Real Property, Probate and Trust Section of the Florida Bar;
member of the Collier County Bar Association; Associate Member of Marco Island
Area Association of Realtors; Associate Member of the Community Association
Managers of Marco Island; Member, Attorney's Title Insurance Fund; and Vice
President, Home and School Association, St. Elizabeth Seton School

James S. Hagedorn, age 55, serves as Vice Chairman of CCBI, Chairman of
the Loan Committee and is a member of the Executive and Strategic Planning
Committees. Mr. Hagedorn also serves as Vice Chairman of the Board of Directors
of Citizens Bank, Chairman of the Loan Committee and is a member of the
Executive, Audit, Asset/Liability, Building and Facilities, and Compensation and
Personnel Committees. Mr. Hagedorn has been President and Director of Waterside
Development Corp. since 1995. He served as Chairman, President, and CEO of The
Merchant Bank of Florida, Brandon, Florida, and as President of The Merchant
Bancorporation of Florida from 1986 through 1994.

Dennis J. Lynch, age 55, is a member of the Board of Directors of CCBI
and serves as Vice Chairman of the Audit and Loan Committees. He is also a
member of the Board of Directors of Citizens Bank, where he serves as Chairman
of the Asset/Liability Committee and the Building and Facilities Committee, and
as Vice Chairman of the Compensation and Personnel and Loan Committees. Mr.
Lynch has been involved in the real estate sales and development business since
moving to Naples in 1971. He has been the owner and President of Dennis J. Lynch
and Associates, a real estate sales agency established in 1979. Since 1979, his
firm has developed and been involved in the management of over 500,000 square
feet of commercial real estate space in Collier County. Currently, the firm is a
co-developer of a 52,000 sq. ft. commercial building in Naples, Florida.

Robert A. Marks, age 66, is a member of the Board of Directors of
Citizens Bank and serves as a member of the Audit, Compensation and Personnel,
CRA, and Welcoming Package Committees, and is an alternate member of the Loan
Committee. Mr. Marks also serves as Chairman of Citizens Bank's Advisory Board.
Mr. Marks retired with over 30 years of service with Metropolitan Life as
Regional Manager heading up their operations in Tennessee and Kentucky. Mr.
Marks' involvement in the Marco Island Community includes serving as a past
President of Marco Island Men's Club, current board member of Sunrise Rotary
Club of Marco Island and the Gulfview Club of Marco Island.

Stephen A. McLaughlin, age 51, is a founding director of CCBI and of
Citizens Bank. He has served on the Boards of both companies since 1995. Mr.
McLaughlin is Senior Vice President, Secretary and Treasurer of CCBI, serves as
Vice Chairman of the Executive Committee, and is a member of the Audit, Loan and
Strategic Planning Committees. He also serves as Vice President, and Secretary
of Citizens Bank. He is Vice Chairman of the Asset/Liability Committee and is a
member of the Executive, Building and Facilities, EDP, and Loan Committees.
Prior to 1996, Mr. McLaughlin's business involved the operations of several
Maine-based real estate consulting and timber companies, including Stillwater
Land & Lumber Limited.

Michael A. Micallef, Jr., age 48, is the President and CEO of Citizens
Bank and a Vice President of CCBI. He is also a member of the Board of Directors
of Citizens Bank and is a member of the Loan Committee. In addition, Mr.
Micallef serves as Citizens Bank's Secrecy, Bribery, Security and Investment
Officer. Mr. Micallef has 29 years of experience in the banking industry and has
spent the past 19 years working for banks in South Florida. Prior to joining
Citizens Bank, Mr. Micallef was President and CEO of BankBoynton in Boynton
Beach, Florida from February, 1993 to May, 1997.

Louis J. Smith, age 74, is a member of the Board of Directors of CCBI.
Mr. Smith was a self-employed Pharmacist for 34 years, currently owns and
operates Pat's Hallmark in the Shops of Marco on Marco Island and is the Officer
in Charge of a U.S. Post Office in Marco Island. Mr. Smith was formerly a bank
director for the 1st Wisconsin Bank of Wisconsin (now First-Star).

Richard Storm, Jr., age 56, is a founding director, Chairman, CEO and
President of CCBI, and serves on the Executive and Loan Committees of the Board.
He is also a member of the Board of Directors of Citizens Bank, where he serves
as Chairman of the Executive and Audit Committees, and is a member of the
Compensation and Personnel, EDP, Loan and Welcoming Package Committees. Mr.
Storm is currently an at-large director for Group VI for Community Bankers of
Florida. Mr. Storm has an extensive background in real estate management,
marketing, finance and development. From 1987 to 1994, Mr. Storm served as a
director of Citizens National Bank and Citizens National Corporation, both of
Naples, Florida. From 1992 to 1994, Mr. Storm served as Corporate Secretary for
Citizens National Corporation. Following the Citizens National merger with
AmSouth Bank of Florida in 1994, Mr. Storm served as a City Director of AmSouth
Bank until April 1995. As a director of Citizens National Bank, Mr. Storm served
as an active member of a number of board committees. Mr. Storm is the President
of Storm & Company, Inc., a Florida corporation specializing in consulting,
venture capital and marketing. He is also President of Loanstar Capital, Inc.,
and the managing General Partner for Cumberland Associates, a shopping center
owner/operator with principal offices in Windham, Maine. He is a member of the
Loyal Order of Moose in Marco Island, the Everglades Sporting Clays Club of
Naples and has been a member of the Masons Ark Lodge 39, A.F. & A.M., in
Georgetown, Connecticut since 1968. Mr. Storm is a member of the Marco Island
Shrine Club and the Marco Island Power Squadron, Inc, and is an honorary member
of the Florida Sheriffs Association/Florida Sheriffs Youth Ranches.

John G. Wolf, age 51, is Assistant Treasurer and a member of the Board
of Directors of CCBI where he serves as the Chairman of the Strategic Planning
Committee. He is also a member of the Audit Committee, and is an alternate
member of the Loan Committee. Mr. Wolf is a practicing dentist in Naples,
Florida and is on the Board of Directors of the Florida Sports Shooting
Association, and a member of the Governor's Council on Sports and Fitness. Mr.
Wolf is also involved in health care delivery and the development and marketing
of dental practices.

W. Terrell Upson, age 59, has been Executive Vice President of the
Company since 1997. He has served as a director of Citizens Bank and the Company
from 1995-1997. Mr. Upson also served as President of Citizens Bank from May
1996 through May 1997. He was the managing director for the Summerlin Group,
Inc. of Ft. Myers from 1995-1996, and a Senior Vice President of corporate
banking for BancFlorida from 1992 to 1995.

Bruce G. Fedor, age 62, is Vice President and General Counsel of CCBI.
He is also a Vice President and the Compliance Officer for Citizens Bank. Prior
to joining Citizens Bank, Mr. Fedor was formerly associated with a Naples law
firm specializing in banking and commercial loan matters and from 1990 to 1994
served as General Counsel of BancFlorida, Inc. He is a member of the Florida and
Collier County Bars.

Sharon K. Ginn, age 44, became a Vice President/Cashier of Citizens
Bank in October, 1997. From February, 1992 to October, 1997, Mrs. Ginn was with
First National Bank and Trust Co. of the Treasure Coast in Stuart, Florida where
she was an Assistant Vice President and Accounting Manager. Mrs. Ginn has more
than 18 years of managerial and technical experience in financial institutions.

David E. Klein, age 42, became a Vice President and Loan Officer of
Citizens Bank in April, 1997, and currently serves as Executive Vice President.
Mr. Klein also serves as Citizens Bank's CRA Officer. Mr. Klein has almost 20
years of banking experience in all areas of residential and commercial lending,
the most recent of which was as Vice President/Loan Officer of Bank of Bowie in
Prince George's County, Maryland from January, 1993 to April, 1997. Prior to his
position at the Bank of Bowie, he was Vice President/Business Banking at the
First American Bank of Maryland and Branch Officer and Market Manager at the
Maryland National Bank. Mr. Klein is an active member of the Marco Island
Sunrise Rotary Club.

EXECUTIVE COMPENSATION

Employment Contracts

CCBI does not have an employment agreement with any of its officers.
Citizens Bank has an employment agreement ("Agreement") with its President and
Chief Executive Officer, Michael A. Micallef, Jr. The Agreement, which became
effective June 2, 1997, is for a one-year term and is automatically renewed for
a successive six month term, unless either party notifies the other of their
desire to terminate the Agreement at the expiration of the term. Such notice
must be given at least 30 days prior to the expiration of the current term.

The Agreement provides Mr. Micallef with a $79,000 base salary, plus
reimbursement of reasonable business expenses. In addition, Mr. Micallef may be
granted an annual performance bonus, which is solely at the discretion of the
Board of Directors. Under the Agreement, Mr. Micallef was granted Incentive
Options for 15,000 shares of Common Stock at a grant price of $10.00 per share
(adjusted to 30,000 shares at $5.00 per share as a result of the December 15,
1997, two-for-one stock split) which vest 20% per year and expire 10 years from
the date of grant, along with an automobile allowance and three-months
disability coverage.

Mr. Micallef may participate in all employee benefits, stock option
plans, pension plans, insurance plans and other fringe benefits that are
commensurate with his position. The Agreement provides for termination by
Citizens Bank for "good cause". In the event Citizens Bank chooses to terminate
Mr. Micallef's employment for reasons other than for good cause, he (or in the
event of death, his beneficiaries) would be entitled to a severance payment
equal to the total annual compensation for the remainder of the term of the
Agreement, or six months pay, whichever is greater. In the event of a change of
control of the Company, Mr. Micallef will be entitled to one-year's annual
compensation.

In the event Mr. Micallef voluntarily terminates his employment other
than for the reasons mentioned herein, all rights and benefits under the
Agreements shall immediately terminate upon the effective date of termination.

Directors Stock Options

On February 24, 1998, the Company adopted its non-employee 1998
Directors Stock Option and Limited Rights Plan ("Directors' Plan") to provide
for the grant of stock options to purchase shares of the Company's Common Stock
to non-employee directors of the Company. Non-employee directors are those
directors who do not receive a salary from CCBI or any of its subsidiaries. The
purpose of the Directors' Plan is to advance the interests of CCBI, its
subsidiaries, and its shareholders by providing the directors of the Company or
its wholly owned subsidiaries, upon whose judgment, initiative, and oversight of
the conduct of the business of the Company depends with an additional incentive
to serve on the Board of Directors of the Company or its subsidiaries, as well
as to attract persons of experience, integrity, and ability to serve as
directors in the future.

The maximum number of shares of Common Stock that may be issued
pursuant to options granted under the Directors' Plan is 150,000. Under the
Directors' Plan, non-employee directors of the Company will each be granted a
stock option for 10,000 shares of common stock and non-employee directors of
Citizens Bank who are not also directors of the Company will each be granted a
stock option for 5,000 shares of Common Stock at an exercise price of $7.50 per
share. The stock options to be granted to the respective Boards of Directors are
not cumulative. The stock options will not be granted until the Directors' Plan
is approved by a majority vote of the Company's shareholders at the Annual
Meeting of Shareholders.

The Directors' Stock Options are for a maximum term of ten years from
the effective date of the Directors' Plan, February 24, 1998. Future stock
options will be granted at an exercise price determined at the time of issuance
to be the "fair market value" of the underlying common stock on the date the
stock option was granted. Options to be granted effective February 24, 1998,
will be at an exercise price of $7.50 per share or the fair market value on that
date. Stock options will vest from a director's Affiliation Date, which is
defined as the date on which a director was elected or appointed to his or her
position, as follows: 50% of the grant on the second anniversary of the
director's Affiliation Date; 75% on the third anniversary of the Affiliation
Date; and 100% on the fourth anniversary of the Affiliation Date. The stock
options held by an outside director are canceled immediately if such director is
removed for "cause", as defined in the Directors' Plan. Neither the Directors'
Plan nor the options to be granted thereunder will be effective unless and until
Director's Plan is approved by the CCBI's shareholders.

Incentive Stock Options

The 1996 Incentive Stock Option Plan ("Plan") for officers and
employees of CCBI and its wholly owned subsidiaries was approved by CCBI's
shareholders at the 1996 Annual Meeting of Shareholders. The Plan provides for
the issuance of up to 200,000 shares (adjusted for the two-for-one stock split)
of the CCBI's Common Stock pursuant to options granted under the Plan. The
exercise price of the 36,000 shares granted in 1996 was $9.00 per share
(adjusted to 72,000 shares at $4.50 per share as a result of the two-for-one
stock split on December 15, 1997). In 1997, 129,000 Incentive Options were
granted at between $9.00 and $12.00 per share (with an adjusted price of $4.50
and $6.00 per share to reflect the December 15, 1997, two-for-one stock split).
At December 31, 1997, Incentive Options for 155,400 shares remained outstanding,
and 36,600 unallocated shares were available for grant. The Incentive Options
have 10 year terms from the date of the grant and vest at a rate of 20% per
year.

The following table sets forth information concerning the Incentive
Options that have been granted (as adjusted to reflect the December 15, 1997,
two-for-one stock split) to the executive officers of the Company and Citizens
Bank.

Price
Name Shares Granted Date of Grant Per Share(1)
- ---- -------------- ------------- ------------

David E. Klein 15,000 April 1, 1997 $4.75
3,000 August 19, 1997 5.50
3,000 October 21, 1997 6.00

Bruce G. Fedor 10,000 November 10, 1997 6.00

Sharon K. Ginn 10,000 October 20, 1997 5.63

Stephen A. McLaughlin 10,000 October 8, 1996 4.50
10,000 May 21, 1997 5.00

Michael A. Micallef, Jr. 30,000 June 4, 1997 5.00

W. Terrell Upson 20,000 May 20, 1996 4.50
10,000 February 18, 1997 4.50

Director Compensation

CCBI does not presently compensate directors for Board or Committee
meetings. Effective October 1, 1997, Citizens Bank began paying directors' fees
to its outside directors. Directors receive $100 for each Board meeting attended
and $25 for each Committee meeting attended.

CERTAIN TRANSACTIONS

Indebtedness of Management

The policy of the Company is generally not to make loans to directors
and officers, but permits loans to employees. Citizens Bank is also subject to
the provisions of Section 22(h) of the Federal Reserve Act. Any credit extended
by Citizens Bank to directors, executive officers and, to the extent otherwise
permitted, principal shareholders, or any affiliates thereof must be: (i) on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions by Citizens Bank with
non-affiliated parties; and (ii) not involve more than the normal risk of
repayment or present other unfavorable features.

As of December 31, 1997, Citizens Bank had no loans outstanding to
directors or executive officers, or their affiliates as that term is defined by
Commission regulations.

MARKET FOR COMMON STOCK AND DIVIDENDS

Limited Trading Activity

The price of CCBI's Common Stock is currently quoted on the Nationsl
Quotation Bureau System Pink Sheets under the symbol "CCBI". Prior to this
Offering, there has been only limited trading activity. Although the Company
expects that an active trading market will develop, there can be no assurance
that an active trading market will develop at the completion of this Offering or
that such a market , if developed, will continue. It is the Company's intent to
list the Common Stock on the Nasdaq - SmallCap Market sometime during the fourth
quarter of 1998 or the first quarter of 1999 depending on market conditions and
assuming the Company meets the Nasdaq SmallCap listing requirements.

Dividends

CCBI has not paid a dividend (cash or stock) since its inception. The
Company expects that its earning will be retained to support growth and
expansion into new business opportunities. The Company does not expect top pay a
cash dividend in the forseeable future.

<PAGE>

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table indicates certain information regarding the current
beneficial ownership of Common Stock by each of the Company's directors and
executive officers, and all of the directors and executive officers as a group.
It is anticipated that 100,000 shares of the Offering will be purchased by the
Company's executive officers and directors, but there has been no formal
commitment to purchase shares as of the date of this Prospectus.

% of % of
Amount Ownership Ownership
Owned at Based on Based on
December 31, % of the Total the Total
Name 1997 Ownership(1) Minimum Maximum
- ---- ---- ------------ ------- -------
Diane M. Beyer 10,000(2) (3) % (3) % (3) %
Joel M. Cox, Sr 58,730(4) 3.69 3.11 2.27
Thomas B. Garrison 23,500(5) 1.49 1.25 (3)
James S. Hagedorn 20,000(6) 1.27 1.07 (3)
Dennis J. Lynch 58,500(7) 3.68 3.09 2.26
Stephen A. McLaughlin 62,000(8) 3.89 3.27 2.39
Louis Smith 400 (3) (3) (3)
Richard Storm, Jr 450,080(9) 26.01 22.17 16.48
Jack G. Wolf 39,000(10) 2.46 2.07 1.51
Michael A. Micallef, Jr N/A N/A N/A N/A
W. Terrell Upson 14,600(11) (3) (3) (3)
Sharon K. Ginn N/A N/A N/A N/A
Jamie B. Greusel 3,600(12) (3) (3) (3)
David E. Klein 20,700(13) 1.31 (3) (3)
Robert A. Marks 9,000(14) (3) (3) (3)
Linda J. Sandlin 3,000(15) (3) (3) (3)

All Directors and
Executive Officers as a
Group (16 persons) 773,110 42.53% 36.50% 27.44%
======= ===== ===== =====

- -----------------------------
(1) Percentage based on current beneficial ownership assuming shares under
Warrants have been exercised.
(2) Amount includes 8,000 shares held jointly with Mrs. Beyer's husband,
Robert F. Beyer, and 1,600 unexercised shares subject to Warrants.
(3) Amount is less than 1%.
(4) Amount includes 18,310 unexercised shares subject to Warrants; 20,000
shares held by Joel M. Cox as Trustee for the Joel M. Cox Revocable Trust;
11,000 shares held by Cede & Co. f/b/o Joel M. Cox; 6,200 shares held by
the Cox's Insurance Agency, Inc. (Joel M. Cox, Vice President); and 2,000
shares held by Joan C. Cox, Mauale M. Greene and William Greene, in which
Mr. Cox disclaims any beneficial interest; and 1,220 shares owned by the
Joan C. Cox Revocable Trust.
(5) Amount includes 11,600 shares held individually; 6,400 shares held by his
individual retirement account; 1,000 shares held by his wife's individual
retirement account; and 4,500 unexercised shares subject to Warrants
(6) Amount includes 19,000 shares held by Robert W. Baird & Co. f/b/o James S.
Hagedorn IRA, and 1,000 shares held by Robert W. Baird f/b/o Pat Hagedorn
IRA.
(7) Amount includes 29,000 shares held by Cede & Co. f/b/o Dennis Lynch IRA;
10,000 shares held by Cede & Co. f/b/o Bonnie Lynch; and 19,500
unexercised shares subject to Warrants.
(8) Includes 20,000 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company=s initial stock offering;
2,000 options vested under the 1996 Incentive Stock Option Plan; 15,000
shares owned individually by Mr. McLaughlin; 8,000 shares held by the
Stillwater Land & Lumber Limited Pension Plan of which Mr. McLaughlin is
the administrator and sole beneficiary; and 17,000 shares held by the
Stillwater Land & Lumber Limited Profit Sharing Plan of which Mr.
McLaughlin is the administrator and sole beneficiary.
(9) Includes 158,730 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company=s initial stock offering;
196,810 shares owned individually by Mr. Storm; 3,000 shares owned by
Storm & Company; 51,000 shares held by the Richard Storm Profit Sharing
Plan; 10,000 shares owned by the Kathleen Storm Profit Sharing Plan; 540
shares owned by his wife, Kathleen Storm; and 30,000 held by US Clearing
FBO Richard Storm, Jr. Profit Sharing Plan.
(10) Amount includes 26,000 shares held individually and 13,000 unexercised
shares subject to Warrants.
(11) 14,600 shares owned individually.
(12) Includes 1,200 unexercised shares subject to Warrants; 2,000 shares owned
jointly with her husband; 200 shares c/f daughter Danin L. Greusel; and
200 shares c/f daughter Mikilena A. Greusel.
(13) Includes 5,500 unexercised shares subject to Warrants and 15,200 shares
owned individually.
(14) Includes 1,000 unexercised shares subject to Warrants and 8,000 shares
owned jointly with his wife.
(15) Includes 1,000 unexercised shares subject to Warrants and 2,000 shares
owned jointly with her husband. Principal Holders of Voting Securities.
The following table sets forth information as of December 31, 1997, with
respect to the ownership of shares of Common Stock by beneficial owners of
more than 5% of the Common Stock of CCBI.

Principal Holders of Voting Securities. The following table sets forth
information as of December 31, 1997, with respect to the ownership of shares of
Common Stock by beneficial owners of more than 5% of the Common Stock of CCBI.

% of Common Stock
Name and Address Amount Owned Issued and Outstanding
---------------- ------------ ----------------------

Richard Storm, Jr. 450,080(1) 26.01%
264 Rock Hill Court
Marco Island, Florida 34145

Paul Janssens-Lens 151,590(2) 9.65%
992 Winterberry
Marco Island, Florida 34145

- ----------------------------
(1) See footnote 9 on pages 48 herein.
(2) Amount includes 105,060 shares held individually and 46,530 unexercised
shares subject to Warrants.

DESCRIPTION OF CAPITAL STOCK

CCBI has authorized 10,000,000 shares of authorized capital stock,
consisting of 8,000,000 shares of Common Stock, par value $0.01 per share, and
2,000,000 shares of Preferred Stock, par value of $0.01 per share. As of
December 31, 1997, 1,571,624 shares of Common Stock were issued and outstanding
and 646,375 shares were subject to issuance pursuant to Warrants. No shares of
Preferred Stock were issued.

Common Stock

Each share of CCBI Common Stock has the same relative rights and is
identical in all respects with every other share of Common Stock. The holders of
Common Stock are entitled to elect the members of the Board of Directors of the
Company and such holders are entitled to vote as a class on all matters required
or permitted to be submitted to the shareholders of the Company. No holder of
any class of stock of the Company has preemptive rights with respect to the
issuance of shares of that or any other class of stock and the Common Stock is
not entitled to cumulative voting rights with respect to the election of
directors.

The holders of Common Stock are entitled to dividends and other
distributions if, as, and when declared by the Board of Directors out of assets
legally available therefore. Upon the liquidation, dissolution or winding up of
the Company, the holder of each share of Common Stock is entitled to share
equally in the distribution of the Company's assets. The holders of Common Stock
are not entitled to the benefit of any sinking fund provision. The shares of
Common Stock are not subject to any redemption provisions, nor are they
convertible into any other security or property of the Company. All shares of
Common Stock outstanding are fully paid and non-assessable. CCBI requires the
payment of a $10.00 transfer fee with regard to all requests for cancellation
and re-issue of shares after the initial issue of share certificates.

<PAGE>

Preferred Stock

CCBI is authorized to issue 2,000,000 shares of Preferred Stock. The
Board of Directors may issue the Preferred Stock in series and to fix the
particular designation of and the rights, preferences, privileges and
restrictions granted to and imposed upon each series, all without approval of
the shareholders. CCBI has no plans at this time to issue any of the Preferred
Stock authorized.

SUMMARY OF ARTICLES OF INCORPORATION OF CCBI

The following is a summary of the material provisions of the October
10, 1995 Amended and Restated Articles of Incorporation of CCBI ("Articles of
Incorporation"). The full text of the Articles of Incorporation are incorporated
by reference as an Exhibit to the Registration Statement to which this
Prospectus is a part. See "AVAILABLE INFORMATION".

The power to issue additional shares of common stock rest with the
Board of Directors of CCBI, which may help delay or deter a change in control by
increasing the number of shares needed to gain control. The following provisions
of CCBI's Articles of Incorporation may also have the effect of preventing,
discouraging or delaying any change in control of CCBI.

Requirements for Super Majority Approval of Transactions

CCBI's Articles of Incorporation contain provisions requiring super
majority stockholder approval to effect certain extraordinary corporate
transactions which are not approved by the Board of Directors. The Articles of
Incorporation require the affirmative vote or consent of the holders of at least
two-thirds (662/3%) of the shares of each class of Common Stock entitled to vote
in elections of directors to approve any merger, consolidation, disposition of
all or a substantial part of the assets of CCBI or a subsidiary of CCBI,
exchange of securities requiring stockholder approval or liquidation of the
Company ("Affiliated Transaction"), if any person who together with his
affiliates and associates owns beneficially 5% or more of any voting stock of
CCBI ("Interested Shareholder") is a party to the transaction; provided that a
majority of the Disinterested Directors of the Company has not approved the
transaction. In addition, the Articles of Incorporation require the separate
approval by the holders of a majority of the shares of each class of stock
entitled to vote in elections of directors which are not beneficially owned,
directly or indirectly, by an Interested Shareholder, of any merger,
consolidation, disposition of all or a substantial part of the assets of CCBI or
a subsidiary of CCBI, or exchange of securities requiring shareholder approval
("Business Combination") if an Interested Shareholder is a party to such
transaction; provided, that such approval is not required if: (i) the
consideration to be received by the holders of the stock of the Company meets
certain minimal levels determined by a formula under the Articles of
Incorporation (generally the highest price paid by the Interested Shareholder
for any shares acquired); (ii) there has been no reduction in the average
dividend rate from that which was obtained prior to the time the Interested
Shareholder became such; and (iii) the consideration to be received by the
shareholders who are not Interested Shareholders shall be paid in cash or in the
same form as the Interested Shareholder previously paid for shares of such class
of stock. This Article, as well as the Article establishing a classified Board
of Directors, may be amended, altered, or repealed only by the affirmative vote
or consent of the holders of at least 66 2/3% of the shares of each class of
stock entitled to vote in elections of directors.

Acquisition Offers

The Board of Directors, when evaluating any offer of another Person (as
defined in the Articles of Incorporation) to: (1) make a tender or exchange
offer for any equity security of CCBI; (2) merge or consolidate the Company with
another corporation or entity; or (3) purchase or otherwise acquire all or
substantially all of the properties and assets of the Company, shall, in
connection with the exercise of its judgment in determining what is in the best
interest of the Company and its shareholders, give due consideration to all
relevant factors, including, without limitation: (i) the social and economic
effect of acceptance of such offer on the Company's present and future customers
and employees and those of its Subsidiaries (as defined in the Articles of
Incorporation); (ii) on the communities in which the Company and its
Subsidiaries operate or are located; (iii) on the ability of the Company to
fulfill its corporate objectives as a financial institution holding company; and
(iv) on the ability of its subsidiary financial institutions to fulfill the
objectives of such institutions under applicable statutes and regulations.

Control Share Acquisitions

The Articles of Incorporation provide that any person who acquires 20%
or more of the Company's shares must comply with the Florida Statutes governing
control-share acquisitions. Generally a person intending to acquire such shares
must give the Company notice of such intent and request a meeting of the
shareholders at which shareholders will be given an opportunity to vote on
whether such shares will be accorded full voting rights. Refusal by the
shareholders to accord full voting rights would result in the proposed acquiror
obtaining shares which could not be voted on any matters to come before the
shareholders. Certain acquisitions are exempt from the effects of the Article,
such as mergers or business combinations which have been approved by the Board
of Directors, as well as acquisitions of shares issued by CCBI in its original
offering or in subsequent offerings approved by the Board.

The effect of all of the above provisions is to make it more difficult
for a person, entity or group to effect a change in control of the Company
through the acquisition of a large block of CCB's voting stock.

Indemnification

The FBC Act authorizes Florida corporations to indemnify any person who
was or is a party to any proceeding (other than an action by, or in the right
of, the corporation) by reason of the fact that he or she is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation or other entity, against liability incurred in connection with such
proceeding, including any appeal thereof, if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or on behalf of a corporation, indemnification may
not be made if the person seeking indemnification is adjudged liable, unless the
court in which such action was brought determines such person is fairly and
reasonably entitled to indemnification. The indemnification provisions of the
FBC Act require indemnification if a director or officer has been successful on
the merits or otherwise in defense of any action, suit or proceeding to which he
or she was a party by reason of the fact that he or she is or was a director or
officer of the corporation. The indemnification authorized under Florida law is
not exclusive and is in addition to any other rights granted to officers and
directors under the articles of incorporation or bylaws of the corporation or
any agreement between officers and directors and the corporation. A corporation
may purchase and maintain insurance or furnish similar protection on behalf of
any officer or director against any liability asserted against the director or
officer and incurred by the director or officer in such capacity, or arising out
of the status, as an officer or director, whether or not the corporation would
have the power to indemnify him or her against such liability under the FBC Act.

CCBI's Articles of Incorporation provide for the indemnification of
directors and executive officers to the maximum extent permitted by Florida law
as authorized by the Board of Directors and for the advancement of expenses
incurred in connection with the defense of any action, suit or proceeding that
the director or executive officer was a party to by reason of the fact that he
or she is or was a director of CCBI upon the receipt of an undertaking to repay
such amount, unless it is ultimately determined that such director is not
entitled to indemnification.

THE OFFERING

Initial Offering

During the first 100 days following the date of the Prospectus (defined
herein as the "Initial Offering Period"), CCBI is offering up to 1,000,000
shares of its Common Stock (the "Maximum Offering") on a priority basis to
Depositors (existing depositors of Citizens Bank who are Florida residents and
have a "demand account" [defined herein to be a checking account, NOW account,
or money market account with a minimum balance of $1,000 as of the Record Date])
and shareholders, as of the Record Date, individually or together with their
Related Parties, a non-transferable Subscription Right to purchase up to a
maximum 3,000 shares of Common Stock in the Initial Offering; while employees
and directors of CCBI are being given a Subscription Right to purchase,
individually or together with their Related Parties, up to 30,000 shares of
Common Stock in the aggregate. The Subscription Right is subject to the
availability of shares. See "Subscription Right". Depositors, shareholders,
employees and directors, and their Related Parties, will be permitted to
purchase their respective limits provided the aggregate number of shares owned
at the conclusion of the Offering does not result in the purchaser's beneficial
ownership, individually or together with their Related Party, exceeding 9.9%.
See "Purchase Limitation" and "RISK FACTORS - Voting Control".

The Community Offering

Immediately following the Initial Offering, CCBI is offering shares of
its Common Stock in a Community Offering to members of the general public who
are Florida residents, and to whom a copy of the Prospectus is delivered.
Persons of the general public may subscribe to purchase, individually or with
their Related Party, a minimum of 100 shares and maximum of 15,000 shares of
Common Stock at the Subscription Price of $7.50 per share. Individuals who
purchase shares in the Initial Offering will be permitted to subscribe for
shares in the Community Offering up to a maximum of 15,000 shares in the
aggregate. See "Employees and Directors Purchase Exception". Shares purchased by
Depositors, shareholders, employees and directors in the Community Offering will
not be on a priority basis. There can be no assurance that any shares of Common
Stock will be available to persons desiring to subscribe for Common Stock in the
Community Offering, or that a subscriber will receive the entire amount of
shares he or she subscribes for in the Community Offering. See "Purchase
Limitation". To properly subscribe for shares of Common Stock in the Offering,
the appropriate sections of the Order Form must be completed, and payment in
full must accompany the Order Form. See "Purchase Limitation".

Subscription Right

Depositors and shareholders, as of the Record Date, and employees and
directors of the Company are being given the right to purchase ("Subscription
Right") shares of Common Stock in the Initial Offering. The Subscription Right
is subject to shares being available at the time the subscription is delivered
to and accepted by the Company. Subscriptions will be honored in the order in
which they are received (as of the logged in time and date) by the Company,
subject to the Order Form being determined by the Company (in its sole
discretion) to be valid and complete. See "Procedure for Subscribing for Common
Stock".

Employees and Directors Purchase Exception

Each employee and director of the Company, together with their Related
Party, will be permitted to purchase up to an aggregate of 30,000 shares during
the Initial Offering, or in the Community Offering. Purchases made in the
Community Offering will not be on a priority basis.

Expiration Dates of the Offering

The Initial Offering will expire at 5:00 p.m., Local Time, on July 23,
1998. At the expiration of the Initial Offering, unexercised Subscription Rights
will be null and void and the Company will not be obligated to honor any Order
Form received by the Escrow Agent after the Initial Offering Period, regardless
of when the documents were sent.

The period for the Minimum Offering will expire at 5:00 p.m., Local
Time, on September 6, 1998. The Community Offering will expire at 5:00 p.m.,
Local Time, on April 13, 1999, unless the Community Offering is terminated
beforehand at the sole discretion of the Board of Directors.

Conditions to Consummation of the Offering

The Offering will not be consummated and all funds received by the
Company's Escrow Agent will be promptly returned with interest if the Minimum
Offering (300,000 shares of Common Stock) is not sold by 5:00 p.m., Local Time,
on September 6, 1998.

Procedure for Subscribing for Common Stock

Depositors, shareholders, employees and directors who desire to
exercise their Subscription Rights, as well as persons who desire to participate
in the Community Offering must deliver to the Company, on or prior to the
Initial Offering Period or the Offering Expiration Date, whichever the case may
be, a properly completed and executed Order Form with any required signatures,
together with payment in full of the aggregate Subscription Price for the shares
of Common Stock subscribed for in the Offering. Such payment in full must be:
(i) a check or bank draft drawn upon a domestic bank or postal, telegraphic or
express money order payable to "IBBF as Escrow Agent for CCBI"; or (ii) wire
transfer of funds to the account maintained by the Escrow Agent for such
purpose. The aggregate Subscription Price will be deemed to have been received
by the Escrow Agent only upon: (i) clearance of any non-certified check, (ii)
receipt by the Escrow Agent of any certified check or bank draft drawn upon a
domestic bank or of any postal, telegraphic or express money order, or (iii)
receipt of good funds in the Escrow Agent's account designated above. If paying
by a non-certified personal check, please note that the funds paid thereby may
take at least five business days to clear. Accordingly, persons who wish to pay
the aggregate Subscription Price by means of a non-certified personal check are
urged to make payment sufficiently in advance of the Expiration Date of the
specific Offering period to ensure that such payment is received and clears by
such date and are urged to consider payment by means of certified or cashier's
check, money order or wire transfer of funds. All funds received by CCBI shall
be forwarded to the Escrow Agent. The Minimum Offering shares must be sold in
order to break escrow. If the Minimum Offering is not sold, the funds held in
the Escrow Account will be returned with interest. If the Minimum Offering
shares are sold and the Offering is closed, earnings on such funds (which are
not expected to be material) will be retained by CCBI. The Escrow Agent will
invest collected Subscription Funds, in short-term direct obligations of the
United States government (either directly or under repurchase agreement), in
FDIC insured money market deposit accounts (not to exceed $100,000), and/or in
short-term FDIC insured certificates of deposit (not to exceed $100,000), but in
any case with maturities of 90 days or less.

The address to which the Order Form and payment of the Subscription
Price should be delivered is:

Citizens Community Bancorp, Inc.
Attention: James S. Hagedorn
650 East Elkcam Circle
Marco Island, Florida 34145

Payment may be made by wire transfer as described above. Persons who
make payments by such method must be sure to deliver to the Company, prior to
the Expiration Date, a properly executed and completed Order Form. Order Forms
may be delivered to the Company at its corporate offices by telecopy, if
subscription funds are being sent via wire transfer. The Company's telephone
number is (941) 389-1800 and the Company's facsimile number is (941) 389-2466.

If the aggregate Subscription Price paid by a subscriber is
insufficient to purchase the number of shares of Common Stock that the
subscriber indicates are being subscribed for, or if a subscriber does not
specify the number of shares of Common Stock to be purchased, or if the
aggregate Subscription Price paid by a subscriber exceeds the amount necessary
to purchase the number of shares of Common Stock for which the subscriber has
indicated an intention to subscribe, then the subscriber will be deemed to have
exercised first, the Subscription Right and second, to have purchased shares of
Common Stock in the Community Offering to the full extent of the payment
tendered (subject to the availability of shares and reduction to the extent
necessary to comply with any regulatory limitation or conditions imposed by CCBI
in connection with the Offering). See "Purchase Limitation".

If the aggregate Subscription Price paid by a person purchasing shares
in the Community Offering is insufficient to purchase the number of shares of
Common Stock that the person indicates are being subscribed for, or if such
Community Offering participant does not specify the number of shares of Common
Stock to be purchased, or if the aggregate Subscription Price paid by an
Offering participant exceeds the amount necessary to purchase the number of
shares of Common Stock for which the Community Offering participant has
subscribed, then the Community Offering participant will be deemed to have
subscribed for the number of shares of Common Stock which may be purchased by
the full extent of the payment tendered (subject only to reduction to comply
with regulatory limitations or conditions of the Offering). See "Purchase
Limitation".

Holders who hold shares of Common Stock for the account of others, such
as brokers, trustees or depositories for securities, should notify the
respective beneficial owners of this Offering as soon as possible to ascertain
such beneficial owners' intentions and to obtain instructions with respect to
Subscription Rights. If such a beneficial owner so instructs, the record holder
of such Subscription Right should submit payment to the Company with the proper
documentation. In addition, beneficial owners of Common Stock held through such
a nominee holder should contact the holder and request the holder to effect
transactions in accordance with the beneficial owner's instructions.

The instructions accompanying the Order Form should be read carefully
and followed in detail. Order Forms should be sent with payment to CCBI's at 650
East Elkcam Circle, Marco Island, Florida 34145.

The method of delivery of Order Forms and payment of the aggregate
Subscription Price to CCBI will be at the election and risk of the participants
in the Offering, but if sent by mail, it is recommended that such Order Form and
payments be sent by registered mail, properly insured, with return receipt
requested and that a sufficient number of days be allowed to ensure delivery to
CCBI and clearance of payment prior to the expiration of the Initial Offering
Period in the case of Depositors, shareholders, employees and directors or the
Offering Expiration Date in the case of the Community Offering participants.
Because uncertified personal checks may take five business days to clear, you
are strongly urged to pay, or arrange for payment, by means of certified or
cashier's check, money order or wire transfer of funds.

All questions concerning the timeliness, validity, form and eligibility
of Order Forms received or any exercise of Subscription Rights will be
determined by CCBI, whose determinations will be final and binding. CCBI in its
sole discretion may waive any defect or irregularity, or permit a defect or
irregularity to be corrected within such time as it may determine, or reject the
purported subscriptions for shares of Common Stock. Order Forms will not be
deemed to have been received or accepted until all irregularities have been
waived or cured within such time as CCBI determine in its sole discretion.
Neither CCBI nor the Escrow Agent will be under any duty to give notification of
any defect or irregularity in connection with the submission of Order Forms or
incur any liability for failure to give such notification.

Subscriptions for the Common Stock which are received by the Company
from Depositors, shareholders, employees or directors exercising Subscription
Rights or from persons in the Community Offering, may not be revoked once
accepted by CCBI.

Plan of Distribution

The securities being offered in the Offering will be sold on a
best-efforts basis by certain directors and executive officers of the Company
and no commission will be paid on such sales. The directors and executive
officers are not registered as securities brokers or dealers under the federal
securities laws, nor are these individuals affiliated with any broker or dealer.
Such persons are registered as Associated Persons with the Florida Department of
Banking, Division of Securities and Investor Protection. In reliance on Rule
3a4-1 of the Exchange Act, the Company believes that its officers and directors
who are engaged in the sale of the securities will not be deemed to be brokers
and/or dealers under the Exchange Act.

Purchase Limitation

CCBI will not be required to issue shares of Common Stock pursuant to
the Offering to any person who, in the opinion of CCBI, would be required to
obtain prior clearance or approval from any state or federal regulatory
authority to own or control such shares. The minimum number of shares of Common
Stock any person may purchase in the Initial Offering or the Community Offering
is 100 shares. No fractional shares will be issued in the Offering. The maximum
a Depositor or shareholder together with their Related Party may purchase in the
Initial Offering is 3,000 shares. An employee or director together with their
Related Party will be permitted to purchase a maximum of 30,000 shares in either
the Initial Offering or the Community Offering. If shares are available in the
Community Offering, each Depositor and shareholder, together with their Related
Parties can, without preference, subscribe for up to a maximum of 15,000 shares
in the aggregate. Shares not subscribed for in the Initial Offering will be
offered to the general public who are Florida residents in the Community
Offering. Participants in the Community Offering may purchase individually or
together with their Related Party a maximum of 15,000 shares of Common Stock in
the aggregate. Except for Richard Storm, who already owns in excess of 9.9% of
the Company's Common Stock, no person shall be allowed to purchase, individually
or together with their Related Party, shares of Common Stock in the Initial
Offering or the Community Offering which, when aggregated, would exceed 9.9% of
the total number of shares outstanding at the conclusion of the Offering.

Related Party. The term "Related Party(ies)" is defined for purposes of
this Offering to mean associates of, or persons acting in concert with, the
individual subscribing to purchase shares of Common Stock in the Offering.
"Associate" is defined to mean: (1) any corporation or organization (other than
CCBI) of which such person is an officer or partner is, directly or indirectly,
the beneficial owner of 10% or more of any class of equity securities; (2) any
trust or other estate in which such person has a substantial beneficial interest
or as to which such person serves as trustee or in a similar fiduciary capacity;
and (3) any relative or spouse of such person, or any relative of such spouse,
who has the same home as such person, or who is a director or officer of CCBI or
any of its subsidiaries.

Acting in Concert. Under FDIC regulations a rebuttable presumption of
concerted action will occur, but is not limited to these situations: (1) a
person will be presumed to be acting in concert with the members of the person's
immediate family (which includes a person's spouse, father, mother, children,
brothers, sisters and grandchildren; the father, mother, brother and sisters of
the persons spouse; and the spouse of the person's child, brother or sister);
(2) persons will be presumed to be acting in concert with each other where: (i)
both own stock in a bank and both are also management officials, controlling
shareholders, partners, or trustees of another company; or (ii) one person
provides credit to another or is instrumental in obtaining financing for another
person to purchase stock of the bank; and (3) a person will be presumed to be
acting in concert with any trust for which such person or company serves as a
trustee.

Blue Sky Consideration

CCBI has determined that its shareholders reside in 27 states, based
upon the most current information available from its records. The sale of the
securities in this Offering are exempt or will be made exempt by appropriate
filings in twenty-two states. In addition, the securities in this offering will
be registered in Florida where the securities in this Offering will be offered
to Depositors, shareholders, employees, directors and the general public. None
of the securities in this Offering will be sold to shareholders residing in
Kentucky and New York, as CCBI has determined not to register in those states.

Issuance of Common Stock

Provided that all conditions necessary to consummate the Offering are
satisfied, including the sale of a minimum of 300,000 shares of Common Stock in
the Minimum Offering, certificates representing shares of Common Stock purchased
pursuant to the Offering will be delivered to purchasers as soon as practical
after the Expiration Date of the Minimum Offering and after all prorations and
adjustments contemplated by the Initial Offering and Community Offering have
been effected. No fractional shares will be issued in the Offering.

Subscription Price

The Subscription Price is $7.50 in cash, per share of the Common Stock
subscribed for in the Offering. See "DETERMINATION OF SUBSCRIPTION PRICE".

<PAGE>

Foreign and Certain Other Shareholders

Order Forms will not be mailed to shareholders whose addresses are
outside the United States or who have an APO or FPO address. To exercise their
Subscription Rights, such shareholder must notify the Company prior to the
expiration of Initial Offering Period.

Certain Federal Income Tax Considerations

For federal income tax purposes, receipt of the Subscription Rights
should be treated as a non-taxable distribution with respect to the Common
Stock. Upon exercise of Subscription Rights, shareholders will not recognize
gain or loss. The basis of each share of Common Stock acquired upon exercise of
a Subscription Right will equal the Subscription Price. The holding period for
such Common Stock will begin on the date the Subscription Rights are exercised.
No loss will be recognized by a shareholder who receives Subscription Rights and
allows those Subscription Rights to lapse.

Because of the individual nature of tax consequences, shareholders are
advised to consult their tax advisors with respect to these and other federal,
state and local tax consequences of the distribution and exercise of
Subscription Rights.

Intention of Directors and Executive Officers

The directors and executive officers of the Company as a group (16
persons) have indicated to the Company that they intend to subscribe for, in the
aggregate, 150,000 shares of Common Stock, either through exercise of
Subscription Rights or in the Community Offering. These intentions are not
commitments and could change based upon individual circumstances. Assuming the
full exercise indicated by the directors and executive officers of the Company,
such persons would be deemed to beneficially own 36.71% and 28.72% of the Common
Stock assumed to be outstanding on a pro forma basis following the Minimum
Offering and the Maximum Offering, respectively.

Right to Amend or Terminate the Offering

CCBI expressly reserves the right to amend the terms and conditions of
the Offering whether the terms and conditions are more or less favorable to the
Initial Offering and Community Offering participants. In the event of a material
change to the terms of the Offering, the Company will file a post-effective
amendment to its Registration Statement, of which this Prospectus is a part, and
resolicit subscribers to the extent required by the Commission. CCBI expressly
reserves the right, at any time prior to delivery of shares of Common Stock
offered hereby, to terminate the Offering if the Offering is prohibited by law
or regulation or the Board of Directors concludes, in its judgment, that it is
not in the best interests of CCBI to complete the Offering under the
circumstances. The Offering would be terminated by CCBI by giving oral or
written notice thereof to the Escrow Agent and making a public announcement
thereof. If the Offering is so terminated, all funds received from the Initial
Offering or Community Offering participants will be promptly refunded, with
interest.

Transfer Agent and Registrar

Prior to the Offering, the Company served as transfer agent for the
Common Stock. The Company has engaged Registrar and Transfer Company, Cranford,
New Jersey, to handle stock transfers, stock record keeping, and mailing of all
proxy materials.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, CCBI will have 1,871,624 shares of
Common Stock outstanding assuming the sale of the Minimum Offering and
2,571,624, assuming the sale of the Maximum Offering. These shares will be
freely tradeable without restriction or further registration under the
ExchangeAct, except for shares held or purchased by "affiliates" of the Company,
defined in Rule 144 promulgated under the Exchange Act to mean a person who
directly or indirectly through the use of one or more intermediaries controls,
is controlled by, or is under common control with the Company. CCBI and its
executive officers and directors, and certain officers of Citizens Bank holding,
in the aggregate, 872,210 shares of Common Stock (assuming full exercise of
their Warrants and intended purchases in this Offering) will be eligible for
sale in the public market, subject to the volume and other limitations on sale
imposed by Rule 144, or unless otherwise registered under the Exchange Act.

In general, under Rule 144, a person (or person whose shares are
aggregated) who has beneficially owned shares for at least one year, including
"affiliates" of the Company, would be entitled to sell within any three month
period that number of shares that does not exceed the greater of (i): 1% of the
number of shares of Common Stock then outstanding (18,716 shares based on the
Minimum Offering and 25,716 shares based on the Maximum Offering); or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding such sale. Sales pursuant to Rule 144 are subject to certain manner of
sale provisions, notice requirements and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed to have been an affiliate of the Company at any time during
the 90 days preceding a sale, and who has beneficially owned the shares proposed
to be sold for at least two years, would be entitled to sell such shares under
Rule 144(k) without regard to the requirements described above.

LEGAL MATTERS

Certain legal matters, including, among other things, the validity of
the shares of Common Stock offered hereby and the tax aspects of the
Subscription Rights for existing shareholders have been passed upon by Igler &
Dougherty, P.A., Tallahassee, Florida, corporate counsel to the Company.

EXPERTS

The consolidated financial statements of the Company set forth herein
as of December 31, 1997 and 1996, and for each of the years in the two-year
period ended December 31, 1997, have been included herein and in the
Registration Statement in reliance upon the report of Hacker, Johnson, Cohen &
Grieb appearing elsewhere herein, and upon the authority of said firm as experts
in accounting and auditing.

AVAILABLE INFORMATION

CCBI is subject to the informational requirements of the Securities
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at the following regional offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60621. Copies of such
material also can be obtained from the Commission's Public Reference Section at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates and from the Commission's Web Site at http://www.sec.gov.

This Prospectus constitutes part of a Registration Statement on Form
SB-2 (File No. 333-47813) filed by CCBI with the Commission under the Exchange
Act. This Prospectus omits certain of the information contained in the
Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to CCBI and the Common Stock.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, where a copy of such document has
been filed as an exhibit to the Registration Statement or otherwise has been
filed with the Commission, reference is made to the copy so filed.

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS

Audited Financial Statements Page
- ---------------------------- ----

Independent Auditors' Report..................................... F-2
Consolidated Balance Sheets, December 31, 1997 and 1996.......... F-3

Consolidated Statements of Operations for the Years Ended
December 31, 1997 and 1996.............................. F-4

Consolidated Statements of Stockholders= Equity for the
Years Ended December 31, 1997 and 1996.................. F-5

Consolidated Statements of Cash Flows for the Years
Ended December 31, 1997 and 1996........................ F-6

Notes to Consolidated Financial Statements for the Years
Ended December 31, 1997 and 1996........................ F-7 - F-18

All schedules are omitted because of the absence of the conditions under which
they are required or because the required information is included in the
financial statements and related notes.

<PAGE>

Independent Auditors' Report

Board of Directors
Citizens Community Bancorp, Inc.
Marco Island, Florida:

We have audited the accompanying consolidated balance sheets of Citizens
Community Bancorp, Inc. and Subsidiaries (the "Company") at December 31, 1997
and 1996, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company'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 audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/HACKER, JOHNSON, COHEN & GRIEB PA
- ------------------------------------
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
February 6, 1998

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

At December 31,
---------------
1997 1996
---- ----
Assets

<S> <C> <C>
Cash and due from banks. . . . . . . . . . . . . . . . . $ 3,153,577 1,353,777
Federal funds sold . . . . . . . . . . . . . . . . . . . 9,057,000 6,688,000
------------ ----------

Cash and cash equivalents . . . . . . . . . . . 12,210,577 8,041,777

Securities held to maturity. . . . . . . . . . . . . . . 2,498,614 2,240,290
Loans, net of allowance for
loan losses of $298,000 and $145,000 . . . . . . . . . 26,420,149 12,115,911
Premises and equipment, net. . . . . . . . . . . . . . . 2,845,997 2,293,140
Accrued interest receivable and other assets . . . . . . 308,152 132,406
Deferred income taxes. . . . . . . . . . . . . . . . . . 138,043 204,000
------------ ----------

Total assets. . . . . . . . . . . . . . . . . . $ 44,421,532 25,027,524
============ ==========

Liabilities and Stockholders' Equity

Liabilities:
Demand deposits. . . . . . . . . . . . . . . . . . . . 3,153,135 2,366,487
Savings and NOW deposits . . . . . . . . . . . . . . . 16,300,813 8,670,357
Money-market deposits. . . . . . . . . . . . . . . . . 1,302,296 417,775
Time deposits. . . . . . . . . . . . . . . . . . . . . 16,182,123 6,430,485
------------ ----------

Total deposits. . . . . . . . . . . . . . . . . 36,938,367 17,885,104

Official checks. . . . . . . . . . . . . . . . . . . . 473,521 579,703
Mortgage payable . . . . . . . . . . . . . . . . . . . - 525,000
Accrued interest payable and other liabilities . . . . 238,886 73,534
------------ ----------

Total liabilities . . . . . . . . . . . . . . . 37,650,774 19,063,341
------------ ----------

Commitments (Note 7)

Stockholders' Equity:
Preferred stock, $.01 value, 2,000,000 shares authorized,
none issued or outstanding . . . . . . . . . . . . . - -
Common stock, $.01 par value 8,000,000 shares authorized
and 1,571,624 and 707,610 shares issued and outstanding. . 15,716 7,076
Additional paid-in capital . . . . . . . . . . . . . . 7,010,515 6,322,086
Accumulated deficit. . . . . . . . . . . . . . . . . . (255,473) (364,979)
------------ ----------

Total stockholders' equity. . . . . . . . . . . 6,770,758 5,964,183
------------ ----------

Total liabilities and stockholders' equity. . . . . . $ 44,421,532 25,027,524
============ ==========
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations
<TABLE>
<CAPTION>

Year Ended December 31,
-----------------------
1997 1996
---- ----
<S> <C> <C>
Interest income:
Loans . . . . . . . . . . . . . . . . . . . . . . . . $ 1,913,828 322,538
Securities . . . . . . . . . . . . . . . . . . . . . . 140,545 118,531
Federal funds sold . . . . . . . . . . . . . . . . . . 468,404 254,864
Deposits in banks. . . . . . . . . . . . . . . . . . . - 43,863
----------- --------

Total interest income . . . . . . . . . . . . . 2,522,777 739,796
----------- --------

Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . . . . . 1,197,823 276,691
Other . . . . . . . . . . . . . . . . . . . . . . . . 9,573 6,182
----------- --------

Total interest expense. . . . . . . . . . . . . 1,207,396 282,873
----------- --------

Net interest income. . . . . . . . . . . . . . . . . . . 1,315,381 456,923

Provision for loan losses. . . . . . . . . . . . . . . . 153,000 145,000
----------- --------

Net interest income after provision for loan losses 1,162,381 311,923
--------- -------

Noninterest income:
Gain on sale of loans. . . . . . . . . . . . . . . . . 68,476 -
Other service charges and fees . . . . . . . . . . . . 176,974 57,412
Other . . . . . . . . . . . . . . . . . . . . . . . . 27,652 12,297
----------- --------

Total noninterest income. . . . . . . . . . . . 273,102 69,709
----------- --------

Noninterest expense:
Compensation and benefits . . . . . . . . . . . . . . 641,693 332,124
Occupancy and equipment. . . . . . . . . . . . . . . . 167,755 153,548
Advertising. . . . . . . . . . . . . . . . . . . . . . 31,917 20,491
Organizational expenses. . . . . . . . . . . . . . . . - 100,079
Professional fees. . . . . . . . . . . . . . . . . . . 18,108 35,257
Office supplies. . . . . . . . . . . . . . . . . . . . 30,120 68,982
Data processing. . . . . . . . . . . . . . . . . . . . 62,195 33,765
Other . . . . . . . . . . . . . . . . . . . . . . . . 308,232 170,681
----------- --------

Total noninterest expense . . . . . . . . . . . 1,260,020 914,927
----------- --------

Earnings (loss) before income taxes (benefit). . . . . . 175,463 (533,295)

Income taxes (benefit). . . . . . . . . . . . . 65,957 (191,000)
----------- --------

Net earnings (loss). . . . . . . . . . . . . . . . . . . $ 109,506 (342,295)
=========== ========

Earnings (loss) per share:

Basic . . . . . . . . . . . . . . . . . . . . . $ .07 (.26)
=========== ========

Diluted . . . . . . . . . . . . . . . . . . . . $ .07 (.26)
=========== ========
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
Common Stock
---------------------
Number Additional Total
Preferred of Paid-In Accumulated Stockholders'
Stock Shares Amount Capital Deficit Equity
----- ------ ------ ------- ------- ------

<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 21,000 -- -- -- (22,684) (1,684)

Redemption of 210 shares of
preferred stock ........... (21,000) -- -- -- -- (21,000)

Issuance of 707,610 shares of
common stock .............. -- 707,610 7,076 6,322,086 -- 6,329,162

Net loss .................... -- -- -- -- (342,295) (342,295)
------ --------- ------ --------- -------- ---------

Balance at December 31, 1996 -- 707,610 7,076 6,322,086 (364,979) 5,964,183

Issuance shares of common
stock at $9.00 ............ -- 77,452 774 689,545 -- 690,319

Two-for-one stock split on
December 15, 1997 ......... -- 785,062 7,851 (7,851) -- --

Issuance of shares at $4.50 . -- 1,500 15 6,735 -- 6,750

Net earnings ................ -- -- -- -- 109,506 109,506
------ --------- ------ --------- -------- ---------

Balance at December 31, 1997 $ -- 1,571,624 15,716 7,010,515 (255,473) 6,770,758
====== ========= ====== ========= ======== =========

</TABLE>
See Accompanying Notes to Consolidated Financial Statements.

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Year Ended December 31,
-----------------------
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net earnings (loss) .................................................... $ 109,506 (342,295)
Adjustments to reconcile net earnings (loss)
to net cash used in
operating activities:
Depreciation .......................................................... 82,818 73,610
Provision for loan losses ............................................. 153,000 145,000
Provision (credit) for deferred income taxes .......................... 65,957 (191,000)
Amortization of loan fees, premiums and discounts ..................... (148,005) (19,340)
(Increase) decrease in accrued interest
receivable and other assets ........................................ (175,746) 14,592
Loans originated for sale ............................................. (4,687,283) --
Sale of loans originated for sale ..................................... 4,755,759 --
Gain on sale of loans ................................................. (68,476) --
Increase in accrued interest payable
and other liabilities .............................................. 165,352 24,503
------------ --------

Net cash provided by (used in)
operating activities ............................................ 252,882 (294,930)
------------ --------

Cash flows from investing activities:
Purchase of securities held to maturity ................................. (1,750,000) (5,220,309)
Maturities of securities held to maturity ............................... 1,500,000 3,000,000
Net increase in loans ................................................... (14,317,557) (12,261,552)
Purchase of premises and equipment ...................................... (635,675) (1,163,961)
------------ --------

Net cash used in investing activities .............................. (15,203,232) (15,645,822)
------------ --------

Cash flows from financing activities:
Net increase in demand, savings, NOW and
money-market deposits ................................................ 9,301,625 11,454,619
Net increase in time deposits ........................................... 9,751,638 6,430,485
Net (decrease) increase in official checks .............................. (106,182) 579,703
Repayment of advances from organizers ................................... -- (239,000)
Redemption of preferred stock ........................................... -- (21,000)
Sale of common stock .................................................... 697,069 6,329,162
Payment of mortgage payable ............................................. (525,000) (593,806)
------------ --------

Net cash provided by financing activities .......................... 19,119,150 23,940,163
------------ --------

Net increase in cash and cash equivalents ................................. 4,168,800 7,999,411

Cash and cash equivalents at beginning of year ............................ 8,041,777 42,366
------------ --------

Cash and cash equivalents at end of year .................................. $ 12,210,577 8,041,777
============ =========

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest .............................................................. $ 1,093,507 233,273
============ =========

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

Noncash transactions-
Issuance of mortgage payable for
acquisition of property ............................................. $ -- 525,000
======== =======
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 1997 and 1996

(1) Summary of Significant Accounting Policies
Organization. Citizens Community Bancorp, Inc. (the "Holding Company") was
incorporated on May 24, 1995. The Holding Company owns 100% of the
outstanding common stock of Citizens Community Bank of Florida (the "Bank")
and 100% of Citizens Financial Corp. ("Citizens Financial") (collectively
the "Company"). The Holding Company was organized simultaneously with the
Bank and its primary business is the ownership and operation of the Bank and
Citizens Financial. The Bank is a Florida state-chartered commercial bank
and is insured by the Federal Deposit Insurance Corporation. The Bank opened
for business on March 8, 1996 and provides community banking services to
businesses and individuals in Collier County, Florida. Citizens Financial
was formed and commenced business as a mortgage broker in 1997.

Basis of Presentation. The accompanying consolidated financial statements of
the Company include the accounts of the Holding Company, the Bank and
Citizens Financial. All significant intercompany accounts and transactions
have been eliminated in consolidation. The accounting and reporting
practices of the Company conform to generally accepted accounting principles
and to general practices within the banking industry.

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

Securities Held to Maturity. United States government treasury and agency
securities for which the Company has the positive intent and ability to hold
to maturity are reported at cost, adjusted for amortization of premiums and
accretion of discounts which are recognized in interest income using the
interest method over the period to maturity.

Loans Held for Sale. Mortgage loans originated and intended for sale in the
secondary market are carried at the lower of cost or estimated market value
in the aggregate. At December 31, 1997 and 1996 there were no loans held for
sale.

Loans Receivable. Loans receivable that management has the intent and ability
to hold for the foreseeable future or until maturity or pay-off are reported
at their outstanding principal adjusted for any charge-offs, the allowance
for loan losses, and any deferred fees or costs on originated loans and
unamortized premiums or discounts on purchased loans.

Loan origination fees and certain direct origination costs are capitalized
and recognized as an adjustment of the yield of the related loan.

The accrual of interest on impaired loans is discontinued when, in
management's opinion, the borrower may be unable to meet payments as they
become due. When interest accrual is discontinued, all unpaid accrued
interest is reversed. Interest income is subsequently recognized only to the
extent cash payments are received.

The allowance for loan losses is increased by charges to income and
decreased by charge-offs (net of recoveries). Management's periodic
evaluation of the adequacy of the allowance is based on the Company's past
loan loss experience, known and inherent risks in the portfolio, adverse
situations that may affect the borrower's ability to repay, the estimated
value of any underlying collateral, and current economic conditions.

(continued)

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Summary of Significant Accounting Policies, Continued
Premises and Equipment. Premises and equipment are stated at cost less
accumulated depreciation. Depreciation expense is computed on the
straight-line basis over the estimated useful life of each type of asset.

Stock-Based Compensation. Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement 123") establishes a
"fair value" based method of accounting for stock-based compensation plans
and encourages all entities to adopt that method of accounting for all of
their employee stock compensation plans. However, it also allows an entity
to continue to measure compensation cost for those plans using the intrinsic
value based method of accounting prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees" (Opinion 25). The Company has
elected to follow Opinion 25 and related interpretations in accounting for
its employee stock options. Statement 123 requires the disclosure of
proforma net earnings and earnings per share determined as if the Company
accounted for its employee stock options under the fair value method of that
Statement.

Income Taxes. Deferred tax assets and liabilities are reflected at currently
enacted income tax rates applicable to the period in which the deferred tax
assets or liabilities are expected to be realized or settled. As changes in
tax laws or rates are enacted, deferred tax assets and liabilities are
adjusted through the provision for income taxes.

Off-Balance-Sheet Instruments. In the ordinary course of business the Company
has entered into off-balance-sheet financial instruments consisting of
commitments to extend credit. Such financial instruments are recorded in the
financial statements when they are funded.

Advertising. The Company expenses all media advertising as incurred.

Fair Values of Financial Instruments. The following methods and assumptions
were used by the Company in estimating fair values of financial instruments
disclosed herein:

Cash and Cash Equivalents. The carrying amounts of cash and cash equivalents
approximate their fair value.

Securities Held to Maturity. Fair values for securities are based on quoted
market prices, where available. If quoted market prices are not available,
fair values are based on quoted market prices of comparable instruments.

Loans. For variable-rate loans that reprice frequently and have no
significant change in credit risk, fair values are based on carrying values.
Fair values for certain fixed-rate mortgage (e.g. one-to-four family
residential), commercial real estate and commercial loans are estimated
using discounted cash flow analyses, using interest rates currently being
offered for loans with similar terms to borrowers of similar credit quality.

Deposit Liabilities. The fair values disclosed for demand, NOW, money-market
and savings deposits are, by definition, equal to the amount payable on
demand at the reporting date (that is, their carrying amounts). Fair values
for fixed-rate certificates of deposit are estimated using a discounted cash
flow calculation that applies interest rates currently being offered on
certificates to a schedule of aggregated expected monthly maturities on time
deposits.

Accrued Interest. The carrying amounts of accrued interest approximate their
fair values.

Off-Balance-Sheet Instruments. Fair values for off-balance-sheet lending
commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and
the counterparties' credit standing.

(continued)
<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1) Summary of Significant Accounting Policies, Continued
Earnings (Loss) Per Share. Earnings (loss) per share ("EPS") of common stock
has been computed on the basis of the weighted-average number of shares of
common stock outstanding. For purposes of calculating diluted EPS because
there is no active trading market for the Company's common stock, the
average book value per share was used. For 1997 and 1996, outstanding
warrants and stock options were not dilutive. The weighted average number of
shares outstanding in 1997 and 1996 were 1,558,457 and 1,331,624,
respectively.

Future Accounting Requirements. Financial Accounting Standards 130 - Reporting
Comprehensive Income establishes standards for reporting comprehensive
income. The Standard defines comprehensive income as the change in equity of
an enterprise except those resulting from stockholder transactions. All
components of comprehensive income are required to be reported in a new
financial statement that is displayed with equal prominence as existing
financial statements. The Company will be required to adopt this Standard
effective January 1, 1998. As the Statement addresses reporting and
presentation issues only, there will be no impact on operating results from
the adoption of this Standard.

Financial Accounting Standards 131 - Disclosures about Segments of an
Enterprise and Related Information establishes standards for related
disclosures about products and services, geographic areas, and major
customers. The Company will be required to adopt this Standard effective
January 1, 1998. As the Standard addresses reporting and disclosure issues
only, there will be no impact on operating results from adoption of this
Standard.

(2) Securities Held to Maturity
Securities have been classified as held to maturity, in accordance with
management's intent. The carrying amount of securities and their approximate
fair values are as follows:
<TABLE>
<CAPTION>

Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----
<S> <C> <C> <C> <C>
December 31, 1997:
U.S. Treasuries ................... $ 249,786 56 -- 249,842
U.S. Government agencies .......... 2,248,828 -- (1,410) 2,247,418
---------- ------ ------ ---------

$2,498,614 56 (1,410) 2,497,260
========== ====== ====== =========

December 31, 1996:
U.S. Treasuries ................... 1,743,345 10,069 (2,251) 1,751,163
U.S. Government agencies .......... 496,945 -- (5,079) 491,866
---------- ------ ------ ---------

$2,240,290 10,069 (7,330) 2,243,029
========== ====== ====== =========
</TABLE>

There were no sales of securities in 1997 or 1996.
<TABLE>
<CAPTION>

The scheduled maturities of securities at December 31, 1997 are as follows:
Amortized Fair
Cost Value
---- -----

<S> <C> <C>
Due in one or less . . . . . . . . . . . . . . $ 998,614 998,200
Due after one through five years . . . . . . . 1,500,000 1,499,060
------------ ---------

$ 2,498,614 2,497,260
============ =========

(continued)
</TABLE>
<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(3) Loans
The components of loans are as follows:
<TABLE>
<CAPTION>

At December 31,
---------------
1997 1996
---- ----
<S> <C> <C>
Commercial real estate .......................................... $ 9,422,955 3,757,335
Residential real estate ......................................... 7,260,686 4,384,301
Commercial ...................................................... 7,710,001 3,814,584
Consumer ........................................................ 2,261,622 305,332
------------ ----------

26,655,264 12,261,552

Add (Subtract):
Deferred costs (fees), net .................................... 62,885 (641)
Allowance for loan losses ..................................... (298,000) (145,000)
------------ ----------

Loans, net ...................................................... $ 26,420,149 12,115,911
============ ==========

An analysis of the change in the allowance for loan losses follows:

Year Ended December 31,
-----------------------
1997 1996
---- ----

Beginning balance ............................................ $145,000 --
Provision for loan losses .................................... 153,000 145,000
-------- -------

$298,000 145,000
======== =======

The Company had no impaired loans in 1997 or 1996

(continued)
</TABLE>

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(4) Premises and Equipment
A summary of premises and equipment follows:

At December 31,
---------------
1997 1996
---- ----

<S> <C> <C>
Land. . . . . . . . . . . . . . . . . . . . . . $ 931,056 931,056
Bank premises . . . . . . . . . . . . . . . . . 1,581,383 536,576
Construction in progress. . . . . . . . . . . . - 696,276
Furniture, fixtures and equipment . . . . . . . 442,775 163,566
----------- ---------

Total, at cost. . . . . . . . . . . . . . 2,955,214 2,327,474

Less accumulated depreciation . . . . . . 109,217 34,334
----------- ---------

Premises and equipment, net . . . . . . . $ 2,845,997 2,293,140
=========== =========
</TABLE>

(5) Deposits
The aggregate amount of certificates of deposit with a minimum denomination of
$100,000, was approximately $4,019,000 and $1,467,000 at December 31, 1997
and 1996, respectively.

A schedule of maturities of certificates of deposit follows:

Year Ending
December 31, Amount
------------ ------
1998. . . . . . . . . $ 11,532,779
1999. . . . . . . . . 4,261,691
2000. . . . . . . . . 285,653
2001. . . . . . . . . --
2002 and thereafter . 102,000
------------

$ 16,182,123
============

(6) Mortgage Payable
At December 31, 1996, the Company had an 8% note payable collateralized by
a mortgage on a future branch site. The note was payable based on a 20
year amortization with a balloon payment due 2001. This note was repaid
during 1997.

(continued)

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(7) Financial Instruments
The Company 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 are commitments to extend credit
and may involve, to varying degrees, elements of credit and
interest-rate risk in excess of the amount recognized in the balance
sheet. The contract amounts of these instruments reflect the extent of
involvement the Company has in these financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit
is represented by the contractual amount of those instruments. The
Company uses the same credit policies in making commitments as it does
for on-balance-sheet instruments.

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.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since some of the commitments
are expected to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements. The
Company evaluates each customer's credit worthiness on a case-by-case
basis. The amount of collateral obtained if deemed necessary by the
Company upon extension of credit is based on management's credit
evaluation of the counterparty.

The estimated fair values of the Company's financial instruments were as
follows (in thousands):
<TABLE>
<CAPTION>

At December 31, 1997 At December 31, 1996
-------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
Financial assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents ............... $12,211 12,211 8,042 8,042

Securities held to maturity ............. 2,499 2,497 2,241 2,243

Loans receivable ........................ 26,420 26,681 12,116 12,116

Accrued interest receivable ............. 220 220 101 101

Financial liabilities:

Deposit liabilities ..................... 36,938 37,053 17,885 17,921
</TABLE>

A summary of the notional amounts of the Company's financial instruments,
which approximates market value with off balance sheet risk at December 31,
1997 follows (in thousands):

Unfunded loan commitments at variable rates. $ 997
========

Available lines of credit. . . . . . . . . . $ 5,110
=======

(continued)

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(8) Credit Risk
The Company grants the majority of its loans to borrowers throughout
Collier County, Florida. Although the Company has a diversified loan
portfolio, a significant portion of its borrowers' ability to honor
their contracts is dependent upon the economy in Collier County,
Florida.

(9) Income Taxes
The income tax provision (benefit) consisted of the following:

Year Ended December 31,
-----------------------
1997 1996
---- ----
Deferred:
Federal . . . . . $ 56,317 (163,000)
State . . . . . . 9,640 (28,000)
----- -------

Total deferred
provision (credit) $ 65,957 (191,000)
======== ========

The reasons for the differences between the statutory federal income tax rate
and the effective tax rate are summarized as follows:
<TABLE>
<CAPTION>

1997 1996
------------------------ ---------------------
% of % of
Pretax Pretax
Amount Earnings Amount Loss
------ -------- ------ ----
<S> <C> <C> <C> <C>
Income tax benefit at statutory Federal
income tax rate ................................... $ 59,657 34.0% $(181,320) (34.0)%
Increase (decreases) resulting from
State taxes, net of federal tax benefit ........... 6,362 3.6 (18,480) (3.4)
Other ............................................. (62) -- 8,800 1.6
--------- ---- --------- -----

$ 65,957 37.6% $(191,000) (35.8)%
========= ==== ========= =====

(continued)
</TABLE>

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(9) Income Taxes, Continued
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below.
<TABLE>
<CAPTION>

At December 31,
---------------
1997 1996
---- ----
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses .................................. $ -- 45,000
Contributions .............................................. 1,451 1,000
Net operating loss carryforward ............................ 154,500 158,000
Organization and start-up costs ............................ 33,753 --
-------- -------

Total deferred tax asset ................................... 189,704 204,000
-------- -------

Deferred tax liabilities:
Depreciation ............................................... 25,522 --
Accrual to cash adjustment ................................. 24,154 --
Allowance for loan losses .................................. 1,985 --
-------- -------

Total deferred tax liabilities ............................. 51,661 --
-------- -------

Net deferred income taxes .................................. $138,043 204,000
======== =======
</TABLE>

AtDecember 31, 1997, the Company had a net operating loss carryforward for
federal and state income tax purposes of approximately $411,000 to offset
future taxable income, which expires in the year 2011.

(10) Stock Options
The Company established an Incentive Stock Option plan for officers and
employees and reserved 200,000 shares of common stock for the plan. At
December 31, 1997, 36,600 shares remain available for grant. The options
vest at the rate of 20% per year beginning one year after grant.
<TABLE>
<CAPTION>

Range
of Per Weighted-
Number Share Average Aggregate
of Option Per Share Option
Shares Price Price Price
------ ----- ----- -----

<S> <C> <C> <C> <C>
Outstanding at December 31, 1995 ............... -- $ -- -- --
Options granted ................................. 51,000 4.50 4.50 229,500
------- -------

Outstanding at December 31, 1996 ............... 51,000 4.50 4.50 229,500
Options granted ................................. 125,000 4.50-6.00 5.18 648,090
Options terminated .............................. (12,600) 4.50 4.50 (56,700)
Options exercised ............................... (8,000) 4.50 4.50 (36,000)
------- -------

Outstanding at December 31, 1997 ............... 155,400 $ 4.50-6.00 5.05 784,890
======= ====== ==== ==== =======
</TABLE>

The weighted-average remaining contractual of the outstanding stock options at
December 31, 1997 and 1996 was 114 months and 76.8 months, respectively.

(continued)
<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(10) Stock Options, Continued
These options are exercisable as follows:

Year Ending
-----------
1998 . . . . . . 43,800
1999 . . . . . . 28,600
2000 . . . . . . 28,600
2001 . . . . . . 25,800
2002 . . . . . . 28,600
------

155,400
=======

In order to calculate the fair value of the options, it was assumed that the
risk-free interest rate was 6.0%, there would be no dividends paid by the
Company over the exercise period, the expected life of the options would
be the entire exercise period and stock volatility would be zero due to
the lack of an active market for the stock. The following information
pertains to the fair value of the options granted to purchase common
stock:
<TABLE>
<CAPTION>

1997 1996
---- ----
<S> <C> <C>
Weighted-average grant-date fair value of options
issued during the year . . . . . . . . . . . . $ 168,041 59,505
========= ======
</TABLE>

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma net earnings and earnings per share were as follows:
<TABLE>
<CAPTION>

1997 1996
---- ----

<S> <C> <C>
Net earnings (loss) - as reported ....................... $ 109,506 (342,295)
Net earnings (loss) - pro forma ......................... 97,605 (342,295)
Basic earnings (loss) per share - as reported ........... .07 (.26)
Basic earnings (loss) per share - pro forma ............. .06 (.26)
</TABLE>

(11) Stockholders' Equity
The Board of Directors voted to split the common shares on a two-for-one basis
effective December 15, 1997. All share amounts reflect this split.

The Bank is subject to certain restrictions on the amount of dividends that it
may declare without prior regulatory approval. At December 31, 1997, the
Bank had no amounts available for dividends.

As of December 31, 1996, the Company had sold 1,415,220 shares of common stock
for an aggregate of $6,368,490. The Company incurred $39,328 in offering
expenses relating to their public offering of the Company's common stock and
warrants. Offering expenses were deducted from the proceeds received from
the sale of common stock and warrants.

During the initial offering period shares were offered in units with a unit
consisting of one share of common stock and one warrant. Each warrant
entitles the holder thereof to purchase one share of additional common stock
for $4.50 per share during the 24 month period ending June 16, 1998. There
were 670,000 warrants issued and as of December 31, 1997 there were 642,775
warrants outstanding entitling the holders to purchase 642,775 shares of the
Company's stock.

(continued)
<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(12) Regulatory Matters
The Holding Company and the Bank are subject to various regulatory capital
requirements administered by various regulatory 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's financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1997,
that the Company meets all capital adequacy requirements to which it is
subject.

Asof December 31, 1997, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well
capitalized the Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are
no conditions or events since that notification that management believes
have changed the Bank's category. The Bank's actual capital amounts and
ratios are also presented in the table (dollars in thousands).
<TABLE>
<CAPTION>

To Be Well
Capitalized Under
Minimum the Provisions
For Capital of Prompt and
Actual Adequacy Purposes: Corrective Action
------ ------------------ -----------------
Amount % Amount % Amount %
------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1997:
Total capital (to Risk
Weighted Assets) ............. $4,643 17.67% $2,102 8.00% $2,627 10.0%
Tier I Capital (to Risk
Weighted Assets) ............. 4,354 16.57 1,051 4.00 1,576 6.0
Tier I Capital
(to Average Assets) ......... 4,354 10.67 1,633 4.00 2,041 5.0

As of December 31, 1996:
Total capital (to Risk
Weighted Assets) ............. 3,890 30.80 1,011 8.00 1,264 10.0
Tier I Capital (to Risk
Weighted Assets) ............. 3,747 29.65 505 4.00 758 6.0
Tier I Capital
(to Average Assets) ......... 3,747 19.46 770 4.00 963 5.0
</TABLE>

(continued)

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(13) Parent Company Only Financial Information
The Holding Company's financial information is as follows:

Condensed Balance Sheets
(In thousands)
At December 31,
---------------
1997 1996
---- ----
Assets
Cash ............................... $ 271 1,313
Loans receivable ................... 1,261 661
Investment in subsidiary ........... 4,458 3,747
Premises and equipment, net ........ 785 754
Other assets ....................... -- 23
------ -----

Total assets .......... $6,775 6,498
====== =====

Liabilities and Stockholders' Equity

Mortgage payable ................... -- 525
Liabilities ........................ 4 9
Stockholders' equity ............... 6,771 5,964
------- -----

Total liabilities
and stockholders' equity $ 6,775 6,498
======= =====

Condensed Statements of Operations
(In thousands)
Year Ended
December 31,
------------
1997 1996

Revenues ........................... $ 162 69
Expenses ........................... (146) (78)
----- ----

Income (loss) before income
(loss) of subsidiary .......... 16 (9)
Income (loss) of subsidiary ..... 94 (333)
----- ----

Net income (loss) ............... $ 110 (342)
===== ====

(continued)

<PAGE>

CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(13) Parent Company Only Financial Information, Continued

Condensed Statements of Cash Flows
(In thousands)
Year Ended
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) ............................................. $ 110 (342)
Adjustments to reconcile net earnings (loss) to net cash provided
by operating activities:
Equity in undistributed (earnings) loss of subsidiaries .... (94) 333
Net decrease in other assets ............................... 23 137
Decrease in other liabilities .............................. (5) (40)
Depreciation ............................................... 17 3
------- -----

Net cash provided by operating activities .................. 51 91
------- -----

Cash flows from investing activities:
Purchase of property and equipment, net of transfer to subsidiary (48) 446
Net increase in loans receivable ................................ (600) (661)
------- -----

Net cash used in investing activities ...................... (648) (215)
------- -----

Cash flows from financing activities:
Repayment of mortgage note payable .............................. (525) (594)
Net proceeds from issuance of common stock ...................... 697 6,329
Retire preferred stock .......................................... -- (21)
Repayment of advances from organizers ........................... -- (239)
Investment in subsidiary ........................................ (617) (4,080)
------- -----

Net cash provided by financing activities .................. (445) 1,395
------- -----

Net (decrease) increase in cash ...................................... (1,042) 1,271

Cash at beginning of the year ........................................ 1,313 42
------- -----

Cash at end of year .................................................. $ 271 1,313
======= =====
</TABLE>

1
<PAGE>
STOCK ORDER FORM & Citizens Community Bancorp, Inc.
CERTIFICATION (Holding Company for Citizens Community Bank of Florida)

(Initial Offering Order Form)

Note: Please read the Stock Order Form Guide and Instructions on the back
of this form before completion
- --------------------------------------------------------------------------------

Deadline: The Initial Offering ends at 5:00 p.m., Local Time, July 23, 1998.
Your Stock Order Form and Certification Form, properly executed and with the
correct payment, must be received at the address on the bottom of this form by
this deadline, or it will be considered void. The Minimum Offering will expire
on September 6, 1998 and the Offering will be terminated, unless 300,000 shares
of Common Stock have been subscribed for in the Offering by 5:00 p.m., Local
Time, on September 6, 1998. The Community Offering will expire on April 13,
1999, unless terminated by the Company beforehand.

- --------------------------------------------------------------------------------
Number of Shares
- --------------------------------------------------------------------------------
(1) Number of Shares Price Per Share (2) Total Amount Due

________________ x $7.50 = $___________

The minimum number of shares that may be subscribed for is 100. The maximum
amount any person may purchase in the Initial Offering is 3,000 shares. The
maximum any individual may subscribe for in the Community Offering is 15,000
shares. The total any participant may purchase in the Initial Offering and the
Community Offering (excluding officers and directors of CCBI) is 15,000 shares.
In addition, no person, together with associates of, and persons acting in
concert with such persons, may purchase more than 9.9% of the total number of
shares outstanding following the completion of the Offering.

- --------------------------------------------------------------------------------
Method of Payment and Purchaser Information
- --------------------------------------------------------------------------------

(3) Enclosed is a check, bank draft or money order payable to Independent
Bankers' Bank of Florida FBO CCBI of $___________.

(4) Check here if you are a shareholder of CCBI as of the close of business
on April 14, 1998.

(5) Check here if you are a Depositor with a demand account with Citizens
Community Bank of Florida as of April 14, 1998. If yes, enter your
account number in the space provided: ____________________.

(6) Check here if you are a director or employee of CCBI or a member of
such person's immediate family.

(7) If purchasing through a broker/dealer, please list the name, address,
and phone number in the space provided.

Name: ____________________________________________________________
Street Address: __________________________________________________
City: ____________________________________________________________
State: _________________________________ Zip Code: _______________
Phone Number: ( ) ________________________________________________

- --------------------------------------------------------------------------------
Stock Registration
- --------------------------------------------------------------------------------
(8) Form of stock ownership
Individual Uniform Transfer to Minors
Joint Tenants Uniform Gift to Minors
Tenants in Common Corporation
Partnership Individual Retirement Account
Fiduciary/Trust (Under Agreement Dated ________)

- --------------------------------------------------------------------------------
Name Social Security or Tax I.D.

- --------------------------------------------------------------------------------
Name Daytime Telephone

- --------------------------------------------------------------------------------
Street Address Evening Telephone

- --------------------------------------------------------------------------------
City State Zip Code State of Residence

- --------------------------------------------------------------------------------

================================================================================
OFFICE USE Batch # _____
Date Rec'd ___/___/___ Order # _____
Check # _____ Category _____
Amount $ _____ Initials _____
================================================================================
<PAGE>

- --------------------------------------------------------------------------------
NASD Affiliation (This section only applies to those individuals who meet the
delineated criteria)
- --------------------------------------------------------------------------------

Check here if you are a member of the National Association of Securities
Dealers, Inc. ("NASD"), a person associated with an NASD member, a member of the
immediate family of any such person to whose support such person contributes,
directly or indirectly, or the holder of an account in which an NASD member or
person associated with an NASD member has a beneficial interest. To comply with
conditions under which an exemption from the NASD's Interpretation with Respect
to Free-Riding and Withholding is available, you agree, if you have checked the
NASD affiliation box: (1) not to sell, transfer or hypothecate the shares
subscribed for herein for a period of three months following the issuance, and
(2) to report this subscription in writing to the applicable NASD member within
one day of the payment therefor.

- --------------------------------------------------------------------------------
Acknowledgments
- --------------------------------------------------------------------------------

1. By signing below, I acknowledge receipt of the Prospectus dated April 14,
1998 and that I have reviewed all provisions therein. I understand that I may
not change or revoke my order once it is received by CCBI. I also certify
that this stock order is for my account and there is no agreement or
understanding regarding any further sale or transfer of these shares. I
understand and agree that I am prohibited from transferring, or entering into
any agreement, directly or indirectly, to transfer the legal or beneficial
ownership of subscription rights in the Initial Offering or the underlying
securities to the account of another person. CCBI will pursue any and all
legal equitable remedies in the event it becomes aware of the transfer of
subscription rights and will not honor orders known by it to involve such
transfer.

2. Under penalties of perjury, I further certify that:

(i) the social security number or taxpayer identification number
given above is correct, and

(ii) I am not subject to backup withholding.

If you have been notified by the Internal Revenue Service that you are
subject to backup withholding because of under-reporting interest or
dividends on your tax return, you must cross out Item (ii) above.

3. By signing below, I also acknowledge that I have not waived any rights under
the Securities Act of 1933 and the Securities Exchange Act of 1934.

4 By signing below, I hereby represent to CCBI that the purchase of shares
subscribed for complies with the "Purchase Limitation" set forth in the
Prospectus dated April 14, 1998.

5. By signing below, I certify that before purchasing the Common Stock of CCBI
that I received a copy of the Prospectus dated, April 14, 1998, which
discloses the nature of the Common Stock being offered thereby and describes
certain risks involved in an investment in the Common Stock under the heading
"Risk Factors" beginning on page 9 of the Prospectus.

Signature

THIS FORM MUST BE SIGNED AND DATED. THIS ORDER IS NOT VALID IF THE STOCK ORDER
FORM IS NOT SIGNED. YOUR ORDER WILL BE FILLED IN ACCORDANCE WITH THE PROVISIONS
OF THE PROSPECTUS.

When purchasing as a custodian, corporate officer, etc.; include your full
title. An additional signature is required only if payment is by withdrawal from
an account that requires more than one signature to withdraw funds.

- --------------------------------------------------------------------------------
Signature Title (if applicable) Date
- --------------------------------------------------------------------------------

1.
- --------------------------------------------------------------------------------

2.
- --------------------------------------------------------------------------------

3.
- --------------------------------------------------------------------------------

THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.

RETURN THIS FORM TO: Citizens Community Bancorp, Inc.
Attn: Stock Sales Center
650 E. Elkcam Circle
Marco Island, FL 34145

<PAGE>

CITIZENS
COMMUNITY
BANCORP, INC.

- --------------------------------------------------------------------------------
Instruction
- --------------------------------------------------------------------------------

Items 1 and 2 - Fill in the number of shares that you wish to purchase and the
total payment due. The amount due is determined by multiplying the number of
shares by the Subscription Price of $7.50 per share. The minimum purchase is 100
shares. With the exception of officers and directors of the Company, the maximum
amount any participant may purchase in the Offering is 15,000 shares (3,000 in
the Initial Offering, and 15,000 shares, in the aggregate, in the Initial
Offering and Community Offering). In addition, no person, together with
associates of, and persons acting in concert with such person, may purchase more
than 9.9% of the total number of shares outstanding following the completion of
the Offering.

CCBI has reserved the right to reject the subscription of any order received in
the Community Offering, if any, in whole or in part.

Item 3 - Payment for shares may be made by check, bank draft or money order made
payable to "Independent Bankers' Bank of Florida FBO CCBI." DO NOT MAIL CASH.
Your funds will be returned promptly with interest if the Offering is
terminated.

Item 4 - Check here if you were a shareholder of record of CCBI at the close of
business on April 14, 1998.

Item 5 - Check here if you were a Depositor of record of Citizens Community Bank
of Florida with a demand account with a balance of $1,000 or more at the close
of business on April 14, 1998.

Item 6 - Please check this box if you are a director, officer, or employee of
CCBI or any of its subsidiaries or a member of such person's immediate family.

Item 7 - If purchasing through a broker/dealer please list the name, address and
phone number in this box.

Item 8 - The stock transfer industry has developed a uniform system of
shareholder registrations that we will use in the issuance of CCBI common stock.
Print the name(s) in which you want the shares registered and the mailing
address of the registration. Include the first name, middle initial and last
name of the shareholder. Avoid the use of two initials. Please omit words that
do not affect ownership rights, such as "Mrs.," "Mr.," "Dr.," "special account,"
etc.

SEE YOUR LEGAL OR FINANCIAL ADVISOR IF YOU ARE UNSURE ABOUT THE CORRECT
REGISTRATION OF YOUR STOCK.

Individual - The shares are to be registered in an individual's name only. You
may not list beneficiaries for this ownership.

Tenants in Common - Tenants in common may also identify two or more owners. When
shares are held by tenants in common, upon the death of one co-tenant, ownership
of the shares will be held by the surviving co-tenant(s) and by the heirs of the
deceased co-tenant. All parties must agree to the transfer or sale of shares
held by tenants in common. You may not list beneficiaries for this ownership.

Individual Retirement Account - Individual Retirement Account ("IRA") holders
may make share purchases from their deposits through a pre-arranged
"trustee-to-trustee" transfer. Shares may only be held in a self-directed IRA.
Citizens Bank does not offer a self-directed IRA. Please contact the Stock Sales
Center if you have any questions about your IRA account. There will be no early
withdrawal or IRS penalties incurred in these transactions.

(Front)

<PAGE>

Uniform Gift to Minors - For residents of many states, shares may be held in the
name of a custodian for the benefit of a minor under the Uniform Transfers to
Minors Act. For residents in other states, shares may be held in a similar type
of ownership under the Uniform Gift to Minors Act of the individual states. For
either type of ownership, the minor is the actual owner of the shares with the
adult custodian being responsible for the investment until the child reaches
legal age.

On the first line, print the first name, middle initial and last name of the
custodian, with the abbreviation "CUST" and "Unif Tran Min Act" or "Unif Gift
Min Act" after the name. Print the first name, middle initial and last name of
the minor on the second "NAME" line. Standard U.S. Postal Service state
abbreviations should be used to describe the appropriate state. For example,
shares held by John Doe as custodian for Susan Doe under the Ohio Transfer to
Minors Act will be abbreviated John Doe, CUST Susan Doe Unif Tran Min Act. OH.
Use the minor's Social Security Number. Only one custodian and one minor may be
designated.

Joint Tenants - Joint Tenants with right of survivorship identifies two or more
owners. When shares are held by joint tenants with rights of survivorship,
ownership automatically passes to the surviving joint tenant(s) upon the death
of any joint tenant. You may not list beneficiaries for this ownership.

Corporation/Partnership - Corporations/Partnerships may purchase shares. Please
provide the Corporation's/Partnership's legal name and Tax I.D.

Fiduciary/Trust - Generally, fiduciary relationships (such as trusts, estates,
guardianships, etc.) are established under a form of trust agreement or pursuant
to a court order. Without a legal document establishing a fiduciary
relationship, your shares may not be registered in a fiduciary capacity.

On the first "NAME" line, print the first name, middle initial and last name of
the fiduciary if the fiduciary is an individual. If the fiduciary is a
corporation, list the corporate title on the first "NAME" line. Following the
name, print the fiduciary "title" such as trustee, executor, personal
representative, etc.

On the second "NAME" line, print either the name of the maker, donor or testator
OR the name of the beneficiary. Following the name, indicate the type of legal
document establishing the fiduciary relationship (agreement, court order, etc.).
In the blank after "Under Agreement Dated," fill in the date of the document
governing the relationship. The date of the document need not be provided for a
trust created by a will.

An example of fiduciary ownership of stock in the case of a trust is: "John D.
Smith, Trustee for Thomas A. Smith Trust Under Agreement Dated June 9, 1987."

- --------------------------------------------------------------------------------
Definition of Associate
- --------------------------------------------------------------------------------

A person's Associates consist of the following: (a) any corporation or other
organization (other than Citizens Community Bancorp, Inc. ["CCBI"], Citizens
Community Bank of Florida ["Bank"], or a majority owned subsidiary of the Bank)
of which such person is a director, officer or partner or is directly or
indirectly the beneficial owner of 10% or more of any class of equity
securities; (b) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a similar
fiduciary capacity, provided, however, that such term shall not in include any
tax-qualified employee stock benefit plan of CCBI or the Bank in which such
person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity; and (c) any relative or spouse of such person, or
any relative of such person, who either has the same home as such person or who
is a director or officer of CCBI or the Bank or any of their subsidiaries.

- --------------------------------------------------------------------------------
Non-Transferability of Rights
- --------------------------------------------------------------------------------

Subscription rights are not transferable. If you are a qualified shareholder, to
protect your priority over other purchasers as described in the Prospectus, you
must take ownership in at least one of the account holder's names. Enter the
Social Security or Tax I.D. number of one registered owner. This registered
owner must be listed on the first "NAME" line. BE SURE TO INCLUDE YOUR TELEPHONE
NUMBER BECAUSE WE WILL NEED TO CONTACT YOU IF WE CANNOT EXECUTE YOUR ORDER AS
GIVEN. Review the Stock Ownership Guide and refer to the instructions for
Uniform Gift to Minors/Uniform Transfer to Minors and Fiduciaries.