SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1997

[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
---------- ----------

CNB Bancshares, Inc. 0-11510
(Exact name of registrant (Commission file number)
as specified in its charter)

Indiana 35-1568731
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

20 N.W. Third Street, Evansville, Indiana 47739
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (812) 456-3400

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

Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Stock, No Par Value New York Stock Exchange

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

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

The aggregate market value of the voting stock held by non-affiliates of
the registrant was $762,249,000 as of March 5, 1998.

The number of shares outstanding of the registrant's common stock, without
par value, as of March 5, 1998 was 20,431,695 shares.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1997. (Part I, Part II and Part IV)

(2) Portions of the Registrant's Proxy Statement for Annual Meeting of
Shareholders to be held April 21, 1998. (Part III)

Exhibit index is on page 18.

PART I

ITEM 1. BUSINESS

Overview

CNB Bancshares, Inc. (the Corporation) is a regional, multi-bank holding
company headquartered in Evansville, Indiana. Incorporated on May 26, 1983,
under the laws of the State of Indiana, the Corporation began operating in 1984
as a one-bank holding company for The Citizens National Bank of Evansville
(Citizens), which was chartered in 1874. Since that time, the Corporation has
acquired additional financial subsidiaries and currently owns six commercial
banks and one consumer finance company. Certain of the acquired subsidiaries
have subsequently been merged into other subsidiaries of the Corporation. With
assets of $2,208,941,000 at December 31, 1997, Citizens remains the lead bank
and largest of the Corporation's subsidiaries. As of December 31, 1997, the
Corporation had consolidated total assets of $4,480,223,000 and total
shareholders' equity of $334,468,000.

The Corporation's banking and finance subsidiaries are listed below:

Financial Principal Year Year Number of Total Total
Subsidiary Office Organized Acquired Locations* Assets# Equity#
---------- ------ --------- -------- --------- ------- -------

The Citizens National Evansville,
Bank of Evansville Indiana 1874 1984 29 $2,208,941 $ 154,048

Citizens Bank of Madisonville,
Kentucky Kentucky 1929 1986 19 678,452 54,946

Citizens Bank of Western Terre Haute,
Indiana Indiana 1890 1990 13 401,367 33,370

Citizens Bank of Jasper Jasper,
Indiana 1978 1991 2 110,060 8,670

Citizens Bank of Greenwood,
Central Indiana Indiana 1933 1992 20 656,997 43,110

Peoples Security Finance Madisonville,
Company Kentucky 1971 1993 33 57,949 7,487

Citizens Bank of Mt. Vernon,
Illinois, N.A. Illinois 1959 1993 12 657,216 51,923

*Number of offices does not include off-site ATM's or non-banking locations.
#Dollar amounts are reported in thousands.

The Corporation's financial subsidiaries are engaged in commercial and
retail banking, consumer lending, mortgage lending and servicing, trust services
and cash management services for corporate accounts and other banks. Through its
financial subsidiaries, the Corporation has 128 offices throughout its primary
market areas of Indiana, Illinois, Kentucky and portions of Tennessee.

The Corporation's financial subsidiaries offer a broad range of deposit,
loan and other banking products and services to their customers. Deposit
products include certificates of deposit, individual retirement accounts and
other time deposits, checking and other demand deposit accounts, including NOW
accounts, and savings and money market accounts. Loans include commercial and
industrial, real estate mortgage, consumer, agricultural and leasing services.
Other products and services include deposit and investment brokerage, credit
cards, credit-related insurance, automatic teller machines and safe deposit
boxes. Citizens Trust Company of Indiana, N.A., a subsidiary of The Citizens
National Bank of Evansville, provides trust, asset management and record-keeping
services for retirement plans. The Corporation continues to explore new products
and services to meet the needs and demands of its growing customer base and to
remain competitive with other financial institutions operating in its market
areas.

The Corporation also has three non-banking subsidiaries. Citizens
Information Systems, Inc., based in Evansville, Indiana, provides data
processing and information services to the Corporation and its subsidiaries and
other banks and businesses in Indiana, Kentucky and Illinois. Citizens Life
Assurance Company underwrites credit life and disability insurance sold through
the Corporation's affiliates in Indiana and Illinois. Citizens Insurance of
Evansville sells property and casualty insurance.

Pending and Recently Completed Acquisitions

As part of its ongoing operations, the Corporation continually is presented
with and seeks out acquisition opportunities to enhance its banking franchise.

On January 1, 1998, the Corporation acquired Wedgewood Partners, a full
service broker/dealer and asset management firm based in St. Louis, Missouri.
Goodwill of $2,345,000 related to this acquisition is being amortized on a
straight-line basis over 15 years. The acquisition was accounted for under the
purchase method of accounting and, accordingly, the consolidated financial
statements will include the assets and liabilities and results of operations
from the January 1, 1998 transaction date forward.

On October 14, 1997, the Corporation signed a definitive agreement to
acquire all of the outstanding shares of Pinnacle Financial Services, Inc.
(Pinnacle), headquartered in St. Joseph, Michigan. Under terms of the agreement,
the Corporation will issue approximately 13 million shares of its common stock.
The transaction will be accounted for under the pooling of interests method of
accounting and is subject to approval by shareholders of the Corporation and
Pinnacle and applicable regulatory agencies. Although the Corporation
anticipates that the merger will be consummated during the second quarter of
1998, there can be no assurances that the acquisition will be completed. At
December 31, 1997, Pinnacle had total assets and shareholders' equity of
$2,116,449,000 and $181,305,000, respectively.

On February 13, 1998, the Corporation signed a definitive agreement to
acquire all of the outstanding shares of National Bancorp of Tell City, Indiana.
Under terms of the agreement, the Corporation will issue approximately 1,118,000
shares of its common stock. The transaction will be accounted for under the
pooling of interests method of accounting and is subject to approval by

shareholders of National Bancorp and applicable regulatory agencies. Although
the Corporation anticipates that the merger will be consummated during the
second quarter of 1998, there can be no assurances that the acquisition will be
completed. At December 31, 1997, National Bancorp had total assets and
shareholders' equity of $191,287,000 and $17,850,000, respectively.

Competition

The business of the Corporation and its subsidiaries is highly competitive.
There are numerous bank holding companies and groupings of banks located in
southern Illinois, southern, western, and central Indiana, Kentucky, and
Tennessee, which offer substantial competition in the acquisition and operation
of banks, savings associations and non-bank financial institutions. The banking
and finance subsidiaries and the Corporation's non-banking subsidiaries
encounter substantial competition in all of their banking and related activities
and expect such competition to intensify as the financial industry expands due
to more non-bank competitors offering financial services. In addition, recent
changes in laws relating to interstate banking have permitted some local
institutions to become part of larger regional and national organizations.

The Corporation's banking and finance subsidiaries compete with other
commercial banks, savings associations and credit unions for loans and deposits
and with money market funds for deposits. Consumer and commercial finance
companies, mortgage banks, securities brokerage companies, investment banking
firms and insurance companies also compete with the financial subsidiaries for
various types of loans and financial services. Some of these entities and
institutions are not subject to the same regulatory restrictions as financial
institution holding companies and their subsidiary banks and savings
associations and therefore enjoy certain competitive advantages. The principal
methods of competition in banking activities are price, service and convenience.

Regulations and Supervision

The United States banking industry is highly regulated, with federal and
state agencies having supervisory authority regarding the chartering,
supervision and examination of banks, savings banks and their bank holding
companies. There are numerous laws and regulations which limit how a bank
holding company and its subsidiaries conduct their businesses, including minimum
capital levels, limitations on the payment of dividends and regulation of
acquisitions and mergers.

As a bank holding company, the Corporation is subject to regulation under
the Bank Holding Company Act of 1956, as amended (the BHC Act), which is
administered by the Board of Governors of the Federal Reserve System (Federal
Reserve Board). The Corporation is required to file reports with the Federal
Reserve Board and various other federal and state agencies and to provide such
additional information as may be required.

A bank holding company must obtain Federal Reserve Board approval before
acquiring, directly or indirectly, ownership or control of any voting shares of
any bank or bank holding company if, after such acquisition, it would own or
control more than 5% of such shares (unless it already owns or controls a
majority of such shares). Federal Reserve Board approval must also be obtained
before any bank holding company acquires all or substantially all of the assets
of another bank or bank holding company or merges or consolidates with another
bank holding company.

The BHC Act also prohibits a bank holding company, with certain limited
exceptions, from acquiring or retaining direct or indirect ownership or control
of more than 5% of the voting shares of any company which is not a bank or bank
holding company, or from engaging in any activities other than those of banking,
managing or controlling banks, or providing services for its subsidiaries. The
principal exceptions to these prohibitions involve certain activities which the
Federal Reserve Board has determined to be so closely related to the business of
banking or managing or controlling banks as to be a proper incident thereto.

The Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA)
was signed into law on September 30, 1996. EGRPRA streamlined the non-banking
activities application process for well-capitalized and well-managed bank
holding companies. Under EGRPRA, qualified bank holding companies may commence a
regulatorily approved non-banking activity without prior notice to the Federal
Reserve Board; written notice is required within 10 days after commencing the
activity. Under EGRPRA, the prior notice period is reduced to 12 days in the
event of any non-banking acquisition or share purchase, assuming the size of the
acquisition does not exceed 10% of risk-weighted assets of the acquiring bank
holding company and the consideration does not exceed 15% of Tier 1 capital. The
Federal Reserve Board has adopted comprehensive amendments to its regulations
under the BHC Act that implement the foregoing provisions of the EGRPRA,
including provisions allowing the 12-day prior notice for acquisitions that
exceed the 10% of risk-weighted assets limit, under certain circumstances, and
that also streamline the application/notice process for acquisitions of banks
and bank holding companies and eliminate regulatory provisions that the Federal
Reserve Board considered unnecessary.

In September 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (Interstate Act) was signed into law, authorizing, among
other things, interstate acquisitions by bank holding companies, interstate
mergers of banks and "agency banking" with affiliates in different states. The
Interstate Act amended the BHC Act to allow an adequately capitalized and
managed bank holding company to acquire banks located in any state, beginning
September 29, 1995, subject to state deposit caps and a 10% nationwide deposit
cap. Adequately capitalized banks were permitted to merge across state lines
without regard to whether the merger is prohibited by the laws of any state
(except for states that "opted-out" of the interstate branching authorization,
specifically Texas and Montana) beginning June 1, 1997. The Interstate Act's
"agency banking" provisions, effective September 29, 1995, permit affiliated
banks to act as agent for each other in the conduct of most core banking
activities. Affiliated banks may receive deposits, renew time deposits, close
loans, service loans and receive payments on loans and other obligations on
behalf of each other, without being treated as branches.

Subsidiary banks of a bank holding company are prohibited from engaging in
certain tie-in arrangements in connection with the extension of credit or the
lease or sale of any property or the furnishing of services. Bank holding
companies and their nonbank subsidiaries that engage in electronic benefit
transfer services are also subject to certain anti-tying restrictions.
Subsidiary banks of a bank holding company are also subject to certain
restrictions imposed by the Federal Reserve Act on any extensions of credit to
the bank holding company or any of its subsidiaries, or investments in stock or
other securities thereof, and on the taking of such stock or other securities as
collateral for loans.

The Federal Reserve Board has prescribed capital adequacy guidelines for
use in its examination and regulation of bank holding companies. If the capital
of a bank holding company falls below the minimum levels established by these
guidelines, it may be denied approval to acquire or establish additional banks
or non-bank businesses. The guidelines established by the Federal Reserve Board
set a

minimum leverage ratio of 3.0% for the most highly rated bank holding companies
that do not anticipate significant growth. All other institutions are required
to maintain a ratio of 4.0% to 5.0% depending on their particular circumstances
and risk profile. This ratio is defined as shareholders' equity less non-
qualifying intangible assets, as a percentage of the sum of quarter to date
total average assets less non-qualifying intangible assets. The Federal Reserve
Board has also adopted risk-based capital guidelines which assign various risk
weightings to assets and off-balance sheet items and set minimum capital
requirements. Under the current rules, banks are required to have core capital
(Tier 1) of at least 4.0% of risk-weighted assets and total capital of 8.0% of
risk-weighted assets. Tier 1 capital consists primarily of shareholders' equity
less intangible assets; and total capital consists of Tier 1 capital, certain
long-term debt and convertible debentures and a portion of the allowance for
loan losses. At December 31, 1997, the Corporation's leverage, Tier 1 and total
capital ratios were 6.9%, 10.7%, and 11.9%, respectively, all well above
regulatory minimums.

The Federal Reserve Board has issued a policy statement on the payment of
cash dividends by bank holding companies. In the statement, the Federal Reserve
Board expressed its view that a holding company experiencing earnings weaknesses
should not pay cash dividends exceeding its net income nor pay a dividend which
can only be funded in a way that weakens the holding company's financial health,
such as by borrowing. The Federal Reserve Board periodically examines bank
holding companies and possesses cease and desist powers over bank holding
companies and their non-bank subsidiaries if their actions represent unsafe or
unsound practices.

Per the "cross guarantee" provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, each financial subsidiary of the
Corporation could be liable for any loss incurred by the FDIC in connection with
the failure of any other financial subsidiary of the Corporation.

Each of the financial subsidiaries is subject to supervision and regulation
by its chartering authority. The primary supervisory authorities of the
Corporation's bank subsidiaries are the Comptroller of the Currency (national
banks) and appropriate state banking regulatory authorities (state banks). Each
regulator regularly examines such areas as reserves, loans, investments,
management practices and other aspects of bank operations, and has the authority
to prevent a bank from engaging in an unsafe or an unsound practice in
conducting its business. In addition, the Corporation's subsidiary banks are
members of, and subject to regulation and examination by, the Federal Deposit
Insurance Corporation (FDIC).

Federal and state banking laws and regulations govern, among other things,
the scope of a bank's business, the investments it may make, the reserves
against deposits it must maintain, loans a bank makes and collateral it takes,
minimum capital levels, activities with respect to mergers and consolidations,
and the establishment of branches.

In December 1991, the Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA) was enacted. FDICIA contains various provisions relating to the
supervision, regulation, and operation of banks and bank holding companies.
Various regulations implementing FDICIA have been promulgated by bank
regulators. FDICIA, among other things, identifies the following capital
standards for depository institutions: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each relevant
capital measure, adequately capitalized if it meets each such measure,
undercapitalized if it fails to meet any such measure, significantly
undercapitalized if it is significantly below any such measure, and critically
undercapitalized

if it fails to meet any critical capital level set forth in the regulations.
FDICIA requires a bank that is determined to be undercapitalized to submit a
capital restoration plan, and the bank's holding company, subject to certain
limitations, must guarantee that the bank will meet its capital plan. FDICIA
also prohibits banks from making any capital distribution or paying any
management fee if the bank would thereafter be undercapitalized. Under these
rules, institutions must have a leverage ratio of 5.0% or above, Tier 1 capital
to risk-based assets of 6.0% or above, and total capital to risk-based assets of
10.0% or above in order to qualify as well capitalized. All of the Corporation's
banking subsidiaries were well capitalized for purposes of FDICIA and exceeded
all other regulatory capital requirements at year-end 1997.

FDICIA grants the FDIC authority to impose special assessments on insured
depository institutions to repay FDIC borrowings from the United States Treasury
or other sources and to establish semiannual assessment rates on Bank Insurance
Fund (BIF) and Savings Association Insurance Fund (SAIF) member banks so as to
maintain the funds at the designated reserve ratios defined in FDICIA. FDICIA
also required the FDIC to implement a risk-based insurance assessment system
pursuant to which the premiums paid by a depository institution are based on the
probability that the BIF or SAIF will incur a loss in respect of such
institution. At December 31, 1997, each of the Corporation's financial
subsidiaries was in the category of institutions that paid deposit assessments
at the lowest rates.

Because of concerns relating to competitiveness and the safety and
soundness of the banking industry, Congress is considering a number of
wide-ranging proposals for altering the structure, regulation and competitive
relationships of the nation's financial institutions. Among such bills are new
proposals to merge the BIF and the SAIF insurance funds, to eliminate the
federal thrift charter, to alter the statutory separation of commercial and
investment banking, to allow a wider variety of financial services companies to
affiliate with banks and to further expand the powers of banks, bank holding
companies and competitors of banks. It cannot be predicted whether or in what
form any of these proposals will be adopted or the extent to which the business
of the Corporation may be affected thereby.

Government Policies

The policies of federal and state agencies including the Federal Reserve
Board, the FDIC and other regulatory authorities may have a significant effect
on the operating results of the Corporation and the banking industry. An
important function of the Federal Reserve Board is to regulate aggregate money
supply and credit conditions and interest rates in order to influence general
economic conditions. The Federal Reserve Board, primarily through open market
operations of U.S. Government securities, and by varying the discount rate for
member bank borrowings and changing reserve requirements against member bank
deposits, can exercise significant influence on the overall growth and
distribution of bank loans and deposits and interest rates charged on loans and
earned on investments or paid for time and savings deposits. The general effect,
if any, of such policies upon the future business and earnings of the
Corporation and its financial subsidiaries cannot be determined.

Forward Looking Statements

Statements contained in this Report and in future filings by the
Corporation with the Securities and Exchange Commission, in the Corporation's
press releases and in oral statements made with the approval of an authorized
executive officer, which are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of

1995 (Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended). There can be no assurance that
such forward-looking statements will in fact transpire. The following important
factors, risks and uncertainties, among others, could cause actual results to
differ materially from such forward-looking statements:

Credit risk: Although the Corporation has had good credit quality in
recent years, changes in economic conditions could adversely affect the
credit quality of the loan portfolio.

Interest rate risk: Although the Corporation actively manages its
interest rate sensitivity, such management is not an exact science.
Rapid increases or decreases in interest rates could adversely impact
the Corporation's net interest margin if changes in its cost of funds
do not correspond to the changes in income yields.

Competition: The Corporation's activities in its local markets involve
competition with other banks as well as other financial institutions
and enterprises. Also, the financial service markets have and likely
will continue to experience substantial changes, which could
significantly change the Corporation's competitive environment in the
future.

Legislative and regulatory environment: The Corporation operates in a
rapidly changing legislative and regulatory environment. It cannot be
predicted how or to what extent future developments in these areas will
affect the Corporation. These developments could negatively impact the
Corporation through increased operating expenses for compliance with
new laws and regulations, restricted access to new products and
markets, or in other ways.

General business and economic trends: These factors, including the
impact of inflation levels, influence the Corporation's results in
numerous ways, including operating expense levels, deposit and loan
activity, and availability of trained individuals needed for future
growth.

The foregoing list should not be construed as exhaustive and the
Corporation disclaims any obligation to subsequently update or revise any
forward-looking statements after the date of this Report.

Executive Officers of the Registrant

The following table sets forth the names and ages of all executive officers
of the Corporation, including all positions and offices with the Corporation
held by each such person, the term of office and the period during which he has
served as such.

Name Age Office and Business Experience

H. Lee Cooper 59 Chairman of the Board of the Corporation since
1986. Previously, Mr. Cooper also served as
Chief Executive Officer and President of the
Corporation and in various capacities as a
senior executive officer of both the Corporation
and Citizens.

James J. Giancola 49 President and Chief Executive Officer of the
Corporation. Mr. Giancola has been President
since 1994 and was named Chief Executive Officer
in 1996. Prior to joining the Corporation in
1992, Mr. Giancola was President of Gainer Bank
of Merrillville, Indiana.
M. Lynn Cooper 47 Executive Vice President of the Corporation
since 1994. Prior to 1994, Mr. Cooper served as
Chairman of the Board, President and Chief
Executive Officer of Citizens Bank of Kentucky,
a subsidiary of the Corporation.
Marvin Huff, Jr. 64 Executive Vice President of the Corporation
since 1996 and President of Citizens Information
Systems, Inc., a subsidiary of the Corporation,
since 1994. Previously, Mr. Huff served in
various capacities as an officer of Citizens.
David L. Knapp 58 Executive Vice President of the Corporation
since 1986. Mr. Knapp was named President and
Chief Executive Officer of Citizens in 1994.
Previously, Mr. Knapp served as Chief Financial
Officer of the Corporation and Citizens and in
various other capacities as a senior executive
officer of both the Corporation and Citizens.
John R. Spruill 55 Executive Vice President and Chief Financial
Officer of the Corporation since 1995. Prior to
1995, Mr. Spruill served as Executive Vice
President and Chief Financial Officer of
Southern National Corporation in North Carolina.
David M. Viar 48 Executive Vice President of the Corporation
since 1996. Previously, Mr. Viar served as
Senior Vice President and Treasury Officer of
the Corporation. Prior to joining the
Corporation in 1993, Mr. Viar was Senior Vice
President--Funds Management of Dominion
Bancshares in Virginia.
Ralph L. Alley 46 Senior Vice President, Controller and Treasurer
of the Corporation and Senior Vice President and
Controller of Citizens since 1985. Previously,
Mr. Alley served in various capacities as an
officer of Citizens.
John N. Daniel, Jr. 52 Senior Vice President and Chief Credit Officer
since 1997. Previously, Mr. Daniel served as
Senior Vice President, Commercial Lending of
Citizens.
James R. Dodd 52 Senior Vice President of the Corporation since
1993. In 1996, Mr. Dodd was named President of
Citizens Trust Co., a subsidiary of Citizens.
Prior to joining the Corporation in 1993, he was
President of BancOklahoma Trust Company.

Douglas R. Hanks 51 Senior Vice President and Director of Marketing
of the Corporation since 1994. Prior to joining
the Corporation in 1994, Mr. Hanks served as
Vice President--Director of Field Marketing for
BancOne Corporation.
John M. Oberhelman 56 Senior Vice President of Human Resources for the
Corporation since 1992 and Senior Vice President
and Human Resources Director of Citizens.
Previously, Mr. Oberhelman served in various
capacities as an officer of Citizens.

There are no family relationships between any of the named persons. Each
executive officer is elected by the Corporation's Board of Directors to serve
until the close of the next annual meeting of the shareholders following his
election and until the election of his successor. No executive officer of the
Corporation was selected to his position pursuant to any arrangement or
understanding with any other person.

Statistical Disclosure

The statistical disclosures of the Corporation on a consolidated basis,
included on pages 18 to 35 of the Corporation's Annual Report to Shareholders
for the year ended December 31, 1997, are hereby incorporated by reference
herein.

ITEM 2. PROPERTIES

Citizens owns a modern, 15-story office building which houses the
Corporation's principal offices and the main banking offices of Citizens. The
building is located at 20 Northwest Third Street, Evansville, Indiana, and is in
excellent condition. The Corporation and Citizens presently occupy approximately
three-fourths of the building and the remainder is leased to various tenants.
The Corporation and Citizens also utilize five other buildings in close
proximity to the main banking office in downtown Evansville which are also owned
and are available for future office needs of the Corporation. A portion of this
space is also currently being leased by various tenants. The financial
subsidiaries own 76 of the 127 remaining offices in which they conduct their
businesses. Additionally, three other properties are utilized as office space by
the Corporation's subsidiaries. The net investment, as of December 31, 1997, of
the Corporation and its subsidiaries in property and equipment was $75,003,000.
Three properties are security for real estate mortgages payable which balances
totaled $2,696,000 at December 31, 1997. None of the other properties are
subject to material liens or other encumbrances.

Management of the Corporation believes that, as a group, the facilities are
in satisfactory condition and repair and will be adequate to meet its
foreseeable needs.

ITEM 3. LEGAL PROCEEDINGS

The Corporation presently is engaged in routine litigation incidental to
its business and management does not believe such litigation will materially
adversely affect the Corporation's consolidated financial position or
operations.

ITEM 4. SUBMISSION MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of 1997.

PART II

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

Pages 1 and 61 of the Corporation's Annual Report to Shareholders for the
year ended December 31, 1997, are hereby incorporated by reference herein.

ITEM 6. SELECTED FINANCIAL DATA

Page 18 of the Corporation's Annual Report to Shareholders for the year
ended December 31, 1997, is hereby incorporated by reference herein.

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

Pages 19 to 35 of the Corporation's Annual Report to Shareholders for the
year ended December 31, 1997, are hereby incorporated by reference herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Managing interest rate risk is fundamental to the financial services
industry. The Corporation's policies are designed to manage the inherently
different maturity and repricing characteristics of the loan and deposit
portfolios to achieve a desired interest sensitivity position and to limit
exposure to interest rate risk. By using a combination of on- and off-balance
sheet financial instruments, the Corporation manages interest rate sensitivity
while optimizing interest income within the constraints of prudent capital
adequacy and liquidity needs. Principal maturities and repricing profiles are
monitored through static gap analysis and future operating results are simulated
through computer modeling.

The management of interest rate sensitivity includes monitoring the
maturities and repricing opportunities of interest earning assets and interest
bearing liabilities. The Corporation's interest rate sensitivity analysis as of
December 31, 1997 is included in the Liquidity and Interest Rate Sensitivity
section of Management's Discussion and Analysis in the Corporation's 1997 Annual
Report to Shareholders on pages 33 and 34. A rate sensitivity position is
computed for various repricing intervals by calculating rate sensitivity gaps.
Interest earning assets and interest bearing liabilities have been distributed
based on their repricing opportunities. The maturities of certain investments,
loans and deposits have been adjusted based on projected prepayment patterns or
historical relationships to changes in market interest rates. The repricing of
certain liabilities has been adjusted to reflect the expected benefit of
interest rate contracts in place at year-end. Although rate sensitivity gaps
constantly change as funds are acquired and invested, the Corporation's negative
gap of $147,517 at one year or less as of

December 31, 1997, was approximately 3.3% of total assets. This, in the opinion
of management, represented a relatively balanced position.

The Corporation utilizes a simulation model to measure and evaluate the
impact of changing interest rates on net interest income. The simulation
techniques involve changes in interest rate relationships, asset and liability
mixes, prepayment options inherent in financial instruments and directional
changes in prevailing interest rates. The table below illustrates the projected
change in the Corporation's net interest income during the next twelve months if
all market rates were to uniformly and gradually increase or decrease by as much
as 2.00% compared to the results of a flat rate environment. These projections,
based upon the Corporation's balance sheet as of December 31, 1997, were
prepared using the modeling techniques and assumptions which were then used for
asset/liability management purposes.

Increase (Decrease)
-----------------------------------

Change in interest rates from current level (2.00)% (1.00)% 1.00% 2.00%

Change in net interest income 1.3% .5% (.2)% (.3)%

The table indicates that if rates were to gradually increase or decrease by
2.00%, net interest income would be expected to decrease by .3% or increase by
1.3%, respectively, compared to a flat rate environment. This narrow projected
exposure to interest rate risk is consistent with management's desire to limit
the sensitivity of net interest income to changes in interest rates in order to
reduce risk to earnings and capital. This model is based solely on gradual,
uniform changes in market rates and does not reflect the levels of interest rate
risk that may arise from other factors such as changes in the spreads between
key market rates or the shape of the Treasury curve.

To assist in achieving the desired level of interest rate sensitivity, the
Corporation has entered into interest rate contracts. Through the purchase of
interest rate cap agreements (caps), the Corporation has reduced the impact of
increased interest rates on its costs to acquire certain deposits, repurchase
agreements and long-term borrowings being hedged. These caps entitle the
Corporation to receive periodic payments from counterparties based upon the
notional amount of the caps and the excess of the index rate over the strike
price. In addition, the Corporation has entered into interest rate swaps as a
hedge against certain long-term borrowings. The contracts represent an exchange
of interest payments requiring the Corporation to pay a fixed rate of interest
ranging from 5.77% to 6.12% and receive a variable rate based on three-month
LIBOR. These contracts are described more fully in Note 14 to the consolidated
financial statements on page 53 of the Corporation's 1997 Annual Report to
Shareholders.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Pages 26 and 36 to 58 of the Corporation's Annual Report to Shareholders
for the year ended December 31, 1997, are hereby incorporated by reference
herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information under the headings "Information Regarding Nominees for
Class I Directors" and "Information Regarding Directors Continuing in Office" on
pages 3 and 4 of the Corporation's Proxy Statement for its Annual Meeting of
Shareholders to be held April 21, 1998, is hereby incorporated by reference
herein. The information on Executive Officers is included in Part I, Item 1 of
this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information under the heading "Executive Compensation" on pages 7 to 13
of the Corporation's Proxy Statement for its Annual Meeting of Shareholders to
be held April 21, 1998, is hereby incorporated by reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information regarding beneficial ownership of the Common Stock of the
Corporation set forth under the headings "Certain Beneficial Ownership,"
"Information Regarding Nominees for Class I Directors," "Information Regarding
Directors Continuing in Office" and "Security Ownership of Management," on pages
2 through 6 of the Corporation's Proxy Statement for its Annual Meeting of
Shareholders to be held April 21, 1998, is hereby incorporated by reference
herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under the heading "Transactions with Directors, Officers
and Associates" on page 14 of the Corporation's Proxy Statement for its Annual
Meeting of Shareholders to be held April 21, 1998, is hereby incorporated by
reference herein.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Financial Statements and Schedules

(1) The following consolidated financial statements of the Corporation,
included on pages 36 through 58 of the Corporation's Annual Report to
Shareholders for the year ended December 31, 1997, are hereby
incorporated by reference herein:

. Consolidated Balance Sheets at December 31, 1997 and 1996.
. Consolidated Statements of Income, years ended December 31, 1997,
1996, and 1995.
. Consolidated Statements of Changes in Shareholders' Equity, years
ended December 31, 1997, 1996 and 1995.

. Consolidated Statements of Cash Flows, years ended December 31, 1997,
1996 and 1995.
. Notes to Consolidated Financial Statements.
. Independent Auditors' Report.

(2) All schedules are omitted because they are not applicable or not
required, or because the required information is included in the
consolidated financial statements or related notes.

(b) Reports on Form 8-K

None.

(1) Exhibits required to be filed by Item 601(a) of Regulation S-K are
included as exhibits to or incorporated by reference in this Report as
follows:

3(i) - Restated Articles of Incorporation of the Corporation,
filed as Exhibit 3(i) to the Corporation's 1994 Annual
Report on Form 10-K, is incorporated herein by reference.

3(ii) - Amended Bylaws of the Corporation, filed as Exhibit 3(ii)
to the Corporation's 1995 Annual Report on Form 10-K, is
incorporated herein by reference.

4 - No long-term debt instrument issued by the Corporation
exceeds 10% of the consolidated total assets of the
Corporation and its subsidiaries. In accordance with
paragraph 4 (iii) of Item 601(b) of Regulation S-K, the
Corporation will furnish to the Securities and Exchange
Commission upon request copies of long-term debt instruments
and related agreements.

10* - (1) The following Executive Compensation Plans and
Arrangements, filed as Exhibits 10(1)(c) and (d) to the
Corporation's 1992 Annual Report on Form 10-K, are
incorporated herein by reference:
(a) CNB Bancshares, Inc. 1992 Incentive Stock Option Plan;
and
(b) Citizens Incentive Savings Plan.

(2) The following Management Contract and Executive
Compensation Plans, filed as exhibits 10 (3)(b) and
10 (3)(c) to the Corporation's 1994 Annual Report on Form
10-K, are incorporated herein by reference.
(a) CNB Bancshares, Inc. Savings Equalization Plan, dated
May 1, 1994.
(b) CNB Bancshares, Inc. Pension Equalization Plan, dated
May 1, 1994.

(3) The CNB Bancshares Inc. 1995 Incentive Stock Option Plan is
incorporated herein by reference to the Corporation's
filing with the Securities and Exchange Commission as an
exhibit to a Registration Statement on Form S-8,
Registration No. 33-60431.

(4) The following Management Contracts are incorporated herein
by reference to the Corporation's filing with the
Securities and Exchange Commission as exhibits (10)(a)
through (10)(e) to a Registration Statement on Form S-4,
Registration No. 333-46837:
(a) Change of Control Agreement, effective August 8, 1997,
between the Corporation and M. Lynn Cooper; and
(b) Change of Control Agreement, effective June 3, 1997,
between the Corporation and James J. Giancola; and
(c) Change of Control Agreement, effective June 3, 1997,
between the Corporation and Marvin Huff, Jr.; and
(d) Change of Control Agreement, effective May 28, 1997,
between the Corporation and David L. Knapp; and
(e) Change of Control Agreement, effective May 23, 1997
between the Corporation and John R. Spruill.

(5) (a) Change of Control Agreement, effective May 23, 1997,
between the Corporation and John N. Daniel, Jr.; and
(b) Change of Control Agreement, effective June 9, 1997,
between the Corporation and James R. Dodd; and
(c) Change of Control Agreement, effective May 23, 1997,
between the Corporation and Douglas R. Hanks; and
(d) Change of Control Agreement, effective May 23, 1997,
between the Corporation and David M. Viar.

13 - Portions of the Annual Report to Shareholders for the year
ended December 31, 1997.

21 - Subsidiaries of the Corporation.

23 - Consent of KPMG Peat Marwick LLP

27 - Financial Data Schedule

(2) The following exhibit will be submitted at a later date:

The annual financial statements and independent auditors' report
thereon for Citizens Incentive Savings Plan for the year ended
December 31, 1997, will be filed as an amendment to the 1997 Annual
Report on Form 10-K no later than June 29, 1998.

* The documents identified herein as 10-(1)(a) and 10-(1)(b), 10-(2)(a) and
10-(2)(b), 10-(3), 10-(4)(a) through 10-(4)(e) and 10-(5)(a) through 10-(5)(d)
constitute all management contracts and compensatory plans and arrangements
required to be filed as an exhibit to this Form, pursuant to Item 14(c) of this
Report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 17th day of
March, 1998.

CNB BANCSHARES, INC.

By /s/ James J. Giancola
----------------------------------
James J. Giancola, President and
Chief Executive Officer
(chief executive officer)

By /s/ John R. Spruill
----------------------------------
John R. Spruill, Executive Vice President
and Chief Financial Officer
(principal financial officer)

By /s/ Ralph L. Alley
----------------------------------
Ralph L. Alley, Senior Vice President,
Controller and Treasurer
(principal accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report on Form 10-K has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Capacity Date
--------- -------- ----

/s/ H. Lee Cooper Director March 17, 1998
- ----------------------------------
H. Lee Cooper

/s/ John D. Engelbrecht Director March 17, 1998
- ----------------------------------
John D. Engelbrecht

/s/ James J. Giancola Director March 17, 1998
- ----------------------------------
James J. Giancola

/s/ Edmund L. Hafer Director March 17, 1998
- ----------------------------------
Edmund L. Hafer

/s/ Robert L. Koch, II Director March 17, 1998
- ----------------------------------
Robert L. Koch, II

/s/ Larry J. Kremer Director March 17, 1998
- ----------------------------------
Larry J. Kremer

/s/ Burkley F. McCarthy Director March 17, 1998
- ----------------------------------
Burkley F. McCarthy

/s/ Robert K. Ruxer Director March 17, 1998
- ----------------------------------
Robert K. Ruxer

Director
- ----------------------------------
Thomas W. Traylor

EXHIBIT INDEX
Reg. S-K

Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----

3(i) Articles of Incorporation of the Corporation filed as Exhibit
3(i) to the Corporation's 1994 Annual Report on Form 10-K is
incorporated herein by reference.

3(ii) Bylaws of the Corporation, filed as Exhibit 3(ii) to the
Corporation's 1995 Annual Report on Form 10-K, is incorporated
herein by reference.

10* - (1) The following Executive Compensation Plans and Arrangements, filed as
Exhibits 10(1)(c) and (d) to the Corporation's 1992 Annual Report on Form
10-K, are incorporated herein by reference:
(a) CNB Bancshares, Inc. 1992 Incentive Stock Option Plan.
(b) Citizens Incentive Savings Plan.

10(2) The following Management Contract and Executive Compensation
Plans filed as Exhibits 10(3)(b) and 10(3)(c) to the
Corporation's 1994 Annual Report on Form 10-K are incorporated
herein by reference:
(a) CNB Bancshares, Inc. Savings Equalization Plan dated May 1, 1994.
(b) CNB Bancshares, Inc. Pension Equalization Plan dated May 1, 1994.

10(3) The CNB Bancshares, Inc. 1995 Incentive Stock Option Plan is
incorporated by reference to the Corporation's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-60431.

10(4) The following Management Contracts are incorporated herein by
reference to the Corporation's filing with the Securities and
Exchange Commission as exhibits (10)(a) through (10)(e) to a
Registration Statement on Form S-4, Registration No. 333-46837:
(a) Change of Control Agreement, effective August 8, 1997,
between the Corporation and M. Lynn Cooper; and
(b) Change of Control Agreement, effective June 3, 1997,
between the Corporation and James J. Giancola; and
(c) Change of Control Agreement, effective June 3, 1997,
between the Corporation and Marvin Huff, Jr.; and
(d) Change of Control Agreement, effective May 28, 1997 between
the Corporation and David L. Knapp; and
(e) Change of Control Agreement, effective May 23, 1997 between
the Corporation and John R. Spruill.

10(5) (a) Change of Control Agreement, effective May 23, 1997, between the
Corporation and John N. Daniel, Jr.; and
(b) Change of Control Agreement, effective June 9, 1997, between the
Corporation and James R. Dodd; and

(c) Change of Control Agreement, effective May 23, 1997,
between the Corporation and Douglas R. Hanks; and
(d) Change of Control Agreement, effective May 23, 1997,
between the Corporation and David M. Viar.

13 Portions of the Annual Report to Shareholders for the Year Ended
December 31, 1997......................................................
-----
21 Subsidiaries of the Corporation........................................
-----
23 Consent of KPMG Peat Marwick LLP ......................................
-----
27 Financial Data Schedule................................................
-----