Contact:  LEEANN GEPHART, CHIEF BANKING OFFICER
First Citizens Community Bank
15 S. Main Street
Mansfield, PA 16933
570-545-6005 
570-662-8512 (fax) 

citizens financial services, inc. reports unaudited third quarter 2025 financial results

MANSFIELD, PENNSYLVANIA— October 30, 2025 – Citizens Financial Services, Inc (Nasdaq: CZFS), parent company of First Citizens Community Bank (the “Bank”), released today its unaudited consolidated financial results for the three and nine months ended September 30, 2025.

Highlights

•
Net income for the first nine months of 2025 was $26,089,000, which was $6,254,000, or 31.5% more  than 2024’s net income through September 30, 2024 due to the increase in net interest income after the provision for credit losses of $8,920,000. The effective tax rate for the first nine months of 2025 was 18.9% compared to 17.8% in the comparable period in 2024.

•
Net income was $10,005,000 for the three months ended September 30, 2025, which was $2,469,000 more than the net income for 2024’s comparable period due to an increase in net interest income after the provision for credit losses of $3,116,000. The effective tax rate for the three months ended September 30, 2025 was 19.1% compared to 18.5% in the comparable period in 2024.

•
Net interest income before the provision for credit losses was $71,790,000 for the nine months ended September 30, 2025, an increase of $8,208,000, or 12.9%, over the same period a year ago and was primarily due to an increase in investment income and a decrease in interest expense.

•
The provision (release) for credit losses for the three and nine months ended September 30, 2025 was $500,000 and $1,875,000, respectively compared to $(200,000) and $2,587,000 for the three and nine months ended September 30, 2024, respectively. The provision for the 2025 periods was driven by the current economic forecasts. The provision for 2024 was significantly impacted by loans that were not sold as part of the sale of a division known as Braavo that occurred in the first quarter of 2024. The vast majority of the Braavo loans that were retained after the sale were originated by Huntington Valley Bank in 2023 prior to the acquisition and were current as of the acquisition date in 2023.  The provision for the nine months ended September 30, 2024, directly attributable to these loans was $1,806,000.

•
Return on average equity for the three and nine months (annualized) ended September 30, 2025 was 12.52% and 11.15% compared to 10.31% and 9.23% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average equity for the nine months (annualized) ended September 30, 2024 would have been 9.56% (non-GAAP). (1)

•
Return on average tangible equity (non-GAAP) for the three and nine months (annualized) ended September 30, 2025 was 17.29% and 15.56% compared to 14.82% and 13.39% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average tangible equity for the nine months (annualized) ended September 30, 2024 would have been 13.87% (non-GAAP). (1)


•
Return on average assets for the three and nine months (annualized) ended September 30, 2025 was 1.33% and 1.16% compared to 1.01% and 0.89% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average assets for the nine months (annualized) ended September 30, 2024 would have been 0.92% (non-GAAP). (1)

•
Non-performing assets decreased $5,618,000, or 19.6% since December 31, 2024 and totaled $22,994,000 as of September 30, 2025, which is $1,051,000 less than the balance as of September 30, 2024. During the third quarter of 2025, the Bank recognized additional interest income of $473,000 from the pay-offs of three relationships that for portions of the last year were considered non-performing. The decrease since December reflects three large relationships being placed back on accrual status due to making contractual payments for at least six consecutive months and the pay-offs of three large relationships in the third quarter of 2025 offset by placing two large relationships on non-accrual status.  As a percent of loans, non-performing assets totaled 0.98%, 1.24% and 1.03% as of September 30, 2025, December 31, 2024 and September 30, 2024, respectively.

Nine Months Ended September 30, 2025 Compared to 2024

•
For the nine months ended September 30, 2025, net income totaled $26,089,000 which compares to net income of $19,835,000 for the first nine months of 2024, an increase of $6,254,000. Basic earnings per share of $5.44 for the first nine months of 2025 compared to $4.14 for the first nine months last year.  Annualized return on equity for the nine months ended September 30, 2025 and 2024 was 11.15% and 9.23%, while annualized return on assets was 1.16% and 0.89%, respectively. The increase in performance when comparing 2025 to 2024 was due to an increase in the net interest margin from 3.09% to 3.44% and a decrease in the provision for credit losses.

•
Net interest income before the provision for credit losses for the nine months ended September 30, 2025 totaled $71,790,000 compared to $63,582,000 for the nine months ended September 30, 2024, resulting in an increase of $8,208,000, or 12.9%.  Average interest earning assets increased $39,854,000 for the nine months ended September 30, 2025 compared to the same period last year, primarily due to an increase in taxable investments and outstanding student loans. Average loans increased $20,223,000, while average investment securities increased $24,472,000. The yield on interest earning assets increased nine basis points to 5.63%, while the cost of interest-bearing liabilities decreased 30 basis points to 2.72%. As a result, the tax effected net interest margin increased from 3.09% for the nine months ended September 30, 2024 to 3.44% for the nine months ended September 30, 2025.

•
The provision for credit losses for the nine months ended September 30, 2025 was $1,875,000 compared to $2,587,000 for the nine months ended September 30, 2024, a decrease of $712,000.  The provision for 2025 was driven by the economic forecasts and the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds. The provision for 2024 was impacted by the Braavo loans as previously mentioned and an increase in past due and classified loans during the second quarter of 2024.


•
Total non-interest income was $10,946,000 for the nine months ended September 30, 2025, which is $1,116,000 less than the non-interest income of $12,062,000 for the same period last year. The primary drivers were the gain on the sale of assets associated with Braavo and earnings on bank owned life insurance due to the passing of a former employee in the first quarter of 2024.

•
Total non-interest expenses for the nine months ended September 30, 2025 totaled $48,709,000 compared to $48,918,000 for the same period last year, which is a decrease of $209,000. Salary and benefit costs increased $567,000 due to additional healthcare expenses and post-employment benefits. There are 12 fewer FTEs in 2025 compared to 2024. The decrease in professional fees and software costs is due to the sale of the Braavo division in 2024.

•
The provision for income taxes increased $1,759,000 when comparing the nine months ended September 30, 2025 to the same period in 2024 as a result of an increase in income before income tax of $8,013,000. The effective tax rate was 18.9% and 17.8% for the three months ended September 30, 2025 and 2024, respectively.

Three Months Ended September 30, 2025 Compared to 2024

•
For the three months ended September 30, 2025, net income totaled $10,005,000 which compares to net income of $7,536,000 for the comparable period of 2024, an increase of $2,469,000 or 32.7%.  Basic earnings per share of $2.09 for the three months ended September 30, 2025 compares to $1.57 for the 2024 comparable period. Annualized return on equity for the three months ended September 30, 2025 and 2024 was 12.52% and 10.31%, while annualized return on assets was 1.33% and 1.01%, respectively.

•
Net interest income before the provision for credit losses for the three months ended September 30, 2025 totaled $25,140,000 compared to $21,324,000 for the three months ended September 30, 2024, resulting in an increase of $3,816,000, or 17.9%. Average interest earning assets increased $24,110,000 for the three months ended September 30, 2025 compared to the same period last year, primarily due to increases in the average balance of investments. Average loans decreased $12,068,000, while average investment securities increased $34,955,000. The tax effected net interest margin for the three months ended September 30, 2025 was 3.60% compared to 3.09% for the same period last year. The yield on interest earning assets increased 16 basis points to 5.74%, while the cost of interest-bearing liabilities decreased 39 basis points to 2.67%.

•
The provision for credit losses for the third quarter of 2025 of $500,000 was driven by the change in economic factors during the quarter. The provision (release) for credit losses of ($200,000) for the 2024 period was due to changes in qualitative factors in the calculation related to inflation.

•
Total non-interest income was $3,854,000 for the three months ended September 30, 2025, $99,000 more than the comparable period last year.  The primary driver of the increase was an increase in brokerage and insurance commissions of $216,000.

•
Total non-interest expenses for the three months ended September 30, 2025 totaled $16,134,000 compared to $16,029,000 for the same period last year, which is an increase of $105,000, or 0.7%. Salary and employee benefits increased due to healthcare costs, profit sharing, vacation costs and other post-retirement benefits.


•
The provision for income taxes increased $641,000 when comparing the three months ended September 30, 2025 to the same period in 2024. This increase was attributable to increase in income before provision for income taxes of $3,110,000.  The effective tax rate was 19.1% and 18.5% for the three months ended September 30, 2025 and 2024, respectively.

Balance Sheet and Other Information:

•
At September 30, 2025, total assets were $3.06 billion compared to $3.03 billion at December 31, 2024 and September 30, 2024. The loan to deposit ratio as of September 30, 2025 was 96.86% compared to 97.21% as of December 31, 2024 and 95.14% as of September 30, 2024.

•
Available for sale securities of $451.4 million at September 30, 2025 increased $25.4 million from December 31, 2024 and $32.2 million from September 30, 2024. The yield on the investment portfolio increased from 2.36% to 2.98% on a tax equivalent basis due to securities purchased during a higher market interest rate environment and lower yielding securities maturing. Investment activity for 2025 has focused on replacing securities as they mature.

•
Net loans totaled $2.31 billion at September 30, 2025 and $2.29 billion at December 31, 2024, an increase of $21.4 million. As of September 30, 2024, net loans totaled $2.31 billion. The increase in net loans since year end was due to an increase in other commercial loans during the year.

•
The allowance for credit losses - loans totaled $22,454,000 at September 30, 2025 which is an  increase of $755,000 from December 31, 2024 and is due to increases in the provision based on the economic forecasts and changes in expected prepayment speeds. The provision for credit losses on loans was $1,485,000 for the first nine months of 2025. Loan recoveries and charge-offs were $71,000 and $801,000, respectively, for the nine months ended September 30, 2025. For the three months ended September 30, 2025, loan recoveries and charge-offs were $17,000 and $20,000, respectively.  The allowance for credit losses as a percent of total loans was 0.96% as of September 30, 2025 and 0.94% as of December 31, 2024.

•
Deposits increased $29.2 million from December 31, 2024, to $2.41 billion at September 30, 2025. Competitive pressure for deposits remains high. Brokered CD’s have decreased $33.1 million since December 31, 2024 and have decreased $81.6 million since September 30, 2024. Additionally, a school district in our southeastern Pennsylvania market saw a decrease in their balance of $43.3 million due to the lack of state budget in 2025.

•
Borrowed funds totaled $279.6 million as of September 30, 2025, a $18.1 million decrease from December 31, 2024 due to deposit growth offset by increases in loans and investments in 2025.

•
Stockholders’ equity totaled $327.7 million at September 30, 2025, compared to $299.7 million at December 31, 2024, an increase of $27.9 million. Excluding accumulated other comprehensive loss (AOCL), stockholders’ equity increased $19.1 million and totals $342.3 million (non-GAAP). The increase in stockholders’ equity was attributable to net income for the nine months ended September 30, 2025 totaling $26.1 million, offset by cash dividends for the nine months ended September 30, 2025 totaling $7.1 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, stockholders’ equity increased due to a decrease in AOCL of $8.9 million from December 31, 2024.


Dividend Declared

On September 2, 2025, the Board of Directors declared a cash dividend of $0.50 per share, which was paid on September 26, 2025 to shareholders of record at the close of business on September 12, 2025. This quarterly cash dividend is an increase of 3.1% over the regular cash dividend of $0.485 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2025.

Citizens Financial Services, Inc. has nearly 1,850 shareholders, the majority of whom reside in markets where its offices are located.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance.  Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions.  Forward-looking statements are not guarantees of future performance.  Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission.  Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf.  The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

(1)
See reconciliation of GAAP and non-gaap measures at the end of the press release

CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED FINANCIAL HIGHLIGHTS
        
(UNAUDITED)
        
(Dollars in thousands, except per share data)
        
 
As of or For The
As of or For The
 
Three Months Ended
Nine Months Ended
 
September 30,
September 30,
 
2025
2024
2025
2024
Income and Performance Ratios
        
Net Income
 $            10,005
 $          7,536
 $          26,089
 $        19,835
Return on average assets (annualized)
1.33%
1.01%
1.16%
0.89%
Return on average equity (annualized)
12.52%
10.31%
11.15%
9.23%
Return on average tangible equity (annualized) (a)
17.29%
14.82%
15.56%
13.39%
Net interest margin (tax equivalent) (a)
3.60%
3.09%
3.44%
3.09%
Earnings per share - basic (b)
 $                2.09
 $            1.57
 $               5.44
 $            4.14
Earnings per share - diluted (b)
 $                2.09
 $            1.57
 $               5.44
 $            4.13
Cash dividends paid per share (b)
 $              0.500
 $          0.485
 $            1.480
 $          1.446
Number of shares used in computation - basic (b)
         4,796,946
      4,796,752
        4,797,335
      4,796,061
Number of shares used in computation - diluted (b)
         4,798,051
      4,798,297
        4,799,466
      4,801,000
         
         
Asset quality
        
Allowance for credit losses - loans
 $            22,454
 $        21,695
    
Non-performing assets
 $            22,994
 $        24,045
    
Allowance for credit losses - loans to total loans
0.96%
0.93%
    
Non-performing assets to total loans
0.98%
1.03%
    
Annualized net charge-offs to total loans
0.00%
0.21%
0.05%
0.15%
         
         
Equity
        
Book value per share (b)
 $              68.16
 $          62.13
    
Tangible book value per share (a) (b)
 $              49.83
 $          43.65
    
Market value per share (Last reported trade of month)
 $              60.28
 $          58.75
    
Common shares outstanding
         4,807,314
      4,759,730
    
         
         
Other
        
Average Full Time Equivalent Employees
381.5
395.7
379.6
393.0
Loan to Deposit Ratio
96.86%
95.14%
    
Trust assets under management
 $         194,325
 $      181,052
    
Brokerage assets under management
 $         341,487
 $      388,594
    
         
         
Balance Sheet Highlights
September 30,
December 31,
September 30,
  
 
2025
2024
2024
  
         
Assets
 $      3,056,421
 $   3,025,724
 $      3,026,468
  
Investment securities
             453,160
         427,659
             420,920
  
Loans (net of unearned income)
         2,335,388
      2,313,242
         2,331,002
  
Allowance for credit losses - loans
               22,454
           21,699
               21,695
  
Deposits
         2,411,203
      2,382,028
         2,450,149
  
Stockholders' Equity
             327,682
         299,734
             298,654
  
         
         
(a) See reconciliation of GAAP and Non-GAAP measures at the end of the press release:
    
(b) Prior period amounts were adjusted to reflect stock dividends.
      


CITIZENS FINANCIAL SERVICES, INC.
      
CONSOLIDATED BALANCE SHEET
      
(UNAUDITED)
      
       
 
September 30,
December 31,
September 30,
(in thousands, except share data)
2025
2024
2024
ASSETS:
      
Cash and due from banks:
      
  Noninterest-bearing
 $        24,529
 $       30,284
 $          26,780
  Interest-bearing
             6,546
          11,918
              9,983
Total cash and cash equivalents
           31,075
          42,202
             36,763
       
Interest bearing time deposits with other banks
             3,820
           3,820
              3,820
       
Equity securities
             1,803
           1,747
              1,730
       
Available-for-sale securities
         451,357
        425,912
           419,190
       
Loans held for sale
           13,508
           9,607
             13,520
       
Loans (net of allowance for credit losses - loans: $22,454 at September 30, 2025;
    
    $21,699 at December 31, 2024 and $21,695 at September 30, 2024)
      2,312,934
     2,291,543
        2,309,307
       
Premises and equipment
           21,508
          21,395
             21,237
Accrued interest receivable
           11,412
          10,307
             10,803
Goodwill
           85,758
          85,758
             85,758
Bank owned life insurance
           51,132
          50,341
             50,084
Other intangibles
             2,374
           2,892
              3,083
Fair value of derivative instruments - asset
             7,487
          10,370
              8,993
Deferred tax asset
           12,294
          15,199
             14,449
Other assets
           49,959
          54,631
             47,731
       
TOTAL ASSETS
 $   3,056,421
 $  3,025,724
 $     3,026,468
       
LIABILITIES:
      
Deposits:
      
  Noninterest-bearing
 $      522,168
 $     532,776
 $        548,218
  Interest-bearing
      1,889,035
     1,849,252
        1,901,931
Total deposits
      2,411,203
     2,382,028
        2,450,149
Borrowed funds
         279,589
        297,721
           231,732
Accrued interest payable
             3,754
           4,693
              5,549
Fair value of derivative instruments - liability
             4,332
           5,817
              4,763
Other liabilities
           29,861
          35,731
             35,621
TOTAL LIABILITIES
      2,728,739
     2,725,990
        2,727,814
STOCKHOLDERS' EQUITY:
      
Preferred Stock $1.00 par value; authorized
      
  3,000,000 shares; none issued in 2025 or 2024
                     -
                  -
                     -
Common stock
      
  $1.00 par value; authorized 25,000,000 shares at September 30, 2025, December 31, 2024 and
  
  September 30, 2024: issued 5,255,464 at September 30, 2025 and 5,207,577 at December 31, 2024
  and 5,207,343 at September 30, 2024
             5,255
           5,208
              5,207
Additional paid-in capital
         147,971
        144,984
           144,927
Retained earnings
         205,542
        189,443
           183,792
Accumulated other comprehensive loss
          (14,650)
        (23,521)
           (18,916)
Treasury stock, at cost:  449,087 shares at September 30, 2025 and 447,965 shares
    
  at December 31, 2024 and 447,613 shares at September 30, 2024
          (16,436)
        (16,380)
           (16,356)
TOTAL STOCKHOLDERS' EQUITY
         327,682
        299,734
           298,654
TOTAL LIABILITIES AND
      
   STOCKHOLDERS' EQUITY
 $   3,056,421
 $  3,025,724
 $     3,026,468


CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED STATEMENT OF INCOME
      
(UNAUDITED)
        
 
Three Months Ended
Nine Months Ended
 
September 30,
September 30,
(in thousands, except share and per share data)
2025
2024
2025
2024
INTEREST INCOME:
        
Interest and fees on loans
 $     36,418
 $      35,858
 $   107,201
 $  106,058
Interest-bearing deposits with banks
             119
             190
             394
           695
Investment securities:
        
    Taxable
          2,595
           1,736
          7,331
         5,023
    Nontaxable
             684
             517
          1,815
         1,569
    Dividends
             438
             388
          1,276
         1,179
TOTAL INTEREST INCOME
        40,254
         38,689
      118,017
     114,524
INTEREST EXPENSE:
        
Deposits
        11,501
         13,475
        35,244
       38,451
Borrowed funds
          3,613
           3,890
        10,983
       12,491
TOTAL INTEREST EXPENSE
        15,114
         17,365
        46,227
       50,942
NET INTEREST INCOME
        25,140
         21,324
        71,790
       63,582
Provision (release) for credit losses
             500
            (200)
          1,875
         2,587
NET INTEREST INCOME AFTER
        
    PROVISION (RELEASE) FOR CREDIT LOSSES
        24,640
         21,524
        69,915
       60,995
NON-INTEREST INCOME:
        
Service charges
          1,598
           1,636
          4,192
         4,393
Trust
             186
             184
             593
           629
Brokerage and insurance
             761
             545
          2,071
         1,773
Gains on loans sold
             709
             752
          1,720
         1,648
Equity security gains, net
               34
             159
               56
           127
Earnings on bank owned life insurance
             363
             338
          1,064
         1,334
Gain on sale of Braavo division
                 -
                 -
                 -
         1,102
Other
             203
             141
          1,250
         1,056
TOTAL NON-INTEREST INCOME
          3,854
           3,755
        10,946
       12,062
NON-INTEREST EXPENSES:
        
Salaries and employee benefits
          9,924
           9,715
        30,189
       29,622
Occupancy
          1,320
           1,215
          3,858
         3,805
Furniture and equipment
             273
             260
             856
           791
Professional fees
             493
             620
          1,535
         2,021
FDIC insurance expense
             395
             555
          1,340
         1,589
Pennsylvania shares tax
             430
             226
          1,054
           866
Amortization of intangibles
             113
             136
             367
           432
Software expenses
             457
             500
          1,342
         1,508
Other real estate owned expenses
                 6
               84
             198
           246
Other
          2,723
           2,718
          7,970
         8,038
TOTAL NON-INTEREST EXPENSES
        16,134
         16,029
        48,709
       48,918
Income before provision for income taxes
        12,360
           9,250
        32,152
       24,139
Provision for income tax expense
          2,355
           1,714
          6,063
         4,304
NET INCOME
 $     10,005
 $        7,536
 $     26,089
 $    19,835
         
PER COMMON SHARE DATA:
        
Net Income - Basic
 $         2.09
 $          1.57
 $         5.44
 $        4.14
Net Income - Diluted
 $         2.09
 $          1.57
 $         5.44
 $        4.13
Cash Dividends Paid
 $       0.500
 $        0.485
 $       1.480
 $      1.446
         
Number of shares used in computation - basic
   4,796,946
    4,796,752
   4,797,335
  4,796,061
Number of shares used in computation - diluted
   4,798,051
    4,798,297
   4,799,466
  4,801,000


CITIZENS FINANCIAL SERVICES, INC.
          
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION
        
(UNAUDITED)
          
(in thousands, except per share data)
Three Months Ended,
      
 
Sept 30,
June 30,
March 31,
Dec 31,
Sept 30,
 
2025
2025
2025
2024
2024
Interest income
 $     40,254
 $      38,749
 $      39,014
 $      39,793
 $      38,689
Interest expense
        15,114
         15,101
         16,012
         16,920
         17,365
Net interest income
        25,140
         23,648
         23,002
         22,873
         21,324
Provision (release) for credit losses
              500
               750
               625
                   -
             (200)
Net interest income after provision (release) for credit losses
        24,640
         22,898
         22,377
         22,873
         21,524
Non-interest income
          3,820
           3,632
           3,438
           3,321
           3,596
Investment securities gains (losses), net
                34
                 33
               (11)
                 18
               159
Non-interest expenses
        16,134
         16,147
         16,428
         16,668
         16,029
Income before provision for income taxes
        12,360
         10,416
           9,376
           9,544
           9,250
Provision for income tax expense
          2,355
           1,953
           1,755
           1,561
           1,714
Net income
 $     10,005
 $        8,463
 $        7,621
 $        7,983
 $        7,536
Earnings Per Share - Basic
 $         2.09
 $          1.76
 $          1.59
 $          1.66
 $          1.57
Earnings Per Share - Diluted
 $         2.09
 $          1.76
 $          1.59
 $          1.66
 $          1.57



CITIZENS FINANCIAL SERVICES, INC.
            
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS
(UNAUDITED)
            
 
Three Months Ended September 30,
    
 
2025
2024
 
Average
  
Average
Average
  
Average
 
Balance (1)
Interest
Rate
Balance (1)
Interest
Rate
(dollars in thousands)
$
$
%
$
$
%
ASSETS
            
Interest-bearing deposits at banks
           19,597
                90
1.82
          18,374
               160
3.44
Interest bearing time deposits at banks
             3,820
                29
3.01
            3,820
                 30
3.12
Investment securities:
            
  Taxable
        381,036
           3,033
3.18
        352,377
            2,124
2.41
  Tax-exempt (3)
        110,638
              865
3.13
        104,342
               653
2.50
Investment securities
        491,674
           3,898
3.17
        456,719
            2,777
2.43
Loans: (2)(3)(4)
            
  Residential mortgage loans
        343,920
           5,227
6.03
        355,551
            5,322
5.95
  Construction loans
        120,492
           2,122
6.99
        183,521
            3,473
7.53
  Commercial Loans
     1,339,367
        22,204
6.58
    1,258,916
          20,019
6.33
  Agricultural Loans
        362,260
           5,252
5.75
        356,105
            4,816
5.38
  Loans to state & political subdivisions
           52,248
              514
3.90
          55,418
               553
3.97
  Other loans
           66,908
           1,203
7.13
          87,752
            1,785
8.09
  Loans, net of discount (2)(3)(4)
     2,285,195
        36,522
6.34
    2,297,263
          35,968
6.23
Total interest-earning assets
     2,800,286
        40,539
5.74
    2,776,176
          38,935
5.58
Cash and due from banks
             9,912
    
            9,119
    
Bank premises and equipment
           21,718
    
          20,864
    
Other assets
        187,100
    
        197,275
    
Total non-interest earning assets
        218,730
    
        227,258
    
Total assets
     3,019,016
    
    3,003,434
    
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Interest-bearing liabilities:
            
  Business Interest Checking
           20,624
                46
             0.88
                    -
                    -
           -
  NOW accounts
        701,732
           3,702
             2.09
        736,449
            4,559
       2.46
  Savings accounts
        284,316
              327
             0.46
        293,990
               387
       0.52
  Money market accounts
        459,993
           3,257
             2.81
        406,363
            3,366
       3.30
  Certificates of deposit
        458,402
           4,169
             3.61
        502,226
            5,163
       4.09
Total interest-bearing deposits
     1,925,067
        11,501
             2.37
    1,939,028
          13,475
       2.76
Other borrowed funds
        321,632
           3,613
             4.46
        319,909
            3,890
       4.84
Total interest-bearing liabilities
     2,246,699
        15,114
             2.67
    2,258,937
          17,365
       3.06
Demand deposits
        394,863
    
        393,632
    
Other liabilities
           37,587
    
          34,487
    
Total non-interest-bearing liabilities
        432,450
    
        428,119
    
Stockholders' equity
        339,867
    
        316,378
    
Total liabilities & stockholders' equity
     3,019,016
    
    3,003,434
    
Net interest income
  
        25,425
    
          21,570
  
Net interest spread (5)
    
3.07%
    
2.52%
Net interest income as a percentage
            
  of average interest-earning assets
    
3.60%
    
3.09%
Ratio of interest-earning assets
            
  to interest-bearing liabilities
    
125%
    
123%
             
(1) Averages are based on daily averages.
            
(2) Includes loan origination and commitment fees.
            
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using
      
       a statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the end
       of the press release
            
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets
    
      and the average rate paid on interest-bearing liabilities.
            


CITIZENS FINANCIAL SERVICES, INC.
            
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS
(UNAUDITED)
            
 
Nine Months Ended September 30,
 
2025
2024
 
Average
  
Average
Average
  
Average
 
Balance (1)
Interest
Rate
Balance (1)
Interest
Rate
(dollars in thousands)
$
$
%
$
$
%
ASSETS
            
Interest-bearing deposits at banks
        24,479
              306
1.67
          29,242
               605
2.76
Interest bearing time deposits at banks
           3,820
                88
3.08
            3,898
                 90
3.08
Investment securities:
            
  Taxable
      381,600
           8,607
3.01
        356,871
            6,202
2.32
  Tax-exempt (3)
      105,477
           2,297
2.90
        105,734
            1,986
2.50
Investment securities
      487,077
        10,904
2.98
        462,605
            8,188
2.36
Loans: (2)(3)(4)
            
  Residential mortgage loans
      347,071
        15,539
5.99
        357,089
          15,612
5.84
  Construction loans
      149,505
           8,010
7.16
        185,832
          10,331
7.43
  Commercial Loans
   1,301,875
        62,345
6.40
    1,264,459
          60,676
6.41
  Agricultural Loans
      359,144
        14,948
5.56
        348,919
          13,703
5.25
  Loans to state & political subdivisions
        53,004
           1,549
3.91
          56,116
            1,659
3.94
  Other loans
        94,947
           5,118
7.21
          72,908
            4,402
8.07
  Loans, net of discount (2)(3)(4)
   2,305,546
      107,509
6.23
    2,285,323
        106,383
6.22
Total interest-earning assets
   2,820,922
      118,807
5.63
    2,781,068
        115,266
5.54
Cash and due from banks
           9,734
    
            9,379
    
Bank premises and equipment
        21,700
    
          21,068
    
Other assets
      179,430
    
        184,561
    
Total non-interest earning assets
      210,864
    
        215,008
    
Total assets
   3,031,786
    
    2,996,076
    
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Interest-bearing liabilities:
            
  Business Interest Checking
        18,881
              132
             0.93
                    -
                    -
          -
  NOW accounts
      716,279
        11,498
             2.15
        767,406
          14,557
      2.53
  Savings accounts
      288,467
           1,003
             0.46
        298,450
            1,165
      0.52
  Money market accounts
      442,024
           9,463
             2.86
        389,655
            9,131
      3.13
  Certificates of deposit
      473,565
        13,148
             3.71
        460,890
          13,598
      3.94
Total interest-bearing deposits
   1,939,216
        35,244
             2.43
    1,916,401
          38,451
      2.68
Other borrowed funds
      332,310
        10,983
             4.42
        340,132
          12,491
      4.91
Total interest-bearing liabilities
   2,271,526
        46,227
             2.72
    2,256,533
          50,942
      3.02
Demand deposits
      385,704
    
        382,340
    
Other liabilities
        40,794
    
          44,303
    
Total non-interest-bearing liabilities
      426,498
    
        426,643
    
Stockholders' equity
      333,762
    
        312,900
    
Total liabilities & stockholders' equity
   3,031,786
    
    2,996,076
    
Net interest income
  
        72,580
    
          64,324
  
Net interest spread (5)
    
2.91%
    
2.52%
Net interest income as a percentage
            
  of average interest-earning assets
    
3.44%
    
3.09%
Ratio of interest-earning assets
            
  to interest-bearing liabilities
    
124%
    
123%
             
(1) Averages are based on daily averages.
            
(2) Includes loan origination and commitment fees.
            
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using
      
       a statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the end
       of the press release
            
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets
    
      and the average rate paid on interest-bearing liabilities.
            


CITIZENS FINANCIAL SERVICES, INC.
          
CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR CREDIT LOSSES
(UNAUDITED)
          
(Excludes Loans Held for Sale)
          
(In Thousands)
          
 
September 30,
June 30,
March 31,
December 31,
September 30,
 
2025
2025
2025
2024
2024
Real estate:
          
  Residential
 $         344,790
 $        341,671
 $       350,221
 $      351,398
 $      353,254
  Commercial
         1,180,655
       1,151,585
      1,117,240
      1,121,435
      1,110,548
  Agricultural
            342,487
           331,995
          329,985
         327,722
         331,734
  Construction
            107,867
           138,307
          168,896
         164,326
         178,706
Consumer
            109,458
             22,364
          109,339
         109,505
         123,286
Other commercial loans
            171,345
           174,740
          158,133
         155,012
         154,063
Other agricultural loans
              27,142
             28,366
            28,488
           29,662
           24,537
State & political subdivision loans
              51,644
             52,727
            53,361
           54,182
           54,874
Total loans
         2,335,388
       2,241,755
      2,315,663
      2,313,242
      2,331,002
Less: allowance for credit losses - loans
              22,454
             22,109
            22,081
           21,699
           21,695
Net loans
 $     2,312,934
 $    2,219,646
 $   2,293,582
 $   2,291,543
 $   2,309,307
           
Past due and non-performing assets
          
           
Total loans past due 30-89 days and still accruing
 $           13,228
 $          18,554
 $           9,632
 $          8,015
 $          7,423
           
Non-accrual loans
 $           20,523
 $          24,595
 $         23,545
 $        25,701
 $        20,858
Loans past due 90 days or more and still accruing
                      37
                  347
              1,393
                 276
                 701
Non-performing loans
 $           20,560
 $          24,942
 $         24,938
 $        25,977
 $        21,559
Other real estate owned
                 2,434
               2,434
              2,544
             2,635
             2,486
Total Non-performing assets
 $           22,994
 $          27,376
 $         27,482
 $        28,612
 $        24,045
           
           
           
 
Three Months Ended
Analysis of the Allowance for Credit Losses - Loans
September 30,
June 30,
March 31,
December 31,
September 30,
(In Thousands)
2025
2025
2025
2024
2024
Balance, beginning of period
 $           22,109
 $          22,081
 $         21,699
 $        21,695
 $        22,797
Charge-offs
                    (20)
                (596)
               (185)
               (105)
            (1,212)
Recoveries
                      17
                    25
                   29
                   19
                   10
Net charge-offs
                      (3)
                (571)
               (156)
                 (86)
            (1,202)
Provision for credit losses - loans
                    348
                  599
                 538
                   90
                 100
Balance, end of period
 $           22,454
 $          22,109
 $         22,081
 $        21,699
 $        21,695


CITIZENS FINANCIAL SERVICES, INC.
        
Reconciliation of GAAP and Non-GAAP Financial Measures
      
(UNAUDITED)
        
(Dollars in thousands, except per share data)
        
         
 
As of
    
 
September 30
    
 
2025
2024
    
Tangible Equity
        
Stockholders' Equity - GAAP
 $         327,682
 $           298,654
    
Intangible Assets
            (88,132)
              (88,841)
    
Tangible Equity - Non-GAAP
            239,550
              209,813
    
Shares outstanding adjusted for June 2025 stock Dividend
         4,807,314
           4,806,803
    
Tangible Book value per share - Non-GAAP
 $              49.83
 $               43.65
    
         
 
As of
    
 
September 30
    
 
2025
2024
    
Tangible Equity per share
        
Stockholders' Equity per share - GAAP
 $              68.16
 $               62.13
    
Adjustment for intangible assets
               (18.33)
                (18.48)
    
Tangible Book value per share - Non-GAAP
 $              49.83
 $               43.65
    
         
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
 
2025
2024
2025
2024
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)
    
Average Assets - GAAP
 $      2,998,788
 $        2,979,371
 $           3,009,997
 $      2,969,857
Average AOCL
            (20,228)
              (24,063)
                 (21,789)
             (26,219)
Average Assets, Excluding AOCL - Non-GAAP
         3,019,016
           3,003,434
              3,031,786
         2,996,076
Net Income - GAAP
 $           10,005
 $               7,536
 $                26,089
 $           19,835
Annualized Return on Average Assets-GAAP
1.33%
1.01%
1.16%
0.89%
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP
1.33%
1.00%
1.15%
0.88%
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
 
2025
2024
2025
2024
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)
    
Average Stockholders' Equity - GAAP
 $         319,639
 $           292,315
 $              311,973
 $         286,681
Average AOCL
            (20,228)
              (24,063)
                 (21,789)
             (26,219)
Average Stockholders' Equity, Excluding AOCL - Non-GAAP
            339,867
              316,378
                 333,762
            312,900
Net Income - GAAP
 $           10,005
 $               7,536
 $                26,089
 $           19,835
Annualized Return on Average Stockholders' Equity-GAAP
12.52%
10.31%
11.15%
9.23%
Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP
11.78%
9.53%
10.42%
8.45%
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
 
2025
2024
2025
2024
Return on Average Tangible Equity
        
Average Stockholders' Equity - GAAP
 $         319,639
 $           292,315
 $              311,973
 $         286,681
Average Intangible Assets
            (88,217)
              (88,931)
                 (88,390)
             (89,123)
Average Tangible Equity - Non-GAAP
            231,422
              203,384
                 223,583
            197,558
Net Income - GAAP
 $           10,005
 $               7,536
 $                26,089
 $           19,835
Annualized Return on Average Tangible Equity Non-GAAP
17.29%
14.82%
15.56%
13.39%
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
 
2025
2024
2025
2024
Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees and provision associated
with Braavo loans remaining after sale
Net Income - GAAP
 $           10,005
 $               7,536
 $                26,089
 $           19,835
After tax gain on sale of Braavo, net of legal fees
                          -
                          -
                               -
                  (712)
After tax provision associated with Braavo loans remaining after sale
                          -
                          -
                               -
                1,427
Net Income excluding sale of Braavo assets, net of legal fees and provision associated with Braavo loans remaining after sale - Non-GAAP
 $           10,005
 $               7,536
 $                26,089
 $           20,550
Average Assets
         2,998,788
           2,979,371
              3,009,997
         2,969,857
Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax - Non-GAAP
1.33%
1.01%
1.16%
0.92%
         
Average Stockholders' Equity - GAAP
 $         319,639
 $           292,315
 $              311,973
 $         286,681
Annualized Return on Average Stockholders' equity, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax   - Non-GAAP
12.52%
10.31%
11.15%
9.56%
         
Average Tangible Equity - Non-GAAP
            231,422
              203,384
                 223,583
            197,558
Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax, - Non-GAAP
17.29%
14.82%
15.56%
13.87%
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
 
2025
2024
2025
2024
Earnings per share, Excluding sale of Braavo assets, net of legal fees and provision associated with Braavo loans remaining after sale
Net Income - GAAP
 $           10,005
 $               7,536
 $                26,089
 $           19,835
After tax gain on sale of Braavo, net of legal fees
                          -
                          -
                               -
                  (712)
After tax provision associated with Braavo loans remaining after sale
                          -
                          -
                               -
                1,427
Net income excluding one time items - Non-GAAP
 $           10,005
 $               7,536
 $                26,089
 $           20,550
Number of shares used in computation - basic
         4,796,946
           4,796,752
              4,797,335
         4,796,061
Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax - Non-GAAP
 $                2.09
 $                 1.57
 $                     5.44
 $               4.28
         
         
 
For the Three Months Ended
For the Nine Months Ended
 
September 30
September 30
Reconciliation of net interest income on fully taxable equivalent basis
2025
2024
2025
2024
Total interest income
 $           40,254
 $             38,689
 $              118,017
 $         114,524
Total interest expense
               15,114
                17,365
                    46,227
              50,942
Net interest income
               25,140
                21,324
                    71,790
              63,582
Tax equivalent adjustment
                    285
                     246
                         790
                    742
Net interest income (fully taxable equivalent) - Non-GAAP
 $           25,425
 $             21,570
 $                72,580
 $           64,324