Citizens Financial Services, Inc. (individually and collectively with its direct and indirect subsidiaries, the “Company”) is a Pennsylvania corporation and the holding company of its wholly owned subsidiary, First Citizens Community Bank (the “Bank”), and of the Bank’s wholly owned subsidiary, First Citizens Insurance Agency, Inc. (“First Citizens Insurance”). 

The accompanying consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and in conformity with U.S. generally accepted accounting principles. Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Certain of the prior year amounts have been reclassified to conform with the current year presentation. Such reclassifications had no effect on net income or stockholders’ equity. All material inter‑company balances and transactions have been eliminated in consolidation.

In the opinion of management of the Company, the accompanying interim consolidated financial statements at September 30, 2026 and for the periods ended September 30, 2026 and 2025 include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial condition and the results of operations at the dates and for the periods presented. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and of revenues and expenses for the periods covered by the Consolidated Statement of Income. The results of operations reported for the Company for the nine month period ended September 30, 2026 is not necessarily indicative of the results to be expected for the full year.  This information should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2025.

During the third quarter of 2026, management identified an error in the reporting of certain student loans originated by the Company that were previously reported as held for investment. The contract under which these loans are issued results in the loans being sold by the Company to a third party 270 days after the last distribution under the loan and therefore loans originated under this contract are considered loans held for sale. As a result, certain prior period amounts have been revised to correct immaterial prior period errors.  Loans held for investment as of December 31, 2025 were reduced by $79,351,000 and are reflected as loans held for sale – student loans. In addition, in the investing section of the statement of cashflows, the net increase in loans for the nine months ended September 30, 2025 was revised to reflect originations of loans held for sale - student loans totaling $314,035,000 and the proceeds from the sale of loans held for sale – student loans of $314,759,000 to be consistent with the presentation for the nine months ended September 30, 2026.  Consumer loan disclosures as of December 31, 2025 are revised to reduce the outstanding loan balances by $79,351,000 to be consistent with the presentation as of September 30, 2026.  These revisions had no impact on total assets, liabilities, stockholders’ equity, income before income taxes, net income or per share amounts as of December 31, 2025, or for the three and nine months ended September 30, 2025.