MANSFIELD, Pa., July 30, 2026 /PRNewswire/ -- 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 six months ended June 30, 2026.
Highlights
- Net income for the first six months of 2026 was $20.6 million, which was $4.5 million, or 27.9% more than 2025's net income through June 30, 2025 due to the increase in net interest income after the provision for credit losses of $5.5 million. The effective tax rate for the first six months of 2026 was 17.9% compared to 19.1% in the comparable period in 2025.
- Net income was $10.2 million for the three months ended June 30, 2026, which was $1.7 million more than the net income for 2025's comparable period due to an increase in net interest income after the provision for credit losses of $2.3 million. The effective tax rate for the three months ended June 30, 2026 was 17.5% compared to 19.1% in the comparable period in 2025.
- Net interest income before the provision for credit losses was $51.8 million for the six months ended June 30, 2026, an increase of $5.2 million, or 11.1%, 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 for credit losses for the three and six months ended June 30, 2026 was $500,000 and $1,000,000, respectively, compared to $750,000 and $1,375,000 for the three and six months ended June 30, 2025, respectively. The provision for 2026 was driven by the updated loss driver analysis for 2026, the economic impact of the Iran conflict, and an increase in specific reserves for non-performing loans.
- Return on average equity for the three and six months (annualized) ended June 30, 2026 was 11.64% and 11.84% compared to 10.88% and 10.44% for the three and six months (annualized) ended June 30, 2025.
- Return on average tangible equity for the three and six months (annualized) ended June 30, 2026 was 15.54% and 15.84% compared to 15.19% and 14.65% for the three and six months (annualized) ended June 30, 2025 (non-GAAP). (1)
- Return on average assets for the three and six months (annualized) ended June 30, 2026 was 1.32% and 1.33% compared to 1.13% and 1.07% for the three and six months (annualized) ended June 30, 2025.
- Loans grew $151.8 million, or 6.8% since June 30, 2025. Loan growth since December 31, 2025, excluding the student loan portfolio, was $92.1 million, or 8.2% on an annualized basis.
- Non-performing assets increased $14,176,000 since December 31, 2025 and totaled $43,365,000 as of June 30, 2026, which is $15,989,000 higher than the balance as of June 30, 2025. The increase from December 31, 2025 is primarily due to six commercial real estate loan relationships and one construction real estate loan relationship, totaling approximately $12.2 million, being placed on non-accrual status during the first half of 2026 due to becoming more than 90 days. The Bank's continued strategy for certain acquired loans is to either improve the credit metrics of the non-performing loans or sell the underlying collateral or have the customers refinance the loans with another institution. As a percent of loans, non-performing assets totaled 1.81%, 1.24% and 1.22% as of June 30, 2026, December 31, 2025 and June 30, 2025, respectively. While non-performing assets have increased significantly as of June 30, 2026 when compared to December 31, 2025 and June 30, 2025, specific reserves for these assets have remained stable at $2,432,000, $1,912,758 and $1,476,000 at June 30, 2026, December 31, 2025 and June 30, 2025, respectively.
Six Months Ended June 30, 2026 Compared to 2025
- For the six months ended June 30, 2026, net income totaled $20,563,000 which compares to net income of $16,084,000 for the first six months of 2025, an increase of $4,479,000. Basic earnings per share of $4.29 for the first six months of 2026 compared to $3.35 for the first six months last year. Annualized return on equity for the six months ended June 30, 2026 and 2025 was 11.84% and 10.44%, while annualized return on assets was 1.33% and 1.07%, respectively. The increase in performance when comparing 2026 to 2025 was due to an increase in the net interest margin from 3.36% to 3.69% and a decrease in the provision for credit losses.
- Net interest income before the provision for credit loss for the six months ended June 30, 2026 totaled $51,807,000 compared to $46,650,000 for the six months ended June 30, 2025, resulting in an increase of $5,157,000, or 11.1%. Average interest earning assets increased $44.4 million for the six months ended June 30, 2026 compared to the same period last year, primarily due to an increase in average loans. Average loans increased $43.2 million while average investment securities increased $3.4 million. The yield on interest earning assets increased 8 basis points to 5.66%, while the cost of interest-bearing liabilities decreased 31 basis points to 2.44%. As a result, the tax effected net interest margin increased from 3.36% for the six months ended June 30, 2025 to 3.69% for the six months ended June 30, 2026.
- The provision for credit losses for the six months ended June 30, 2026 was $1,000,000 compared to $1,375,000 for the six months ended June 30, 2025, a decrease of $375,000. The provision for credit losses associated with loans for the six months ended June 30, 2026 and 2025 was $722,000 and $1,137,000, respectively, while the provision for off-balance sheet items was $278,000 and $238,000 for the six months ended June 30, 2026 and 2025, respectively. The provision for 2026 was due to the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds, the economic impact of the conflict with Iran is having on diesel and fertilizer prices, and an increase in specific reserves for non-performing loans. The provision for 2025 was due to an increase in past due loans and the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds.
- Total non-interest income was $7,704,000 for the six months ended June 30, 2026, which is $612,000 more than the non-interest income of $7,092,000 for the same period last year. The primary driver of the increase was an increase in earnings on bank owned life insurance (BOLI) of $656,000, as the result of purchasing $22,000,000 of additional insurance in the first quarter of 2026.
- Total non-interest expenses for the six months ended June 30, 2026 totaled $33,468,000 compared to $32,475,000 for the same period last year, which is an increase of $993,000. Salary and benefit costs increased $283,000 due to merit increases and an increase in full-time equivalent employees (FTEs) of 8.3 employees. Other real estate owned expenses increased due to legal fees associated with the increase in non-performing assets. The increase in other expenses is due to an increase in fraudulent expenses on customer line of credit accounts.
- The provision for income taxes increased $672,000 when comparing the six months ended June 30, 2026 to the same period in 2025 as a result of an increase in income before income taxes of $5,151,000. The effective tax rate was 17.9% and 19.1% for the six months ended June 30, 2026 and 2025, respectively, with the decrease in the effective tax rate being due to the increase in non-taxable investment income and BOLI income.
Three Months Ended June 30, 2026 Compared to 2025
- For the three months ended June 30, 2026, net income totaled $10,187,000 which compares to net income of $8,463,000 for the comparable period of 2025, an increase of $1,724,000 or 20.4%. Basic earnings per share of $2.12 for the three months ended June 30, 2026 compares to $1.76 for the 2025 comparable period. Annualized return on equity for the three months ended June 30, 2026 and 2025 was 11.64% and 10.88%, while annualized return on assets was 1.32% and 1.13%, respectively.
- Net interest income before the provision for credit losses for the three months ended June 30, 2026 totaled $25,694,000 compared to $23,648,000 for the three months ended June 30, 2025, resulting in an increase of $2,046,000, or 8.7%. Average interest earning assets increased $64.8 million for the three months ended June 30, 2026 compared to the same period last year, primarily due to increases in the average balance of outstanding commercial loans. Average loans increased $55.1 million, while average investment securities increased $9.1 million. The tax effected net interest margin for the three months ended June 30, 2026 was 3.67% compared to 3.47% for the same period last year. The yield on interest earning assets decreased six basis points to 5.60%, while the cost of interest-bearing liabilities decreased 32 basis points to 2.41%.
- The provision for credit losses for the second quarter of 2026 of $500,000, of which $578,000 related to loans, while ($78,000) related to off-balance sheet items, was due to the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds, the impact of the war with Iran and an increase in specific reserves for non-performing loans. The provision for credit losses of $750,000 for the second quarter of 2025 was driven by the increase in past due commercial loans, which primarily related to one commercial real estate relationship in our central Pennsylvania market that totaled $14.4 million.
- Total non-interest income was $4,014,000 for the three months ended June 30, 2026, $349,000 more than the comparable period last year. The primary driver of the increase was an increase in BOLI earnings of $432,000, which offset the decrease in the gains on loans sold of $118,000.
- Total non-interest expenses for the three months ended June 30, 2026 totaled $16,867,000 compared to $16,097,000 for the same period last year, which is an increase of $770,000, or 4.8%. Salary and employee benefits increased due to merit increases and an increase in FTEs of 9.9 employees. Other real estate owned expenses increased due to legal fees associated with the increase in non-performing assets. The increase in other expenses is to fraudulent expenses on customer line of credit accounts.
- The provision for income taxes increased $151,000 when comparing the three months ended June 30, 2026 to the same period in 2025. This increase was attributable to an increase in income before provision for income taxes of $1,875,000. The effective tax rate was 17.5% and 19.1% for the three months ended June 30, 2026 and 2025, respectively, with the decrease in the effective tax rate being due to the increase in non-taxable investment income and BOLI income.
Balance Sheet and Other Information:
- At June 30, 2026, total assets were $3.19 billion compared to $3.06 billion at December 31, 2025 and $2.97 billion at June 30, 2025. The loan to deposit ratio as of June 30, 2026 was 100.02% compared to 98.89% as of December 31, 2025 and 97.78% as of June 30, 2025.
- Available for sale securities of $491.3 million at June 30, 2026 increased $46.6 million from December 31, 2025 and $59.7 million from June 30, 2025. The yield on the investment portfolio increased from 2.89% for the six months ended June 30, 2025 to 3.48% for the six months ended June 30, 2026 on a tax equivalent basis due to securities purchased during a higher market interest rate environment and lower yielding securities maturing. Investment activity for 2026 has focused on increasing the investment portfolio yield during periods of higher market interest rates, which has resulted in additional purchases during 2026.
- Net loans totaled $2.37 billion at June 30, 2026 and $2.33 billion at December 31, 2025, an increase of $43.7 million. As of June 30, 2025, net loans totaled $2.22 billion. The increase in net loans since December 31, 2025 and June 30, 2025 was due increases in commercial and agricultural real estate loans.
- The allowance for credit losses - loans totaled $23,559,000 at June 30, 2026 which is an increase of $753,000 from December 31, 2025 and is due to loan growth, the conflict with Iran and an increase in specific reserves on non-performing loans. The provision for credit losses on loans was $722,000 for the first half of 2026. Loan recoveries and charge-offs were $183,000 and $152,000, respectively, for the six months ended June 30, 2026. The allowance for credit losses as a percent of total loans was 0.98% as of June 30, 2026 and 0.97% as of December 31, 2025. While non-performing loans increased $14.2 million or 48.6%, the commercial loans are individually evaluated to determine whether a specific reserve is necessary or not. Specific reserves associated with commercial loans totaled $1,414,000 and $1,039,000 as of June 30, 2026 and December 31, 2025, respectively.
- Deposits increased $17.6 million from December 31, 2025, to $2.39 billion at June 30, 2026. Competitive pressure for deposits remains high. Brokered CD's have decreased $3.5 million since December 31, 2025.
- Borrowed funds totaled $394.0 million as of June 30, 2026, a $84.6 million increase from December 31, 2025 to fund investment and loan growth since year-end.
- Stockholders' equity totaled $352.8 million at June 30, 2026, compared to $338.1 million at December 31, 2025, an increase of $14.8 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $15.8 million and totaled $366.2 million at June 30, 2026 (non-GAAP). The increase in stockholders' equity was attributable to net income for the six months ended June 30, 2026 totaling $20.6 million, offset by cash dividends for the six months ended June 30, 2026 totaling $4.9 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL increased $1.0 million from December 31, 2025.
Dividend Declared
On June 2, 2026, the Board of Directors declared a cash dividend of $0.51 per share, which was paid on June 26, 2026 to shareholders of record at the close of business on June 12, 2026. This quarterly cash dividend is an increase of 4.0% over the quarterly cash dividend of $0.49 per share declared one year ago.
Citizens Financial Services, Inc. has nearly 1,790 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
Six Months Ended
June 30,
June 30,
2026 2025 2026 2025
Income and Performance Ratios
Net Income $10,187 $8,463 $20,563 $16,084
Return on average assets (annualized) 1.32 % 1.13 % 1.33 % 1.07 %
Return on average equity (annualized) 11.64 % 10.88 % 11.84 % 10.44 %
Return on average tangible equity (annualized) (a) 15.54 % 15.19 % 15.84 % 14.65 %
Net interest margin (tax equivalent) (a) 3.67 % 3.47 % 3.69 % 3.36 %
Earnings per share - basic (b) $2.12 $1.76 $4.29 $3.35
Earnings per share - diluted (b) $2.12 $1.76 $4.28 $3.35
Cash dividends paid per share (b) $0.51 $0.49 $1.01 $0.98
Number of shares used in computation - basic (b) 4,797,940 4,797,716 4,798,104 4,797,642
Number of shares used in computation - diluted (b) 4,802,193 4,800,384 4,801,951 4,800,862
Asset quality
Allowance for credit losses - loans $23,559 $22,109
Non-performing assets $43,365 $27,376
Allowance for credit losses - loans to total loans 0.98 % 0.99 %
Non-performing assets to total loans 1.81 % 1.22 %
Annualized net (recoveries) charge-offs to total loans -0.01 % 0.10 % 0.00 % 0.06 %
Equity
Book value per share (b) $73.36 $65.25
Tangible book value per share (a) (b) $55.13 $46.88
Market Value per share (last reported trade of month) $72.44 $58.72
Common shares outstanding 4,809,281 4,807,000
Other
Average Full Time Equivalent Employees 391.3 381.4 388.9 380.6
Loan to Deposit Ratio 100.02 % 97.78 %
Trust assets under management $207,584 $188,844
Brokerage assets under management $347,814 $416,923
Balance Sheet Highlights June 30, December 31, June 30,
2026 2025 2025
Assets $3,192,116 $3,064,564 $2,967,274
Investment securities 493,241 446,556 433,417
Loans (net of unearned income) 2,395,028 2,350,622 2,241,755
Allowance for credit losses - loans 23,559 22,806 22,109
Deposits 2,394,537 2,376,979 2,292,662
Stockholders' Equity 352,833 338,051 313,653
(a) See reconcilation 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)
June 30, December 31, June 30,
(in thousands, except share data) 2026 2025 2025
ASSETS:
Cash and due from banks:
Noninterest-bearing $30,343 $23,933 $26,799
Interest-bearing 9,086 10,358 22,685
Total cash and cash equivalents 39,429 34,291 49,484
Interest bearing time deposits with other banks 3,324 3,820 3,820
Equity securities 1,930 1,815 1,768
Available-for-sale securities 491,311 444,741 431,649
Loans held for sale 10,369 9,393 15,529
Loans (net of allowance for credit losses - loans: $23,559 at June 30, 2026;
$22,806 at December 31, 2025 and $22,109 at June 30, 2025) 2,371,469 2,327,816 2,219,646
Premises and equipment 20,660 20,998 21,776
Accrued interest receivable 10,922 10,698 10,603
Goodwill 85,758 85,758 85,758
Bank owned life insurance 74,465 51,501 50,770
Other intangibles 1,934 2,221 2,530
Fair value of derivative instruments - asset 6,755 6,927 8,272
Deferred tax asset 11,443 11,440 13,913
Other assets 62,347 53,145 51,756
TOTAL ASSETS $3,192,116 $3,064,564 $2,967,274
LIABILITIES:
Deposits:
Noninterest-bearing $495,914 $516,657 $499,252
Interest-bearing 1,898,623 1,860,322 1,793,410
Total deposits 2,394,537 2,376,979 2,292,662
Borrowed funds 394,024 309,448 313,219
Accrued interest payable 3,358 3,130 2,741
Fair value of derivative instruments - liability 3,948 4,100 4,701
Other liabilities 43,416 32,856 40,298
TOTAL LIABILITIES 2,839,283 2,726,513 2,653,621
STOCKHOLDERS' EQUITY:
Preferred Stock $1.00 par value; authorized
3,000,000 shares; none issued in 2026 or 2025
Common stock
$1.00 par value; authorized 25,000,000 shares at June 30, 2026, December 31, 2025 and
June 30, 2025: issued 5,262,935 at June 30, 2026 and 5,255,807 at December 31, 2025
and 5,255,190 at June 30, 2025 5,263 5,256 5,255
Additional paid-in capital 148,341 147,965 147,878
Retained earnings 229,333 213,623 197,940
Accumulated other comprehensive loss (13,362) (12,377) (21,026)
Treasury stock, at cost: 453,654 shares at June 30, 2026, 448,727 shares
at December 31, 2025 and 448,190 shares at June 30, 2025 (16,742) (16,416) (16,394)
TOTAL STOCKHOLDERS' EQUITY 352,833 338,051 313,653
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,192,116 $3,064,564 $2,967,274
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30,
June 30,
(in thousands, except share and per share data) 2026 2025 2026 2025
INTEREST INCOME:
Interest and fees on loans $35,233 $35,227 $71,595 $70,783
Interest-bearing deposits with banks 89 132 192 275
Investment securities:
Taxable 2,823 2,397 5,334 4,736
Nontaxable 968 584 1,847 1,131
Dividends 392 409 814 838
TOTAL INTEREST INCOME 39,505 38,749 79,782 77,763
INTEREST EXPENSE:
Deposits 11,160 11,449 22,465 23,743
Borrowed funds 2,651 3,652 5,510 7,370
TOTAL INTEREST EXPENSE 13,811 15,101 27,975 31,113
NET INTEREST INCOME 25,694 23,648 51,807 46,650
Provision for credit losses 500 750 1,000 1,375
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 25,194 22,898 50,807 45,275
NON-INTEREST INCOME:
Service charges 1,388 1,303 2,712 2,594
Trust 200 183 435 407
Brokerage and insurance 640 627 1,209 1,310
Gains on loans sold 621 739 886 1,011
Equity security gains, net 96 32 115 21
Earnings on bank owned life insurance 787 355 1,357 701
Other 282 426 990 1,048
TOTAL NON-INTEREST INCOME 4,014 3,665 7,704 7,092
NON-INTEREST EXPENSES:
Salaries and employee benefits 10,272 9,976 20,548 20,265
Occupancy 1,289 1,182 2,701 2,538
Furniture and equipment 336 318 623 583
Professional fees 528 525 1,068 1,042
FDIC insurance expense 370 495 765 945
Pennsylvania shares tax 340 305 717 624
Amortization of intangibles 105 127 211 254
Software expenses 429 453 884 885
Other real estate owned expenses 194 73 390 192
Other 3,004 2,643 5,561 5,147
TOTAL NON-INTEREST EXPENSES 16,867 16,097 33,468 32,475
Income before provision for income taxes 12,341 10,466 25,043 19,892
Provision for income tax expense 2,154 2,003 4,480 3,808
NET INCOME $10,187 $8,463 $20,563 $16,084
PER COMMON SHARE DATA:
Net Income - Basic $2.12 $1.76 $4.29 $3.35
Net Income - Diluted $2.12 $1.76 $4.28 $3.35
Cash Dividends Paid $0.51 $0.49 $1.01 $0.98
Number of shares used in computation - basic 4,797,940 4,797,716 4,798,104 4,797,642
Number of shares used in computation - diluted 4,802,193 4,800,384 4,801,951 4,800,862
CITIZENS FINANCIAL SERVICES, INC.
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION
(UNAUDITED)
(in thousands, except per share data) Three Months Ended,
June 30, March 31, Dec 31, Sept 30, June 30,
2026 2026 2025 2025 2025
Interest income $39,505 $40,277 $41,151 $40,254 $38,749
Interest expense 13,811 14,164 14,940 15,114 15,101
Net interest income 25,694 26,113 26,211 25,140 23,648
Provision for credit losses 500 500 500 500 750
Net interest income after provision for credit losses 25,194 25,613 25,711 24,640 22,898
Non-interest income 3,918 3,671 3,387 3,820 3,632
Investment securities gains, net 96 19 11 34 33
Non-interest expenses 16,867 16,601 16,173 16,084 16,097
Income before provision for income taxes 12,341 12,702 12,936 12,410 10,466
Provision for income tax expense 2,154 2,326 2,453 2,405 2,003
Net income $10,187 $10,376 $10,483 $10,005 $8,463
Earnings Per Share - Basic $2.12 $2.16 $2.19 $2.09 $1.76
Earnings Per Share - Diluted $2.12 $2.16 $2.18 $2.09 $1.76
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 June 30,
2026 2025
Average Average Average Average
Balance Interest Rate Balance
(1) (1) Interest Rate
(dollars in thousands)
$
$ %
$
$ %
ASSETS
Interest-bearing deposits at banks 18,626 61 1.31 17,879 102 2.31
Interest bearing time deposits at banks 3,624 28 3.10 3,820 30 3.18
Investment securities:
Taxable 359,897 3,215 3.57 381,141 2,806 2.95
Tax-exempt (3) 133,017 1,225 3.68 102,694 739 2.88
Investment securities 492,914 4,440 3.60 483,835 3,545 2.93
Loans: (2)(3)(4)
Residential mortgage loans 338,351 5,004 5.93 347,408 5,212 6.08
Construction loans 90,925 1,620 7.15 165,056 2,967 7.29
Commercial Loans 1,440,839 21,768 6.06 1,292,501 20,362 6.32
Agricultural Loans 373,312 5,679 6.10 358,245 4,970 5.63
Loans to state & political subdivisions 73,147 888 4.87 53,051 517 3.95
Other loans 28,176 459 6.53 73,344 1,300 7.11
Loans, net of discount (2)(3)(4) 2,344,750 35,418 6.06 2,289,605 35,328 6.26
Total interest-earning assets 2,859,914 39,947 5.60 2,795,139 39,005 5.66
Cash and due from banks 9,519 9,665
Bank premises and equipment 20,686 21,836
Other assets 201,511 184,184
Total non-interest earning assets 231,716 215,685
Total assets 3,091,630 3,010,824
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Business Interest Checking 28,757 66 0.92 18,345 45 0.99
NOW accounts 713,343 3,264 1.84 707,715 3,742 2.14
Savings accounts 291,013 337 0.46 288,198 329 0.46
Money market accounts 445,311 2,822 2.54 447,711 3,181 2.88
Certificates of deposit 539,316 4,671 3.47 454,893 4,152 3.70
Total interest-bearing deposits 2,017,740 11,160 2.22 1,916,862 11,449 2.42
Other borrowed funds 279,088 2,651 3.81 329,154 3,652 4.50
Total interest-bearing liabilities 2,296,828 13,811 2.41 2,246,016 15,101 2.73
Demand deposits 388,265 390,102
Other liabilities 42,613 41,369
Total non-interest-bearing liabilities 430,878 431,471
Stockholders' equity 363,924 333,337
Total liabilities & stockholders' equity 3,091,630 3,010,824
Net interest income 26,136 23,904
Net interest spread (5) 3.19 % 2.93 %
Net interest income as a percentage
of average interest-earning assets 3.67 % 3.47 %
Ratio of interest-earning assets
to interest-bearing liabilities 125 % 124 %
(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 2026 and 2025. 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)
Six Months Ended June 30,
2026 2025
Average Average Average Average
Balance Interest Rate Balance
(1) (1) Interest Rate
(dollars in thousands)
$
$ %
$
$ %
ASSETS
Interest-bearing deposits at banks 21,981 135 1.24 24,052 216 1.81
Interest bearing time deposits at banks 3,721 57 3.09 3,820 59 3.11
Investment securities:
Taxable 359,114 6,148 3.42 381,886 5,574 2.92
Tax-exempt (3) 129,056 2,338 3.62 102,854 1,431 2.78
Investment securities 488,170 8,486 3.48 484,740 7,005 2.89
Loans: (2)(3)(4)
Residential mortgage loans 337,899 9,945 5.94 349,226 10,312 5.95
Construction loans 90,381 3,145 7.02 164,252 5,888 7.23
Commercial Loans 1,427,517 43,273 6.11 1,283,174 40,141 6.31
Agricultural Loans 374,681 11,940 6.43 357,561 9,696 5.47
Loans to state & political subdivisions 66,719 1,560 4.72 53,389 1,034 3.91
Other loans 62,784 2,054 6.60 109,198 3,916 7.23
Loans, net of discount (2)(3)(4) 2,359,981 71,917 6.15 2,316,800 70,987 6.18
Total interest-earning assets 2,873,853 80,595 5.66 2,829,412 78,267 5.58
Cash and due from banks 9,380 9,643
Bank premises and equipment 20,808 21,691
Other assets 196,894 177,531
Total non-interest earning assets 227,082 208,865
Total assets 3,100,935 3,038,277
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Business Interest Checking 27,109 123 0.91 17,995 85 0.95
NOW accounts 712,025 6,586 1.87 723,673 7,796 2.17
Savings accounts 289,898 675 0.47 290,576 677 0.47
Money market accounts 453,348 5,736 2.55 432,891 6,206 2.89
Certificates of deposit 539,795 9,345 3.49 481,272 8,979 3.76
Total interest-bearing deposits 2,022,175 22,465 2.24 1,946,407 23,743 2.46
Other borrowed funds 291,547 5,510 3.81 337,737 7,370 4.40
Total interest-bearing liabilities 2,313,722 27,975 2.44 2,284,144 31,113 2.75
Demand deposits 384,952 381,048
Other liabilities 42,165 42,426
Total non-interest-bearing liabilities 427,117 423,474
Stockholders' equity 360,096 330,659
Total liabilities & stockholders' equity 3,100,935 3,038,277
Net interest income 52,620 47,154
Net interest spread (5) 3.22 % 2.83 %
Net interest income as a percentage
of average interest-earning assets 3.69 % 3.36 %
Ratio of interest-earning assets
to interest-bearing liabilities 124 % 124 %
(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 2026 and 2025. 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)
June 30, March 31, December 31, September 30, June 30,
2026 2026 2025 2025 2025
Real estate:
Residential $337,628 $336,066 $340,972 $344,790 $341,671
Commercial 1,267,682 1,249,900 1,218,514 1,180,655 1,151,585
Agricultural 357,643 344,938 347,448 342,487 331,995
Construction 93,241 83,217 93,965 107,867 138,307
Consumer 39,623 19,592 88,210 109,458 22,364
Other commercial loans 180,997 170,628 179,166 171,345 174,740
Other agricultural loans 29,746 30,004 30,247 27,142 28,366
State & political subdivision loans 88,468 63,877 52,100 51,644 52,727
Total loans 2,395,028 2,298,222 2,350,622 2,335,388 2,241,755
Less: allowance for credit losses - loans 23,559 22,894 22,806 22,454 22,109
Net loans $2,371,469 $2,275,328 $2,327,816 $2,312,934 $2,219,646
Past due loans and non-performing assets
Total Loans past due 30-89 days and still accruing $8,695 $7,056 $9,269 $13,228 $18,554
Non-accrual loans $40,350 $37,670 $26,602 $20,523 $24,595
Loans past due 90 days or more and accruing 657 75 229 37 347
Non-performing loans $41,007 $37,745 $26,831 $20,560 $24,942
Other real estate owned 2,358 2,358 2,358 2,434 2,434
Total Non-performing assets $43,365 $40,103 $29,189 $22,994 $27,376
Three Months Ended
Analysis of the Allowance for Credit Losses - Loans June 30, March 31, December 31, September 30, June 30,
(In Thousands) 2026 2026 2025 2025 2025
Balance, beginning of period $22,894 $22,806 $22,454 $22,109 $22,081
Charge-offs (74) (78) (57) (20) (596)
Recoveries 161 22 6 17 25
Net charge-offs 87 (56) (51) (3) (571)
Provision for credit losses - loans 578 144 403 348 599
Balance, end of period $23,559 $22,894 $22,806 $22,454 $22,109
CITIZENS FINANCIAL SERVICES, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(Dollars in thousands, except per share data)
As of
June 30,
2026 2025
Tangible Equity
Stockholders' Equity - GAAP $352,833 $313,653
Intangible Assets (87,692) (88,288)
Tangible Equity - Non-GAAP 265,141 225,365
Shares outstanding 4,809,281 4,807,000
Tangible Book value per share - Non-GAAP $55.13 $46.88
As of
June 30,
2026 2025
Tangible Equity per share
Stockholders' Equity per share - GAAP $73.36 $65.25
Adjustment for intangible assets (18.23) (18.37)
Tangible Book value per share - Non-GAAP $55.13 $46.88
For the Three Months Ended For the Six Months Ended
June 30,
June 30,
2026 2025 2026 2025
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)
Average Assets - GAAP $3,077,668 $2,988,726 $3,088,281 $3,015,696
Average AOCL (13,962) (22,098) (12,654) (22,581)
Average Assets, Excluding AOCL - Non-GAAP 3,091,630 3,010,824 3,100,935 3,038,277
Net Income - GAAP $10,187 $8,463 $20,563 $16,084
Annualized Return on Average Assets-GAAP 1.32 % 1.13 % 1.33 % 1.07 %
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP 1.32 % 1.12 % 1.33 % 1.06 %
For the Three Months Ended For the Six Months Ended
June 30,
June 30,
2026 2025 2026 2025
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)
Average Stockholders' Equity - GAAP $349,962 $311,239 $347,442 $308,078
Average AOCL (13,962) (22,098) (12,654) (22,581)
Average Stockholders' Equity, Excluding AOCL - Non-GAAP 363,924 333,337 360,096 330,659
Net Income - GAAP $10,187 $8,463 $20,563 $16,084
Annualized Return on Average Stockholders' Equity-GAAP 11.64 % 10.88 % 11.84 % 10.44 %
Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP 11.20 % 10.16 % 11.42 % 9.73 %
For the Three Months Ended For the Six Months Ended
June 30,
June 30,
2026 2025 2026 2025
Return on Average Tangible Equity
Average Stockholders' Equity - GAAP $349,962 $311,239 $347,442 $308,078
Average Intangible Assets (87,767) (88,388) (87,841) (88,479)
Average Tangible Equity - Non-GAAP 262,195 222,851 259,601 219,599
Net Income - GAAP $10,187 $8,463 $20,563 $16,084
Annualized Return on Average Tangible Equity - Non-GAAP 15.54 % 15.19 % 15.84 % 14.65 %
For the Three Months Ended For the Six Months Ended
June 30,
June 30,
Reconciliation of net interest income on fully taxable equivalent basis 2026 2025 2026 2025
Total interest income $39,505 $38,749 $79,782 $77,763
Total interest expense 13,811 15,101 27,975 31,113
Net interest income 25,694 23,648 51,807 46,650
Tax equivalent adjustment 442 256 813 504
Net interest income (fully taxable equivalent) - Non-GAAP $26,136 $23,904 $52,620 $47,154
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SOURCE Citizens Financial Services, Inc.
