MANSFIELD, Pa., Oct. 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 nine months ended September 30, 2026.
Highlights
- Net income for the first nine months of 2026 was $32.5 million, which was $6.4 million, or 24.5% more than 2025's net income through September 30, 2025 due to the increase in net interest income after the provision for credit losses of $8.1 million. The effective tax rate for the first nine months of 2026 was 17.9% compared to 19.2% in the comparable period in 2025.
- Net income was $11.9 million for the three months ended September 30, 2026, which was $1.9 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 $2.6 million. The effective tax rate for the three months ended September 30, 2026 was 18.0% compared to 19.4% in the comparable period in 2025.
- Net interest income before the provision for credit losses was $79.1 million for the nine months ended September 30, 2026, an increase of $7.3 million, or 10.1%, over the same period a year ago and was primarily due to an increase in loan and investment interest income due to organic growth.
- Net interest income before the provision for credit losses increased $2.1 million, or 8.4% to $27.3 million for the three months ended September 30, 2026 due to an increase in loan and investment interest income due to organic growth.
- The provision for credit losses for the nine months ended September 30, 2026 was $1,000,000. There was no provision for credit losses recorded for the three months ended September 30, 2026. This compares to a provision for credit losses of $500,000 and $1,875,000 for the three and nine months ended September 30, 2025, respectively. The provision for 2026 was driven by the updated loss driver analysis for 2026 offset by the economic impact of the Iran conflict and the increase in non-accrual commercial real estate loans.
- Return on average equity for the three and nine months (annualized) ended September 30, 2026 was 13.39% and 12.36% compared to 12.52% and 11.15% for the three and nine months (annualized) ended September 30, 2025.
- Return on average tangible equity for the three and nine months (annualized) ended September 30, 2026 was 17.77% and 16.50% compared to 17.29% and 15.56% for the three and nine months (annualized) ended September 30, 2025 (non-GAAP). (1)
- Return on average assets for the three and nine months (annualized) ended September 30, 2026 was 1.45% and 1.37% compared to 1.33% and 1.16% for the three and nine months (annualized) ended September 30, 2025.
- Loans grew $152.8 million, or 6.8% since September 30, 2025. Loan growth since December 31, 2025 was $116.4 million, or 6.8% on an annualized basis.
- Non-performing assets increased $22,355,000 since December 31, 2025 and totaled $51,544,000 as of September 30, 2026, which is $28,550,000 higher than the balance as of September 30, 2025. The increase from December 31, 2025 is primarily due to ten commercial real estate loan relationships and one construction real estate loan relationship, totaling approximately $21.4 million, being placed on non-accrual status during the first nine months of 2026 as a result of becoming more than 90 days past due. 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 2.16%, 1.29% and 1.03% as of September 30, 2026, December 31, 2025 and September 30, 2025, respectively. While non-performing assets have increased significantly as of September 30, 2026 when compared to December 31, 2025 and September 30, 2025, specific reserves for these assets have remained relatively stable at $2,149,000, $1,913,000 and $1,516,000 at September 30, 2026, December 31, 2025 and September 30, 2025, respectively.
Nine Months Ended September 30, 2026 Compared to 2025
- For the nine months ended September 30, 2026, net income totaled $32,484,000 which compares to net income of $26,089,000 for the first nine months of 2025, an increase of $6,395,000. Basic earnings per share of $6.77 for the first nine months of 2026 compared to $5.44 for the first nine months last year. Annualized return on equity for the nine months ended September 30, 2026 and 2025 was 12.36% and 11.15%, while annualized return on assets was 1.37% and 1.16%, respectively. The increase in performance when comparing 2026 to 2025 was due to an increase in the net interest margin from 3.44% to 3.66% 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, 2026 totaled $79,064,000 compared to $71,790,000 for the nine months ended September 30, 2025, resulting in an increase of $7,274,000, or 10.1%. Average interest earning assets increased $117.2 million for the nine months ended September 30, 2026 compared to the same period last year, primarily due to an increase in average loans. Average loans, which includes loans held for sale-student loans, increased $99.6 million while average investment securities increased $20.0 million. The yield on interest earning assets increased 4 basis points to 5.67%, while the cost of interest-bearing liabilities decreased 24 basis points to 2.48%. As a result, the tax effected net interest margin increased from 3.44% for the nine months ended September 30, 2025 to 3.66% for the nine months ended September 30, 2026.
- The provision for credit losses for the nine months ended September 30, 2026 was $1,000,000 compared to $1,875,000 for the nine months ended September 30, 2025, a decrease of $875,000. The provision for credit losses associated with loans for the nine months ended September 30, 2026 and 2025 was $1,088,000 and $1,485,000, respectively, while the provision for off-balance sheet items was ($88,000) and $390,000 for the nine months ended September 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 the increase in non-accrual 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 $12,012,000 for the nine months ended September 30, 2026, which is $1,066,000 more than the non-interest income of $10,946,000 for the same period last year. The primary driver of the increase was an increase in earnings on bank owned life insurance (BOLI) of $958,000, as the result of purchasing $22,000,000 of additional insurance in the first quarter of 2026.
- Total non-interest expenses for the nine months ended September 30, 2026 totaled $50,492,000 compared to $48,559,000 for the same period last year, which is an increase of $1,933,000. Salary and benefit costs increased $992,000 due to merit increases and an increase in full-time equivalent employees (FTEs) of 11.9 employees. Other real estate owned expenses increased due to legal fees and real estate taxes associated with the increase in non-performing loans and other real estate owned.
- The provision for income taxes increased $887,000 when comparing the nine months ended September 30, 2026 to the same period in 2025 as a result of an increase in income before income taxes of $7,282,000. The effective tax rate was 17.9% and 19.2% for the nine months ended September 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 September 30, 2026 Compared to 2025
- For the three months ended September 30, 2026, net income totaled $11,921,000 which compares to net income of $10,005,000 for the comparable period of 2025, an increase of $1,916,000 or 19.2%. Basic earnings per share of $2.48 for the three months ended September 30, 2026 compares to $2.09 for the 2025 comparable period. Annualized return on equity for the three months ended September 30, 2026 and 2025 was 13.39% and 12.52%, while annualized return on assets was 1.45% and 1.33%, respectively.
- Net interest income before the provision for credit losses for the three months ended September 30, 2026 totaled $27,257,000 compared to $25,140,000 for the three months ended September 30, 2025, resulting in an increase of $2,117,000, or 8.4%. Average interest earning assets increased $261.4 million for the three months ended September 30, 2026 compared to the same period last year, primarily due to increases in the average balance of outstanding commercial loans. Average loans increased $210.6 million, while average investment securities increased $52.5 million. The tax effected net interest margin for the three months ended September 30, 2026 was 3.60% for the three month periods ended September 30, 2026 and 2025. The yield on interest earning assets decreased five basis points to 5.69%, while the cost of interest-bearing liabilities decreased 10 basis points to 2.57%.
- There was no provision for credit losses recorded in the third quarter of 2026, the provision related to loans was $366,000, while ($366,000) 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 and the impact of the conflict with Iran. The provision for credit losses of $500,000 for the third quarter of 2025 was driven by the change in economic factors during the quarter.
- Total non-interest income was $4,308,000 for the three months ended September 30, 2026, $454,000 more than the comparable period last year. The primary driver of the increase was an increase in BOLI earnings of $302,000 and an increase in gains on equity securities of $224,000.
- Total non-interest expenses for the three months ended September 30, 2026 totaled $17,024,000 compared to $16,084,000 for the same period last year, which is an increase of $940,000, or 5.8%. Salary and employee benefits increased due to merit increases, an increase in FTEs of 13.7 employees and incentive compensation expenses. Other real estate owned expenses increased due to legal fees and real estate taxes associated with the increase in non-performing loans and other real estate owned. The decrease in other expenses is due to the recovery of fraud losses on customer line of credit accounts.
- The provision for income taxes increased $215,000 when comparing the three months ended September 30, 2026 to the same period in 2025. This increase was attributable to an increase in income before provision for income taxes of $2,131,000. The effective tax rate was 18.0% and 19.4% for the three months ended September 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 September 30, 2026, total assets were $3.41 billion compared to $3.06 billion at December 31, 2025 and $3.06 billion at September 30, 2025. The loan to deposit ratio as of September 30, 2026 was 95.15% compared to 95.55% as of December 31, 2025 and 92.71% as of September 30, 2025.
- Available for sale securities of $477.6 million at September 30, 2026 increased $32.8 million from December 31, 2025 and $26.2 million from September 30, 2025. The yield on the investment portfolio increased from 2.98% for the nine months ended September 30, 2025 to 3.59% for the nine months ended September 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.
- Loans held for sale - Student loans increased $165.9 million to $245.3 million as of September 30, 2026 due to an increase in activity and seasonal activity for the first semester of college that occurs in the third quarter.
- Net loans totaled $2.36 billion at September 30, 2026 and $2.25 billion at December 31, 2025, an increase of $115.4 million. As of September 30, 2025, net loans totaled $2.21 billion. The increase in net loans since December 31, 2025 and September 30, 2025 was due to increases in commercial real estate loans and agricultural real estate loans.
- The allowance for credit losses - loans totaled $23,786,000 at September 30, 2026 which is an increase of $980,000 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 $1,088,000 for the first nine months of 2026. Loan recoveries and charge-offs were $192,000 and $300,000, respectively, for the nine months ended September 30, 2026. The allowance for credit losses as a percent of total loans was 1.00% as of September 30, 2026 and December 31, 2025. While non-performing loans increased $20.3 million or 75.5%, commercial loans are individually evaluated to determine whether a specific reserve is necessary or not. Specific reserves associated with commercial loans totaled $1,628,000 and $1,039,000 as of September 30, 2026 and December 31, 2025, respectively.
- Deposits increased $132.4 million from December 31, 2025, to $2.51 billion at September 30, 2026. Competitive pressure for deposits remains high. Brokered CD's have decreased $20.0 million since December 31, 2025.
- Borrowed funds totaled $512.5 million as of September 30, 2026, a $203.0 million increase from December 31, 2025 to fund student loans held for sale and investment growth since year-end.
- Stockholders' equity totaled $351.3 million at September 30, 2026, compared to $338.1 million at December 31, 2025, an increase of $13.2 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $25.4 million and totaled $375.8 million at September 30, 2026 (non-GAAP). The increase in stockholders' equity was attributable to net income for the nine months ended September 30, 2026 totaling $32.5 million, offset by cash dividends for the nine months ended September 30, 2026 totaling $7.3 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL increased $12.1 million from December 31, 2025.
Dividend Declared
On September 1, 2026, the Board of Directors declared a cash dividend of $0.51 per share, which was paid on September 25, 2026 to shareholders of record at the close of business on September 11, 2026. This quarterly cash dividend is an increase of 2.0% over the quarterly cash dividend of $0.50 per share declared one year ago.
Citizens Financial Services, Inc. has nearly 1,775 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,
2026 2025 2026 2025
Income and Performance Ratios
Net Income $11,921 $10,005 $32,484 $26,089
Return on average assets (annualized) 1.45 % 1.33 % 1.37 % 1.16 %
Return on average equity (annualized) 13.39 % 12.52 % 12.36 % 11.15 %
Return on average tangible equity (annualized) (a) 17.77 % 17.29 % 16.50 % 15.56 %
Net interest margin (tax equivalent) (a) 3.60 % 3.60 % 3.66 % 3.44 %
Earnings per share - basic (b) $2.48 $2.09 $6.77 $5.44
Earnings per share - diluted (b) $2.48 $2.09 $6.77 $5.44
Cash dividends paid per share (b) $0.510 $0.500 $1.520 $1.480
Number of shares used in computation - basic (b) 4,800,757 4,796,946 4,798,879 4,797,335
Number of shares used in computation - diluted (b) 4,802,407 4,798,051 4,801,314 4,799,466
Asset quality
Allowance for credit losses - loans $23,786 $22,454
Non-performing assets $51,544 $22,994
Allowance for credit losses - loans to total loans 1.00 % 0.99 %
Non-performing assets to total loans 2.16 % 1.03 %
Annualized net charge-offs to total loans 0.02 % 0.00 % 0.00 % 0.05 %
Equity
Book value per share (b) $73.02 $68.16
Tangible book value per share (a) (b) $54.82 $49.83
Market Value per share (last reported trade of month) $78.61 $60.28
Common shares outstanding 4,810,685 4,807,314
Other
Average Full Time Equivalent Employees 395.2 381.5 391.5 379.6
Loan to Deposit Ratio 95.15 % 92.71 %
Trust assets under management $203,432 $194,325
Brokerage assets under management $354,363 $341,487
Balance Sheet Highlights September 30, December 31, September 30,
2026 2025 2025
Assets $3,413,039 $3,064,564 $3,056,421
Investment securities 480,522 446,556 453,160
Loans held for sale 257,842 88,744 113,385
Loans (net of unearned income) 2,387,696 2,271,271 2,235,511
Allowance for credit losses - loans 23,786 22,806 22,454
Deposits 2,509,378 2,376,979 2,411,203
Stockholders' Equity 351,287 338,051 327,682
(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)
September 30, December 31, September 30,
(in thousands, except share data) 2026 2025 2025
ASSETS:
Cash and due from banks:
Noninterest-bearing $18,187 $23,933 $24,529
Interest-bearing 9,171 10,358 6,546
Total cash and cash equivalents 27,358 34,291 31,075
Interest bearing time deposits with other banks 3,076 3,820 3,820
Equity securities 2,951 1,815 1,803
Available-for-sale securities 477,571 444,741 451,357
Loans held for sale - Residential Mortgages 12,559 9,393 13,508
Loans held for sale - Student Loans 245,283 79,351 99,877
Loans (net of allowance for credit losses - loans: $23,786 at September 30, 2026;
$22,806 at December 31, 2025 and $22,454 at September 30, 2025) 2,363,910 2,248,465 2,213,057
Premises and equipment 20,569 20,998 21,508
Accrued interest receivable 13,183 10,698 11,412
Goodwill 85,758 85,758 85,758
Bank owned life insurance 75,130 51,501 51,132
Other intangibles 1,812 2,221 2,374
Fair value of derivative instruments - asset 8,259 6,927 7,487
Deferred tax asset 14,525 11,440 12,294
Other assets 61,095 53,145 49,959
TOTAL ASSETS $3,413,039 $3,064,564 $3,056,421
LIABILITIES:
Deposits:
Noninterest-bearing $509,898 $516,657 $522,168
Interest-bearing 1,999,480 1,860,322 1,889,035
Total deposits 2,509,378 2,376,979 2,411,203
Borrowed funds 512,489 309,448 279,589
Accrued interest payable 3,571 3,130 3,754
Fair value of derivative instruments - liability 5,493 4,100 4,332
Other liabilities 30,821 32,856 29,861
TOTAL LIABILITIES 3,061,752 2,726,513 2,728,739
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 September 30, 2026, December 31, 2025 and
September 30, 2025: issued 5,264,708 at September 30, 2026 and 5,255,807 at
December 31, 2025 and 5,255,464 at September 30, 2025 5,265 5,256 5,255
Additional paid-in capital 148,511 147,965 147,971
Retained earnings 238,801 213,623 205,542
Accumulated other comprehensive loss (24,524) (12,377) (14,650)
Treasury stock, at cost: 454,023 shares at September 30, 2026, 448,727 shares
at December 31, 2025 and 449,087 shares at September 30, 2025 (16,766) (16,416) (16,436)
TOTAL STOCKHOLDERS' EQUITY 351,287 338,051 327,682
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,413,039 $3,064,564 $3,056,421
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) 2026 2025 2026 2025
INTEREST INCOME:
Interest and fees on loans $38,430 $36,418 $110,025 $107,201
Interest-bearing deposits with banks 88 119 280 394
Investment securities:
Taxable 3,298 2,595 8,632 7,331
Nontaxable 1,022 684 2,869 1,815
Dividends 576 438 1,390 1,276
TOTAL INTEREST INCOME 43,414 40,254 123,196 118,017
INTEREST EXPENSE:
Deposits 11,774 11,501 34,239 35,244
Borrowed funds 4,383 3,613 9,893 10,983
TOTAL INTEREST EXPENSE 16,157 15,114 44,132 46,227
NET INTEREST INCOME 27,257 25,140 79,064 71,790
Provision for credit losses - 500 1,000 1,875
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 27,257 24,640 78,064 69,915
NON-INTEREST INCOME:
Service charges 1,677 1,598 4,389 4,192
Trust 191 186 626 593
Brokerage and insurance 623 761 1,832 2,071
Gains on loans sold 659 709 1,545 1,720
Equity security gains, net 258 34 373 56
Earnings on bank owned life insurance 665 363 2,022 1,064
Other 235 203 1,225 1,250
TOTAL NON-INTEREST INCOME 4,308 3,854 12,012 10,946
NON-INTEREST EXPENSES:
Salaries and employee benefits 10,633 9,924 31,181 30,189
Occupancy 1,241 1,320 3,942 3,858
Furniture and equipment 288 273 911 856
Professional fees 531 493 1,599 1,535
FDIC insurance expense 420 395 1,185 1,340
Pennsylvania shares tax 430 430 1,147 1,054
Amortization of intangibles 92 113 303 367
Software expenses 536 457 1,420 1,342
Other real estate owned expenses 422 6 812 198
Other 2,431 2,673 7,992 7,820
TOTAL NON-INTEREST EXPENSES 17,024 16,084 50,492 48,559
Income before provision for income taxes 14,541 12,410 39,584 32,302
Provision for income tax expense 2,620 2,405 7,100 6,213
NET INCOME $11,921 $10,005 $32,484 $26,089
PER COMMON SHARE DATA:
Net Income - Basic $2.48 $2.09 $6.77 $5.44
Net Income - Diluted $2.48 $2.09 $6.77 $5.44
Number of shares used in computation - basic 4,800,757 4,796,946 4,798,879 4,797,335
Number of shares used in computation - diluted 4,802,407 4,798,051 4,801,314 4,799,466
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,
2026 2026 2026 2025 2025
Interest income $43,414 $39,505 $40,277 $41,151 $40,254
Interest expense 16,157 13,811 14,164 14,940 15,114
Net interest income 27,257 25,694 26,113 26,211 25,140
Provision for credit losses - 500 500 500 500
Net interest income after provision for credit losses 27,257 25,194 25,613 25,711 24,640
Non-interest income 4,050 3,918 3,671 3,387 3,820
Equity securities gains, net 258 96 19 11 34
Non-interest expenses 17,024 16,867 16,601 16,173 16,084
Income before provision for income taxes 14,541 12,341 12,702 12,936 12,410
Provision for income tax expense 2,620 2,154 2,326 2,453 2,405
Net income $11,921 $10,187 $10,376 $10,483 $10,005
Earnings Per Share - Basic $2.48 $2.12 $2.16 $2.19 $2.09
Earnings Per Share - Diluted $2.48 $2.12 $2.16 $2.18 $2.09
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,
2026 2025
Average Average Average Average
Balance (1) Interest Rate Balance (1) Interest Rate
(dollars in thousands)
$
$ %
$
$ %
ASSETS
Short-term investments:
Interest-bearing deposits at banks 18,504 65 1.37 19,597 90 1.82
Total short-term investments 18,504 65 1.37 19,597 90 1.82
Interest bearing time deposits at banks 3,189 23 2.86 3,820 29 3.01
Investment securities:
Taxable 406,924 3,874 3.81 381,036 3,033 3.18
Tax-exempt (3) 137,258 1,294 3.77 110,638 865 3.13
Investment securities 544,182 5,168 3.80 491,674 3,898 3.17
Loans: (2)(3)(4)
Residential mortgage loans 337,890 5,266 6.18 343,920 5,227 6.03
Construction loans 98,355 1,717 6.93 120,492 2,122 6.99
Commercial Loans 1,459,127 22,409 6.09 1,339,367 22,204 6.58
Agricultural Loans 394,077 6,185 6.23 362,260 5,252 5.75
Loans to state & political subdivisions 83,424 1,063 5.06 52,248 514 3.90
Other loans 122,955 2,007 6.48 66,908 1,203 7.13
Loans, net of discount (2)(3)(4) 2,495,828 38,647 6.14 2,285,195 36,522 6.34
Total interest-earning assets 3,061,703 43,903 5.69 2,800,286 40,539 5.74
Cash and due from banks 9,713 9,912
Bank premises and equipment 20,647 21,718
Other assets 207,077 187,100
Total non-interest earning assets 237,437 218,730
Total assets 3,299,140 3,019,016
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Business Interest Checking 30,338 69 0.90 20,624 46 0.88
NOW accounts 715,981 3,373 1.87 701,732 3,702 2.09
Savings accounts 291,589 352 0.48 284,316 327 0.46
Money market accounts 468,532 3,229 2.73 459,993 3,257 2.81
Certificates of deposit 541,443 4,751 3.48 458,402 4,169 3.61
Total interest-bearing deposits 2,047,883 11,774 2.28 1,925,067 11,501 2.37
Other borrowed funds 447,373 4,383 3.89 321,632 3,613 4.46
Total interest-bearing liabilities 2,495,256 16,157 2.57 2,246,699 15,114 2.67
Demand deposits 392,998 394,863
Other liabilities 38,939 37,587
Total non-interest-bearing liabilities 431,937 432,450
Stockholders' equity 371,947 339,867
Total liabilities & stockholders' equity 3,299,140 3,019,016
Net interest income 27,746 25,425
Net interest spread (5) 3.12 % 3.07 %
Net interest income as a percentage
of average interest-earning assets 3.60 % 3.60 %
Ratio of interest-earning assets
to interest-bearing liabilities 123 % 125 %
(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)
Nine Months Ended September 30,
2026 2025
Average Average Average Average
Balance (1) Interest Rate Balance (1) Interest Rate
(dollars in thousands)
$
$ %
$
$ %
ASSETS
Short-term investments:
Interest-bearing deposits at banks 22,323 200 1.19 24,479 306 1.67
Total short-term investments 22,323 200 1.19 24,479 306 1.67
Interest bearing time deposits at banks 3,542 80 3.02 3,820 88 3.08
Investment securities:
Taxable 375,226 10,022 3.56 381,600 8,607 3.01
Tax-exempt (3) 131,820 3,632 3.67 105,477 2,297 2.90
Investment securities 507,046 13,654 3.59 487,077 10,904 2.98
Loans: (2)(3)(4)
Residential mortgage loans 337,564 15,211 6.02 347,071 15,539 5.99
Construction loans 93,068 4,862 6.98 149,505 8,010 7.16
Commercial Loans 1,437,933 65,682 6.11 1,301,875 62,345 6.40
Agricultural Loans 381,217 18,124 6.36 359,144 14,948 5.56
Loans to state & political subdivisions 72,349 2,622 4.85 53,004 1,549 3.91
Other loans 83,061 4,063 6.54 94,947 5,118 7.21
Loans, net of discount (2)(3)(4) 2,405,192 110,564 6.15 2,305,546 107,509 6.23
Total interest-earning assets 2,938,103 124,498 5.67 2,820,922 118,807 5.63
Cash and due from banks 9,492 9,734
Bank premises and equipment 20,754 21,700
Other assets 199,381 179,430
Total non-interest earning assets 229,627 210,864
Total assets 3,167,730 3,031,786
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Business Interest Checking 28,197 192 0.91 18,881 132 0.93
NOW accounts 713,358 9,959 1.87 716,279 11,498 2.15
Savings accounts 290,468 1,027 0.47 288,467 1,003 0.46
Money market accounts 458,465 8,965 2.61 442,024 9,463 2.86
Certificates of deposit 540,350 14,096 3.49 473,565 13,148 3.71
Total interest-bearing deposits 2,030,838 34,239 2.25 1,939,216 35,244 2.43
Other borrowed funds 344,060 9,893 3.85 332,310 10,983 4.42
Total interest-bearing liabilities 2,374,898 44,132 2.48 2,271,526 46,227 2.72
Demand deposits 387,663 385,704
Other liabilities 41,080 40,794
Total non-interest-bearing liabilities 428,743 426,498
Stockholders' equity 364,089 333,762
Total liabilities & stockholders' equity 3,167,730 3,031,786
Net interest income 80,366 72,580
Net interest spread (5) 3.19 % 2.91 %
Net interest income as a percentage
of average interest-earning assets 3.66 % 3.44 %
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 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,
2026 2026 2026 2025 2025
Real estate:
Residential $336,190 $337,628 $336,066 $340,972 $344,790
Commercial 1,276,050 1,267,682 1,249,900 1,218,514 1,180,655
Agricultural 370,505 357,643 344,938 347,448 342,487
Construction 103,498 93,241 83,217 93,965 107,867
Consumer 8,597 8,692 8,704 8,859 9,581
Other commercial loans 178,977 180,997 170,628 179,166 171,345
Other agricultural loans 31,323 29,746 30,004 30,247 27,142
State & political subdivision loans 82,556 88,468 63,877 52,100 51,644
Total loans 2,387,696 2,364,097 2,287,334 2,271,271 2,235,511
Less: allowance for credit losses - loans 23,786 23,559 22,894 22,806 22,454
Net loans $2,363,910 $2,340,538 $2,264,440 $2,248,465 $2,213,057
Past due and non-performing assets
Total Loans past due 30-89 days and still accruing $4,696 $8,695 $7,056 $9,269 $13,228
Non-accrual loans $47,072 $40,350 $37,670 $26,602 $20,523
Loans past due 90 days or more and accruing 11 657 75 229 37
Non-performing loans $47,083 $41,007 $37,745 $26,831 $20,560
Other real estate owned 4,461 2,358 2,358 2,358 2,434
Total Non-performing assets $51,544 $43,365 $40,103 $29,189 $22,994
Three Months Ended
Analysis of the Allowance for Credit Losses - Loans September 30, June 30, March 31, December 31, September 30,
(In Thousands) 2026 2026 2026 2025 2025
Balance, beginning of period $23,559 $22,894 $22,806 $22,454 $22,109
Charge-offs (148) (74) (78) (57) (20)
Recoveries 9 161 22 6 17
Net charge-offs (139) 87 (56) (51) (3)
Provision for credit losses - loans 366 578 144 403 348
Balance, end of period $23,786 $23,559 $22,894 $22,806 $22,454
CITIZENS FINANCIAL SERVICES, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
(Dollars in thousands, except per share data)
As of
September 30,
2026 2025
Tangible Equity
Stockholders' Equity - GAAP $351,287 $327,682
Intangible Assets (87,570) (88,132)
Tangible Equity - Non-GAAP 263,717 239,550
Shares outstanding 4,810,685 4,807,314
Tangible Book value per share - Non-GAAP $54.82 $49.83
As of
September 30,
2026 2025
Tangible Equity per share
Stockholders' Equity per share - GAAP $73.02 $68.16
Adjustment for intangible assets (18.20) (18.33)
Tangible Book value per share - Non-GAAP $54.82 $49.83
For the Three Months
Ended For the Nine Months Ended
September 30,
September 30,
2026 2025 2026 2025
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)
Average Assets - GAAP $3,283,235 $2,998,788 $3,153,980 $3,009,997
Average AOCL (15,905) (20,228) (13,750) (21,789)
Average Assets, Excluding AOCL - Non-GAAP 3,299,140 3,019,016 3,167,730 3,031,786
Net Income - GAAP $11,921 $10,005 $32,484 $26,089
Annualized Return on Average Assets-GAAP 1.45 % 1.33 % 1.37 % 1.16 %
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP 1.45 % 1.33 % 1.37 % 1.15 %
For the Three Months
Ended For the Nine Months Ended
September 30,
September 30,
2026 2025 2026 2025
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)
Average Stockholders' Equity - GAAP $356,042 $319,639 $350,339 $311,973
Average AOCL (15,905) (20,228) (13,750) (21,789)
Average Stockholders' Equity, Excluding AOCL - Non-GAAP 371,947 339,867 364,089 333,762
Net Income - GAAP $11,921 $10,005 $32,484 $26,089
Annualized Return on Average Stockholders' Equity-GAAP 13.39 % 12.52 % 12.36 % 11.15 %
Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP 12.82 % 11.78 % 11.90 % 10.42 %
For the Three Months
Ended For the Nine Months Ended
September 30,
September 30,
2026 2025 2026 2025
Return on Average Tangible Equity
Average Stockholders' Equity - GAAP $356,042 $319,639 $350,339 $311,973
Average Intangible Assets (87,636) (88,217) (87,772) (88,390)
Average Tangible Equity - Non-GAAP 268,406 231,422 262,567 223,583
Net Income - GAAP $11,921 $10,005 $32,484 $26,089
Annualized Return on Average Tangible Equity Non-GAAP 17.77 % 17.29 % 16.50 % 15.56 %
For the Three Months
Ended For the Nine Months Ended
September 30,
September 30,
Reconciliation of net interest income on fully taxable equivalent basis 2026 2025 2026 2025
Total interest income $43,414 $40,254 $123,196 $118,017
Total interest expense 16,157 15,114 44,132 46,227
Net interest income 27,257 25,140 79,064 71,790
Tax equivalent adjustment 489 285 1,302 790
Net interest income (fully taxable equivalent) - Non-GAAP $27,746 $25,425 $80,366 $72,580
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SOURCE Citizens Financial Services, Inc.
