Form 8-K

8-K — CITIZENS FINANCIAL SERVICES INC

Accession: 0000739421-26-000027

Filed: 2026-04-29

Period: 2026-03-31

CIK: 0000739421

SIC: 6022 (STATE COMMERCIAL BANKS)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — firstqtrearnings2026.htm (Primary)

EX-99.1 — FIRST QUARTER 2026 PRESS RELEASE (firstqtrpressrelease2026.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K — FIRST QUARTER EARNINGS MARCH 31 2026

8-K (Primary)

Filename: firstqtrearnings2026.htm · Sequence: 1

false000073942100007394212026-03-312026-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 31, 2026

CITIZENS FINANCIAL SERVICES INC

(Exact name of registrant as specified in its charter)

Pennsylvania

001-41410

23-2265045

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

15 S MAIN ST

MANSFIELD, Pennsylvania

16933

(Address of principal executive offices)

(Zip code)

Registrant's telephone number, including area code (570) 662-0444

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $1.00 Per Share

CZFS

NASDAQ Capital Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following

provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities

Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange

Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under

the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under

the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act

of 1934 (§240.12b-2 of this chapter):

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards

provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

Randall E. Black, Chief Executive Officer, recently announced the unaudited consolidated financial results for Citizens Financial

Services, Inc. and susbisidaries for the first quarter 2026.

On April 29, 2026, Citizens Financial Services, Inc. issued a press release titled “Citizens Financial Services, Inc. Reports Unaudited

First Quarter 2026 Financial Results”, attached as Exhibit 99.1 to the Current Report on Form 8-K and incorporated herein by reference. The information furnished under Item 2.02 of the Current Report on an 8-K shall not be deemed “filed” for any

purpose.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Description of Exhibit

99.1

Press release issued by Citizens Financial Services, Inc. on April 29, 2026, titled “Citizens Financial Services, Inc.

Reports Unaudited First Quarter 2026 Financial Results”.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be

signed on its behalf by the undersigned hereunto duly authorized.

CITIZENS FINANCIAL SERVICES, INC.

Date: April 29, 2026

By:

/s/ Stephen J. Guillaume

Stephen J. Guillaume

Chief Financial Officer

EX-99.1 — FIRST QUARTER 2026 PRESS RELEASE

EX-99.1

Filename: firstqtrpressrelease2026.htm · Sequence: 2

Contact: LeeAnn Gephart, Chief Banking Officer

First Citizens Community Bank

15 South Main Street

Mansfield, PA 16933

570-545-6005

570-662-8512 (fax)

citizens financial services, inc. reports unaudited first quarter 2026 financial results

MANSFIELD, PENNSYLVANIA— April 29, 2026 – 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 months ended March 31, 2026.

Highlights

•

Net income was $10.4 million for the three months ended March 31, 2026, which is 36.15% more than the net income for 2025’s comparable period. The

increase was driven by the increase in net interest income before the provision for credit losses of $3.1 million. The effective tax rate for the three months ended March 31, 2026 was 18.3% compared to 19.1% in the comparable period in

2025, with the decrease due to increases in nontaxable interest income and earnings on BOLI due to the purchase of additional insurance policies in the first quarter of 2026.

•

Net interest income before the provision for credit losses was $26.1 million for the three months ended March 31, 2026, an increase of $3,111,000,

or 13.5%, over the same period a year ago and was primarily due to an increase in loan interest income and a decrease in interest expense on deposits and borrowings.

•

Return on average equity for the three months (annualized) ended March 31, 2026 was 12.03% compared to 10.00% for the three months (annualized)

ended March 31, 2025.

•

Return on average tangible equity for the three months (annualized) ended March 31, 2026 was 16.15% compared to 14.09% for the three months

(annualized) ended March 31, 2025 (non-GAAP). (1)

•

Return on average assets for the three months (annualized) ended March 31, 2026 was 1.34% compared to 1.00% for the three months (annualized) ended

March 31, 2025.

•

Non-performing assets increased $10,914,000 since December 31, 2025 and totaled $40,103,000 as of March 31, 2026, which is $12,621,000 higher than

the balance as of March 31, 2025. The increase from December 31, 2025 is due to four commercial real estate loan relationships being placed on non-accrual status during the first quarter of 2026 due to 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 1.74%, 1.24% and 1.19% as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively. While non-performing assets have increased significantly as of March 31, 2026 when compared to December

31, 2025 and March 31, 2025, specific reserves for these assets have remained stable at $1,862,000, $1,912,758 and $1,603,000 at March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

First Quarter of 2026 Compared to the First Quarter of 2025

•

For the three months ended March 31, 2026, net income totaled $10,376,000 which compares to net income of $7,621,000 for the comparable period of

2025, an increase of $2,755,000 or 36.2%. Basic earnings per share of $2.16 for the three months ended March 31, 2026 compares to $1.59 for the 2025 comparable period. Annualized return on equity for the three months ended March 31, 2026

and 2025 was 12.03% and 10.00%, while annualized return on assets was 1.34% and 1.00%, respectively.

•

Net interest income before the provision for credit losses for the three months ended March 31, 2026 totaled $26,113,000 compared to $23,002,000 for

the three months ended March 31, 2025, resulting in an increase of $3,111,000, or 13.5%. Average interest earning assets increased $26.4 million for the three months ended March 31, 2026 compared to the same period last year, primarily due

to organic growth in our commercial and agricultural loan portfolios offset by decreases in consumer loans. During the first quarter of 2026, the Company recovered $683,000 in previously charged-off interest that offset the charged-off

interest related to the loans placed on non-accrual status during the first quarter of 2026. The tax effected net interest margin for the three months ended March 31, 2026 was 3.72% compared to 3.30% for the same period last year. The yield

on interest earning assets increased 14 basis points to 5.71%, while the cost of interest bearing liabilities decreased 34 basis points to 2.46%.

•

The provision for credit losses for the first quarter of 2025 of $500,000 was driven by the annual update of loss drivers, which includes historical

loss data, as well as prepayment and curtailment speeds and the potential impact of the Iran war compared to $625,000 for the first quarter of 2025, which was driven by the annual updates for 2025.

•

Total non-interest income was $3,690,000 for the three months ended March 31, 2026, $263,000 more than the comparable period last year. The primary

driver of the increase was an increase in earning on bank owned life insurance of $224,000, as the result of purchasing $22,000,000 of additional insurance in the first quarter of 2026.

•

Total non-interest expenses for the three months ended March 31, 2026 totaled $16,601,000 compared to $16,378,000 for the same period last year,

which is an increase of $223,000, or 1.4%.

•

The provision for income taxes increased $521,000 when comparing the three months ended March 31, 2026 to the same period in 2025. This increase was

attributable to an increase in income before provision for income taxes of $3,276,000. The effective tax rate was 18.3% and 19.1% for the three months ended March 31, 2026 and 2025, respectively.

Balance Sheet and Other Information:

•

At March 31, 2026, total assets were $3.03 billion compared to $3.06 billion at December 31, 2025 and $3.02 billion at March 31, 2025. The loan to

deposit ratio as of March 31, 2026 was 94.14% compared to 98.89% as of December 31, 2025 and 97.92% as of March 31, 2025.

•

Available for sale securities of $448.3 million at March 31, 2026 increased $3.5 million from December 31, 2025 and $17.6 million from March 31,

2025. The yield on the investment portfolio increased from 2.85% to 3.35% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. Investment activity for 2026 has

focused on replacing securities as they mature.

•

Net loans totaled $2.28 billion at March 31, 2026 in comparison to $2.33 billion as of December 31, 2025 and $2.29 billion at March 31, 2025. The

decrease since December 31, 2025 and March 31, 2025 of $68.6 million and $89.7 million, respectively, was due to the seasonal decrease in student loans that typically occurs late in the first quarter or early in the second quarter. A large

component of the increase in commercial loans was due to construction loans being transferred via a permanent financing arrangement. In addition, we continue to see strong demand in commercial real estate in our south eastern Pennsylvania

and Delaware markets.

•

The allowance for credit losses - loans totaled $22,894,000 at March 31, 2026 which is an increase of $88,000 from December 31, 2025 due to changes

in expected prepayment and curtailment speeds, economic forecasts and the Iran war. The provision for credit losses on loans was $144,000 for the first quarter of 2026. Loan recoveries and charge-offs were $22,000 and $78,000, respectively,

for the three months ended March 31, 2026. The allowance as a percent of total loans was 1.00% as of March 31, 2026 and 0.97% as of December 31, 2025.

•

Deposits increased $64.2 million from December 31, 2025, to $2.44 billion at March 31, 2026, with the increase driven by an increase in brokered

deposits of $52.8 million, which total $112.8 million at March 31, 2026. The increase in brokered deposits was to offset the seasonal decrease in municipal deposits. Competitive pressure for deposits remains high.

•

Borrowed funds totaled $198.7 million as of March 31, 2026, a $110.7 million decrease from December 31, 2025 due to the decrease in loans and

increase in deposits.

•

Stockholders’ equity totaled $343.6 million at March 31, 2026, compared to $338.1 million at December 31, 2025, an increase of $5.5 million.

Excluding accumulated other comprehensive loss (AOCL), stockholders’ equity increased $7.8 million and totals $358.3 million (non-GAAP). The increase in stockholders’ equity, excluding AOCL, was attributable to net income for the three

months ended March 31, 2026 totaling $10.4 million, offset by cash dividends for the first quarter totaling $2.4 million. As a result of increases in market interest rates impacting the fair value of investment securities and swaps, AOCL

increased $2.3 million from December 31, 2025.

Dividend Declared

On March 2, 2026, the Board of Directors declared a cash dividend of $0.50 per share, which was paid on March 27, 2026 to shareholders of record at the close

of business on March 13, 2026. This quarterly cash dividend is an increase of 2.0% over the regular cash dividend of $0.49 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2025.

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

Three Months Ended

March 31,

2026

2025

Income and Performance Ratios

Net Income

$ 10,376

$ 7,621

Return on average assets (annualized)

1.34%

1.00%

Return on average equity (annualized)

12.03%

10.00%

Return on average tangible equity (annualized) (a)

16.15%

14.09%

Net interest margin (tax equivalent) (a)

3.72%

3.30%

Earnings per share - basic (b)

$ 2.16

$ 1.59

Earnings per share - diluted (b)

$ 2.16

$ 1.59

Cash dividends paid per share (b)

$ 0.500

$ 0.490

Number of shares used in computation - basic (b)

4,798,170

4,797,611

Number of shares used in computation - diluted (b)

4,799,078

4,799,016

Asset quality

Allowance for credit losses - loans

$ 22,894

$ 22,081

Non-performing assets

$ 40,103

$ 27,482

Allowance for credit losses - loans to total loans

1.00%

0.95%

Non-performing assets to total loans

1.74%

1.19%

Annualized net charge-offs to total loans

0.01%

0.03%

Equity

Book value per share (b)

$ 71.51

$ 64.14

Tangible book value per share (a) (b)

$ 53.23

$ 45.73

Market Value per share (last reported trade of month)

$ 61.15

$ 58.05

Common shares outstanding

4,804,936

4,759,672

Other

Average Full Time Equivalent Employees

386.4

379.7

Loan to Deposit Ratio

94.14%

97.92%

Trust assets under management

$ 191,602

$ 178,007

Brokerage assets under management

$ 319,485

$ 397,204

Balance Sheet Highlights

March 31,

December 31,

March 31,

2026

2025

Assets

$ 3,026,478

$ 3,064,564

$ 3,016,338

Investment securities

450,120

446,556

432,438

Loans (net of unearned income)

2,298,222

2,350,622

2,315,663

Allowance for credit losses - loans

22,894

22,806

22,081

Deposits

2,441,185

2,376,979

2,364,854

Stockholders' Equity

343,578

338,051

308,296

(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)

March 31,

December 31,

March 31,

(in thousands except share data)

2026

2025

ASSETS:

Cash and due from banks:

Noninterest-bearing

$ 26,798

$ 23,933

$ 28,127

Interest-bearing

6,307

10,358

8,659

Total cash and cash equivalents

33,105

34,291

36,786

Interest bearing time deposits with other banks

3,820

Equity securities

1,834

1,815

1,737

Available-for-sale securities

448,286

444,741

430,701

Loans held for sale

5,874

9,393

6,054

Loans (net of allowance for credit losses - loans: $22,894 at March 31, 2026;

$22,806 at December 31, 2025 and $22,081 at March 31, 2025)

2,275,328

2,327,816

2,293,582

Premises and equipment

20,715

20,998

21,627

Accrued interest receivable

10,941

10,698

10,918

Goodwill

85,758

Bank owned life insurance

74,071

51,501

50,578

Other intangibles

2,073

2,221

2,707

Fair value of derivative instruments - asset

7,104

6,927

9,120

Deferred tax asset

12,240

11,440

14,436

Other assets

45,329

53,145

48,514

TOTAL ASSETS

$ 3,026,478

$ 3,064,564

$ 3,016,338

LIABILITIES:

Deposits:

Noninterest-bearing

$ 509,638

$ 516,657

$ 505,826

Interest-bearing

1,931,547

1,860,322

1,859,028

Total deposits

2,441,185

2,376,979

2,364,854

Borrowed funds

198,738

309,448

302,027

Accrued interest payable

3,748

3,130

3,143

Fair value of derivative instruments - liability

4,186

4,100

5,196

Other liabilities

35,043

32,856

32,822

TOTAL LIABILITIES

2,682,900

2,726,513

2,708,042

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 March 31, 2026, December 31, 2025 and

March 31, 2025: issued 5,256,083 at March 31, 2026 and 5,255,807 at December 31, 2025

5,256

5,208

and 5,207,824 at March 31, 2025

147,986

147,965

145,010

Retained earnings

221,597

213,623

194,709

Accumulated other comprehensive loss

(14,682)

(12,377)

(20,239)

Treasury stock, at cost: 451,147 shares at March 31, 2026, 448,727 shares

at December 31, 2025 and 448,152 shares at March 31, 2025

(16,579)

(16,416)

(16,392)

TOTAL STOCKHOLDERS' EQUITY

343,578

338,051

308,296

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$ 3,026,478

$ 3,064,564

$ 3,016,338

CITIZENS FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

Three Months Ended

March 31,

(in thousands, except share and per share data)

2026

2025

INTEREST INCOME:

Interest and fees on loans

$ 36,362

$ 35,556

Interest-bearing deposits with banks

103

143

Investment securities:

Taxable

2,511

2,339

Nontaxable

879

547

Dividends

422

429

TOTAL INTEREST INCOME

40,277

39,014

INTEREST EXPENSE:

Deposits

11,305

12,294

Borrowed funds

2,859

3,718

TOTAL INTEREST EXPENSE

14,164

16,012

NET INTEREST INCOME

26,113

23,002

Provision for credit losses

500

625

NET INTEREST INCOME AFTER

PROVISION FOR CREDIT LOSSES

25,613

22,377

NON-INTEREST INCOME:

Service charges

1,324

1,291

Trust

235

224

Brokerage and insurance

569

683

Gains on loans sold

265

272

Equity security gains (losses), net

(11)

Earnings on bank owned life insurance

570

346

Other

708

622

TOTAL NON-INTEREST INCOME

3,690

3,427

NON-INTEREST EXPENSES:

Salaries and employee benefits

10,276

10,289

Occupancy

1,412

1,356

Furniture and equipment

287

265

Professional fees

540

517

FDIC insurance expense

395

450

Pennsylvania shares tax

377

319

Amortization of intangibles

106

127

Software expenses

455

432

Other real estate owned expenses

196

119

Other

2,557

2,504

TOTAL NON-INTEREST EXPENSES

16,601

16,378

Income before provision for income taxes

12,702

9,426

Provision for income tax expense

2,326

1,805

NET INCOME

$ 10,376

$ 7,621

PER COMMON SHARE DATA:

Net Income - Basic

$ 2.16

$ 1.59

Net Income - Diluted

$ 2.16

$ 1.59

Cash Dividends Paid

$ 0.500

$ 0.490

Number of shares used in computation - basic

4,798,170

4,797,611

Number of shares used in computation - diluted

4,799,078

4,799,016

CITIZENS FINANCIAL SERVICES, INC.

QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

(in thousands, except per share data)

Three Months Ended,

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

2026

2025

Interest income

$ 40,277

$ 41,151

$ 40,254

$ 38,749

$ 39,014

Interest expense

14,164

14,940

15,114

15,101

16,012

Net interest income

26,113

26,211

25,140

23,648

23,002

Provision for credit losses

500

750

625

Net interest income after provision for credit losses

25,613

25,711

24,640

22,898

22,377

Non-interest income

3,671

3,387

3,820

3,632

3,438

Investment securities gains (losses), net

(11)

Non-interest expenses

16,601

16,173

16,084

16,097

16,378

Income before provision for income taxes

12,702

12,936

12,410

10,466

9,426

Provision for income tax expense

2,326

2,453

2,405

2,003

1,805

Net income

$ 10,376

$ 10,483

$ 10,005

$ 8,463

$ 7,621

Earnings Per Share - Basic

$ 2.16

$ 2.19

$ 2.09

$ 1.76

$ 1.59

Earnings Per Share - Diluted

$ 2.16

$ 2.18

$ 2.09

$ 1.76

$ 1.59

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 March 31,

2026

2025

Average

Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

ASSETS

Interest-bearing deposits at banks

21,668

1.39

23,985

114

1.93

Interest bearing time deposits at banks

3,820

3.08

3,820

3.08

Investment securities:

Taxable

358,323

2,933

3.27

382,640

2,768

2.89

Tax-exempt (3)

125,051

1,112

3.56

103,015

693

2.69

Investment securities

483,374

4,045

3.35

485,655

3,461

2.85

Loans: (2)(3)(4)

Residential mortgage loans

338,473

4,941

5.92

352,194

5,099

5.87

Construction loans

89,831

1,526

6.89

163,440

2,922

7.25

Commercial Loans

1,414,754

21,505

6.16

1,274,453

19,779

6.29

Agricultural Loans

376,065

6,260

6.75

356,868

4,726

5.37

Loans to state & political subdivisions

60,220

672

4.53

53,731

517

3.90

Other loans

97,777

1,595

6.62

145,450

2,615

7.29

Loans, net of discount (2)(3)(4)

2,377,120

36,499

6.23

2,346,136

35,658

6.16

Total interest-earning assets

2,885,982

40,647

5.71

2,859,596

39,262

5.57

Cash and due from banks

9,240

9,620

Bank premises and equipment

20,932

21,545

Other assets

194,190

175,273

Total non-interest earning assets

224,362

206,438

Total assets

3,110,344

3,066,034

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest-bearing liabilities:

Business Interest Checking

25,443

0.91

17,640

0.94

NOW accounts

710,694

3,322

1.90

739,808

4,054

2.22

Savings accounts

288,772

338

0.47

292,981

348

0.48

Money market accounts

461,474

2,915

2.56

417,907

3,025

2.94

Certificates of deposit

540,278

4,673

3.51

507,944

4,827

3.85

Total interest-bearing deposits

2,026,661

11,305

2.26

1,976,280

12,294

2.52

Other borrowed funds

304,144

2,859

3.81

346,416

3,718

4.35

Total interest-bearing liabilities

2,330,805

14,164

2.46

2,322,696

16,012

2.80

Demand deposits

381,074

371,893

Other liabilities

42,241

43,493

Total non-interest-bearing liabilities

423,315

415,386

Stockholders' equity

356,224

327,952

Total liabilities & stockholders' equity

3,110,344

3,066,034

Net interest income

26,483

23,250

Net interest spread (5)

3.25%

2.77%

Net interest income as a percentage

of average interest-earning assets

3.72%

3.30%

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 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)

March 31,

December 31,

September 30,

June 30,

March 31,

2026

2025

Real estate:

Residential

$ 336,066

$ 340,972

$ 344,790

$ 341,671

$ 350,221

Commercial

1,249,900

1,218,514

1,180,655

1,151,585

1,117,240

Agricultural

344,938

347,448

342,487

331,995

329,985

Construction

83,217

93,965

107,867

138,307

168,896

Consumer

19,592

88,210

109,458

22,364

109,339

Other commercial loans

170,628

179,166

171,345

174,740

158,133

Other agricultural loans

30,004

30,247

27,142

28,366

28,488

State & political subdivision loans

63,877

52,100

51,644

52,727

53,361

Total loans

2,298,222

2,350,622

2,335,388

2,241,755

2,315,663

Less: allowance for credit losses - loans

22,894

22,806

22,454

22,109

22,081

Net loans

$ 2,275,328

$ 2,327,816

$ 2,312,934

$ 2,219,646

$ 2,293,582

Past due and non-performing assets

Total Loans past due 30-89 days and still accruing

$ 7,056

$ 9,269

$ 13,228

$ 18,554

$ 9,632

Non-accrual loans

$ 37,670

$ 26,602

$ 20,523

$ 24,595

$ 23,545

Loans past due 90 days or more and accruing

229

347

1,393

Non-performing loans

$ 37,745

$ 26,831

$ 20,560

$ 24,942

$ 24,938

Other real estate owned

2,358

2,434

2,544

Total Non-performing assets

$ 40,103

$ 29,189

$ 22,994

$ 27,376

$ 27,482

Three Months Ended

Analysis of the Allowance for Credit Losses - Loans

March 31,

December 31,

September 30,

June 30,

March 31,

(In Thousands)

2026

2025

Balance, beginning of period

$ 22,806

$ 22,454

$ 22,109

$ 22,081

$ 21,699

Charge-offs

(78)

(57)

(20)

(596)

(185)

Recoveries

Net charge-offs

(56)

(51)

(3)

(571)

(156)

Provision for credit losses - loans

144

403

348

599

538

Balance, end of period

$ 22,894

$ 22,806

$ 22,454

$ 22,109

$ 22,081

CITIZENS FINANCIAL SERVICES, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

(UNAUDITED)

(Dollars in thousands, except per share data)

As of

March 31

2026

2025

Tangible Equity

Stockholders' Equity - GAAP

$ 343,578

$ 308,296

Intangible Assets

(87,831)

(88,465)

Tangible Equity - Non-GAAP

255,747

219,831

Shares outstanding adjusted for June 2025 stock Dividend

4,804,936

4,806,745

Tangible Book value per share - Non-GAAP

$ 53.23

$ 45.73

As of

March 31

2026

2025

Tangible Equity per share

Stockholders' Equity per share - GAAP

$ 71.51

$ 64.14

Adjustment for intangible assets

(18.28)

(18.41)

Tangible Book value per share - Non-GAAP

$ 53.23

$ 45.73

For the Three Months Ended

March 31,

2026

2025

Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)

Average Assets - GAAP

$ 3,099,013

$ 3,042,963

Average AOCL

(11,331)

(23,071)

Average Assets, Excluding AOCL - Non-GAAP

3,110,344

3,066,034

Net Income - GAAP

$ 10,376

$ 7,621

Annualized Return on Average Assets-GAAP

1.34%

1.00%

Annualized Return on Average Assets, Excluding AOCL - Non-GAAP

1.33%

0.99%

For the Three Months Ended

March 31,

2026

2025

Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)

Average Stockholders' Equity - GAAP

$ 344,893

$ 304,881

Average AOCL

(11,331)

(23,071)

Average Stockholders' Equity, Excluding AOCL - Non-GAAP

356,224

327,952

Net Income - GAAP

$ 10,376

$ 7,621

Annualized Return on Average Stockholders' Equity-GAAP

12.03%

10.00%

Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP

11.65%

9.30%

For the Three Months Ended

March 31,

2026

2025

Return on Average Tangible Equity

Average Stockholders' Equity - GAAP

$ 344,893

$ 304,881

Average Intangible Assets

(87,916)

(88,570)

Average Tangible Equity - Non-GAAP

256,977

216,311

Net Income - GAAP

$ 10,376

$ 7,621

Annualized Return on Average Tangible Equity Non-GAAP

16.15%

14.09%

For the Three Months Ended

March 31,

Reconciliation of net interest income on fully taxable equivalent basis

2026

2025

Total interest income

$ 40,277

$ 39,014

Total interest expense

14,164

16,012

Net interest income

26,113

23,002

Tax equivalent adjustment

370

248

Net interest income (fully taxable equivalent) - Non-GAAP

$ 26,483

$ 23,250

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