CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED SECOND QUARTER 2026 FINANCIAL RESULTS

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

Six Months Ended June 30, 2026 Compared to 2025

Three Months Ended June 30, 2026 Compared to 2025

Balance Sheet and Other Information:

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

Three Months Ended

Six Months Ended

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

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

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

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

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,

(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

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

115

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

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

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

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

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

Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

ASSETS

Interest-bearing deposits at banks

18,626

1.31

17,879

102

2.31

Interest bearing time deposits at banks

3,624

3.10

3,820

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

0.92

18,345

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

Balance (1)

Interest

Rate

Balance (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

3.09

3,820

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

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 %

(1) Averages are based on daily averages.

(2) Includes loan origination and commitment fees.

(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

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

229

347

Non-performing loans

$ 41,007

$ 37,745

$ 26,831

$ 20,560

$ 24,942

Other real estate owned

2,358

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

2025

Balance, beginning of period

$ 22,894

$ 22,806

$ 22,454

$ 22,109

$ 22,081

Charge-offs

(74)

(78)

(57)

(20)

(596)

Recoveries

161

Net charge-offs

(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,

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,

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,

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,

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

SOURCE Citizens Financial Services, Inc.