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, 2025.
Highlights
— Net income for the first nine months of 2025 was $26,089,000, which was $6,254,000, or 31.5% more than 2024's net income through September 30, 2024 due to the increase in net interest income after the provision for credit losses of $8,920,000. The effective tax rate for the first nine months of 2025 was 18.9% compared to 17.8% in the comparable period in 2024.
— Net income was $10,005,000 for the three months ended September 30, 2025, which was $2,469,000 more than the net income for 2024's comparable period due to an increase in net interest income after the provision for credit losses of $3,116,000. The effective tax rate for the three months ended September 30, 2025 was 19.1% compared to 18.5% in the comparable period in 2024.
— Net interest income before the provision for credit losses was $71,790,000 for the nine months ended September 30, 2025, an increase of $8,208,000, or 12.9%, 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 (release) for credit losses for the three and nine months ended September 30, 2025 was $500,000 and $1,875,000, respectively compared to $(200,000) and $2,587,000 for the three and nine months ended September 30, 2024, respectively. The provision for the 2025 periods was driven by the current economic forecasts. The provision for 2024 was significantly impacted by loans that were not sold as part of the sale of a division known as Braavo that occurred in the first quarter of 2024. The vast majority of the Braavo loans that were retained after the sale were originated by Huntington Valley Bank in 2023 prior to the acquisition and were current as of the acquisition date in 2023. The provision for the nine months ended September 30, 2024, directly attributable to these loans was $1,806,000.
— Return on average equity for the three and nine months (annualized) ended September 30, 2025 was 12.52% and 11.15% compared to 10.31% and 9.23% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average equity for the nine months (annualized) ended September 30, 2024 would have been 9.56% (non-GAAP). (1)
— Return on average tangible equity (non-GAAP) for the three and nine months (annualized) ended September 30, 2025 was 17.29% and 15.56% compared to 14.82% and 13.39% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average tangible equity for the nine months (annualized) ended September 30, 2024 would have been 13.87% (non-GAAP). (1)
— Return on average assets for the three and nine months (annualized) ended September 30, 2025 was 1.33% and 1.16% compared to 1.01% and 0.89% for the three and nine months (annualized) ended September 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average assets for the nine months (annualized) ended September 30, 2024 would have been 0.92% (non-GAAP). (1)
— Non-performing assets decreased $5,618,000, or 19.6% since December 31, 2024 and totaled $22,994,000 as of September 30, 2025, which is $1,051,000 less than the balance as of September 30, 2024. During the third quarter of 2025, the Bank recognized additional interest income of $473,000 from the pay-offs of three relationships that for portions of the last year were considered non-performing. The decrease since December reflects three large relationships being placed back on accrual status due to making contractual payments for at least six consecutive months and the pay-offs of three large relationships in the third quarter of 2025 offset by placing two large relationships on non-accrual status. As a percent of loans, non-performing assets totaled 0.98%, 1.24% and 1.03% as of September 30, 2025, December 31, 2024 and September 30, 2024, respectively.
Nine Months Ended September 30, 2025 Compared to 2024
— For the nine months ended September 30, 2025, net income totaled $26,089,000 which compares to net income of $19,835,000 for the first nine months of 2024, an increase of $6,254,000. Basic earnings per share of $5.44 for the first nine months of 2025 compared to $4.14 for the first nine months last year. Annualized return on equity for the nine months ended September 30, 2025 and 2024 was 11.15% and 9.23%, while annualized return on assets was 1.16% and 0.89%, respectively. The increase in performance when comparing 2025 to 2024 was due to an increase in the net interest margin from 3.09% to 3.44% 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, 2025 totaled $71,790,000 compared to $63,582,000 for the nine months ended September 30, 2024, resulting in an increase of $8,208,000, or 12.9%. Average interest earning assets increased $39,854,000 for the nine months ended September 30, 2025 compared to the same period last year, primarily due to an increase in taxable investments and outstanding student loans. Average loans increased $20,223,000, while average investment securities increased $24,472,000. The yield on interest earning assets increased nine basis points to 5.63%, while the cost of interest-bearing liabilities decreased 30 basis points to 2.72%. As a result, the tax effected net interest margin increased from 3.09% for the nine months ended September 30, 2024 to 3.44% for the nine months ended September 30, 2025.
— The provision for credit losses for the nine months ended September 30, 2025 was $1,875,000 compared to $2,587,000 for the nine months ended September 30, 2024, a decrease of $712,000. The provision for 2025 was driven by the economic forecasts and the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds. The provision for 2024 was impacted by the Braavo loans as previously mentioned and an increase in past due and classified loans during the second quarter of 2024.
— Total non-interest income was $10,946,000 for the nine months ended September 30, 2025, which is $1,116,000 less than the non-interest income of $12,062,000 for the same period last year. The primary drivers were the gain on the sale of assets associated with Braavo and earnings on bank owned life insurance due to the passing of a former employee in the first quarter of 2024.
— Total non-interest expenses for the nine months ended September 30, 2025 totaled $48,709,000 compared to $48,918,000 for the same period last year, which is a decrease of $209,000. Salary and benefit costs increased $567,000 due to additional healthcare expenses and post-employment benefits. There are 12 fewer FTEs in 2025 compared to 2024. The decrease in professional fees and software costs is due to the sale of the Braavo division in 2024.
— The provision for income taxes increased $1,759,000 when comparing the nine months ended September 30, 2025 to the same period in 2024 as a result of an increase in income before income tax of $8,013,000. The effective tax rate was 18.9% and 17.8% for the three months ended September 30, 2025 and 2024, respectively.
Three Months Ended September 30, 2025 Compared to 2024
— For the three months ended September 30, 2025, net income totaled $10,005,000 which compares to net income of $7,536,000 for the comparable period of 2024, an increase of $2,469,000 or 32.7%. Basic earnings per share of $2.09 for the three months ended September 30, 2025 compares to $1.57 for the 2024 comparable period. Annualized return on equity for the three months ended September 30, 2025 and 2024 was 12.52% and 10.31%, while annualized return on assets was 1.33% and 1.01%, respectively.
— Net interest income before the provision for credit losses for the three months ended September 30, 2025 totaled $25,140,000 compared to $21,324,000 for the three months ended September 30, 2024, resulting in an increase of $3,816,000, or 17.9%. Average interest earning assets increased $24,110,000 for the three months ended September 30, 2025 compared to the same period last year, primarily due to increases in the average balance of investments. Average loans decreased $12,068,000, while average investment securities increased $34,955,000. The tax effected net interest margin for the three months ended September 30, 2025 was 3.60% compared to 3.09% for the same period last year. The yield on interest earning assets increased 16 basis points to 5.74%, while the cost of interest-bearing liabilities decreased 39 basis points to 2.67%.
— The provision for credit losses for the third quarter of 2025 of $500,000 was driven by the change in economic factors during the quarter. The provision (release) for credit losses of ($200,000) for the 2024 period was due to changes in qualitative factors in the calculation related to inflation.
— Total non-interest income was $3,854,000 for the three months ended September 30, 2025, $99,000 more than the comparable period last year. The primary driver of the increase was an increase in brokerage and insurance commissions of $216,000.
— Total non-interest expenses for the three months ended September 30, 2025 totaled $16,134,000 compared to $16,029,000 for the same period last year, which is an increase of $105,000, or 0.7%. Salary and employee benefits increased due to healthcare costs, profit sharing, vacation costs and other post-retirement benefits.
— The provision for income taxes increased $641,000 when comparing the three months ended September 30, 2025 to the same period in 2024. This increase was attributable to increase in income before provision for income taxes of $3,110,000. The effective tax rate was 19.1% and 18.5% for the three months ended September 30, 2025 and 2024, respectively.
Balance Sheet and Other Information:
— At September 30, 2025, total assets were $3.06 billion compared to $3.03 billion at December 31, 2024 and September 30, 2024. The loan to deposit ratio as of September 30, 2025 was 96.86% compared to 97.21% as of December 31, 2024 and 95.14% as of September 30, 2024.
— Available for sale securities of $451.4 million at September 30, 2025 increased $25.4 million from December 31, 2024 and $32.2 million from September 30, 2024. The yield on the investment portfolio increased from 2.36% to 2.98% on a tax equivalent basis due to securities purchased during a higher market interest rate environment and lower yielding securities maturing. Investment activity for 2025 has focused on replacing securities as they mature.
— Net loans totaled $2.31 billion at September 30, 2025 and $2.29 billion at December 31, 2024, an increase of $21.4 million. As of September 30, 2024, net loans totaled $2.31 billion. The increase in net loans since year end was due to an increase in other commercial loans during the year.
— The allowance for credit losses – loans totaled $22,454,000 at September 30, 2025 which is an increase of $755,000 from December 31, 2024 and is due to increases in the provision based on the economic forecasts and changes in expected prepayment speeds. The provision for credit losses on loans was $1,485,000 for the first nine months of 2025. Loan recoveries and charge-offs were $71,000 and $801,000, respectively, for the nine months ended September 30, 2025. For the three months ended September 30, 2025, loan recoveries and charge-offs were $17,000 and $20,000, respectively. The allowance for credit losses as a percent of total loans was 0.96% as of September 30, 2025 and 0.94% as of December 31, 2024.
— Deposits increased $29.2 million from December 31, 2024, to $2.41 billion at September 30, 2025. Competitive pressure for deposits remains high. Brokered CD's have decreased $33.1 million since December 31, 2024 and have decreased $81.6 million since September 30, 2024. Additionally, a school district in our southeastern Pennsylvania market saw a decrease in their balance of $43.3 million due to the lack of state budget in 2025.
— Borrowed funds totaled $279.6 million as of September 30, 2025, a $18.1 million decrease from December 31, 2024 due to deposit growth offset by increases in loans and investments in 2025.
— Stockholders' equity totaled $327.7 million at September 30, 2025, compared to $299.7 million at December 31, 2024, an increase of $27.9 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $19.1 million and totals $342.3 million (non-GAAP). The increase in stockholders' equity was attributable to net income for the nine months ended September 30, 2025 totaling $26.1 million, offset by cash dividends for the nine months ended September 30, 2025 totaling $7.1 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, stockholders' equity increased due to a decrease in AOCL of $8.9 million from December 31, 2024.
Dividend Declared
On September 2, 2025, the Board of Directors declared a cash dividend of $0.50 per share, which was paid on September 26, 2025 to shareholders of record at the close of business on September 12, 2025. This quarterly cash dividend is an increase of 3.1% over the regular cash dividend of $0.485 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2025.
Citizens Financial Services, Inc. has nearly 1,850 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, 2025 2024 2025 2024Income and Performance RatiosNet Income $ 10,005 $ 7,536 $ 26,089 $ 19,835Return on average assets (annualized) 1.33% 1.01% 1.16% 0.89%Return on average equity (annualized) 12.52% 10.31% 11.15% 9.23%Return on average tangible equity (annualized) (a) 17.29% 14.82% 15.56% 13.39%Net interest margin (tax equivalent) (a) 3.60% 3.09% 3.44% 3.09%Earnings per share – basic (b) $ 2.09 $ 1.57 $ 5.44 $ 4.14Earnings per share – diluted (b) $ 2.09 $ 1.57 $ 5.44 $ 4.13Cash dividends paid per share (b) $ 0.500 $ 0.485 $ 1.480 $ 1.446Number of shares used in computation – basic (b) 4,796,946 4,796,752 4,797,335 4,796,061Number of shares used in computation – diluted (b) 4,798,051 4,798,297 4,799,466 4,801,000Asset qualityAllowance for credit losses – loans $ 22,454 $ 21,695Non-performing assets $ 22,994 $ 24,045Allowance for credit losses – loans to total loans 0.96% 0.93%Non-performing assets to total loans 0.98% 1.03%Annualized net charge-offs to total loans 0.00% 0.21% 0.05% 0.15%EquityBook value per share (b) $ 68.16 $ 62.13Tangible book value per share (a) (b) $ 49.83 $ 43.65Market value per share (Last reported trade of month) $ 60.28 $ 58.75Common shares outstanding 4,807,314 4,759,730OtherAverage Full Time Equivalent Employees 381.5 395.7 379.6 393.0Loan to Deposit Ratio 96.86% 95.14%Trust assets under management $ 194,325 $ 181,052Brokerage assets under management $ 341,487 $ 388,594Balance Sheet Highlights September 30, December 31, September 30, 2025 2024 2024Assets $ 3,056,421 $ 3,025,724 $ 3,026,468Investment securities 453,160 427,659 420,920Loans (net of unearned income) 2,335,388 2,313,242 2,331,002Allowance for credit losses – loans 22,454 21,699 21,695Deposits 2,411,203 2,382,028 2,450,149Stockholders' Equity 327,682 299,734 298,654(a) See reconciliation 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) 2025 2024 2024ASSETS:Cash and due from banks:Noninterest-bearing $ 24,529 $ 30,284 $ 26,780Interest-bearing 6,546 11,918 9,983Total cash and cash equivalents 31,075 42,202 36,763Interest bearing time deposits with other banks 3,820 3,820 3,820Equity securities 1,803 1,747 1,730Available-for-sale securities 451,357 425,912 419,190Loans held for sale 13,508 9,607 13,520Loans (net of allowance for credit losses – loans: $22,454 at September 30, 2025;$21,699 at December 31, 2024 and $21,695 at September 30, 2024) 2,312,934 2,291,543 2,309,307Premises and equipment 21,508 21,395 21,237Accrued interest receivable 11,412 10,307 10,803Goodwill 85,758 85,758 85,758Bank owned life insurance 51,132 50,341 50,084Other intangibles 2,374 2,892 3,083Fair value of derivative instruments – asset 7,487 10,370 8,993Deferred tax asset 12,294 15,199 14,449Other assets 49,959 54,631 47,731TOTAL ASSETS $ 3,056,421 $ 3,025,724 $ 3,026,468LIABILITIES:Deposits:Noninterest-bearing $ 522,168 $ 532,776 $ 548,218Interest-bearing 1,889,035 1,849,252 1,901,931Total deposits 2,411,203 2,382,028 2,450,149Borrowed funds 279,589 297,721 231,732Accrued interest payable 3,754 4,693 5,549Fair value of derivative instruments – liability 4,332 5,817 4,763Other liabilities 29,861 35,731 35,621TOTAL LIABILITIES 2,728,739 2,725,990 2,727,814STOCKHOLDERS' EQUITY:Preferred Stock $1.00 par value; authorized3,000,000 shares; none issued in 2025 or 2024 – – -Common stock$1.00 par value; authorized 25,000,000 shares at September 30, 2025, December 31, 2024 andSeptember 30, 2024: issued 5,255,464 at September 30, 2025 and 5,207,577 at December 31, 2024and 5,207,343 at September 30, 2024 5,255 5,208 5,207Additional paid-in capital 147,971 144,984 144,927Retained earnings 205,542 189,443 183,792Accumulated other comprehensive loss (14,650) (23,521) (18,916)Treasury stock, at cost: 449,087 shares at September 30, 2025 and 447,965 sharesat December 31, 2024 and 447,613 shares at September 30, 2024 (16,436) (16,380) (16,356)TOTAL STOCKHOLDERS' EQUITY 327,682 299,734 298,654TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $ 3,056,421 $ 3,025,724 $ 3,026,468
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) 2025 2024 2025 2024INTEREST INCOME:Interest and fees on loans $ 36,418 $ 35,858 $ 107,201 $ 106,058Interest-bearing deposits with banks 119 190 394 695Investment securities:Taxable 2,595 1,736 7,331 5,023Nontaxable 684 517 1,815 1,569Dividends 438 388 1,276 1,179TOTAL INTEREST INCOME 40,254 38,689 118,017 114,524INTEREST EXPENSE:Deposits 11,501 13,475 35,244 38,451Borrowed funds 3,613 3,890 10,983 12,491TOTAL INTEREST EXPENSE 15,114 17,365 46,227 50,942NET INTEREST INCOME 25,140 21,324 71,790 63,582Provision (release) for credit losses 500 (200) 1,875 2,587NET INTEREST INCOME AFTERPROVISION (RELEASE) FOR CREDIT LOSSES 24,640 21,524 69,915 60,995NON-INTEREST INCOME:Service charges 1,598 1,636 4,192 4,393Trust 186 184 593 629Brokerage and insurance 761 545 2,071 1,773Gains on loans sold 709 752 1,720 1,648Equity security gains, net 34 159 56 127Earnings on bank owned life insurance 363 338 1,064 1,334Gain on sale of Braavo division – – – 1,102Other 203 141 1,250 1,056TOTAL NON-INTEREST INCOME 3,854 3,755 10,946 12,062NON-INTEREST EXPENSES:Salaries and employee benefits 9,924 9,715 30,189 29,622Occupancy 1,320 1,215 3,858 3,805Furniture and equipment 273 260 856 791Professional fees 493 620 1,535 2,021FDIC insurance expense 395 555 1,340 1,589Pennsylvania shares tax 430 226 1,054 866Amortization of intangibles 113 136 367 432Software expenses 457 500 1,342 1,508Other real estate owned expenses 6 84 198 246Other 2,723 2,718 7,970 8,038TOTAL NON-INTEREST EXPENSES 16,134 16,029 48,709 48,918Income before provision for income taxes 12,360 9,250 32,152 24,139Provision for income tax expense 2,355 1,714 6,063 4,304NET INCOME $ 10,005 $ 7,536 $ 26,089 $ 19,835PER COMMON SHARE DATA:Net Income – Basic $ 2.09 $ 1.57 $ 5.44 $ 4.14Net Income – Diluted $ 2.09 $ 1.57 $ 5.44 $ 4.13Cash Dividends Paid $ 0.500 $ 0.485 $ 1.480 $ 1.446Number of shares used in computation – basic 4,796,946 4,796,752 4,797,335 4,796,061Number of shares used in computation – diluted 4,798,051 4,798,297 4,799,466 4,801,000
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, 2025 2025 2025 2024 2024Interest income $ 40,254 $ 38,749 $ 39,014 $ 39,793 $ 38,689Interest expense 15,114 15,101 16,012 16,920 17,365Net interest income 25,140 23,648 23,002 22,873 21,324Provision (release) for credit losses 500 750 625 – (200)Net interest income after provision (release) for credit losses 24,640 22,898 22,377 22,873 21,524Non-interest income 3,820 3,632 3,438 3,321 3,596Investment securities gains (losses), net 34 33 (11) 18 159Non-interest expenses 16,134 16,147 16,428 16,668 16,029Income before provision for income taxes 12,360 10,416 9,376 9,544 9,250Provision for income tax expense 2,355 1,953 1,755 1,561 1,714Net income $ 10,005 $ 8,463 $ 7,621 $ 7,983 $ 7,536Earnings Per Share – Basic $ 2.09 $ 1.76 $ 1.59 $ 1.66 $ 1.57Earnings Per Share – Diluted $ 2.09 $ 1.76 $ 1.59 $ 1.66 $ 1.57
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, 2025 2024 Average Average Average Average Balance (1) Interest Rate Balance (1) Interest Rate(dollars in thousands) $ $ % $ $ %ASSETSInterest-bearing deposits at banks 19,597 90 1.82 18,374 160 3.44Interest bearing time deposits at banks 3,820 29 3.01 3,820 30 3.12Investment securities:Taxable 381,036 3,033 3.18 352,377 2,124 2.41Tax-exempt (3) 110,638 865 3.13 104,342 653 2.50Investment securities 491,674 3,898 3.17 456,719 2,777 2.43Loans: (2)(3)(4)Residential mortgage loans 343,920 5,227 6.03 355,551 5,322 5.95Construction loans 120,492 2,122 6.99 183,521 3,473 7.53Commercial Loans 1,339,367 22,204 6.58 1,258,916 20,019 6.33Agricultural Loans 362,260 5,252 5.75 356,105 4,816 5.38Loans to state & political subdivisions 52,248 514 3.90 55,418 553 3.97Other loans 66,908 1,203 7.13 87,752 1,785 8.09Loans, net of discount (2)(3)(4) 2,285,195 36,522 6.34 2,297,263 35,968 6.23Total interest-earning assets 2,800,286 40,539 5.74 2,776,176 38,935 5.58Cash and due from banks 9,912 9,119Bank premises and equipment 21,718 20,864Other assets 187,100 197,275Total non-interest earning assets 218,730 227,258Total assets 3,019,016 3,003,434LIABILITIES AND STOCKHOLDERS' EQUITYInterest-bearing liabilities:Business Interest Checking 20,624 46 0.88 – – -NOW accounts 701,732 3,702 2.09 736,449 4,559 2.46Savings accounts 284,316 327 0.46 293,990 387 0.52Money market accounts 459,993 3,257 2.81 406,363 3,366 3.30Certificates of deposit 458,402 4,169 3.61 502,226 5,163 4.09Total interest-bearing deposits 1,925,067 11,501 2.37 1,939,028 13,475 2.76Other borrowed funds 321,632 3,613 4.46 319,909 3,890 4.84Total interest-bearing liabilities 2,246,699 15,114 2.67 2,258,937 17,365 3.06Demand deposits 394,863 393,632Other liabilities 37,587 34,487Total non-interest-bearing liabilities 432,450 428,119Stockholders' equity 339,867 316,378Total liabilities & stockholders' equity 3,019,016 3,003,434Net interest income 25,425 21,570Net interest spread (5) 3.07% 2.52%Net interest income as a percentageof average interest-earning assets 3.60% 3.09%Ratio of interest-earning assetsto interest-bearing liabilities 125% 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 usinga statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the endof 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 assetsand 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, 2025 2024 Average Average Average Average Balance (1) Interest Rate Balance (1) Interest Rate(dollars in thousands) $ $ % $ $ %ASSETSInterest-bearing deposits at banks 24,479 306 1.67 29,242 605 2.76Interest bearing time deposits at banks 3,820 88 3.08 3,898 90 3.08Investment securities:Taxable 381,600 8,607 3.01 356,871 6,202 2.32Tax-exempt (3) 105,477 2,297 2.90 105,734 1,986 2.50Investment securities 487,077 10,904 2.98 462,605 8,188 2.36Loans: (2)(3)(4)Residential mortgage loans 347,071 15,539 5.99 357,089 15,612 5.84Construction loans 149,505 8,010 7.16 185,832 10,331 7.43Commercial Loans 1,301,875 62,345 6.40 1,264,459 60,676 6.41Agricultural Loans 359,144 14,948 5.56 348,919 13,703 5.25Loans to state & political subdivisions 53,004 1,549 3.91 56,116 1,659 3.94Other loans 94,947 5,118 7.21 72,908 4,402 8.07Loans, net of discount (2)(3)(4) 2,305,546 107,509 6.23 2,285,323 106,383 6.22Total interest-earning assets 2,820,922 118,807 5.63 2,781,068 115,266 5.54Cash and due from banks 9,734 9,379Bank premises and equipment 21,700 21,068Other assets 179,430 184,561Total non-interest earning assets 210,864 215,008Total assets 3,031,786 2,996,076LIABILITIES AND STOCKHOLDERS' EQUITYInterest-bearing liabilities:Business Interest Checking 18,881 132 0.93 – – -NOW accounts 716,279 11,498 2.15 767,406 14,557 2.53Savings accounts 288,467 1,003 0.46 298,450 1,165 0.52Money market accounts 442,024 9,463 2.86 389,655 9,131 3.13Certificates of deposit 473,565 13,148 3.71 460,890 13,598 3.94Total interest-bearing deposits 1,939,216 35,244 2.43 1,916,401 38,451 2.68Other borrowed funds 332,310 10,983 4.42 340,132 12,491 4.91Total interest-bearing liabilities 2,271,526 46,227 2.72 2,256,533 50,942 3.02Demand deposits 385,704 382,340Other liabilities 40,794 44,303Total non-interest-bearing liabilities 426,498 426,643Stockholders' equity 333,762 312,900Total liabilities & stockholders' equity 3,031,786 2,996,076Net interest income 72,580 64,324Net interest spread (5) 2.91% 2.52%Net interest income as a percentageof average interest-earning assets 3.44% 3.09%Ratio of interest-earning assetsto 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 usinga statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the endof 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 assetsand 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, 2025 2025 2025 2024 2024Real estate:Residential $ 344,790 $ 341,671 $ 350,221 $ 351,398 $ 353,254Commercial 1,180,655 1,151,585 1,117,240 1,121,435 1,110,548Agricultural 342,487 331,995 329,985 327,722 331,734Construction 107,867 138,307 168,896 164,326 178,706Consumer 109,458 22,364 109,339 109,505 123,286Other commercial loans 171,345 174,740 158,133 155,012 154,063Other agricultural loans 27,142 28,366 28,488 29,662 24,537State & political subdivision loans 51,644 52,727 53,361 54,182 54,874Total loans 2,335,388 2,241,755 2,315,663 2,313,242 2,331,002Less: allowance for credit losses – loans 22,454 22,109 22,081 21,699 21,695Net loans $ 2,312,934 $ 2,219,646 $ 2,293,582 $ 2,291,543 $ 2,309,307Past due and non-performing assetsTotal loans past due 30-89 days and still accruing $ 13,228 $ 18,554 $ 9,632 $ 8,015 $ 7,423Non-accrual loans $ 20,523 $ 24,595 $ 23,545 $ 25,701 $ 20,858Loans past due 90 days or more and still accruing 37 347 1,393 276 701Non-performing loans $ 20,560 $ 24,942 $ 24,938 $ 25,977 $ 21,559Other real estate owned 2,434 2,434 2,544 2,635 2,486Total Non-performing assets $ 22,994 $ 27,376 $ 27,482 $ 28,612 $ 24,045 Three Months EndedAnalysis of the Allowance for Credit Losses – Loans September 30, June 30, March 31, December 31, September 30,(In Thousands) 2025 2025 2025 2024 2024Balance, beginning of period $ 22,109 $ 22,081 $ 21,699 $ 21,695 $ 22,797Charge-offs (20) (596) (185) (105) (1,212)Recoveries 17 25 29 19 10Net charge-offs (3) (571) (156) (86) (1,202)Provision for credit losses – loans 348 599 538 90 100Balance, end of period $ 22,454 $ 22,109 $ 22,081 $ 21,699 $ 21,695
CITIZENS FINANCIAL SERVICES, INC.Reconciliation of GAAP and Non-GAAP Financial Measures(UNAUDITED)(Dollars in thousands, except per share data) As of September 30 2025 2024Tangible EquityStockholders' Equity – GAAP $ 327,682 $ 298,654Intangible Assets (88,132) (88,841)Tangible Equity – Non-GAAP 239,550 209,813Shares outstanding adjusted for June 2025 stock Dividend 4,807,314 4,806,803Tangible Book value per share – Non-GAAP $ 49.83 $ 43.65 As of September 30 2025 2024Tangible Equity per shareStockholders' Equity per share – GAAP $ 68.16 $ 62.13Adjustment for intangible assets (18.33) (18.48)Tangible Book value per share – Non-GAAP $ 49.83 $ 43.65 For the Three Months Ended For the Nine Months Ended September 30 September 30 2025 2024 2025 2024Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)Average Assets – GAAP $ 2,998,788 $ 2,979,371 $ 3,009,997 $ 2,969,857Average AOCL (20,228) (24,063) (21,789) (26,219)Average Assets, Excluding AOCL – Non-GAAP 3,019,016 3,003,434 3,031,786 2,996,076Net Income – GAAP $ 10,005 $ 7,536 $ 26,089 $ 19,835Annualized Return on Average Assets-GAAP 1.33% 1.01% 1.16% 0.89%Annualized Return on Average Assets, Excluding AOCL – Non-GAAP 1.33% 1.00% 1.15% 0.88% For the Three Months Ended For the Nine Months Ended September 30 September 30 2025 2024 2025 2024Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)Average Stockholders' Equity – GAAP $ 319,639 $ 292,315 $ 311,973 $ 286,681Average AOCL (20,228) (24,063) (21,789) (26,219)Average Stockholders' Equity, Excluding AOCL – Non-GAAP 339,867 316,378 333,762 312,900Net Income – GAAP $ 10,005 $ 7,536 $ 26,089 $ 19,835Annualized Return on Average Stockholders' Equity-GAAP 12.52% 10.31% 11.15% 9.23%Annualized Return on Average Stockholders' Equity, Excluding AOCL – Non-GAAP 11.78% 9.53% 10.42% 8.45% For the Three Months Ended For the Nine Months Ended September 30 September 30 2025 2024 2025 2024Return on Average Tangible EquityAverage Stockholders' Equity – GAAP $ 319,639 $ 292,315 $ 311,973 $ 286,681Average Intangible Assets (88,217) (88,931) (88,390) (89,123)Average Tangible Equity – Non-GAAP 231,422 203,384 223,583 197,558Net Income – GAAP $ 10,005 $ 7,536 $ 26,089 $ 19,835Annualized Return on Average Tangible Equity Non-GAAP 17.29% 14.82% 15.56% 13.39% For the Three Months Ended For the Nine Months Ended September 30 September 30 2025 2024 2025 2024Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees andprovision associated with Braavo loans remaining after saleNet Income – GAAP $ 10,005 $ 7,536 $ 26,089 $ 19,835After tax gain on sale of Braavo, net of legal fees – – – (712)After tax provision associated with Braavo loans remaining after sale – – – 1,427Net Income excluding sale of Braavo assets, net of legal fees and provision associated with Braavo loans $ 10,005 $ 7,536 $ 26,089 $ 20,550remaining after sale – Non-GAAPAverage Assets 2,998,788 2,979,371 3,009,997 2,969,857Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provision associated 1.33% 1.01% 1.16% 0.92%with Braavo loans remaining after sale, net of tax – Non-GAAPAverage Stockholders' Equity – GAAP $ 319,639 $ 292,315 $ 311,973 $ 286,681Annualized Return on Average Stockholders' equity, Excluding sale of Braavo assets, net of legal fees, provision 12.52% 10.31% 11.15% 9.56%associated with Braavo loans remaining after sale, net of tax – Non-GAAPAverage Tangible Equity – Non-GAAP 231,422 203,384 223,583 197,558Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provision 17.29% 14.82% 15.56% 13.87%associated with Braavo loans remaining after sale, net of tax, – Non-GAAP For the Three Months Ended For the Nine Months Ended September 30 September 30 2025 2024 2025 2024Earnings per share, Excluding sale of Braavo assets, net of legal fees and provision associatedwith Braavo loans remaining after saleNet Income – GAAP $ 10,005 $ 7,536 $ 26,089 $ 19,835After tax gain on sale of Braavo, net of legal fees – – – (712)After tax provision associated with Braavo loans remaining after sale – – – 1,427Net income excluding one time items – Non-GAAP $ 10,005 $ 7,536 $ 26,089 $ 20,550Number of shares used in computation – basic 4,796,946 4,796,752 4,797,335 4,796,061Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associated with $ 2.09 $ 1.57 $ 5.44 $ 4.28Braavo loans remaining after sale, net of tax – Non-GAAP For the Three Months Ended For the Nine Months Ended September 30 September 30Reconciliation of net interest income on fully taxable equivalent basis 2025 2024 2025 2024Total interest income $ 40,254 $ 38,689 $ 118,017 $ 114,524Total interest expense 15,114 17,365 46,227 50,942Net interest income 25,140 21,324 71,790 63,582Tax equivalent adjustment 285 246 790 742Net interest income (fully taxable equivalent) – Non-GAAP $ 25,425 $ 21,570 $ 72,580 $ 64,324
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