MANSFIELD, Pa., Oct. 30, 2025 /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, 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 | 2024 |
| Income and Performance Ratios | | | | |
| Net Income | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| Return 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 | $ 4.14 |
| Earnings per share - diluted (b) | $ 2.09 | $ 1.57 | $ 5.44 | $ 4.13 |
| Cash dividends paid per share (b) | $ 0.500 | $ 0.485 | $ 1.480 | $ 1.446 |
| Number of shares used in computation - basic (b) | 4,796,946 | 4,796,752 | 4,797,335 | 4,796,061 |
| Number of shares used in computation - diluted (b) | 4,798,051 | 4,798,297 | 4,799,466 | 4,801,000 |
| | | | | |
| | | | | |
| Asset quality | | | | |
| Allowance for credit losses - loans | $ 22,454 | $ 21,695 | | |
| Non-performing assets | $ 22,994 | $ 24,045 | | |
| Allowance 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 % |
| | | | | |
| | | | | |
| Equity | | | | |
| Book value per share (b) | $ 68.16 | $ 62.13 | | |
| Tangible book value per share (a) (b) | $ 49.83 | $ 43.65 | | |
| Market value per share (Last reported trade of month) | $ 60.28 | $ 58.75 | | |
| Common shares outstanding | 4,807,314 | 4,759,730 | | |
| | | | | |
| | | | | |
| Other | | | | |
| Average Full Time Equivalent Employees | 381.5 | 395.7 | 379.6 | 393.0 |
| Loan to Deposit Ratio | 96.86 % | 95.14 % | | |
| Trust assets under management | $ 194,325 | $ 181,052 | | |
| Brokerage assets under management |
$ 341,487 | $ 388,594 | | |
| | | | | |
| | | | | |
| Balance Sheet Highlights | September 30, | December 31, | September 30, | |
| | 2025 | 2024 | 2024 | |
| | | | | |
| Assets | $ 3,056,421 | $ 3,025,724 | $ 3,026,468 | |
| Investment securities | 453,160 | 427,659 | 420,920 | |
| Loans (net of unearned income) | 2,335,388 | 2,313,242 | 2,331,002 | |
| Allowance for credit losses - loans | 22,454 | 21,699 | 21,695 | |
| Deposits | 2,411,203 | 2,382,028 | 2,450,149 | |
| Stockholders' 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 | 2024 |
| ASSETS: | | | |
| Cash and due from banks: | | | |
| Noninterest-bearing | $ 24,529 | $ 30,284 | $ 26,780 |
| Interest-bearing | 6,546 | 11,918 | 9,983 |
| Total cash and cash equivalents | 31,075 | 42,202 | 36,763 |
| | | | |
| Interest bearing time deposits with other banks | 3,820 | 3,820 | 3,820 |
| | | | |
| Equity securities | 1,803 | 1,747 | 1,730 |
| | | | |
| Available-for-sale securities | 451,357 | 425,912 | 419,190 |
| | | | |
| Loans held for sale | 13,508 | 9,607 | 13,520 |
| | | | |
| Loans (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 | 2,309,307 |
| | | | |
| Premises and equipment | 21,508 | 21,395 | 21,237 |
| Accrued interest receivable | 11,412 | 10,307 | 10,803 |
| Goodwill | 85,758 | 85,758 | 85,758 |
| Bank owned life insurance | 51,132 | 50,341 | 50,084 |
| Other intangibles | 2,374 | 2,892 | 3,083 |
| Fair value of derivative instruments - asset | 7,487 | 10,370 | 8,993 |
| Deferred tax asset | 12,294 | 15,199 | 14,449 |
| Other assets | 49,959 | 54,631 | 47,731 |
| | | | |
| TOTAL ASSETS | $ 3,056,421 | $ 3,025,724 | $ 3,026,468 |
| | | | |
| LIABILITIES: | | | |
| Deposits: | | | |
| Noninterest-bearing | $ 522,168 | $ 532,776 | $ 548,218 |
| Interest-bearing | 1,889,035 | 1,849,252 | 1,901,931 |
| Total deposits | 2,411,203 | 2,382,028 | 2,450,149 |
| Borrowed funds | 279,589 | 297,721 | 231,732 |
| Accrued interest payable | 3,754 | 4,693 | 5,549 |
| Fair value of derivative instruments - liability | 4,332 | 5,817 | 4,763 |
| Other liabilities | 29,861 | 35,731 | 35,621 |
| TOTAL LIABILITIES | 2,728,739 | 2,725,990 | 2,727,814 |
| 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 September 30, 2025, December 31, 2024 and | | | |
| September 30, 2024: issued 5,255,464 at September 30, 2025 and 5,207,577 at December 31, 2024 | | | |
| and 5,207,343 at September 30, 2024 | 5,255 | 5,208 | 5,207 |
| Additional paid-in capital | 147,971 | 144,984 | 144,927 |
| Retained earnings | 205,542 | 189,443 | 183,792 |
| Accumulated other comprehensive loss | (14,650) | (23,521) | (18,916) |
| Treasury stock, at cost: 449,087 shares at September 30, 2025 and 447,965 shares | | | |
| at December 31, 2024 and 447,613 shares at September 30, 2024 | (16,436) | (16,380) | (16,356) |
| TOTAL STOCKHOLDERS' EQUITY | 327,682 | 299,734 | 298,654 |
| TOTAL LIABILITIES AND | | | |
| STOCKHOLDERS' 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 | 2024 |
| INTEREST INCOME: | | | | |
| Interest and fees on loans | $ 36,418 | $ 35,858 | $ 107,201 | $ 106,058 |
| Interest-bearing deposits with banks | 119 | 190 | 394 | 695 |
| Investment securities: | | | | |
| Taxable | 2,595 | 1,736 | 7,331 | 5,023 |
| Nontaxable | 684 | 517 | 1,815 | 1,569 |
| Dividends | 438 | 388 | 1,276 | 1,179 |
| TOTAL INTEREST INCOME | 40,254 | 38,689 | 118,017 | 114,524 |
| INTEREST EXPENSE: | | | | |
| Deposits | 11,501 | 13,475 | 35,244 | 38,451 |
| Borrowed funds | 3,613 | 3,890 | 10,983 | 12,491 |
| TOTAL INTEREST EXPENSE | 15,114 | 17,365 | 46,227 | 50,942 |
| NET INTEREST INCOME | 25,140 | 21,324 | 71,790 | 63,582 |
| Provision (release) for credit losses | 500 | (200) | 1,875 | 2,587 |
| NET INTEREST INCOME AFTER | | | | |
| PROVISION (RELEASE) FOR CREDIT LOSSES | 24,640 | 21,524 | 69,915 | 60,995 |
| NON-INTEREST INCOME: | | | | |
| Service charges | 1,598 | 1,636 | 4,192 | 4,393 |
| Trust | 186 | 184 | 593 | 629 |
| Brokerage and insurance | 761 | 545 | 2,071 | 1,773 |
| Gains on loans sold | 709 | 752 | 1,720 | 1,648 |
| Equity security gains, net | 34 | 159 | 56 | 127 |
| Earnings on bank owned life insurance | 363 | 338 | 1,064 | 1,334 |
| Gain on sale of Braavo division | - | - | - | 1,102 |
| Other | 203 | 141 | 1,250 | 1,056 |
| TOTAL NON-INTEREST INCOME | 3,854 | 3,755 | 10,946 | 12,062 |
| NON-INTEREST EXPENSES: | | | | |
| Salaries and employee benefits | 9,924 | 9,715 | 30,189 | 29,622 |
| Occupancy | 1,320 | 1,215 | 3,858 | 3,805 |
| Furniture and equipment | 273 | 260 | 856 | 791 |
| Professional fees | 493 | 620 | 1,535 | 2,021 |
| FDIC insurance expense | 395 | 555 | 1,340 | 1,589 |
| Pennsylvania shares tax | 430 | 226 | 1,054 | 866 |
| Amortization of intangibles | 113 | 136 | 367 | 432 |
| Software expenses | 457 | 500 | 1,342 | 1,508 |
| Other real estate owned expenses | 6 | 84 | 198 | 246 |
| Other | 2,723 | 2,718 | 7,970 | 8,038 |
| TOTAL NON-INTEREST EXPENSES | 16,134 | 16,029 | 48,709 | 48,918 |
| Income before provision for income taxes | 12,360 | 9,250 | 32,152 | 24,139 |
| Provision for income tax expense | 2,355 | 1,714 | 6,063 | 4,304 |
| NET INCOME | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| | | | | |
| PER COMMON SHARE DATA: | | | |
|
| Net Income - Basic | $ 2.09 | $ 1.57 | $ 5.44 | $ 4.14 |
| Net Income - Diluted | $ 2.09 | $ 1.57 | $ 5.44 | $ 4.13 |
| Cash Dividends Paid | $ 0.500 | $ 0.485 | $ 1.480 | $ 1.446 |
| | | | | |
| Number of shares used in computation - basic | 4,796,946 | 4,796,752 | 4,797,335 | 4,796,061 |
| Number 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 | 2024 |
| Interest income | $ 40,254 | $ 38,749 | $ 39,014 | $ 39,793 | $ 38,689 |
| Interest expense | 15,114 | 15,101 | 16,012 | 16,920 | 17,365 |
| Net interest income | 25,140 | 23,648 | 23,002 | 22,873 | 21,324 |
| Provision (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 | 21,524 |
| Non-interest income | 3,820 | 3,632 | 3,438 | 3,321 | 3,596 |
| Investment securities gains (losses), net | 34 | 33 | (11) | 18 | 159 |
| Non-interest expenses | 16,134 | 16,147 | 16,428 | 16,668 | 16,029 |
| Income before provision for income taxes | 12,360 | 10,416 | 9,376 | 9,544 | 9,250 |
| Provision for income tax expense | 2,355 | 1,953 | 1,755 | 1,561 | 1,714 |
| Net income | $ 10,005 | $ 8,463 | $ 7,621 | $ 7,983 | $ 7,536 |
| Earnings Per Share - Basic | $ 2.09 | $ 1.76 | $ 1.59 | $ 1.66 | $ 1.57 |
| Earnings 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) | $ | $ | % | $ | $ | % |
| ASSETS | | | | | | |
| Interest-bearing deposits at banks | 19,597 | 90 | 1.82 | 18,374 | 160 | 3.44 |
| Interest bearing time deposits at banks | 3,820 | 29 | 3.01 | 3,820 | 30 | 3.12 |
| Investment securities: | | | | | | |
| Taxable | 381,036 | 3,033 | 3.18 | 352,377 | 2,124 | 2.41 |
| Tax-exempt (3) | 110,638 | 865 | 3.13 | 104,342 | 653 | 2.50 |
| Investment securities | 491,674 | 3,898 | 3.17 | 456,719 | 2,777 | 2.43 |
| Loans: (2)(3)(4) | | | | | | |
| Residential mortgage loans | 343,920 | 5,227 | 6.03 | 355,551 | 5,322 | 5.95 |
| Construction loans | 120,492 | 2,122 | 6.99 | 183,521 | 3,473 | 7.53 |
| Commercial Loans | 1,339,367 | 22,204 | 6.58 | 1,258,916 | 20,019 | 6.33 |
| Agricultural Loans | 362,260 | 5,252 | 5.75 | 356,105 | 4,816 | 5.38 |
| Loans to state & political subdivisions | 52,248 | 514 | 3.90 | 55,418 | 553 | 3.97 |
| Other loans | 66,908 | 1,203 | 7.13 | 87,752 | 1,785 | 8.09 |
| Loans, net of discount (2)(3)(4) | 2,285,195 | 36,522 | 6.34 | 2,297,263 | 35,968 | 6.23 |
| Total interest-earning assets | 2,800,286 | 40,539 | 5.74 | 2,776,176 | 38,935 | 5.58 |
| Cash and due from banks | 9,912 | | | 9,119 | | |
| Bank premises and equipment | 21,718 | | | 20,864 | | |
| Other assets | 187,100 | | | 197,275 | | |
| Total non-interest earning assets | 218,730 | | | 227,258 | | |
| Total assets | 3,019,016 | | | 3,003,434 | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Business Interest Checking | 20,624 | 46 | 0.88 | - | - | - |
| NOW accounts | 701,732 | 3,702 | 2.09 | 736,449 | 4,559 | 2.46 |
| Savings accounts | 284,316 | 327 | 0.46 | 293,990 | 387 | 0.52 |
| Money market accounts | 459,993 | 3,257 | 2.81 | 406,363 | 3,366 | 3.30 |
| Certificates of deposit | 458,402 | 4,169 | 3.61 | 502,226 | 5,163 | 4.09 |
| Total interest-bearing deposits | 1,925,067 | 11,501 | 2.37 | 1,939,028 | 13,475 | 2.76 |
| Other borrowed funds | 321,632 | 3,613 | 4.46 | 319,909 | 3,890 | 4.84 |
| Total interest-bearing liabilities | 2,246,699 | 15,114 | 2.67 | 2,258,937 | 17,365 | 3.06 |
| Demand deposits | 394,863 | | | 393,632 | | |
| Other liabilities | 37,587 | | | 34,487 | | |
| Total non-interest-bearing liabilities | 432,450 | | | 428,119 | | |
| Stockholders' equity | 339,867 | | | 316,378 | | |
| Total liabilities & stockholders' equity | 3,019,016 | | | 3,003,434 | | |
| Net interest income | | 25,425 | | | 21,570 | |
| Net interest spread (5) | | | 3.07 % | | | 2.52 % |
| Net interest income as a percentage | | | | | | |
| of average interest-earning assets | | | 3.60 % | | | 3.09 % |
| Ratio of interest-earning assets | | | | | | |
| to 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 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 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) | $ | $ | % | $ | $ | % |
| ASSETS | | | | | | |
| Interest-bearing deposits at banks | 24,479 | 306 | 1.67 | 29,242 | 605 | 2.76 |
| Interest bearing time deposits at banks | 3,820 | 88 | 3.08 | 3,898 | 90 | 3.08 |
| Investment securities: | | | | | | |
| Taxable | 381,600 | 8,607 | 3.01 | 356,871 | 6,202 | 2.32 |
| Tax-exempt (3) | 105,477 | 2,297 | 2.90 | 105,734 | 1,986 | 2.50 |
| Investment securities | 487,077 | 10,904 | 2.98 | 462,605 | 8,188 | 2.36 |
| Loans: (2)(3)(4) | | | | | | |
| Residential mortgage loans | 347,071 | 15,539 | 5.99 | 357,089 | 15,612 | 5.84 |
| Construction loans | 149,505 | 8,010 | 7.16 | 185,832 | 10,331 | 7.43 |
| Commercial Loans | 1,301,875 | 62,345 | 6.40 | 1,264,459 | 60,676 | 6.41 |
| Agricultural Loans | 359,144 | 14,948 | 5.56 | 348,919 | 13,703 | 5.25 |
| Loans to state & political subdivisions | 53,004 | 1,549 | 3.91 | 56,116 | 1,659 | 3.94 |
| Other loans | 94,947 | 5,118 | 7.21 | 72,908 | 4,402 | 8.07 |
| Loans, net of discount (2)(3)(4) | 2,305,546 | 107,509 | 6.23 | 2,285,323 | 106,383 | 6.22 |
| Total interest-earning assets | 2,820,922 | 118,807 | 5.63 | 2,781,068 | 115,266 | 5.54 |
| Cash and due from banks | 9,734 | | | 9,379 | | |
| Bank premises and equipment | 21,700 | | | 21,068 | | |
| Other assets | 179,430 | | | 184,561 | | |
| Total non-interest earning assets | 210,864 | | | 215,008 | | |
| Total assets | 3,031,786 | | | 2,996,076 | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Business Interest Checking | 18,881 | 132 | 0.93 | - | - | - |
| NOW accounts | 716,279 | 11,498 | 2.15 | 767,406 | 14,557 | 2.53 |
| Savings accounts | 288,467 | 1,003 | 0.46 | 298,450 | 1,165 | 0.52 |
| Money market accounts | 442,024 | 9,463 | 2.86 | 389,655 | 9,131 | 3.13 |
| Certificates of deposit | 473,565 | 13,148 | 3.71 | 460,890 | 13,598 | 3.94 |
| Total interest-bearing deposits | 1,939,216 | 35,244 | 2.43 | 1,916,401 | 38,451 | 2.68 |
| Other borrowed funds | 332,310 | 10,983 | 4.42 | 340,132 | 12,491 | 4.91 |
| Total interest-bearing liabilities | 2,271,526 | 46,227 | 2.72 | 2,256,533 | 50,942 | 3.02 |
| Demand deposits | 385,704 | | | 382,340 | | |
| Other liabilities | 40,794 | | | 44,303 | | |
| Total non-interest-bearing liabilities | 426,498 | | | 426,643 | | |
| Stockholders' equity | 333,762 | | | 312,900 | | |
| Total liabilities & stockholders' equity | 3,031,786 | | | 2,996,076 | | |
| Net interest income | | 72,580 | | | 64,324 | |
| Net interest spread (5) | | | 2.91 % | | | 2.52 % |
| Net interest income as a percentage | | | | | | |
| of average interest-earning assets | | | 3.44 % | | | 3.09 % |
| 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 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, |
| | 2025 | 2025 | 2025 | 2024 | 2024 |
| Real estate: | | | | | |
| Residential | $ 344,790 | $ 341,671 | $ 350,221 | $ 351,398 | $ 353,254 |
| Commercial | 1,180,655 | 1,151,585 | 1,117,240 | 1,121,435 | 1,110,548 |
| Agricultural | 342,487 | 331,995 | 329,985 | 327,722 | 331,734 |
| Construction | 107,867 | 138,307 | 168,896 | 164,326 | 178,706 |
| Consumer | 109,458 | 22,364 | 109,339 | 109,505 | 123,286 |
| Other commercial loans | 171,345 | 174,740 | 158,133 | 155,012 | 154,063 |
| Other agricultural loans | 27,142 | 28,366 | 28,488 | 29,662 | 24,537 |
| State & political subdivision loans | 51,644 | 52,727 | 53,361 | 54,182 | 54,874 |
| Total loans | 2,335,388 | 2,241,755 | 2,315,663 | 2,313,242 | 2,331,002 |
| Less: allowance for credit losses - loans | 22,454 | 22,109 | 22,081 | 21,699 | 21,695 |
| Net loans | $ 2,312,934 | $ 2,219,646 | $ 2,293,582 | $ 2,291,543 | $ 2,309,307 |
| | | | | | |
| Past due and non-performing assets | | | | | |
| | | | | | |
| Total loans past due 30-89 days and still accruing | $ 13,228 | $ 18,554 | $ 9,632 | $ 8,015 | $ 7,423 |
| | | | | | |
| Non-accrual loans | $ 20,523 | $ 24,595 | $ 23,545 | $ 25,701 | $ 20,858 |
| Loans past due 90 days or more and still accruing | 37 | 347 | 1,393 | 276 | 701 |
| Non-performing loans | $ 20,560 | $ 24,942 | $ 24,938 | $ 25,977 | $ 21,559 |
| Other real estate owned | 2,434 | 2,434 | 2,544 | 2,635 | 2,486 |
| Total Non-performing assets | $ 22,994 | $ 27,376 | $ 27,482 | $ 28,612 | $ 24,045 |
| | | | | | |
| | | | | | |
| | | | | | |
| | Three Months Ended | ||||
| Analysis of the Allowance for Credit Losses - Loans | September 30, | June 30, | March 31, | December 31, | September 30, |
| (In Thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Balance, beginning of period | $ 22,109 | $ 22,081 | $ 21,699 | $ 21,695 | $ 22,797 |
| Charge-offs | (20) | (596) | (185) | (105) | (1,212) |
| Recoveries | 17 | 25 | 29 | 19 | 10 |
| Net charge-offs | (3) | (571) | (156) | (86) | (1,202) |
| Provision for credit losses - loans | 348 | 599 | 538 | 90 | 100 |
| Balance, 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 | 2024 | | |
| Tangible Equity | | | | |
| Stockholders' Equity - GAAP | $ 327,682 | $ 298,654 | | |
| Intangible Assets | (88,132) | (88,841) | | |
| Tangible Equity - Non-GAAP | 239,550 | 209,813 | | |
| Shares outstanding adjusted for June 2025 stock Dividend | 4,807,314 | 4,806,803 | | |
| Tangible Book value per share - Non-GAAP | $ 49.83 | $ 43.65 | | |
| | | | | |
| | As of | | | |
| | September 30 | | | |
| | 2025 | 2024 | | |
| Tangible Equity per share | | | | |
| Stockholders' Equity per share - GAAP | $ 68.16 | $ 62.13 | | |
| Adjustment 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 | 2024 |
| Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL) | | | | |
| Average Assets - GAAP | $ 2,998,788 | $ 2,979,371 | $ 3,009,997 | $ 2,969,857 |
| Average AOCL | (20,228) | (24,063) | (21,789) | (26,219) |
| Average Assets, Excluding AOCL - Non-GAAP | 3,019,016 | 3,003,434 | 3,031,786 | 2,996,076 |
| Net Income - GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| Annualized 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 | 2024 |
| Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL) | | | | |
| Average Stockholders' Equity - GAAP | $ 319,639 | $ 292,315 | $ 311,973 | $ 286,681 |
| Average AOCL | (20,228) | (24,063) | (21,789) | (26,219) |
| Average Stockholders' Equity, Excluding AOCL - Non-GAAP | 339,867 | 316,378 | 333,762 | 312,900 |
| Net Income - GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| Annualized 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 | 2024 |
| Return on Average Tangible Equity | | | | |
| Average Stockholders' Equity - GAAP | $ 319,639 | $ 292,315 | $ 311,973 | $ 286,681 |
| Average Intangible Assets | (88,217) | (88,931) | (88,390) | (89,123) |
| Average Tangible Equity - Non-GAAP | 231,422 | 203,384 | 223,583 | 197,558 |
| Net Income - GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| Annualized 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 | 2024 |
| Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees and | | | | |
| Net Income - GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| After tax gain on sale of Braavo, net of legal fees | - | - | - | (712) |
| After tax provision associated with Braavo loans remaining after sale | - | - | - | 1,427 |
| Net Income excluding sale of Braavo assets, net of legal fees and provision associated with Braavo loans | $ 10,005 | $ 7,536 | $ 26,089 | $ 20,550 |
| Average Assets | 2,998,788 | 2,979,371 | 3,009,997 | 2,969,857 |
| Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provision associated | 1.33 % | 1.01 % | 1.16 % | 0.92 % |
| | | | | |
| Average Stockholders' Equity - GAAP | $ 319,639 | $ 292,315 | $ 311,973 | $ 286,681 |
| Annualized Return on Average Stockholders' equity, Excluding sale of Braavo assets, net of legal fees, provision | 12.52 % | 10.31 % | 11.15 % | 9.56 % |
| | | | | |
| Average Tangible Equity - Non-GAAP | 231,422 | 203,384 | 223,583 | 197,558 |
| Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provision | 17.29 % | 14.82 % | 15.56 % | 13.87 % |
| | | | | |
| | For the Three Months Ended | For the Nine Months Ended | ||
| | September 30 | September 30 | ||
| | 2025 | 2024 | 2025 | 2024 |
| Earnings per share, Excluding sale of Braavo assets, net of legal fees and provision associated | | | | |
| Net Income - GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 19,835 |
| After tax gain on sale of Braavo, net of legal fees | - | - | - | (712) |
| After tax provision associated with Braavo loans remaining after sale | - | - | - | 1,427 |
| Net income excluding one time items - Non-GAAP | $ 10,005 | $ 7,536 | $ 26,089 | $ 20,550 |
| Number of shares used in computation - basic | 4,796,946 | 4,796,752 | 4,797,335 | 4,796,061 |
| Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associated with | $ 2.09 | $ 1.57 | $ 5.44 | $ 4.28 |
| | | | | |
| | | | | |
| | For the Three Months Ended | For the Nine Months Ended | ||
| | September 30 | September 30 | ||
| Reconciliation of net interest income on fully taxable equivalent basis | 2025 | 2024 | 2025 | 2024 |
| Total interest income | $ 40,254 | $ 38,689 | $ 118,017 | $ 114,524 |
| Total interest expense | 15,114 | 17,365 | 46,227 | 50,942 |
| Net interest income | 25,140 | 21,324 | 71,790 | 63,582 |
| Tax equivalent adjustment | 285 | 246 | 790 | 742 |
| Net interest income (fully taxable equivalent) - Non-GAAP | $ 25,425 | $ 21,570 | $ 72,580 | $ 64,324 |
SOURCE CITIZENS FINANCIAL SERVICES, INC.
