MANSFIELD, Pa., Oct. 30, 2026 /PRNewswire/ -- Citizens Financial Services, Inc (Nasdaq: CZFS), parent company of First Citizens Community Bank (the "Bank"), released today its unaudited consolidated financial results for the three and nine months ended September 30, 2026.
Highlights
- Net income for the first nine months of 2026 was $32.5 million, which was $6.4 million, or 24.5% more than 2025's net income through September 30, 2025 due to the increase in net interest income after the provision for credit losses of $8.1 million. The effective tax rate for the first nine months of 2026 was 17.9% compared to 19.2% in the comparable period in 2025.
- Net income was $11.9 million for the three months ended September 30, 2026, which was $1.9 million more than the net income for 2025's comparable period due to an increase in net interest income after the provision for credit losses of $2.6 million. The effective tax rate for the three months ended September 30, 2026 was 18.0% compared to 19.4% in the comparable period in 2025.
- Net interest income before the provision for credit losses was $79.1 million for the nine months ended September 30, 2026, an increase of $7.3 million, or 10.1%, over the same period a year ago and was primarily due to an increase in loan and investment interest income due to organic growth.
- Net interest income before the provision for credit losses increased $2.1 million, or 8.4% to $27.3 million for the three months ended September 30, 2026 due to an increase in loan and investment interest income due to organic growth.
- The provision for credit losses for the nine months ended September 30, 2026 was $1,000,000. There was no provision for credit losses recorded for the three months ended September 30, 2026. This compares to a provision for credit losses of $500,000 and $1,875,000 for the three and nine months ended September 30, 2025, respectively. The provision for 2026 was driven by the updated loss driver analysis for 2026 offset by the economic impact of the Iran conflict and the increase in non-accrual commercial real estate loans.
- Return on average equity for the three and nine months (annualized) ended September 30, 2026 was 13.39% and 12.36% compared to 12.52% and 11.15% for the three and nine months (annualized) ended September 30, 2025.
- Return on average tangible equity for the three and nine months (annualized) ended September 30, 2026 was 17.77% and 16.50% compared to 17.29% and 15.56% for the three and nine months (annualized) ended September 30, 2025 (non-GAAP). (1)
- Return on average assets for the three and nine months (annualized) ended September 30, 2026 was 1.45% and 1.37% compared to 1.33% and 1.16% for the three and nine months (annualized) ended September 30, 2025.
- Loans grew $152.8 million, or 6.8% since September 30, 2025. Loan growth since December 31, 2025 was $116.4 million, or 6.8% on an annualized basis.
- Non-performing assets increased $22,355,000 since December 31, 2025 and totaled $51,544,000 as of September 30, 2026, which is $28,550,000 higher than the balance as of September 30, 2025. The increase from December 31, 2025 is primarily due to ten commercial real estate loan relationships and one construction real estate loan relationship, totaling approximately $21.4 million, being placed on non-accrual status during the first nine months of 2026 as a result of becoming more than 90 days past due. The Bank's continued strategy for certain acquired loans is to either improve the credit metrics of the non-performing loans or sell the underlying collateral or have the customers refinance the loans with another institution. As a percent of loans, non-performing assets totaled 2.16%, 1.29% and 1.03% as of September 30, 2026, December 31, 2025 and September 30, 2025, respectively. While non-performing assets have increased significantly as of September 30, 2026 when compared to December 31, 2025 and September 30, 2025, specific reserves for these assets have remained relatively stable at $2,149,000, $1,913,000 and $1,516,000 at September 30, 2026, December 31, 2025 and September 30, 2025, respectively.
Nine Months Ended September 30, 2026 Compared to 2025
- For the nine months ended September 30, 2026, net income totaled $32,484,000 which compares to net income of $26,089,000 for the first nine months of 2025, an increase of $6,395,000. Basic earnings per share of $6.77 for the first nine months of 2026 compared to $5.44 for the first nine months last year. Annualized return on equity for the nine months ended September 30, 2026 and 2025 was 12.36% and 11.15%, while annualized return on assets was 1.37% and 1.16%, respectively. The increase in performance when comparing 2026 to 2025 was due to an increase in the net interest margin from 3.44% to 3.66% and a decrease in the provision for credit losses.
- Net interest income before the provision for credit losses for the nine months ended September 30, 2026 totaled $79,064,000 compared to $71,790,000 for the nine months ended September 30, 2025, resulting in an increase of $7,274,000, or 10.1%. Average interest earning assets increased $117.2 million for the nine months ended September 30, 2026 compared to the same period last year, primarily due to an increase in average loans. Average loans, which includes loans held for sale-student loans, increased $99.6 million while average investment securities increased $20.0 million. The yield on interest earning assets increased 4 basis points to 5.67%, while the cost of interest-bearing liabilities decreased 24 basis points to 2.48%. As a result, the tax effected net interest margin increased from 3.44% for the nine months ended September 30, 2025 to 3.66% for the nine months ended September 30, 2026.
- The provision for credit losses for the nine months ended September 30, 2026 was $1,000,000 compared to $1,875,000 for the nine months ended September 30, 2025, a decrease of $875,000. The provision for credit losses associated with loans for the nine months ended September 30, 2026 and 2025 was $1,088,000 and $1,485,000, respectively, while the provision for off-balance sheet items was ($88,000) and $390,000 for the nine months ended September 30, 2026 and 2025, respectively. The provision for 2026 was due to the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds, the economic impact of the conflict with Iran is having on diesel and fertilizer prices, and the increase in non-accrual loans. The provision for 2025 was due to an increase in past due loans and the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds.
- Total non-interest income was $12,012,000 for the nine months ended September 30, 2026, which is $1,066,000 more than the non-interest income of $10,946,000 for the same period last year. The primary driver of the increase was an increase in earnings on bank owned life insurance (BOLI) of $958,000, as the result of purchasing $22,000,000 of additional insurance in the first quarter of 2026.
- Total non-interest expenses for the nine months ended September 30, 2026 totaled $50,492,000 compared to $48,559,000 for the same period last year, which is an increase of $1,933,000. Salary and benefit costs increased $992,000 due to merit increases and an increase in full-time equivalent employees (FTEs) of 11.9 employees. Other real estate owned expenses increased due to legal fees and real estate taxes associated with the increase in non-performing loans and other real estate owned.
- The provision for income taxes increased $887,000 when comparing the nine months ended September 30, 2026 to the same period in 2025 as a result of an increase in income before income taxes of $7,282,000. The effective tax rate was 17.9% and 19.2% for the nine months ended September 30, 2026 and 2025, respectively, with the decrease in the effective tax rate being due to the increase in non-taxable investment income and BOLI income.
Three Months Ended September 30, 2026 Compared to 2025
- For the three months ended September 30, 2026, net income totaled $11,921,000 which compares to net income of $10,005,000 for the comparable period of 2025, an increase of $1,916,000 or 19.2%. Basic earnings per share of $2.48 for the three months ended September 30, 2026 compares to $2.09 for the 2025 comparable period. Annualized return on equity for the three months ended September 30, 2026 and 2025 was 13.39% and 12.52%, while annualized return on assets was 1.45% and 1.33%, respectively.
- Net interest income before the provision for credit losses for the three months ended September 30, 2026 totaled $27,257,000 compared to $25,140,000 for the three months ended September 30, 2025, resulting in an increase of $2,117,000, or 8.4%. Average interest earning assets increased $261.4 million for the three months ended September 30, 2026 compared to the same period last year, primarily due to increases in the average balance of outstanding commercial loans. Average loans increased $210.6 million, while average investment securities increased $52.5 million. The tax effected net interest margin for the three months ended September 30, 2026 was 3.60% for the three month periods ended September 30, 2026 and 2025. The yield on interest earning assets decreased five basis points to 5.69%, while the cost of interest-bearing liabilities decreased 10 basis points to 2.57%.
- There was no provision for credit losses recorded in the third quarter of 2026, the provision related to loans was $366,000, while ($366,000) related to off-balance sheet items, was due to the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds and the impact of the conflict with Iran. The provision for credit losses of $500,000 for the third quarter of 2025 was driven by the change in economic factors during the quarter.
- Total non-interest income was $4,308,000 for the three months ended September 30, 2026, $454,000 more than the comparable period last year. The primary driver of the increase was an increase in BOLI earnings of $302,000 and an increase in gains on equity securities of $224,000.
- Total non-interest expenses for the three months ended September 30, 2026 totaled $17,024,000 compared to $16,084,000 for the same period last year, which is an increase of $940,000, or 5.8%. Salary and employee benefits increased due to merit increases, an increase in FTEs of 13.7 employees and incentive compensation expenses. Other real estate owned expenses increased due to legal fees and real estate taxes associated with the increase in non-performing loans and other real estate owned. The decrease in other expenses is due to the recovery of fraud losses on customer line of credit accounts.
- The provision for income taxes increased $215,000 when comparing the three months ended September 30, 2026 to the same period in 2025. This increase was attributable to an increase in income before provision for income taxes of $2,131,000. The effective tax rate was 18.0% and 19.4% for the three months ended September 30, 2026 and 2025, respectively, with the decrease in the effective tax rate being due to the increase in non-taxable investment income and BOLI income.
Balance Sheet and Other Information:
- At September 30, 2026, total assets were $3.41 billion compared to $3.06 billion at December 31, 2025 and $3.06 billion at September 30, 2025. The loan to deposit ratio as of September 30, 2026 was 95.15% compared to 95.55% as of December 31, 2025 and 92.71% as of September 30, 2025.
- Available for sale securities of $477.6 million at September 30, 2026 increased $32.8 million from December 31, 2025 and $26.2 million from September 30, 2025. The yield on the investment portfolio increased from 2.98% for the nine months ended September 30, 2025 to 3.59% for the nine months ended September 30, 2026 on a tax equivalent basis due to securities purchased during a higher market interest rate environment and lower yielding securities maturing. Investment activity for 2026 has focused on increasing the investment portfolio yield during periods of higher market interest rates, which has resulted in additional purchases during 2026.
- Loans held for sale - Student loans increased $165.9 million to $245.3 million as of September 30, 2026 due to an increase in activity and seasonal activity for the first semester of college that occurs in the third quarter.
- Net loans totaled $2.36 billion at September 30, 2026 and $2.25 billion at December 31, 2025, an increase of $115.4 million. As of September 30, 2025, net loans totaled $2.21 billion. The increase in net loans since December 31, 2025 and September 30, 2025 was due to increases in commercial real estate loans and agricultural real estate loans.
- The allowance for credit losses - loans totaled $23,786,000 at September 30, 2026 which is an increase of $980,000 from December 31, 2025 and is due to loan growth, the conflict with Iran and an increase in specific reserves on non-performing loans. The provision for credit losses on loans was $1,088,000 for the first nine months of 2026. Loan recoveries and charge-offs were $192,000 and $300,000, respectively, for the nine months ended September 30, 2026. The allowance for credit losses as a percent of total loans was 1.00% as of September 30, 2026 and December 31, 2025. While non-performing loans increased $20.3 million or 75.5%, commercial loans are individually evaluated to determine whether a specific reserve is necessary or not. Specific reserves associated with commercial loans totaled $1,628,000 and $1,039,000 as of September 30, 2026 and December 31, 2025, respectively.
- Deposits increased $132.4 million from December 31, 2025, to $2.51 billion at September 30, 2026. Competitive pressure for deposits remains high. Brokered CD's have decreased $20.0 million since December 31, 2025.
- Borrowed funds totaled $512.5 million as of September 30, 2026, a $203.0 million increase from December 31, 2025 to fund student loans held for sale and investment growth since year-end.
- Stockholders' equity totaled $351.3 million at September 30, 2026, compared to $338.1 million at December 31, 2025, an increase of $13.2 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $25.4 million and totaled $375.8 million at September 30, 2026 (non-GAAP). The increase in stockholders' equity was attributable to net income for the nine months ended September 30, 2026 totaling $32.5 million, offset by cash dividends for the nine months ended September 30, 2026 totaling $7.3 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL increased $12.1 million from December 31, 2025.
Dividend Declared
On September 1, 2026, the Board of Directors declared a cash dividend of $0.51 per share, which was paid on September 25, 2026 to shareholders of record at the close of business on September 11, 2026. This quarterly cash dividend is an increase of 2.0% over the quarterly cash dividend of $0.50 per share declared one year ago.
Citizens Financial Services, Inc. has nearly 1,775 shareholders, the majority of whom reside in markets where its offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
(1) See reconciliation of GAAP and non-GAAP measures at the end of the press release
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||
(UNAUDITED) | ||||
(Dollars in thousands, except per share data) | ||||
As of or For The | As of or For The | |||
Three Months Ended | Nine Months Ended | |||
September 30, | September 30, | |||
2026 | 2025 | 2026 | 2025 | |
Income and Performance Ratios | ||||
Net Income | $ 11,921 | $ 10,005 | $ 32,484 | $ 26,089 |
Return on average assets (annualized) | 1.45 % | 1.33 % | 1.37 % | 1.16 % |
Return on average equity (annualized) | 13.39 % | 12.52 % | 12.36 % | 11.15 % |
Return on average tangible equity (annualized) (a) | 17.77 % | 17.29 % | 16.50 % | 15.56 % |
Net interest margin (tax equivalent) (a) | 3.60 % | 3.60 % | 3.66 % | 3.44 % |
Earnings per share - basic (b) | $ 2.48 | $ 2.09 | $ 6.77 | $ 5.44 |
Earnings per share - diluted (b) | $ 2.48 | $ 2.09 | $ 6.77 | $ 5.44 |
Cash dividends paid per share (b) | $ 0.510 | $ 0.500 | $ 1.520 | $ 1.480 |
Number of shares used in computation - basic (b) | 4,800,757 | 4,796,946 | 4,798,879 | 4,797,335 |
Number of shares used in computation - diluted (b) | 4,802,407 | 4,798,051 | 4,801,314 | 4,799,466 |
Asset quality | ||||
Allowance for credit losses - loans | $ 23,786 | $ 22,454 | ||
Non-performing assets | $ 51,544 | $ 22,994 | ||
Allowance for credit losses - loans to total loans | 1.00 % | 0.99 % | ||
Non-performing assets to total loans | 2.16 % | 1.03 % | ||
Annualized net charge-offs to total loans | 0.02 % | 0.00 % | 0.00 % | 0.05 % |
Equity | ||||
Book value per share (b) | $ 73.02 | $ 68.16 | ||
Tangible book value per share (a) (b) | $ 54.82 | $ 49.83 | ||
Market Value per share (last reported trade of month) | $ 78.61 | $ 60.28 | ||
Common shares outstanding | 4,810,685 | 4,807,314 | ||
Other | ||||
Average Full Time Equivalent Employees | 395.2 | 381.5 | 391.5 | 379.6 |
Loan to Deposit Ratio | 95.15 % | 92.71 % | ||
Trust assets under management | $ 203,432 | $ 194,325 | ||
Brokerage assets under management | $ 354,363 | $ 341,487 | ||
Balance Sheet Highlights | September 30, | December 31, | September 30, | |
2026 | 2025 | 2025 | ||
Assets | $ 3,413,039 | $ 3,064,564 | $ 3,056,421 | |
Investment securities | 480,522 | 446,556 | 453,160 | |
Loans held for sale | 257,842 | 88,744 | 113,385 | |
Loans (net of unearned income) | 2,387,696 | 2,271,271 | 2,235,511 | |
Allowance for credit losses - loans | 23,786 | 22,806 | 22,454 | |
Deposits | 2,509,378 | 2,376,979 | 2,411,203 | |
Stockholders' Equity | 351,287 | 338,051 | 327,682 | |
(a) See reconcilation of GAAP and Non-GAAP measures at the end of the press release. | ||
(b) Prior period amounts were adjusted to reflect stock dividends. | ||
CITIZENS FINANCIAL SERVICES, INC. | |||
CONSOLIDATED BALANCE SHEET | |||
(UNAUDITED) | |||
September 30, | December 31, | September 30, | |
(in thousands, except share data) | 2026 | 2025 | 2025 |
ASSETS: | |||
Cash and due from banks: | |||
Noninterest-bearing | $ 18,187 | $ 23,933 | $ 24,529 |
Interest-bearing | 9,171 | 10,358 | 6,546 |
Total cash and cash equivalents | 27,358 | 34,291 | 31,075 |
Interest bearing time deposits with other banks | 3,076 | 3,820 | 3,820 |
Equity securities | 2,951 | 1,815 | 1,803 |
Available-for-sale securities | 477,571 | 444,741 | 451,357 |
Loans held for sale - Residential Mortgages | 12,559 | 9,393 | 13,508 |
Loans held for sale - Student Loans | 245,283 | 79,351 | 99,877 |
Loans (net of allowance for credit losses - loans: $23,786 at September 30, 2026; | |||
$22,806 at December 31, 2025 and $22,454 at September 30, 2025) | 2,363,910 | 2,248,465 | 2,213,057 |
Premises and equipment | 20,569 | 20,998 | 21,508 |
Accrued interest receivable | 13,183 | 10,698 | 11,412 |
Goodwill | 85,758 | 85,758 | 85,758 |
Bank owned life insurance | 75,130 | 51,501 | 51,132 |
Other intangibles | 1,812 | 2,221 | 2,374 |
Fair value of derivative instruments - asset | 8,259 | 6,927 | 7,487 |
Deferred tax asset | 14,525 | 11,440 | 12,294 |
Other assets | 61,095 | 53,145 | 49,959 |
TOTAL ASSETS | $ 3,413,039 | $ 3,064,564 | $ 3,056,421 |
LIABILITIES: | |||
Deposits: | |||
Noninterest-bearing | $ 509,898 | $ 516,657 | $ 522,168 |
Interest-bearing | 1,999,480 | 1,860,322 | 1,889,035 |
Total deposits | 2,509,378 | 2,376,979 | 2,411,203 |
Borrowed funds | 512,489 | 309,448 | 279,589 |
Accrued interest payable | 3,571 | 3,130 | 3,754 |
Fair value of derivative instruments - liability | 5,493 | 4,100 | 4,332 |
Other liabilities | 30,821 | 32,856 | 29,861 |
TOTAL LIABILITIES | 3,061,752 | 2,726,513 | 2,728,739 |
STOCKHOLDERS' EQUITY: | |||
Preferred Stock $1.00 par value; authorized | |||
3,000,000 shares; none issued in 2026 or 2025 | - | - | - |
Common stock | |||
$1.00 par value; authorized 25,000,000 shares at September 30, 2026, December 31, 2025 and | |||
September 30, 2025: issued 5,264,708 at September 30, 2026 and 5,255,807 at | |||
December 31, 2025 and 5,255,464 at September 30, 2025 | 5,265 | 5,256 | 5,255 |
Additional paid-in capital | 148,511 | 147,965 | 147,971 |
Retained earnings | 238,801 | 213,623 | 205,542 |
Accumulated other comprehensive loss | (24,524) | (12,377) | (14,650) |
Treasury stock, at cost: 454,023 shares at September 30, 2026, 448,727 shares | |||
at December 31, 2025 and 449,087 shares at September 30, 2025 | (16,766) | (16,416) | (16,436) |
TOTAL STOCKHOLDERS' EQUITY | 351,287 | 338,051 | 327,682 |
TOTAL LIABILITIES AND | |||
STOCKHOLDERS' EQUITY | $ 3,413,039 | $ 3,064,564 | $ 3,056,421 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED STATEMENT OF INCOME | ||||
(UNAUDITED) | ||||
Three Months Ended | Nine Months Ended | |||
September 30, | September 30, | |||
(in thousands, except share and per share data) | 2026 | 2025 | 2026 | 2025 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 38,430 | $ 36,418 | $ 110,025 | $ 107,201 |
Interest-bearing deposits with banks | 88 | 119 | 280 | 394 |
Investment securities: | ||||
Taxable | 3,298 | 2,595 | 8,632 | 7,331 |
Nontaxable | 1,022 | 684 | 2,869 | 1,815 |
Dividends | 576 | 438 | 1,390 | 1,276 |
TOTAL INTEREST INCOME | 43,414 | 40,254 | 123,196 | 118,017 |
INTEREST EXPENSE: | ||||
Deposits | 11,774 | 11,501 | 34,239 | 35,244 |
Borrowed funds | 4,383 | 3,613 | 9,893 | 10,983 |
TOTAL INTEREST EXPENSE | 16,157 | 15,114 | 44,132 | 46,227 |
NET INTEREST INCOME | 27,257 | 25,140 | 79,064 | 71,790 |
Provision for credit losses | - | 500 | 1,000 | 1,875 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR CREDIT LOSSES | 27,257 | 24,640 | 78,064 | 69,915 |
NON-INTEREST INCOME: | ||||
Service charges | 1,677 | 1,598 | 4,389 | 4,192 |
Trust | 191 | 186 | 626 | 593 |
Brokerage and insurance | 623 | 761 | 1,832 | 2,071 |
Gains on loans sold | 659 | 709 | 1,545 | 1,720 |
Equity security gains, net | 258 | 34 | 373 | 56 |
Earnings on bank owned life insurance | 665 | 363 | 2,022 | 1,064 |
Other | 235 | 203 | 1,225 | 1,250 |
TOTAL NON-INTEREST INCOME | 4,308 | 3,854 | 12,012 | 10,946 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 10,633 | 9,924 | 31,181 | 30,189 |
Occupancy | 1,241 | 1,320 | 3,942 | 3,858 |
Furniture and equipment | 288 | 273 | 911 | 856 |
Professional fees | 531 | 493 | 1,599 | 1,535 |
FDIC insurance expense | 420 | 395 | 1,185 | 1,340 |
Pennsylvania shares tax | 430 | 430 | 1,147 | 1,054 |
Amortization of intangibles | 92 | 113 | 303 | 367 |
Software expenses | 536 | 457 | 1,420 | 1,342 |
Other real estate owned expenses | 422 | 6 | 812 | 198 |
Other | 2,431 | 2,673 | 7,992 | 7,820 |
TOTAL NON-INTEREST EXPENSES | 17,024 | 16,084 | 50,492 | 48,559 |
Income before provision for income taxes | 14,541 | 12,410 | 39,584 | 32,302 |
Provision for income tax expense | 2,620 | 2,405 | 7,100 | 6,213 |
NET INCOME | $ 11,921 | $ 10,005 | $ 32,484 | $ 26,089 |
PER COMMON SHARE DATA: | ||||
Net Income - Basic | $ 2.48 | $ 2.09 | $ 6.77 | $ 5.44 |
Net Income - Diluted | $ 2.48 | $ 2.09 | $ 6.77 | $ 5.44 |
Number of shares used in computation - basic | 4,800,757 | 4,796,946 | 4,798,879 | 4,797,335 |
Number of shares used in computation - diluted | 4,802,407 | 4,798,051 | 4,801,314 | 4,799,466 |
CITIZENS FINANCIAL SERVICES, INC. | |||||
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION | |||||
(UNAUDITED) | |||||
(in thousands, except per share data) | Three Months Ended, | ||||
Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | |
2026 | 2026 | 2026 | 2025 | 2025 | |
Interest income | $ 43,414 | $ 39,505 | $ 40,277 | $ 41,151 | $ 40,254 |
Interest expense | 16,157 | 13,811 | 14,164 | 14,940 | 15,114 |
Net interest income | 27,257 | 25,694 | 26,113 | 26,211 | 25,140 |
Provision for credit losses | - | 500 | 500 | 500 | 500 |
Net interest income after provision for credit losses | 27,257 | 25,194 | 25,613 | 25,711 | 24,640 |
Non-interest income | 4,050 | 3,918 | 3,671 | 3,387 | 3,820 |
Equity securities gains, net | 258 | 96 | 19 | 11 | 34 |
Non-interest expenses | 17,024 | 16,867 | 16,601 | 16,173 | 16,084 |
Income before provision for income taxes | 14,541 | 12,341 | 12,702 | 12,936 | 12,410 |
Provision for income tax expense | 2,620 | 2,154 | 2,326 | 2,453 | 2,405 |
Net income | $ 11,921 | $ 10,187 | $ 10,376 | $ 10,483 | $ 10,005 |
Earnings Per Share - Basic | $ 2.48 | $ 2.12 | $ 2.16 | $ 2.19 | $ 2.09 |
Earnings Per Share - Diluted | $ 2.48 | $ 2.12 | $ 2.16 | $ 2.18 | $ 2.09 |
CITIZENS FINANCIAL SERVICES, INC. | ||||||
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS | ||||||
(UNAUDITED) | ||||||
Three Months Ended September 30, | ||||||
2026 | 2025 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Short-term investments: | ||||||
Interest-bearing deposits at banks | 18,504 | 65 | 1.37 | 19,597 | 90 | 1.82 |
Total short-term investments | 18,504 | 65 | 1.37 | 19,597 | 90 | 1.82 |
Interest bearing time deposits at banks | 3,189 | 23 | 2.86 | 3,820 | 29 | 3.01 |
Investment securities: | ||||||
Taxable | 406,924 | 3,874 | 3.81 | 381,036 | 3,033 | 3.18 |
Tax-exempt (3) | 137,258 | 1,294 | 3.77 | 110,638 | 865 | 3.13 |
Investment securities | 544,182 | 5,168 | 3.80 | 491,674 | 3,898 | 3.17 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 337,890 | 5,266 | 6.18 | 343,920 | 5,227 | 6.03 |
Construction loans | 98,355 | 1,717 | 6.93 | 120,492 | 2,122 | 6.99 |
Commercial Loans | 1,459,127 | 22,409 | 6.09 | 1,339,367 | 22,204 | 6.58 |
Agricultural Loans | 394,077 | 6,185 | 6.23 | 362,260 | 5,252 | 5.75 |
Loans to state & political subdivisions | 83,424 | 1,063 | 5.06 | 52,248 | 514 | 3.90 |
Other loans | 122,955 | 2,007 | 6.48 | 66,908 | 1,203 | 7.13 |
Loans, net of discount (2)(3)(4) | 2,495,828 | 38,647 | 6.14 | 2,285,195 | 36,522 | 6.34 |
Total interest-earning assets | 3,061,703 | 43,903 | 5.69 | 2,800,286 | 40,539 | 5.74 |
Cash and due from banks | 9,713 | 9,912 | ||||
Bank premises and equipment | 20,647 | 21,718 | ||||
Other assets | 207,077 | 187,100 | ||||
Total non-interest earning assets | 237,437 | 218,730 | ||||
Total assets | 3,299,140 | 3,019,016 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
Business Interest Checking | 30,338 | 69 | 0.90 | 20,624 | 46 | 0.88 |
NOW accounts | 715,981 | 3,373 | 1.87 | 701,732 | 3,702 | 2.09 |
Savings accounts | 291,589 | 352 | 0.48 | 284,316 | 327 | 0.46 |
Money market accounts | 468,532 | 3,229 | 2.73 | 459,993 | 3,257 | 2.81 |
Certificates of deposit | 541,443 | 4,751 | 3.48 | 458,402 | 4,169 | 3.61 |
Total interest-bearing deposits | 2,047,883 | 11,774 | 2.28 | 1,925,067 | 11,501 | 2.37 |
Other borrowed funds | 447,373 | 4,383 | 3.89 | 321,632 | 3,613 | 4.46 |
Total interest-bearing liabilities | 2,495,256 | 16,157 | 2.57 | 2,246,699 | 15,114 | 2.67 |
Demand deposits | 392,998 | 394,863 | ||||
Other liabilities | 38,939 | 37,587 | ||||
Total non-interest-bearing liabilities | 431,937 | 432,450 | ||||
Stockholders' equity | 371,947 | 339,867 | ||||
Total liabilities & stockholders' equity | 3,299,140 | 3,019,016 | ||||
Net interest income | 27,746 | 25,425 | ||||
Net interest spread (5) | 3.12 % | 3.07 % | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.60 % | 3.60 % | ||||
Ratio of interest-earning assets | ||||||
to interest-bearing liabilities | 123 % | 125 % | ||||
(1) | Averages are based on daily averages. | |||
(2) | Includes loan origination and commitment fees. | |||
(3) | Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for 2026 and 2025. See reconciliation of GAAP and non-GAAP measures at the end of the press release. | |||
(4) | Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. | |||
(5) | Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. | |||
CITIZENS FINANCIAL SERVICES, INC. | ||||||
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS | ||||||
(UNAUDITED) | ||||||
Nine Months Ended September 30, | ||||||
2026 | 2025 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Short-term investments: | ||||||
Interest-bearing deposits at banks | 22,323 | 200 | 1.19 | 24,479 | 306 | 1.67 |
Total short-term investments | 22,323 | 200 | 1.19 | 24,479 | 306 | 1.67 |
Interest bearing time deposits at banks | 3,542 | 80 | 3.02 | 3,820 | 88 | 3.08 |
Investment securities: | ||||||
Taxable | 375,226 | 10,022 | 3.56 | 381,600 | 8,607 | 3.01 |
Tax-exempt (3) | 131,820 | 3,632 | 3.67 | 105,477 | 2,297 | 2.90 |
Investment securities | 507,046 | 13,654 | 3.59 | 487,077 | 10,904 | 2.98 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 337,564 | 15,211 | 6.02 | 347,071 | 15,539 | 5.99 |
Construction loans | 93,068 | 4,862 | 6.98 | 149,505 | 8,010 | 7.16 |
Commercial Loans | 1,437,933 | 65,682 | 6.11 | 1,301,875 | 62,345 | 6.40 |
Agricultural Loans | 381,217 | 18,124 | 6.36 | 359,144 | 14,948 | 5.56 |
Loans to state & political subdivisions | 72,349 | 2,622 | 4.85 | 53,004 | 1,549 | 3.91 |
Other loans | 83,061 | 4,063 | 6.54 | 94,947 | 5,118 | 7.21 |
Loans, net of discount (2)(3)(4) | 2,405,192 | 110,564 | 6.15 | 2,305,546 | 107,509 | 6.23 |
Total interest-earning assets | 2,938,103 | 124,498 | 5.67 | 2,820,922 | 118,807 | 5.63 |
Cash and due from banks | 9,492 | 9,734 | ||||
Bank premises and equipment | 20,754 | 21,700 | ||||
Other assets | 199,381 | 179,430 | ||||
Total non-interest earning assets | 229,627 | 210,864 | ||||
Total assets | 3,167,730 | 3,031,786 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
Business Interest Checking | 28,197 | 192 | 0.91 | 18,881 | 132 | 0.93 |
NOW accounts | 713,358 | 9,959 | 1.87 | 716,279 | 11,498 | 2.15 |
Savings accounts | 290,468 | 1,027 | 0.47 | 288,467 | 1,003 | 0.46 |
Money market accounts | 458,465 | 8,965 | 2.61 | 442,024 | 9,463 | 2.86 |
Certificates of deposit | 540,350 | 14,096 | 3.49 | 473,565 | 13,148 | 3.71 |
Total interest-bearing deposits | 2,030,838 | 34,239 | 2.25 | 1,939,216 | 35,244 | 2.43 |
Other borrowed funds | 344,060 | 9,893 | 3.85 | 332,310 | 10,983 | 4.42 |
Total interest-bearing liabilities | 2,374,898 | 44,132 | 2.48 | 2,271,526 | 46,227 | 2.72 |
Demand deposits | 387,663 | 385,704 | ||||
Other liabilities | 41,080 | 40,794 | ||||
Total non-interest-bearing liabilities | 428,743 | 426,498 | ||||
Stockholders' equity | 364,089 | 333,762 | ||||
Total liabilities & stockholders' equity | 3,167,730 | 3,031,786 | ||||
Net interest income | 80,366 | 72,580 | ||||
Net interest spread (5) | 3.19 % | 2.91 % | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.66 % | 3.44 % | ||||
Ratio of interest-earning assets | ||||||
to interest-bearing liabilities | 124 % | 124 % | ||||
(1) | Averages are based on daily averages. | |||
(2) | Includes loan origination and commitment fees. | |||
(3) | Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-GAAP measures at the end of the press release. | |||
(4) | Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. | |||
(5) | Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. | |||
CITIZENS FINANCIAL SERVICES, INC. | |||||
CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR CREDIT LOSSES | |||||
(UNAUDITED) | |||||
(Excludes Loans Held for Sale) | |||||
(In Thousands) | |||||
September 30, | June 30, | March 31, | December 31, | September 30, | |
2026 | 2026 | 2026 | 2025 | 2025 | |
Real estate: | |||||
Residential | $ 336,190 | $ 337,628 | $ 336,066 | $ 340,972 | $ 344,790 |
Commercial | 1,276,050 | 1,267,682 | 1,249,900 | 1,218,514 | 1,180,655 |
Agricultural | 370,505 | 357,643 | 344,938 | 347,448 | 342,487 |
Construction | 103,498 | 93,241 | 83,217 | 93,965 | 107,867 |
Consumer | 8,597 | 8,692 | 8,704 | 8,859 | 9,581 |
Other commercial loans | 178,977 | 180,997 | 170,628 | 179,166 | 171,345 |
Other agricultural loans | 31,323 | 29,746 | 30,004 | 30,247 | 27,142 |
State & political subdivision loans | 82,556 | 88,468 | 63,877 | 52,100 | 51,644 |
Total loans | 2,387,696 | 2,364,097 | 2,287,334 | 2,271,271 | 2,235,511 |
Less: allowance for credit losses - loans | 23,786 | 23,559 | 22,894 | 22,806 | 22,454 |
Net loans | $ 2,363,910 | $ 2,340,538 | $ 2,264,440 | $ 2,248,465 | $ 2,213,057 |
Past due and non-performing assets | |||||
Total Loans past due 30-89 days and still accruing | $ 4,696 | $ 8,695 | $ 7,056 | $ 9,269 | $ 13,228 |
Non-accrual loans | $ 47,072 | $ 40,350 | $ 37,670 | $ 26,602 | $ 20,523 |
Loans past due 90 days or more and accruing | 11 | 657 | 75 | 229 | 37 |
Non-performing loans | $ 47,083 | $ 41,007 | $ 37,745 | $ 26,831 | $ 20,560 |
Other real estate owned | 4,461 | 2,358 | 2,358 | 2,358 | 2,434 |
Total Non-performing assets | $ 51,544 | $ 43,365 | $ 40,103 | $ 29,189 | $ 22,994 |
Three Months Ended | |||||
Analysis of the Allowance for Credit Losses - Loans | September 30, | June 30, | March 31, | December 31, | September 30, |
(In Thousands) | 2026 | 2026 | 2026 | 2025 | 2025 |
Balance, beginning of period | $ 23,559 | $ 22,894 | $ 22,806 | $ 22,454 | $ 22,109 |
Charge-offs | (148) | (74) | (78) | (57) | (20) |
Recoveries | 9 | 161 | 22 | 6 | 17 |
Net charge-offs | (139) | 87 | (56) | (51) | (3) |
Provision for credit losses - loans | 366 | 578 | 144 | 403 | 348 |
Balance, end of period | $ 23,786 | $ 23,559 | $ 22,894 | $ 22,806 | $ 22,454 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||
(UNAUDITED) | ||||
(Dollars in thousands, except per share data) | ||||
As of | ||||
September 30, | ||||
2026 | 2025 | |||
Tangible Equity | ||||
Stockholders' Equity - GAAP | $ 351,287 | $ 327,682 | ||
Intangible Assets | (87,570) | (88,132) | ||
Tangible Equity - Non-GAAP | 263,717 | 239,550 | ||
Shares outstanding | 4,810,685 | 4,807,314 | ||
Tangible Book value per share - Non-GAAP | $ 54.82 | $ 49.83 | ||
As of | ||||
September 30, | ||||
2026 | 2025 | |||
Tangible Equity per share | ||||
Stockholders' Equity per share - GAAP | $ 73.02 | $ 68.16 | ||
Adjustment for intangible assets | (18.20) | (18.33) | ||
Tangible Book value per share - Non-GAAP | $ 54.82 | $ 49.83 | ||
For the Three Months Ended | For the Nine Months Ended | |||
September 30, | September 30, | |||
2026 | 2025 | 2026 | 2025 | |
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL) | ||||
Average Assets - GAAP | $ 3,283,235 | $ 2,998,788 | $ 3,153,980 | $ 3,009,997 |
Average AOCL | (15,905) | (20,228) | (13,750) | (21,789) |
Average Assets, Excluding AOCL - Non-GAAP | 3,299,140 | 3,019,016 | 3,167,730 | 3,031,786 |
Net Income - GAAP | $ 11,921 | $ 10,005 | $ 32,484 | $ 26,089 |
Annualized Return on Average Assets-GAAP | 1.45 % | 1.33 % | 1.37 % | 1.16 % |
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP | 1.45 % | 1.33 % | 1.37 % | 1.15 % |
For the Three Months Ended | For the Nine Months Ended | |||
September 30, | September 30, | |||
2026 | 2025 | 2026 | 2025 | |
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL) | ||||
Average Stockholders' Equity - GAAP | $ 356,042 | $ 319,639 | $ 350,339 | $ 311,973 |
Average AOCL | (15,905) | (20,228) | (13,750) | (21,789) |
Average Stockholders' Equity, Excluding AOCL - Non-GAAP | 371,947 | 339,867 | 364,089 | 333,762 |
Net Income - GAAP | $ 11,921 | $ 10,005 | $ 32,484 | $ 26,089 |
Annualized Return on Average Stockholders' Equity-GAAP | 13.39 % | 12.52 % | 12.36 % | 11.15 % |
Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP | 12.82 % | 11.78 % | 11.90 % | 10.42 % |
For the Three Months Ended | For the Nine Months Ended | |||
September 30, | September 30, | |||
2026 | 2025 | 2026 | 2025 | |
Return on Average Tangible Equity | ||||
Average Stockholders' Equity - GAAP | $ 356,042 | $ 319,639 | $ 350,339 | $ 311,973 |
Average Intangible Assets | (87,636) | (88,217) | (87,772) | (88,390) |
Average Tangible Equity - Non-GAAP | 268,406 | 231,422 | 262,567 | 223,583 |
Net Income - GAAP | $ 11,921 | $ 10,005 | $ 32,484 | $ 26,089 |
Annualized Return on Average Tangible Equity Non-GAAP | 17.77 % | 17.29 % | 16.50 % | 15.56 % |
For the Three Months Ended | For the Nine Months Ended | |||
September 30, | September 30, | |||
Reconciliation of net interest income on fully taxable equivalent basis | 2026 | 2025 | 2026 | 2025 |
Total interest income | $ 43,414 | $ 40,254 | $ 123,196 | $ 118,017 |
Total interest expense | 16,157 | 15,114 | 44,132 | 46,227 |
Net interest income | 27,257 | 25,140 | 79,064 | 71,790 |
Tax equivalent adjustment | 489 | 285 | 1,302 | 790 |
Net interest income (fully taxable equivalent) - Non-GAAP | $ 27,746 | $ 25,425 | $ 80,366 | $ 72,580 |
SOURCE Citizens Financial Services, Inc.
