Citizens Financial (NASDAQ: CZFS) boosts Q1 2026 profit and margin
Filing Impact
Filing Sentiment
Form Type
8-K
Citizens Financial Services, Inc. reported stronger unaudited results for the three months ended March 31, 2026. Net income rose to $10,376 thousand from $7,621 thousand a year earlier, and basic and diluted earnings per share increased to $2.16 from $1.59.
The bank’s annualized return on average assets improved to 1.34%, and return on average equity reached 12.03%, supported by a higher tax-equivalent net interest margin of 3.72% versus 3.30% in 2025. A quarterly cash dividend of $0.50 per share was paid in March 2026, up from $0.49.
Total assets were $3.03 billion and loans were $2.30 billion at March 31, 2026, while stockholders’ equity increased to $343.6 million. Asset quality remained generally stable in charge-offs, though non-performing assets increased to $40,103 thousand, or 1.74% of total loans.
Positive
- Earnings and profitability improved notably, with net income rising to $10,376 thousand, EPS to $2.16, return on average assets to 1.34%, and tax-equivalent net interest margin to 3.72%, indicating stronger core banking performance in Q1 2026 versus Q1 2025.
Negative
- None.
Insights
CZFS posted higher Q1 2026 earnings with a stronger margin but higher non-performing assets.
Citizens Financial Services, Inc. generated Q1 2026 net income of $10,376 thousand versus $7,621 thousand in Q1 2025, with basic EPS rising to $2.16. Net interest income increased to $26,113 thousand, and the tax-equivalent net interest margin improved to 3.72% from 3.30%.
Profitability ratios strengthened, with annualized return on average assets at 1.34% and return on average equity at 12.03%. Tangible book value per share climbed to $53.23, and stockholders’ equity reached $343,578 thousand. The board also supported shareholder returns through a $0.50 quarterly dividend per share.
Credit quality metrics were mixed. Allowance for credit losses on loans was $22,894 thousand, or 1.00% of total loans, and annualized net charge-offs were low at 0.01% of loans. However, non-performing assets rose to $40,103 thousand, representing 1.74% of total loans. Future company filings may provide additional context on these asset quality trends.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net income: $10,376 thousand
Basic EPS: $2.16 per share
Return on average assets: 1.34% (annualized)
+5 more
8 metrics
Net income
$10,376 thousand
Three months ended March 31, 2026
Basic EPS
$2.16 per share
Three months ended March 31, 2026
Return on average assets
1.34% (annualized)
Three months ended March 31, 2026
Return on average equity
12.03% (annualized)
Three months ended March 31, 2026
Net interest margin (tax equivalent)
3.72%
Three months ended March 31, 2026
Cash dividend per share
$0.50
Declared March 2, 2026; paid March 27, 2026
Total assets
$3,026,478 thousand
Balance sheet at March 31, 2026
Non-performing assets
$40,103 thousand
Balance sheet at March 31, 2026
Key Terms
net interest margin, non-performing assets, allowance for credit losses, tangible book value per share, +1 more
5 terms
net interest margin financial
"Net interest margin (tax equivalent) (a) | 3.72% | 3.30%"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
non-performing assets financial
"Non-performing assets | $ 40,103 | $ 27,482 |"
Loans or other credit exposures that are not producing expected income because borrowers have stopped making scheduled payments for a significant period (commonly around 90 days). Think of it like a business lending money that has gone quiet — the cash flow stops while the lender still carries the debt on its books. High levels of non-performing assets matter to investors because they reduce a lender’s earnings, tie up capital that could be used for growth, and signal higher risk of future losses.
allowance for credit losses financial
"Allowance for credit losses - loans | $ 22,894 | $ 22,081 |"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
tangible book value per share financial
"Tangible book value per share (a) (b) | $ 53.23 | $ 45.73 |"
Tangible book value per share is the company's total physical and financial assets minus its liabilities and intangible items (like goodwill and brand value), divided by the number of outstanding shares. It gives investors a conservative, per‑share estimate of what would remain if the business sold only its hard assets and paid its debts—useful for judging whether a stock is priced above or below its underlying, tangible worth, like valuing a property by its bricks and cash rather than its reputation.
accumulated other comprehensive loss financial
"Accumulated other comprehensive loss | (14,682) | (12,377) | (20,239)"
Accumulated other comprehensive loss is the running negative total of certain gains and losses that companies record outside their regular profit-and-loss statement, such as changes in the value of some investments, pension adjustments, or currency translation effects. It matters to investors because it reduces shareholders’ equity and reveals economic swings that haven’t affected reported net income yet — like a side ledger showing pending ups and downs that could influence future cash flow or balance-sheet strength.
Earnings Snapshot
Net income: $10,376 thousand
Q1 2026
Net income
$10,376 thousand
Basic EPS
$2.16
Net interest income
$26,113 thousand
Net interest margin (tax equivalent)
3.72%
Return on average assets (annualized)
1.34%
Return on average equity (annualized)
12.03%
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 2026
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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(Address of principal executive offices)
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(Zip code)
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Registrant's telephone number, including area code (570 ) 662-0444
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act
of 1934 (§240.12b-2 of this chapter):
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
Randall E. Black, Chief Executive Officer, recently announced the unaudited consolidated financial results for Citizens Financial
Services, Inc. and susbisidaries for the first quarter 2026.
On April 29, 2026, Citizens Financial Services, Inc. issued a press release titled “Citizens Financial Services, Inc. Reports Unaudited
First Quarter 2026 Financial Results”, attached as Exhibit 99.1 to the Current Report on Form 8-K and incorporated herein by reference. The information furnished under Item 2.02 of the Current Report on an 8-K shall not be deemed “filed” for any
purpose.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description of Exhibit
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99.1
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Press release issued by Citizens Financial Services, Inc. on April 29, 2026, titled “Citizens Financial Services, Inc.
Reports Unaudited First Quarter 2026 Financial Results”.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
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CITIZENS FINANCIAL SERVICES, INC.
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Date: April 29, 2026
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By:
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/s/ Stephen J. Guillaume
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Stephen J. Guillaume
Chief Financial Officer
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Contact: LeeAnn Gephart, Chief Banking Officer
First Citizens Community Bank
First Citizens Community Bank
15 South Main Street
Mansfield, PA 16933
570-545-6005
570-662-8512 (fax)
citizens financial services, inc. reports unaudited first quarter 2026 financial results
MANSFIELD, PENNSYLVANIA— April 29, 2026 – Citizens Financial Services, Inc (Nasdaq: CZFS), parent company of First Citizens Community Bank (the “Bank”),
released today its unaudited consolidated financial results for the three months ended March 31, 2026.
Highlights
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Net income was $10.4 million for the three months ended March 31, 2026, which is 36.15% more than the net income for 2025’s comparable period. The
increase was driven by the increase in net interest income before the provision for credit losses of $3.1 million. The effective tax rate for the three months ended March 31, 2026 was 18.3% compared to 19.1% in the comparable period in
2025, with the decrease due to increases in nontaxable interest income and earnings on BOLI due to the purchase of additional insurance policies in the first quarter of 2026.
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Net interest income before the provision for credit losses was $26.1 million for the three months ended March 31, 2026, an increase of $3,111,000,
or 13.5%, over the same period a year ago and was primarily due to an increase in loan interest income and a decrease in interest expense on deposits and borrowings.
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Return on average equity for the three months (annualized) ended March 31, 2026 was 12.03% compared to 10.00% for the three months (annualized)
ended March 31, 2025.
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Return on average tangible equity for the three months (annualized) ended March 31, 2026 was 16.15% compared to 14.09% for the three months
(annualized) ended March 31, 2025 (non-GAAP). (1)
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Return on average assets for the three months (annualized) ended March 31, 2026 was 1.34% compared to 1.00% for the three months (annualized) ended
March 31, 2025.
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Non-performing assets increased $10,914,000 since December 31, 2025 and totaled $40,103,000 as of March 31, 2026, which is $12,621,000 higher than
the balance as of March 31, 2025. The increase from December 31, 2025 is due to four commercial real estate loan relationships being placed on non-accrual status during the first quarter of 2026 due to becoming more than 90 days past due.
The Bank’s continued strategy for certain acquired loans is to either improve the credit metrics of the non-performing loans or sell the underlying collateral or have the customers refinance the loans with another institution. As a percent
of loans, non-performing assets totaled 1.74%, 1.24% and 1.19% as of March 31, 2026, December 31, 2025 and March 31, 2025, respectively. While non-performing assets have increased significantly as of March 31, 2026 when compared to December
31, 2025 and March 31, 2025, specific reserves for these assets have remained stable at $1,862,000, $1,912,758 and $1,603,000 at March 31, 2026, December 31, 2025 and March 31, 2025, respectively.
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First Quarter of 2026 Compared to the First Quarter of 2025
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For the three months ended March 31, 2026, net income totaled $10,376,000 which compares to net income of $7,621,000 for the comparable period of
2025, an increase of $2,755,000 or 36.2%. Basic earnings per share of $2.16 for the three months ended March 31, 2026 compares to $1.59 for the 2025 comparable period. Annualized return on equity for the three months ended March 31, 2026
and 2025 was 12.03% and 10.00%, while annualized return on assets was 1.34% and 1.00%, respectively.
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Net interest income before the provision for credit losses for the three months ended March 31, 2026 totaled $26,113,000 compared to $23,002,000 for
the three months ended March 31, 2025, resulting in an increase of $3,111,000, or 13.5%. Average interest earning assets increased $26.4 million for the three months ended March 31, 2026 compared to the same period last year, primarily due
to organic growth in our commercial and agricultural loan portfolios offset by decreases in consumer loans. During the first quarter of 2026, the Company recovered $683,000 in previously charged-off interest that offset the charged-off
interest related to the loans placed on non-accrual status during the first quarter of 2026. The tax effected net interest margin for the three months ended March 31, 2026 was 3.72% compared to 3.30% for the same period last year. The yield
on interest earning assets increased 14 basis points to 5.71%, while the cost of interest bearing liabilities decreased 34 basis points to 2.46%.
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The provision for credit losses for the first quarter of 2025 of $500,000 was driven by the annual update of loss drivers, which includes historical
loss data, as well as prepayment and curtailment speeds and the potential impact of the Iran war compared to $625,000 for the first quarter of 2025, which was driven by the annual updates for 2025.
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Total non-interest income was $3,690,000 for the three months ended March 31, 2026, $263,000 more than the comparable period last year. The primary
driver of the increase was an increase in earning on bank owned life insurance of $224,000, as the result of purchasing $22,000,000 of additional insurance in the first quarter of 2026.
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Total non-interest expenses for the three months ended March 31, 2026 totaled $16,601,000 compared to $16,378,000 for the same period last year,
which is an increase of $223,000, or 1.4%.
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The provision for income taxes increased $521,000 when comparing the three months ended March 31, 2026 to the same period in 2025. This increase was
attributable to an increase in income before provision for income taxes of $3,276,000. The effective tax rate was 18.3% and 19.1% for the three months ended March 31, 2026 and 2025, respectively.
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Balance Sheet and Other Information:
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At March 31, 2026, total assets were $3.03 billion compared to $3.06 billion at December 31, 2025 and $3.02 billion at March 31, 2025. The loan to
deposit ratio as of March 31, 2026 was 94.14% compared to 98.89% as of December 31, 2025 and 97.92% as of March 31, 2025.
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Available for sale securities of $448.3 million at March 31, 2026 increased $3.5 million from December 31, 2025 and $17.6 million from March 31,
2025. The yield on the investment portfolio increased from 2.85% to 3.35% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. Investment activity for 2026 has
focused on replacing securities as they mature.
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Net loans totaled $2.28 billion at March 31, 2026 in comparison to $2.33 billion as of December 31, 2025 and $2.29 billion at March 31, 2025. The
decrease since December 31, 2025 and March 31, 2025 of $68.6 million and $89.7 million, respectively, was due to the seasonal decrease in student loans that typically occurs late in the first quarter or early in the second quarter. A large
component of the increase in commercial loans was due to construction loans being transferred via a permanent financing arrangement. In addition, we continue to see strong demand in commercial real estate in our south eastern Pennsylvania
and Delaware markets.
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The allowance for credit losses - loans totaled $22,894,000 at March 31, 2026 which is an increase of $88,000 from December 31, 2025 due to changes
in expected prepayment and curtailment speeds, economic forecasts and the Iran war. The provision for credit losses on loans was $144,000 for the first quarter of 2026. Loan recoveries and charge-offs were $22,000 and $78,000, respectively,
for the three months ended March 31, 2026. The allowance as a percent of total loans was 1.00% as of March 31, 2026 and 0.97% as of December 31, 2025.
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Deposits increased $64.2 million from December 31, 2025, to $2.44 billion at March 31, 2026, with the increase driven by an increase in brokered
deposits of $52.8 million, which total $112.8 million at March 31, 2026. The increase in brokered deposits was to offset the seasonal decrease in municipal deposits. Competitive pressure for deposits remains high.
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Borrowed funds totaled $198.7 million as of March 31, 2026, a $110.7 million decrease from December 31, 2025 due to the decrease in loans and
increase in deposits.
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Stockholders’ equity totaled $343.6 million at March 31, 2026, compared to $338.1 million at December 31, 2025, an increase of $5.5 million.
Excluding accumulated other comprehensive loss (AOCL), stockholders’ equity increased $7.8 million and totals $358.3 million (non-GAAP). The increase in stockholders’ equity, excluding AOCL, was attributable to net income for the three
months ended March 31, 2026 totaling $10.4 million, offset by cash dividends for the first quarter totaling $2.4 million. As a result of increases in market interest rates impacting the fair value of investment securities and swaps, AOCL
increased $2.3 million from December 31, 2025.
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Dividend Declared
On March 2, 2026, the Board of Directors declared a cash dividend of $0.50 per share, which was paid on March 27, 2026 to shareholders of record at the close
of business on March 13, 2026. This quarterly cash dividend is an increase of 2.0% over the regular cash dividend of $0.49 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2025.
Citizens Financial Services, Inc. has nearly 1,790 shareholders, the majority of whom reside in markets where its offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These
statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms
such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results,
performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions,
including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange
Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its
behalf. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
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(1)
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See reconciliation of GAAP and non-GAAP measures at the end of the press release.
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED FINANCIAL HIGHLIGHTS
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(UNAUDITED)
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(Dollars in thousands, except per share data)
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As of or For The
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Three Months Ended
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March 31,
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2026
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2025
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Income and Performance Ratios
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Net Income
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$ 10,376
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$ 7,621
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Return on average assets (annualized)
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1.34%
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1.00%
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Return on average equity (annualized)
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12.03%
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10.00%
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Return on average tangible equity (annualized) (a)
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16.15%
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14.09%
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Net interest margin (tax equivalent) (a)
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3.72%
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3.30%
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Earnings per share - basic (b)
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$ 2.16
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$ 1.59
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Earnings per share - diluted (b)
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$ 2.16
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$ 1.59
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Cash dividends paid per share (b)
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$ 0.500
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$ 0.490
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Number of shares used in computation - basic (b)
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4,798,170
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4,797,611
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Number of shares used in computation - diluted (b)
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4,799,078
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4,799,016
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Asset quality
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Allowance for credit losses - loans
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$ 22,894
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$ 22,081
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Non-performing assets
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$ 40,103
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$ 27,482
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Allowance for credit losses - loans to total loans
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1.00%
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0.95%
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Non-performing assets to total loans
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1.74%
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1.19%
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Annualized net charge-offs to total loans
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0.01%
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0.03%
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Equity
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Book value per share (b)
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$ 71.51
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$ 64.14
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Tangible book value per share (a) (b)
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$ 53.23
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$ 45.73
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Market Value per share (last reported trade of month)
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$ 61.15
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$ 58.05
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Common shares outstanding
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4,804,936
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4,759,672
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Other
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Average Full Time Equivalent Employees
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386.4
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379.7
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Loan to Deposit Ratio
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94.14%
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97.92%
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Trust assets under management
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$ 191,602
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$ 178,007
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Brokerage assets under management
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$ 319,485
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$ 397,204
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Balance Sheet Highlights
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March 31,
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December 31,
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March 31,
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2026
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2025
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2025
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Assets
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$ 3,026,478
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$ 3,064,564
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$ 3,016,338
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Investment securities
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450,120
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446,556
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432,438
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Loans (net of unearned income)
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2,298,222
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2,350,622
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2,315,663
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Allowance for credit losses - loans
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22,894
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22,806
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22,081
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Deposits
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2,441,185
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2,376,979
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2,364,854
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Stockholders' Equity
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343,578
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338,051
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308,296
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(a) See reconcilation of GAAP and Non-GAAP measures at
the end of the press release.
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(b) Prior period amounts were adjusted to reflect stock dividends.
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED BALANCE SHEET
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(UNAUDITED)
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March 31,
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December 31,
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March 31,
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(in thousands except share data)
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2026
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2025
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2025
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ASSETS:
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Cash and due from banks:
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Noninterest-bearing
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$ 26,798
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$ 23,933
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$ 28,127
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Interest-bearing
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6,307
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10,358
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8,659
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Total cash and cash equivalents
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33,105
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34,291
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36,786
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Interest bearing time deposits with other banks
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3,820
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3,820
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3,820
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Equity securities
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1,834
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1,815
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1,737
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Available-for-sale securities
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448,286
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444,741
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430,701
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Loans held for sale
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5,874
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9,393
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6,054
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Loans (net of allowance for credit losses - loans: $22,894 at March 31, 2026;
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$22,806 at December 31, 2025 and $22,081 at March 31, 2025)
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2,275,328
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2,327,816
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2,293,582
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Premises and equipment
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20,715
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20,998
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21,627
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Accrued interest receivable
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10,941
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10,698
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10,918
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Goodwill
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85,758
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85,758
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85,758
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Bank owned life insurance
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74,071
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51,501
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50,578
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Other intangibles
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2,073
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2,221
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2,707
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Fair value of derivative instruments - asset
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7,104
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6,927
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9,120
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Deferred tax asset
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12,240
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11,440
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14,436
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Other assets
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45,329
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53,145
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48,514
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TOTAL ASSETS
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$ 3,026,478
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$ 3,064,564
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$ 3,016,338
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 509,638
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$ 516,657
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$ 505,826
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Interest-bearing
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1,931,547
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1,860,322
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1,859,028
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Total deposits
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2,441,185
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2,376,979
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2,364,854
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Borrowed funds
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198,738
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309,448
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302,027
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Accrued interest payable
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3,748
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3,130
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3,143
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Fair value of derivative instruments - liability
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4,186
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4,100
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5,196
|
|
Other liabilities
|
35,043
|
32,856
|
32,822
|
|
TOTAL LIABILITIES
|
2,682,900
|
2,726,513
|
2,708,042
|
|
STOCKHOLDERS' EQUITY:
|
|||
|
Preferred Stock $1.00 par value; authorized
|
|||
|
3,000,000 shares; none issued in 2025 or 2024
|
-
|
-
|
-
|
|
Common stock
|
|||
|
$1.00 par value; authorized 25,000,000 shares at March 31, 2026, December 31, 2025 and
|
|||
|
March 31, 2025: issued 5,256,083 at March 31, 2026 and 5,255,807 at December 31, 2025
|
5,256
|
5,256
|
5,208
|
|
and 5,207,824 at March 31, 2025
|
147,986
|
147,965
|
145,010
|
|
Retained earnings
|
221,597
|
213,623
|
194,709
|
|
Accumulated other comprehensive loss
|
(14,682)
|
(12,377)
|
(20,239)
|
|
Treasury stock, at cost: 451,147 shares at March 31, 2026, 448,727 shares
|
|||
|
at December 31, 2025 and 448,152 shares at March 31, 2025
|
(16,579)
|
(16,416)
|
(16,392)
|
|
TOTAL STOCKHOLDERS' EQUITY
|
343,578
|
338,051
|
308,296
|
|
TOTAL LIABILITIES AND
|
|||
|
STOCKHOLDERS' EQUITY
|
$ 3,026,478
|
$ 3,064,564
|
$ 3,016,338
|
|
CITIZENS FINANCIAL SERVICES, INC.
|
||
|
CONSOLIDATED STATEMENT OF INCOME
|
||
|
(UNAUDITED)
|
||
|
Three Months Ended
|
||
|
March 31,
|
||
|
(in thousands, except share and per share data)
|
2026
|
2025
|
|
INTEREST INCOME:
|
||
|
Interest and fees on loans
|
$ 36,362
|
$ 35,556
|
|
Interest-bearing deposits with banks
|
103
|
143
|
|
Investment securities:
|
||
|
Taxable
|
2,511
|
2,339
|
|
Nontaxable
|
879
|
547
|
|
Dividends
|
422
|
429
|
|
TOTAL INTEREST INCOME
|
40,277
|
39,014
|
|
INTEREST EXPENSE:
|
||
|
Deposits
|
11,305
|
12,294
|
|
Borrowed funds
|
2,859
|
3,718
|
|
TOTAL INTEREST EXPENSE
|
14,164
|
16,012
|
|
NET INTEREST INCOME
|
26,113
|
23,002
|
|
Provision for credit losses
|
500
|
625
|
|
NET INTEREST INCOME AFTER
|
||
|
PROVISION FOR CREDIT LOSSES
|
25,613
|
22,377
|
|
NON-INTEREST INCOME:
|
||
|
Service charges
|
1,324
|
1,291
|
|
Trust
|
235
|
224
|
|
Brokerage and insurance
|
569
|
683
|
|
Gains on loans sold
|
265
|
272
|
|
Equity security gains (losses), net
|
19
|
(11)
|
|
Earnings on bank owned life insurance
|
570
|
346
|
|
Other
|
708
|
622
|
|
TOTAL NON-INTEREST INCOME
|
3,690
|
3,427
|
|
NON-INTEREST EXPENSES:
|
||
|
Salaries and employee benefits
|
10,276
|
10,289
|
|
Occupancy
|
1,412
|
1,356
|
|
Furniture and equipment
|
287
|
265
|
|
Professional fees
|
540
|
517
|
|
FDIC insurance expense
|
395
|
450
|
|
Pennsylvania shares tax
|
377
|
319
|
|
Amortization of intangibles
|
106
|
127
|
|
Software expenses
|
455
|
432
|
|
Other real estate owned expenses
|
196
|
119
|
|
Other
|
2,557
|
2,504
|
|
TOTAL NON-INTEREST EXPENSES
|
16,601
|
16,378
|
|
Income before provision for income taxes
|
12,702
|
9,426
|
|
Provision for income tax expense
|
2,326
|
1,805
|
|
NET INCOME
|
$ 10,376
|
$ 7,621
|
|
PER COMMON SHARE DATA:
|
||
|
Net Income - Basic
|
$ 2.16
|
$ 1.59
|
|
Net Income - Diluted
|
$ 2.16
|
$ 1.59
|
|
Cash Dividends Paid
|
$ 0.500
|
$ 0.490
|
|
Number of shares used in computation - basic
|
4,798,170
|
4,797,611
|
|
Number of shares used in computation - diluted
|
4,799,078
|
4,799,016
|
|
CITIZENS FINANCIAL SERVICES, INC.
|
|||||
|
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION
|
|||||
|
(UNAUDITED)
|
|||||
|
(in thousands, except per share data)
|
Three Months Ended,
|
||||
|
March 31,
|
Dec 31,
|
Sept 30,
|
June 30,
|
March 31,
|
|
|
2026
|
2025
|
2025
|
2025
|
2025
|
|
|
Interest income
|
$ 40,277
|
$ 41,151
|
$ 40,254
|
$ 38,749
|
$ 39,014
|
|
Interest expense
|
14,164
|
14,940
|
15,114
|
15,101
|
16,012
|
|
Net interest income
|
26,113
|
26,211
|
25,140
|
23,648
|
23,002
|
|
Provision for credit losses
|
500
|
500
|
500
|
750
|
625
|
|
Net interest income after provision for credit losses
|
25,613
|
25,711
|
24,640
|
22,898
|
22,377
|
|
Non-interest income
|
3,671
|
3,387
|
3,820
|
3,632
|
3,438
|
|
Investment securities gains (losses), net
|
19
|
11
|
34
|
33
|
(11)
|
|
Non-interest expenses
|
16,601
|
16,173
|
16,084
|
16,097
|
16,378
|
|
Income before provision for income taxes
|
12,702
|
12,936
|
12,410
|
10,466
|
9,426
|
|
Provision for income tax expense
|
2,326
|
2,453
|
2,405
|
2,003
|
1,805
|
|
Net income
|
$ 10,376
|
$ 10,483
|
$ 10,005
|
$ 8,463
|
$ 7,621
|
|
Earnings Per Share - Basic
|
$ 2.16
|
$ 2.19
|
$ 2.09
|
$ 1.76
|
$ 1.59
|
|
Earnings Per Share - Diluted
|
$ 2.16
|
$ 2.18
|
$ 2.09
|
$ 1.76
|
$ 1.59
|
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||||
|
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS
|
||||||
|
(UNAUDITED)
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2026
|
2025
|
|||||
|
Average
|
Average
|
Average
|
Average
|
|||
|
Balance (1)
|
Interest
|
Rate
|
Balance (1)
|
Interest
|
Rate
|
|
|
(dollars in thousands)
|
$
|
$
|
%
|
$
|
$
|
%
|
|
ASSETS
|
||||||
|
Interest-bearing deposits at banks
|
21,668
|
74
|
1.39
|
23,985
|
114
|
1.93
|
|
Interest bearing time deposits at banks
|
3,820
|
29
|
3.08
|
3,820
|
29
|
3.08
|
|
Investment securities:
|
||||||
|
Taxable
|
358,323
|
2,933
|
3.27
|
382,640
|
2,768
|
2.89
|
|
Tax-exempt (3)
|
125,051
|
1,112
|
3.56
|
103,015
|
693
|
2.69
|
|
Investment securities
|
483,374
|
4,045
|
3.35
|
485,655
|
3,461
|
2.85
|
|
Loans: (2)(3)(4)
|
||||||
|
Residential mortgage loans
|
338,473
|
4,941
|
5.92
|
352,194
|
5,099
|
5.87
|
|
Construction loans
|
89,831
|
1,526
|
6.89
|
163,440
|
2,922
|
7.25
|
|
Commercial Loans
|
1,414,754
|
21,505
|
6.16
|
1,274,453
|
19,779
|
6.29
|
|
Agricultural Loans
|
376,065
|
6,260
|
6.75
|
356,868
|
4,726
|
5.37
|
|
Loans to state & political subdivisions
|
60,220
|
672
|
4.53
|
53,731
|
517
|
3.90
|
|
Other loans
|
97,777
|
1,595
|
6.62
|
145,450
|
2,615
|
7.29
|
|
Loans, net of discount (2)(3)(4)
|
2,377,120
|
36,499
|
6.23
|
2,346,136
|
35,658
|
6.16
|
|
Total interest-earning assets
|
2,885,982
|
40,647
|
5.71
|
2,859,596
|
39,262
|
5.57
|
|
Cash and due from banks
|
9,240
|
9,620
|
||||
|
Bank premises and equipment
|
20,932
|
21,545
|
||||
|
Other assets
|
194,190
|
175,273
|
||||
|
Total non-interest earning assets
|
224,362
|
206,438
|
||||
|
Total assets
|
3,110,344
|
3,066,034
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
|
Interest-bearing liabilities:
|
||||||
|
Business Interest Checking
|
25,443
|
57
|
0.91
|
17,640
|
40
|
0.94
|
|
NOW accounts
|
710,694
|
3,322
|
1.90
|
739,808
|
4,054
|
2.22
|
|
Savings accounts
|
288,772
|
338
|
0.47
|
292,981
|
348
|
0.48
|
|
Money market accounts
|
461,474
|
2,915
|
2.56
|
417,907
|
3,025
|
2.94
|
|
Certificates of deposit
|
540,278
|
4,673
|
3.51
|
507,944
|
4,827
|
3.85
|
|
Total interest-bearing deposits
|
2,026,661
|
11,305
|
2.26
|
1,976,280
|
12,294
|
2.52
|
|
Other borrowed funds
|
304,144
|
2,859
|
3.81
|
346,416
|
3,718
|
4.35
|
|
Total interest-bearing liabilities
|
2,330,805
|
14,164
|
2.46
|
2,322,696
|
16,012
|
2.80
|
|
Demand deposits
|
381,074
|
371,893
|
||||
|
Other liabilities
|
42,241
|
43,493
|
||||
|
Total non-interest-bearing liabilities
|
423,315
|
415,386
|
||||
|
Stockholders' equity
|
356,224
|
327,952
|
||||
|
Total liabilities & stockholders' equity
|
3,110,344
|
3,066,034
|
||||
|
Net interest income
|
26,483
|
23,250
|
||||
|
Net interest spread (5)
|
3.25%
|
2.77%
|
||||
|
Net interest income as a percentage
|
||||||
|
of average interest-earning assets
|
3.72%
|
3.30%
|
||||
|
Ratio of interest-earning assets
|
||||||
|
to interest-bearing liabilities
|
124%
|
123%
|
||||
|
(1) Averages are based on daily averages.
|
||||||
|
(2) Includes loan origination and commitment fees.
|
||||||
|
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using
|
||||||
|
a statutory federal income tax rate of 21% for 2026 and 2025. See reconciliation of GAAP and non-GAAP measures at the end
|
||||||
|
of the press release.
|
||||||
|
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.
|
||||||
|
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets
|
||||||
|
and the average rate paid on interest-bearing liabilities.
|
||||||
|
CITIZENS FINANCIAL SERVICES, INC.
|
|||||
|
CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR CREDIT LOSSES
|
|||||
|
(UNAUDITED)
|
|||||
|
(Excludes Loans Held for Sale)
|
|||||
|
(In Thousands)
|
|||||
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
|
2026
|
2025
|
2025
|
2025
|
2025
|
|
|
Real estate:
|
|||||
|
Residential
|
$ 336,066
|
$ 340,972
|
$ 344,790
|
$ 341,671
|
$ 350,221
|
|
Commercial
|
1,249,900
|
1,218,514
|
1,180,655
|
1,151,585
|
1,117,240
|
|
Agricultural
|
344,938
|
347,448
|
342,487
|
331,995
|
329,985
|
|
Construction
|
83,217
|
93,965
|
107,867
|
138,307
|
168,896
|
|
Consumer
|
19,592
|
88,210
|
109,458
|
22,364
|
109,339
|
|
Other commercial loans
|
170,628
|
179,166
|
171,345
|
174,740
|
158,133
|
|
Other agricultural loans
|
30,004
|
30,247
|
27,142
|
28,366
|
28,488
|
|
State & political subdivision loans
|
63,877
|
52,100
|
51,644
|
52,727
|
53,361
|
|
Total loans
|
2,298,222
|
2,350,622
|
2,335,388
|
2,241,755
|
2,315,663
|
|
Less: allowance for credit losses - loans
|
22,894
|
22,806
|
22,454
|
22,109
|
22,081
|
|
Net loans
|
$ 2,275,328
|
$ 2,327,816
|
$ 2,312,934
|
$ 2,219,646
|
$ 2,293,582
|
|
Past due and non-performing assets
|
|||||
|
Total Loans past due 30-89 days and still accruing
|
$ 7,056
|
$ 9,269
|
$ 13,228
|
$ 18,554
|
$ 9,632
|
|
Non-accrual loans
|
$ 37,670
|
$ 26,602
|
$ 20,523
|
$ 24,595
|
$ 23,545
|
|
Loans past due 90 days or more and accruing
|
75
|
229
|
37
|
347
|
1,393
|
|
Non-performing loans
|
$ 37,745
|
$ 26,831
|
$ 20,560
|
$ 24,942
|
$ 24,938
|
|
Other real estate owned
|
2,358
|
2,358
|
2,434
|
2,434
|
2,544
|
|
Total Non-performing assets
|
$ 40,103
|
$ 29,189
|
$ 22,994
|
$ 27,376
|
$ 27,482
|
|
Three Months Ended
|
|||||
|
Analysis of the Allowance for Credit Losses - Loans
|
March 31,
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
(In Thousands)
|
2026
|
2025
|
2025
|
2025
|
2025
|
|
Balance, beginning of period
|
$ 22,806
|
$ 22,454
|
$ 22,109
|
$ 22,081
|
$ 21,699
|
|
Charge-offs
|
(78)
|
(57)
|
(20)
|
(596)
|
(185)
|
|
Recoveries
|
22
|
6
|
17
|
25
|
29
|
|
Net charge-offs
|
(56)
|
(51)
|
(3)
|
(571)
|
(156)
|
|
Provision for credit losses - loans
|
144
|
403
|
348
|
599
|
538
|
|
Balance, end of period
|
$ 22,894
|
$ 22,806
|
$ 22,454
|
$ 22,109
|
$ 22,081
|
|
CITIZENS FINANCIAL SERVICES, INC.
|
||
|
Reconciliation of GAAP and Non-GAAP Financial Measures
|
||
|
(UNAUDITED)
|
||
|
(Dollars in thousands, except per share data)
|
||
|
As of
|
||
|
March 31
|
||
|
2026
|
2025
|
|
|
Tangible Equity
|
||
|
Stockholders' Equity - GAAP
|
$ 343,578
|
$ 308,296
|
|
Intangible Assets
|
(87,831)
|
(88,465)
|
|
Tangible Equity - Non-GAAP
|
255,747
|
219,831
|
|
Shares outstanding adjusted for June 2025 stock Dividend
|
4,804,936
|
4,806,745
|
|
Tangible Book value per share - Non-GAAP
|
$ 53.23
|
$ 45.73
|
|
As of
|
||
|
March 31
|
||
|
2026
|
2025
|
|
|
Tangible Equity per share
|
||
|
Stockholders' Equity per share - GAAP
|
$ 71.51
|
$ 64.14
|
|
Adjustment for intangible assets
|
(18.28)
|
(18.41)
|
|
Tangible Book value per share - Non-GAAP
|
$ 53.23
|
$ 45.73
|
|
For the Three Months Ended
|
||
|
March 31,
|
||
|
2026
|
2025
|
|
|
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)
|
||
|
Average Assets - GAAP
|
$ 3,099,013
|
$ 3,042,963
|
|
Average AOCL
|
(11,331)
|
(23,071)
|
|
Average Assets, Excluding AOCL - Non-GAAP
|
3,110,344
|
3,066,034
|
|
Net Income - GAAP
|
$ 10,376
|
$ 7,621
|
|
Annualized Return on Average Assets-GAAP
|
1.34%
|
1.00%
|
|
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP
|
1.33%
|
0.99%
|
|
For the Three Months Ended
|
||
|
March 31,
|
||
|
2026
|
2025
|
|
|
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)
|
||
|
Average Stockholders' Equity - GAAP
|
$ 344,893
|
$ 304,881
|
|
Average AOCL
|
(11,331)
|
(23,071)
|
|
Average Stockholders' Equity, Excluding AOCL - Non-GAAP
|
356,224
|
327,952
|
|
Net Income - GAAP
|
$ 10,376
|
$ 7,621
|
|
Annualized Return on Average Stockholders' Equity-GAAP
|
12.03%
|
10.00%
|
|
Annualized Return on Average Stockholders' Equity, Excluding AOCL - Non-GAAP
|
11.65%
|
9.30%
|
|
For the Three Months Ended
|
||
|
March 31,
|
||
|
2026
|
2025
|
|
|
Return on Average Tangible Equity
|
||
|
Average Stockholders' Equity - GAAP
|
$ 344,893
|
$ 304,881
|
|
Average Intangible Assets
|
(87,916)
|
(88,570)
|
|
Average Tangible Equity - Non-GAAP
|
256,977
|
216,311
|
|
Net Income - GAAP
|
$ 10,376
|
$ 7,621
|
|
Annualized Return on Average Tangible Equity Non-GAAP
|
16.15%
|
14.09%
|
|
For the Three Months Ended
|
||
|
March 31,
|
||
|
Reconciliation of net interest income on fully taxable equivalent basis
|
2026
|
2025
|
|
Total interest income
|
$ 40,277
|
$ 39,014
|
|
Total interest expense
|
14,164
|
16,012
|
|
Net interest income
|
26,113
|
23,002
|
|
Tax equivalent adjustment
|
370
|
248
|
|
Net interest income (fully taxable equivalent) - Non-GAAP
|
$ 26,483
|
$ 23,250
|
FAQ
How did Citizens Financial Services (CZFS) perform in Q1 2026?
Citizens Financial Services reported higher Q1 2026 profit. Net income was $10,376 thousand versus $7,621 thousand a year earlier, and basic EPS reached $2.16. Stronger net interest income and a higher 3.72% tax-equivalent net interest margin supported the earnings improvement.
What were the key profitability ratios for CZFS in the first quarter of 2026?
CZFS showed stronger profitability in Q1 2026. Annualized return on average assets was 1.34%, while return on average equity was 12.03%. Return on average tangible equity reached 16.15%, reflecting higher earnings relative to the company’s equity base and tangible capital.
What dividend did Citizens Financial Services (CZFS) pay in Q1 2026?
The board declared a higher quarterly cash dividend. On March 2, 2026, CZFS approved a $0.50 per share dividend, paid March 27, 2026, to shareholders of record March 13, 2026. This was a 2.0% increase over the prior-year regular dividend, adjusted for the 2025 stock dividend.
How did asset quality trends look for CZFS in Q1 2026?
Asset quality was mixed in Q1 2026. The allowance for credit losses on loans was $22,894 thousand, or 1.00% of total loans, and annualized net charge-offs were 0.01%. Non-performing assets increased to $40,103 thousand, representing 1.74% of total loans.
What was Citizens Financial Services’ (CZFS) balance sheet size at March 31, 2026?
CZFS ended Q1 2026 with a $3.03 billion balance sheet. Total assets were $3,026,478 thousand, loans were $2,298,222 thousand, deposits totaled $2,441,185 thousand, and stockholders’ equity stood at $343,578 thousand, reflecting a well-capitalized community banking franchise.
How did CZFS’s net interest margin change in Q1 2026 versus Q1 2025?
The tax-equivalent net interest margin improved year over year. CZFS reported a 3.72% net interest margin on a fully taxable equivalent basis in Q1 2026, compared with 3.30% in Q1 2025, as net interest income increased to $26,483 thousand on that basis.