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): December 31, 2024

CITIZENS FINANCIAL SERVICES INC
(Exact name of registrant as specified in its charter)

Pennsylvania
 
001-41410
 
23-2265045
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)

15 S MAIN ST
MANSFIELD, Pennsylvania
 
16933
(Address of principal executive offices)
 
(Zip code)

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:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, Par Value $1.00 Per Share
 CZFS
 NASDAQ Capital Market

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):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 fourth quarter 2024.
On January 30, 2025, Citizens Financial Services, Inc. issued a press release titled “Citizens Financial Services, Inc. Reports Unaudited Full Year and Fourth Quarter 2024 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

 
 
 
Exhibit No.
 
Description of Exhibit
 
99.1
 
  
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document)
  


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.

  CITIZENS FINANCIAL SERVICES, INC
  
       
January 30, 2025
By:
/s/ Stephen J. Guillaume
  
    Stephen J. Guillaume
  
    Chief Financial Officer
  
       

Contact:  LEEANN GEPHART CHIEF CONSUMER BANKING OFFICER
First Citizens Community Bank
570-545-6005
15 S. Main Street
570-662-8512 (fax)
Mansfield, PA 16933

citizens financial services, inc. reports unaudited full year and  fourth quarter 2024 financial results

MANSFIELD, PENNSYLVANIA— January 30, 2025 – Citizens Financial Services, Inc. (Nasdaq: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three months and year ended December 31, 2024.

Highlights

•
Net income was $27.8 million for 2024, which is $10.0 million, or 56.2%, more than 2024’s net income due to the one-time merger and acquisition costs and the provision for credit losses on non-purchase credit deteriorated loans (the “NPC Provision”) recorded in the second quarter of 2023 as a result of the acquisition of HV Bancorp, Inc., (“HVB”).  The effective tax rate for 2024 was 17.4% compared to 17.2% in 2023.

•
Net income was $8.0 million for the three months ended December 31, 2024, which is 5.9% more than the net income for 2023’s comparable period. The effective tax rate for the three months ended December 31, 2024 was 16.4% compared to 18.3% in the comparable period in 2023.

•
During the first quarter of 2024, the Company completed the sale of certain assets acquired as part of the HVB acquisition, which included loans and accrued interest, and software, as well as transferring certain contracts, processes and employees of a division internally known as Braavo. The proceeds from the sale totaled approximately $7.2 million and generated a pre-tax gain of approximately $1.1 million.

•
Net interest income before the provision for credit losses was $86.5 million for 2024, an increase of $6.2 million, or 7.7%, over 2023.

•
The provision for credit losses for 2024 was $2.6 million. The provision was significantly impacted by loans that were not sold as part of the Braavo sale that was completed in the first quarter of 2024. The provision for 2024 directly attributable to these loans was $1,806,000. As of December 31, 2024, the Company had approximately $971,000 of Braavo loans of which $774,000 were considering performing as of December 31, 2024.

•
Return on average equity for the three months (annualized) and the year ended December 31, 2024 was 10.63% and 9.59% compared to 11.29% and 7.39% for the three months (annualized) and the year ended December 31, 2023, respectively. If accumulated other comprehenisve loss is excluded, the return on average equity for the three months (annualized) and the year ended December 31, 2024 was 9.91% and 8.82% compared to 9.93% and 6.52% for the three months (annualized) and the year ended December 31, 2023, respectively (1). If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average equity for the year ended December 31, 2024 would have been 9.84% (1).

•
Return on average tangible equity (non-GAAP) for the three months (annualized) and the year ended December 31, 2024 was 15.10% and 13.84% compared to 16.88% and 10.00% for the three months (annualized) and the year ended December 31, 2023, respectively. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average tangible equity for the year ended December 31, 2024 would have been 14.19% (annualized) (1).

•
Return on average assets for the three months (annualized) and the year ended December 31, 2024 was 1.06% and 0.93% compared to 1.01% and 0.67% for the three months (annualized) and the year ended December 31, 2023, respectively. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average assets for the year ended December 31, 2024 would have been 0.96% (annualized) (1).

2024 Compared to 2023

•
For 2024, net income totaled $27,818,000 which compares to net income of $17,811,000 for 2023, an increase of $10,007,000. Basic and diluted earnings per share were $5.86 and $5.85, respectively, for 2024 compares to $4.02 per share for 2023.  Return on equity for 2024 and 2023 was 9.59% and 7.39%, while return on assets was 0.93% and 0.67%, respectively. The increase in performance when comparing 2024 to 2023 was due to the one time costs associated with the acquisition of HVB and the NPC Provision recorded in 2023.

•
Net interest income before the provision for credit loss for 2024 totaled $86,445,000 compared to $80,260,000 for 2023, resulting in an increase of $6,195,000, or 7.7%.  Average interest earning assets increased $262.0 million in 2024 compared to 2023, primarily due to the HVB acquisition. Average loans increased $290.8 million while average investment securities decreased $31.2 million. The yield on interest earning assets increased 49 basis points to 5.56%, while the cost of interest-bearing liabilities increased 66 basis points to 3.00% due to the rise in market interest rates and competitive pressure. The tax effected net interest margin for 2024 was 3.13% compared to 3.21% for 2023.

•
The provision for credit losses for 2024 was $2,587,000 compared to $5,528,000 for 2023, a decrease of $2,941,000.  The provision for 2024 was impacted by the Braavo loans as previously mentioned and an increase in past due, non-accrual and classified loans during the final three quarters of 2024. As a result of the HVB acquisition during 2023, the Company recorded a $4.6 million provision for credit losses for loans acquired that did not have any credit deterioration at the time of purchase. Excluding the impact of the acquisition from 2023, the provision would have increased $1,650,000 when comparing 2024 to 2023 with the increase being attributable to the Braavo loans and the increase in past due, non-accrual and substandard loans in 2024.

•
Total non-interest income was $15,401,000 for 2024, which is $3,796,000 more than the non-interest income of $11,605,000 for 2023. The primary drivers were the gain on the sale of assets associated with Braavo and activity due to the HVB acquisition. As a result of the acquisition, service charges, gains on loans sold, earnings on bank owned life insurance and other income all increased.  Earnings on bank owned life insurance also increased due to the passing of a former employee in the first quarter of 2024. During 2024, the Company experienced a gain on its equity investment portfolio compared to a loss during 2023.

•
Total non-interest expenses for 2024 totaled $65,586,000 compared to $64,822,000 for 2023, which is an increase of $764,000, or 1.2%. Salary and benefit costs increased $4,357,000, or 12.5%, due to an additional 34.3 FTEs as a result of the acquisition, merit increases for 2024, as well as an increase in health insurance costs due to additional headcount and claims. The increases in occupancy, furniture and fixtures, software expenses and amortization expenses was due to the HVB acquisition and additional branches as part of it. FDIC insurance expense increased $521,000 due to the Company’s increased size and the Bank’s lower leverage capital ratio during the first half of 2024 compared to 2023. Professional fees increased due to increased legal expenses, of which $201,000 was related to the sale of certain Braavo assets. Pennsylvania shares tax increased due to the increased size of the Bank. Other expenses increased primarily due to the acquisition, with increases experienced in subscriptions, marketing and advertising, postage, printing, data communication expenses and FHLB letter of credit fees. Independent of the HVB acquisition, other expenses increased due to insurance reimbursement received in 2023 to cover amounts previously charged-off through expense. Merger and acquisitions costs for the HVB acquisition totaled $9,269,000 in 2023 and included professional and consulting fees, printing, travel, contract termination payments and severance-related expenses.

•
The provision for income taxes increased $2,161,000 when comparing 2024 to 2023 as a result of an increase in income before income tax of $12,168,000.

Three Months Ended December 31, 2024 Compared to December 31, 2023

•
For the three months ended December 31, 2024, net income totaled $7,983,000 which compares to net income of $7,540,000 for the comparable period of 2023, an increase of $443,000. Basic and diluted earnings per share of $1.68 for the three months ended December 31, 2024 compares to $1.59 for the 2023 comparable period.  Annualized return on equity for the three months ended December 31, 2024 and 2023 was 10.63% and 11.29%, while annualized return on assets was 1.06% and 1.01%, respectively.

•
Net interest income before the provision for credit loss for the three months ended December 31, 2024 totaled $22,873,000 compared to $21,855,000 for the three months ended December 31, 2023, resulting in an increase of $1,018,000, or 4.7%. Average interest earning assets increased $20.3 million for the three months ended December 31, 2024 compared to the same period last year due to organic growth.  Average loans increased $35.8 million while average investment securities decreased $14.0 million. The tax effected net interest margin for the three months ended December 31, 2024 was 3.26% compared to 3.13% for the same period last year, which was impacted by the increase in the average yield on interest earning assets of 16 basis points, to 5.65%.

•
There was no provision for credit losses recorded during the three months ended December 31, 2024 compared to a provision of credit losses of $200,000 for the three months ended December 31, 2023. The decrease in the provision is due to lower loan growth in the fourth quarter of 2024 compared to the same period in 2023.

•
Total non-interest income was $3,339,000 for the three months ended December 31, 2024, which is $150,000 less than for the comparable period last year.  The primary driver was the decrease in gains on loans sold.

•
Total non-interest expenses for the three months ended December 31, 2024 totaled $16,668,000 compared to $15,920,000 for the same period last year, which is an increase of $748,000. Salaries and benefits increased $333,000 due primarily an increase in profit sharing expense accrued based on financial results for 2024. Pennsylvania shares tax increased due to the increased size of the Bank and timing and amount contributions that provide tax credits utilized as a reduction of the expense.

•
The provision for income taxes decreased $123,000 when comparing the three months ended December 31, 2024 to the same period in 2023 primarily due to tax credits and activity associated with our investments in various low income housing partnerships, as a third investment started to provide credits in the fourth quarter of 2024.  The effective tax rate was 16.4% and 18.3% for the three months ended December 31, 2024 and 2023, respectively.

Balance Sheet and Other Information:
•
At December 31, 2024, total assets were $3.03 billion, compared to $2.98 billion at December 31, 2023. The loan to deposit ratio as of December 31, 2024 was 97.11% compared to 96.87% as of December 31, 2023.

•
Available for sale securities of $425.9 million at December 31, 2024 increased $8.3 million from December 31, 2023. The yield on the investment portfolio increased from 2.20% to 2.44% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. During 2024, we purchased $70.4 million of investments, which offset the $62.9 million of investments that matured or were called during 2024.

•
Net loans as of December 31, 2024 totaled $2.29 billion an increase of $63.9 million from December 31, 2023, due to primarily to an increase in student loans outstanding. Loans would have increased an additional $6.1 million, if not for the Braavo disposition.

•
The allowance for credit losses - loans totaled $21,699,000 at December 31, 2024 which is an increase of $546,000 from December 31, 2023. The increase is due to change in expected prepayment speeds, changes in economic forecasts and an increase in past due and substandard loans. The provision for credit losses on loans was $3,176,000 for 2024 compared to $901,000 for 2023. Loan recoveries and charge-offs were $43,000 and $2,673,000, respectively, 2024 with the majority of the charge-offs associated with loans acquired as part of the HVB acquisition. If the Braavo charge-offs were excluded, charge-offs as a percent of average loans would decrease from 0.11% to 0.01%. The allowance as a percent of total loans was 0.94% as of December 31, 2024 and 2023.

•
Non-performing assets totaled $28.6 million as of December 31, 2024, an increase of $15.4 million since December 31, 2023. The increase was driven by eight large commercial relationships being placed on non-accrual status during 2024. Six of these relationships were acquired as part of the HVB acquisition. Several of the loans matured and took an extended period of time to be underwritten and extended in accordance with Company policies during which time payments were not received resulting the loans being placed on non-accrual status. Several relationships have started making payments under revised terms. Of these relationships, three required  specific reserves as of December 31, 2024, which totaled approximately $459,000. Accruing loans past due 30-89 days totaled $8.0 million, a decrease of $2.4 million from December 31, 2023 that was  driven by loans transferred to non-accrual status during 2024.

•
Deposits increased $60.5 million from December 31, 2023, to $2.38 billion at December 31, 2024. With the rise in market interest rates, competitive pressure for deposits continues to be at the forefront. Additionally, we have numerous state and political organization depositors with seasonal funding timelines. During 2024, brokered certificates of deposit decreased $16.2 million to $93.1 million. At December 31, 2024, the Bank estimates that deposit balances held by customers in excess of the FDIC insurance limit ($250,000 per insured account) totaled $1.16 billion, or 48.7% of the Bank’s total deposits. Included in this balance are balances held through Intrafi, which provides customers with additional FDIC insurance, as well as deposits collateralized by securities  or letters of credit (almost exclusively municipal deposits). The total of these items was $638.6 million, or 26.8% of the Bank’s total deposits, as of December 31, 2024.

•
Stockholders’ equity totaled $299.7 million at December 31, 2024, compared to $279.7 million at December 31, 2023, an increase of $20.1 million. Excluding accumulated other comprehensive loss (AOCL), stockholders’ equity increased $18.7 million  to $323.3 million at December 31, 2024. The increase in stockholders’ equity, excluding AOCL, was attributable to net income for 2024 totaling $27.8 million, offset by cash dividends for 2024 totaling $9.3 million, net treasury stock activity of $412,000. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL decreased $1.4 million from December 31, 2023.

Dividend Declared

On December 3, 2024, the Board of Directors declared a cash dividend of $0.49 per share, which was paid on December 27, 2024 to shareholders of record at the close of business on December 13, 2024. The quarterly cash dividend is an increase of 1.0% over the regular cash dividend of $0.485 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2024.

Citizens Financial Services, Inc. has nearly 1,850 shareholders, the majority of whom reside in markets where its offices are located.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance.  Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions.  Forward-looking statements are not guarantees of future performance.  Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission.  Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf.  The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

(1) See reconciliation of GAAP and non-GAAP measures at the end of the press release
CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED FINANCIAL HIGHLIGHTS
        
(UNAUDITED)
        
(Dollars in thousands, except per share data)
        
 
As of or For The
As of or For The
 
Three Months Ended
Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Income and Performance Ratios
        
Net Income
 $              7,983
 $          7,540
 $          27,818
 $        17,811
Return on average assets (annualized)
1.06%
1.01%
0.93%
0.67%
Return on average equity (annualized)
10.63%
11.29%
9.59%
7.39%
Return on average tangible equity (annualized) (a)
15.10%
16.88%
13.84%
10.00%
Net interest margin (tax equivalent) (a)
3.26%
3.13%
3.13%
3.21%
Earnings per share - basic (b)
 $                1.68
 $            1.59
 $               5.86
 $            4.02
Earnings per share - diluted (b)
 $                1.68
 $            1.59
 $               5.85
 $            4.02
Cash dividends paid per share (b)
 $              0.490
 $          0.485
 $            1.950
 $          1.920
Number of shares used in computation - basic (b)
         4,750,062
      4,746,719
        4,750,185
      4,429,162
Number of shares used in computation - diluted (b)
         4,752,505
      4,746,720
        4,755,066
      4,429,162
         
         
Asset quality
        
Allowance for credit losses - loans
 $            21,699
 $        21,153
    
Non-performing assets
 $            28,612
 $        13,177
    
Allowance for credit losses - loans to total loans
0.94%
0.94%
    
Non-performing assets to total loans
1.24%
0.59%
    
Annualized net charge-offs to total loans
0.01%
0.09%
0.11%
0.06%
         
         
Equity
        
Book value per share (b)
 $              62.97
 $          58.83
    
Tangible Book value per share (a) (b)
 $              44.35
 $          40.02
    
Market Value (Last reported trade of month)
 $              63.31
 $          64.72
    
Common shares outstanding
         4,759,612
      4,706,994
    
         
         
Other
        
Average Full Time Equivalent Employees
388.5
395.3
392.0
357.7
Loan to Deposit Ratio
97.11%
96.87%
    
Trust assets under management
 $         180,710
 $      167,894
    
Brokerage assets under management
 $         395,869
 $      329,446
    
         
         
Balance Sheet Highlights
December 31,
December 31,
    
 
2024
2023
    
         
Assets
 $      3,025,724
 $   2,975,321
    
Investment securities
             427,659
         419,539
    
Loans (net of unearned income)
         2,313,242
      2,248,836
    
Allowance for credit losses - loans
               21,699
           21,153
    
Deposits
         2,382,028
      2,321,481
    
Stockholders' Equity
             299,734
         279,666
    
         
         
(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)
    
     
 
December 31,
December 31,
(in thousands except share data)
2024
2023
ASSETS:
    
Cash and due from banks:
    
  Noninterest-bearing
 $        30,284
 $       37,733
  Interest-bearing
           11,918
          15,085
Total cash and cash equivalents
           42,202
          52,818
     
Interest bearing time deposits with other banks
             3,820
           4,070
     
Equity securities
             1,747
           1,938
     
Available-for-sale securities
         425,912
        417,601
     
Loans held for sale
             9,607
           9,379
     
Loans (net of allowance for credit losses - loans: $21,699 at December 31, 2024;
  
    $21,153 at December 31, 2023)
      2,291,543
     2,227,683
     
Premises and equipment
           21,395
          21,384
Accrued interest receivable
           10,307
          11,043
Goodwill
           85,758
          85,758
Bank owned life insurance
           50,341
          49,897
Other intangibles
             2,892
           3,650
Fair value of derivative instruments - asset
           10,370
          13,687
Deferred tax asset
           15,199
          17,339
Other assets
           54,631
          59,074
     
TOTAL ASSETS
 $   3,025,724
 $  2,975,321
     
LIABILITIES:
    
Deposits:
    
  Noninterest-bearing
 $      532,776
 $     523,784
  Interest-bearing
      1,849,252
     1,797,697
Total deposits
      2,382,028
     2,321,481
Borrowed funds
         297,721
        322,036
Accrued interest payable
             4,693
           4,298
Fair value of derivative instruments - liability
             5,817
           7,922
Other liabilities
           35,731
          39,918
TOTAL LIABILITIES
      2,725,990
     2,695,655
STOCKHOLDERS' EQUITY:
    
Preferred Stock $1.00 par value; authorized
    
  3,000,000 shares; none issued in 2024 or 2023
                     -
                  -
Common stock
    
  $1.00 par value; authorized 25,000,000 shares at December 31, 2024, and 2023:
  
   issued 5,207,577 at December 31, 2024 and 5,160,754 at December 31, 2023
             5,208
           5,161
Additional paid-in capital
         144,984
        143,233
Retained earnings
         189,443
        172,975
Accumulated other comprehensive loss
          (23,521)
        (24,911)
Treasury stock, at cost:  447,965 at December 31, 2024 and 453,760 shares
    
  at December 31, 2023
          (16,380)
        (16,792)
TOTAL STOCKHOLDERS' EQUITY
         299,734
        279,666
TOTAL LIABILITIES AND
    
   STOCKHOLDERS' EQUITY
 $   3,025,724
 $  2,975,321

CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED STATEMENT OF INCOME
      
(UNAUDITED)
        
 
Three Months Ended
Year  Ended
 
December 31,
December 31,
(in thousands, except share and per share data)
2024
2023
2024
2023
INTEREST INCOME:
        
Interest and fees on loans
 $     36,630
 $      35,637
 $   142,688
 $  116,075
Interest-bearing deposits with banks
             156
             274
             851
           736
Investment securities:
        
    Taxable
          2,112
           1,663
          7,135
         6,636
    Nontaxable
             524
             535
          2,093
         2,264
    Dividends
             371
             403
          1,550
         1,407
TOTAL INTEREST INCOME
        39,793
         38,512
      154,317
     127,118
INTEREST EXPENSE:
        
Deposits
        13,875
         12,180
        52,326
       31,699
Borrowed funds
          3,045
           4,477
        15,536
       15,159
TOTAL INTEREST EXPENSE
        16,920
         16,657
        67,862
       46,858
NET INTEREST INCOME
        22,873
         21,855
        86,455
       80,260
Provision for credit losses
                 -
             200
          2,587
           937
Provision for credit losses - acquisition day 1 non-PCD
                 -
                 -
                 -
         4,591
NET INTEREST INCOME AFTER
        
    PROVISION FOR CREDIT LOSSES
        22,873
         21,655
        83,868
       74,732
NON-INTEREST INCOME:
        
Service charges
          1,356
           1,443
          5,749
         5,639
Trust
             187
             181
             816
           764
Brokerage and insurance
             608
             495
          2,381
         1,924
Gains on loans sold
             596
             737
          2,316
         1,464
Equity security gains (losses), net
               18
               79
             145
          (144)
Available for sale security losses, net
                 -
                 -
                 -
            (51)
Earnings on bank owned life insurance
             350
             313
          1,684
         1,254
Gain on sale of Braavo division
                 -
                 -
          1,102
               -
Other
             224
             241
          1,208
           755
TOTAL NON-INTEREST INCOME
          3,339
           3,489
        15,401
       11,605
NON-INTEREST EXPENSES:
        
Salaries and employee benefits
          9,725
           9,392
        39,347
       34,990
Occupancy
          1,208
           1,253
          5,013
         4,123
Furniture and equipment
             247
             254
          1,038
           822
Professional fees
             578
             688
          2,599
         1,962
FDIC insurance expense
             407
             475
          1,996
         1,475
Pennsylvania shares tax
             248
            (310)
          1,114
           583
Amortization of intangibles
             132
             154
             564
           373
Software expenses
             445
             510
          1,953
         1,784
ORE (recovery) expenses
             (34)
               40
             212
           166
Merger and acquisition expenses
                 -
                 -
                 -
         9,269
Other
          3,712
           3,464
        11,750
         9,275
TOTAL NON-INTEREST EXPENSES
        16,668
         15,920
        65,586
       64,822
Income before provision for income taxes
          9,544
           9,224
        33,683
       21,515
Provision for income tax expense
          1,561
           1,684
          5,865
         3,704
NET INCOME
 $       7,983
 $        7,540
 $     27,818
 $    17,811
         
PER COMMON SHARE DATA:
        
Net Income - Basic
 $         1.68
 $          1.59
 $         5.86
 $        4.02
Net Income - Diluted
 $         1.68
 $          1.59
 $         5.85
 $        4.02
Cash Dividends Paid
 $       0.490
 $        0.485
 $       1.950
 $      1.920
         
Number of shares used in computation - basic
   4,750,062
    4,746,719
   4,750,185
  4,429,162
Number of shares used in computation - diluted
   4,752,505
    4,746,720
   4,755,066
  4,429,162

CITIZENS FINANCIAL SERVICES, INC.
          
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION
        
(UNAUDITED)
          
(in thousands, except per share data)
  
Three Months Ended,
    
 
Dec 31,
Sept 30,
June 30,
March 31,
Dec 31,
 
2024
2024
2024
2024
2023
Interest income
 $     39,793
 $      38,689
 $      37,902
 $      37,933
 $      38,512
Interest expense
        16,920
         17,365
         16,602
         16,975
         16,657
Net interest income
        22,873
         21,324
         21,300
         20,958
         21,855
Provision (negative) for credit losses
                   -
             (200)
           2,002
               785
               200
Net interest income after provision (negative) for credit losses
        22,873
         21,524
         19,298
         20,173
         21,655
Non-interest income
          3,321
           3,596
           3,423
           4,916
           3,410
Investment securities  gains (losses), net
                18
               159
               (87)
                 55
                 79
Non-interest expenses
        16,668
         16,029
         16,246
         16,643
         15,920
Income before provision for income taxes
          9,544
           9,250
           6,388
           8,501
           9,224
Provision for income tax expense
          1,561
           1,714
           1,113
           1,477
           1,684
Net income
 $       7,983
 $        7,536
 $        5,275
 $        7,024
 $        7,540
Earnings Per Share - Basic
 $         1.68
 $          1.59
 $          1.11
 $          1.48
 $          1.59
Earnings Per Share - Diluted
 $         1.68
 $          1.59
 $          1.11
 $          1.48
 $          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 December 31,
 
2024
2023
 
Average
  
Average
Average
  
Average
 
Balance (1)
Interest
Rate
Balance (1)
Interest
Rate
(dollars in thousands)
$
$
%
$
$
%
ASSETS
            
Interest-bearing deposits at banks
           17,680
              126
2.84
          18,507
               239
5.12
Interest bearing time deposits at banks
             3,820
                30
3.12
            4,410
                 35
3.06
Investment securities:
            
  Taxable
        368,221
           2,483
2.70
        377,292
            2,066
2.19
  Tax-exempt (3)
        103,375
              664
2.57
        108,353
               678
2.50
Investment securities
        471,596
           3,147
2.67
        485,645
            2,744
2.26
Loans: (2)(3)(4)
            
  Residential mortgage loans
        355,108
           5,146
5.77
        358,735
            5,120
5.66
  Construction loans
        173,427
           3,276
7.51
        197,420
            3,653
7.34
  Commercial Loans
     1,248,114
        19,716
6.28
    1,208,249
          19,482
6.40
  Agricultural Loans
        355,557
           5,275
5.90
        339,720
            4,302
5.02
  Loans to state & political subdivisions
           55,333
              555
3.99
          56,710
               562
3.93
  Other loans
        139,567
           2,770
7.90
        130,468
            2,627
7.99
  Loans, net of discount (2)(3)(4)
     2,327,106
        36,738
6.28
    2,291,302
          35,746
6.19
Total interest-earning assets
     2,820,202
        40,041
5.65
    2,799,864
          38,764
5.49
Cash and due from banks
             9,088
    
          11,215
    
Bank premises and equipment
           21,291
    
          21,446
    
Other assets
        186,815
    
        191,231
    
Total non-interest earning assets
        217,194
    
        223,892
    
Total assets
     3,037,396
    
    3,023,756
    
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Interest-bearing liabilities:
            
  NOW accounts
        759,604
           4,648
             2.43
        816,067
            5,344
       2.60
  Savings accounts
        289,798
              367
             0.50
        312,575
               417
       0.53
  Money market accounts
        422,624
           3,351
             3.15
        400,971
            2,910
       2.88
  Certificates of deposit
        544,320
           5,509
             4.03
        401,932
            3,509
       3.46
Total interest-bearing deposits
     2,016,346
        13,875
             2.74
    1,931,545
          12,180
       2.50
Other borrowed funds
        273,604
           3,045
             4.43
        351,492
            4,477
       5.05
Total interest-bearing liabilities
     2,289,950
        16,920
             2.94
    2,283,037
          16,657
       2.89
Demand deposits
        395,714
    
        389,927
    
Other liabilities
           29,545
    
          46,888
    
Total non-interest-bearing liabilities
        425,259
    
        436,815
    
Stockholders' equity
        322,187
    
        303,904
    
Total liabilities & stockholders' equity
     3,037,396
    
    3,023,756
    
Net interest income
  
        23,121
    
          22,107
  
Net interest spread (5)
    
2.71%
    
2.60%
Net interest income as a percentage
            
  of average interest-earning assets
    
3.26%
    
3.13%
Ratio of interest-earning assets
            
  to interest-bearing liabilities
    
123%
    
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 2024 and 2023. 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)
            
 
Year Ended December 31,
 
2024
2023
 
Average
  
Average
Average
  
Average
 
Balance (1)
Interest
Rate
Balance (1)
Interest
Rate
(dollars in thousands)
$
$
%
$
$
%
ASSETS
            
Interest-bearing deposits at banks
        28,264
              730
2.58
          24,470
               572
2.34
Interest bearing time deposits at banks
           3,878
              121
3.09
            5,255
               164
3.10
Investment securities:
            
  Taxable
      359,724
           8,685
2.41
        383,241
            8,043
2.10
  Tax-exempt (3)
      105,141
           2,650
2.52
        112,806
            2,866
2.54
Investment securities
      464,865
        11,335
2.44
        496,047
          10,909
2.20
Loans: (2)(3)(4)
            
  Residential mortgage loans
      356,292
        20,758
5.83
        290,971
          15,918
5.47
  Construction loans
      182,714
        13,607
7.45
        135,315
            9,485
7.01
  Commercial Loans
   1,242,182
        78,912
6.35
    1,081,488
          64,561
5.97
  Agricultural Loans
      350,588
        18,978
5.41
        342,980
          17,061
4.97
  Loans to state & political subdivisions
        55,919
           2,213
3.96
          59,308
            2,299
3.88
  Other loans
      107,656
           8,654
8.04
          94,519
            7,204
7.62
  Loans, net of discount (2)(3)(4)
   2,295,351
      143,122
6.24
    2,004,581
        116,528
5.81
Total interest-earning assets
   2,792,358
      155,308
5.56
    2,530,353
        128,173
5.07
Cash and due from banks
           9,306
    
            9,341
    
Bank premises and equipment
        21,124
    
          19,871
    
Other assets
      183,674
    
        139,474
    
Total non-interest earning assets
      214,104
    
        168,686
    
Total assets
   3,006,462
    
    2,699,039
    
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Interest-bearing liabilities:
            
  NOW accounts
      765,445
        19,205
             2.51
        666,505
          13,396
              2.01
  Savings accounts
      296,275
           1,532
             0.52
        318,299
            1,314
              0.41
  Money market accounts
      397,942
        12,482
             3.14
        364,385
            8,713
              2.39
  Certificates of deposit
      481,862
        19,107
             3.97
        328,553
            8,276
              2.52
Total interest-bearing deposits
   1,941,524
        52,326
             2.70
    1,677,742
          31,699
              1.89
Other borrowed funds
      323,409
        15,536
             4.80
        326,577
          15,159
              4.64
Total interest-bearing liabilities
   2,264,933
        67,862
             3.00
    2,004,319
          46,858
              2.34
Demand deposits
      385,702
    
        382,979
    
Other liabilities
        40,593
    
          38,419
    
Total non-interest-bearing liabilities
      426,295
    
        421,398
    
Stockholders' equity
      315,234
    
        273,322
    
Total liabilities & stockholders' equity
   3,006,462
    
    2,699,039
    
Net interest income
  
        87,446
    
          81,315
  
Net interest spread (5)
    
2.56%
    
2.73%
Net interest income as a percentage
            
  of average interest-earning assets
    
3.13%
    
3.21%
Ratio of interest-earning assets
            
  to interest-bearing liabilities
    
123%
    
126%
             
(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 2024 and 2023. 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)
          
 
December 31,
September 30,
June 30,
March 31,
December 31,
 
2024
2024
2024
2024
2023
Real estate:
          
  Residential
 $         351,398
 $        353,254
 $       354,588
 $      357,779
 $      359,990
  Commercial
         1,121,435
       1,110,548
      1,110,269
      1,115,900
      1,092,887
  Agricultural
            327,722
           331,734
          327,057
         318,413
         314,802
  Construction
            164,326
           178,706
          180,157
         184,506
         195,826
Consumer
            133,207
           143,064
            70,542
           53,101
           61,316
Other commercial loans
            131,310
           134,285
          130,851
         129,438
         136,168
Other agricultural loans
              29,662
             24,537
            26,247
           24,345
           30,673
State & political subdivision loans
              54,182
             54,874
            56,005
           56,177
           57,174
Total loans
         2,313,242
       2,331,002
      2,255,716
      2,239,659
      2,248,836
Less: allowance for credit losses - loans
              21,699
             21,695
            22,797
           21,598
           21,153
Net loans
 $     2,291,543
 $    2,309,307
 $   2,232,919
 $   2,218,061
 $   2,227,683
           
Past due and non-performing assets
          
           
Total Loans past due 30-89 days and still accruing
 $             8,015
 $            7,423
 $         20,652
 $          6,311
 $        10,457
           
Non-accrual loans
 $           25,701
 $          20,858
 $         14,949
 $        14,693
 $        12,187
Loans past due 90 days or more and accruing
                    276
                  701
                 285
                 820
                 516
Non-performing loans
 $           25,977
 $          21,559
 $         15,234
 $        15,513
 $        12,703
Other real estate owned
                 2,635
               2,486
              2,690
                 200
                 474
Total Non-performing assets
 $           28,612
 $          24,045
 $         17,924
 $        15,713
 $        13,177
           
           
           
 
Three Months Ended
Analysis of the Allowance for Credit Losses - Loans
December 31,
September 30,
June 30,
March 31,
December 31,
(In Thousands)
2024
2024
2024
2024
2023
Balance, beginning of period
 $           21,695
 $          22,797
 $         21,598
 $        21,153
 $        21,455
Charge-offs
                  (105)
             (1,212)
               (682)
               (674)
               (510)
Recoveries
                      19
                    10
                     7
                     7
                     8
Net (charge-offs) recoveries
                    (86)
             (1,202)
               (675)
               (667)
               (502)
Provision for credit losses - loans
                      90
                  100
              1,874
             1,112
                 200
Balance, end of period
 $           21,699
 $          21,695
 $         22,797
 $        21,598
 $        21,153


CITIZENS FINANCIAL SERVICES, INC.
        
Reconciliation of GAAP and Non-GAAP Financial Measures
      
(UNAUDITED)
        
(Dollars in thousands, except per share data)
        
         
 
As of
    
 
December 31,
    
 
2024
2023
    
Tangible Equity
        
Stockholders Equity - GAAP
 $         299,734
 $           279,666
    
Intangible Assets
            (88,650)
              (89,408)
    
Tangible Equity - Non-GAAP
            211,084
              190,258
    
Shares outstanding adjusted for June 2024 stock Dividend
         4,759,612
           4,753,583
    
Tangible Book value per share - Non-GAAP
 $              44.35
 $               40.02
    
         
 
As of
    
 
December 31,
    
 
2024
2023
    
Tangible Equity per share
        
Stockholders Equity per share - GAAP
 $              62.97
 $               58.83
    
Adjustment for intangible assets
               (18.62)
                (18.81)
    
Tangible Book value per share - Non-GAAP
 $              44.35
 $               40.02
    
         
         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL)
  
Average Stockholders Equity - GAAP
 $      3,015,467
 $        2,987,084
 $           2,981,322
 $      2,666,841
Average AOCL
            (21,929)
              (36,672)
                 (25,140)
             (32,198)
Average Assets, Excluding AOCL - Non-GAAP
         3,037,396
           3,023,756
              3,006,462
         2,699,039
Net Income - GAAP
 $              7,983
 $               7,540
 $                27,818
 $           17,811
Annualized Return on Average Assets-GAAP
1.06%
1.01%
0.93%
0.67%
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP
1.05%
1.00%
0.93%
0.66%
         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL)
  
Average Stockholders Equity - GAAP
 $         300,258
 $           267,232
 $              290,094
 $         241,124
Average AOCL
            (21,929)
              (36,672)
                 (25,140)
             (32,198)
Average Stockholder's Equity, Excluding AOCL - Non-GAAP
            322,187
              303,904
                 315,234
            273,322
Net Income - GAAP
 $              7,983
 $               7,540
 $                27,818
 $           17,811
Annualized Return on Average Stockholder's Equity-GAAP
10.63%
11.29%
9.59%
7.39%
Annualized Return on Average Stockholder's Equity, Excluding AOCL - Non-GAAP
9.91%
9.93%
8.82%
6.52%
         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Return on Average Tangible Equity
        
Average Stockholders Equity - GAAP
 $         300,258
 $           267,232
 $              290,094
 $         241,124
Average Intangible Assets
            (88,757)
              (88,536)
                 (89,031)
             (62,993)
Average Tangible Equity - Non-GAAP
            211,501
              178,696
                 201,063
            178,131
Net Income - GAAP
 $              7,983
 $               7,540
 $                27,818
 $           17,811
Annualized Return on Average Tangible Equity Non-GAAP
15.10%
16.88%
13.84%
10.00%
         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees, provision
associated with Braavo loans remaining after sale  and  merger and acquisition costs
Net Income - GAAP
 $              7,983
 $               7,540
 $                27,818
 $           17,811
After tax gain on sale of Braavo, net of legal fees
                          -
                          -
                       (712)
                        -
After tax provisision associatated with Braavo loans remaining after sale
                          -
                          -
                      1,427
                        -
After tax provision for credit losses - acquisition day 1 non-PCD
                          -
                          -
                               -
                3,627
After Tax merger and acquisition costs
                          -
                          -
                               -
                7,513
Net Income excluding merger and acquisition costs - Non-GAAP
 $              7,983
 $               7,540
 $                28,533
 $           28,951
Average Assets
         3,015,467
           2,987,084
              2,981,322
         2,666,841
Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax  and  merger and acquisition costs - Non-GAAP
1.06%
1.01%
0.96%
1.09%
         
Average Stockholders Equity - GAAP
 $         300,258
 $           267,232
 $              290,094
 $         241,124
Annualized Return on Average stockholders equity, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax  and  merger and acquisition costs - Non-GAAP
10.63%
11.29%
9.84%
12.01%
         
Average Tangible Equity - Non-GAAP
            211,501
              178,696
                 201,063
            178,131
Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax,   and  merger and acquisition costs - Non-GAAP
15.10%
16.88%
14.19%
16.25%
         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
 
2024
2023
2024
2023
Earnings per share, Excluding sale of Braavo assets, net of legal fees and  merger and acquisition costs
Net Income - GAAP
 $              7,983
 $               7,540
 $                27,818
 $           17,811
After tax gain on sale of Braavo, net of legal fees
                          -
                          -
                       (712)
                        -
After tax provisision associatated with Braavo loans remaining after sale
                          -
                          -
                      1,427
                        -
After tax provision for credit losses - acquisition day 1 non-PCD
                          -
                          -
                               -
                3,627
After Tax merger and acquisition costs
                          -
                          -
                               -
                7,513
Net income excluding one time items - Non-GAAP
 $              7,983
 $               7,540
 $                28,533
 $           28,951
Number of shares used in computation - basic
         4,750,062
           4,746,719
              4,750,185
         4,429,162
Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax,   and  merger and acquisition costs - Non-GAAP
 $                1.68
 $                 1.59
 $                     6.01
 $               6.54
         


         
 
For the Three Months Ended
For the Year Ended
 
December 31,
December 31,
Reconciliation of net interest income on fully taxable equivalent basis
2024
2023
2024
2023
Total interest income
 $           39,793
 $             38,512
 $              154,317
 $         127,118
Total interest expense
               16,920
                16,657
                    67,862
              46,858
Net interest income
               22,873
                21,855
                    86,455
              80,260
Tax equivalent adjustment
                    248
                     252
                         991
                1,055
Net interest income (fully taxable equivalent) - Non-GAAP
 $           23,121
 $             22,107
 $                87,446
 $           81,315




v3.24.4
Document and Entity Information
Dec. 31, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Dec. 31, 2024
Entity File Number 001-41410
Entity Registrant Name CITIZENS FINANCIAL SERVICES INC
Entity Central Index Key 0000739421
Entity Incorporation, State or Country Code PA
Entity Tax Identification Number 23-2265045
Entity Address, Address Line One 15 S MAIN ST
Entity Address, City or Town MANSFIELD
Entity Address, State or Province PA
Entity Address, Postal Zip Code 16933
City Area Code 570
Local Phone Number 662-0444
Title of 12(b) Security Common Stock, Par Value $1.00 Per Share
Trading Symbol CZFS
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Citizens Financial Servi... (NASDAQ:CZFS)
Historical Stock Chart
From Jan 2025 to Feb 2025 Click Here for more Citizens Financial Servi... Charts.
Citizens Financial Servi... (NASDAQ:CZFS)
Historical Stock Chart
From Feb 2024 to Feb 2025 Click Here for more Citizens Financial Servi... Charts.