CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED SECOND QUARTER 2025 FINANCIAL RESULTS

, /PRNewswire/ -- Citizens Financial Services, Inc (Nasdaq: CZFS), parent company of First Citizens Community Bank (the "Bank"), released today its unaudited consolidated financial results for the three and six months ended June 30, 2025. Highlights Net income for the first six months of 2025 was $16.1 million, which was $3.8 million, or 30.8% more than 2024's net income through June 30, 2024 due to the increase in net interest income after the provision for credit losses of $5.8 million. The effective tax rate for the first six months of 2025 was 18.7% compared to 17.4% in the comparable period in 2024. Net income was $8.5 million for the three months ended June 30, 2025, which was $3.2 million more than the net income for 2024's comparable period due an increase in net interest income after the provision for credit losses of $3.6 million. The effective tax rate for the three months ended June 30, 2025 was 18.8% compared to 17.4% in the comparable period in 2024. Net interest income before the provision for credit losses was $46.7 million for the six months ended June 30, 2025, an increase of $4,392,000, or 10.4%, over the same period a year ago and was primarily due to an increase in investment income and a decrease in interest expense. The provision for credit losses for the three and six months ended June 30, 2025 was $750,000 and $1,375,000, respectively compared to $2,002,000 and $2,787,000 for the three and six months ended June 30, 2024, respectively. The provision for 2024 was significantly impacted by loans that were not sold as part of the sale of a division known as Braavo that occurred in the first quarter of 2024. The vast majority of the Braavo loans that were retained after the sale were originated by HVB in 2023 prior to the acquisition and were current as of the acquisition date in 2023. The provision for the three and six months ended June 30, 2024, directly attributable to these loans was $1,137,000 and $1,806,000, respectively. Return on average equity for the three and six months (annualized) ended June 30, 2025 was 10.88% and 10.44% compared to 7.40% and 8.67% for the three and six months (annualized) ended June 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average equity for the three and six months (annualized) ended June 30, 2024 would have been 8.66% and 9.17%, respectively (non-GAAP). (1) Return on average tangible equity (non-GAAP) for the three and six months (annualized) ended June 30, 2025 was 15.19% and 14.65 compared to 10.76% and 12.64% for the three and six months (annualized) ended June 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average tangible equity for the three and six months (annualized) ended June 30, 2024 would have been 12.59% and 13.37% (non-GAAP). (1) Return on average assets for the three and six months (annualized) ended June 30, 2025 was 1.13% and 1.07% compared to 0.72% and 0.83% for the three and six months (annualized) ended June 30, 2024. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo were excluded, the return on average assets for the three and six months (annualized) ended June 30, 2024 would have been 0.84% and 0.88% (non-GAAP). (1) Non-performing assets decreased $1,236,000 since December 31, 2024 and totaled $27,376,000 as of June 30, 2025, which is $9,452,000 higher than the balance as of June 30, 2024. The increase from June 30, 2024 is due to loans acquired as part of the HVB acquisition. The Bank's strategy during 2024 for certain acquired loans was to either improve the credit metrics of the non-performing loans or have the customers refinance the loans with another institution or sell the underlying collateral. We continue to work with these customers on their ability to return to performing status or to pay-off the loan through a refinancing. The decrease since December reflects two large relationships being placed back on accrual status due to making contractual payments for at least six consecutive months. As a percent of loans, non-performing assets totaled 1.22%, 1.24% and 0.79% as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively. While non-performing assets have increased significantly as of June 30, 2025 when compared to June 30, 2024, specific reserves for these assets have decreased from $2,405,000 to $1,477,000. The decrease in the specific reserves from June 2024 is due to the amount of charge-offs recorded in the second half of 2024 that were reserved for as of June 30, 2024. Six Months Ended June 30, 2025 Compared to 2024 For the six months ended June 30, 2025, net income totaled $16,084,000 which compares to net income of $12,299,000 for the first six months of 2024, an increase of $3,785,000. Basic earnings per share of $3.35 for the first six months of 2025 compared to $2.56 for the first six months last year. Annualized return on equity for the six months ended June 30, 2025 and 2024 was 10.44% and 8.67%, while annualized return on assets was 1.07% and 0.83%, respectively. The increase in performance when comparing 2025 to 2024 was due to an increase in the net interest margin from 3.09% to 3.36% and a decrease in the provision for credit losses. Net interest income before the provision for credit loss for the six months ended June 30, 2025 totaled $46,650,000 compared to $42,258,000 for the six months ended June 30, 2024, resulting in an increase of $4,392,000, or 10.4%. Average interest earning assets increased $49.5 million for the six months ended June 30, 2025 compared to the same period last year, primarily due to an increase in taxable investments and outstanding student loans. Average loans increased $36.6 million while average investment securities increased $19.2 million. The yield on interest earning assets increased 6 basis points to 5.58%, while the cost of interest-bearing liabilities decreased 24 basis points to 2.75%. As a result, the tax effected net interest margin increased from 3.09% for the six months ended June 30, 2024 to 3.36% for the six months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2025 was $1,375,000 compared to $2,787,000 for the six months ended June 30, 2024, a decrease of $1,412,000. The provision for 2025 was due to an increase in past due loans and the annual update of loss drivers, which includes historical loss data, as well as prepayment and curtailment speeds. The provision for 2024 was impacted by the Braavo loans as previously mentioned and an increase in past due and classified loans during the second quarter of 2024. Total non-interest income was $7,092,000 for the six months ended June 30, 2025, which is $1,215,000 less than the non-interest income of $8,307,000 for the same period last year. The primary drivers were the gain on the sale of assets associated with Braavo and earnings on bank owned life insurance due to the passing of a former employee in the first quarter of 2024. Total non-interest expenses for the six months ended June 30, 2025 totaled $32,575,000 compared to $32,889,000 for the same period last year, which is a decrease of $314,000. Salary and benefit costs increased $358,000 due to additional healthcare expenses and post-employment benefits. There are 11 fewer FTES in 2025 compared to 2024. The decrease in professional fees and software costs is due to the sale of the Braavo division in 2024. The provision for income taxes increased $1,118,000 when comparing the six months ended June 30, 2025 to the same period in 2024 as a result of an increase in income before income tax of $4,903,000. Three Months Ended June 30, 2025 Compared to 2024 For the three months ended June 30, 2025, net income totaled $8,463,000 which compares to net income of $5,275,000 for the comparable period of 2024, an increase of $3,188,000 or 60.4%. Basic earnings per share of $1.76 for the three months ended June 30, 2025 compares to $1.10 for the 2024 comparable period. Annualized return on equity for the three months ended June 30, 2025 and 2024 was 10.88% and 7.40%, while annualized return on assets was 1.13% and 0.72%, respectively. Net interest income before the provision for credit losses for the three months ended June 30, 2025 totaled $23,648,000 compared to $21,300,000 for the three months ended June 30, 2024, resulting in an increase of $2,348,000, or 11.0%. Average interest earning assets increased $47.0 million for the three months ended June 30, 2025 compared to the same period last year, primarily due to increases in the average balance of outstanding student loans and taxable investments. Average loans increased $24.4 million, while average investment securities increased $23.1 million. The tax effected net interest margin for the three months ended June 30, 2025 was 3.47% compared to 3.15% for the same period last year. The yield on interest earning assets increased eight basis points to 5.66%, while the cost of interest-bearing liabilities decreased 27 basis points to 2.73%. The provision for credit losses for the second quarter of 2025 of $750,000 was driven by the increase in past due commercial loans, which primarily related to one commercial real estate relationship in our central Pennsylvania market that totaled $14.4 million. The provision for credit losses for 2024 period was impacted by the Braavo loans as previously mentioned and an increase in past due and classified loans during the second quarter of 2024. Total non-interest income was $3,665,000 for the three months ended June 30, 2025, $329,000 more than the comparable period last year. The primary drivers of the increase were an increase in the gains on loans sold of $260,000 and an increase in equity security gains of $120,000 due to market conditions. Total non-interest expenses for the three months ended June 30, 2025 totaled $16,147,000 compared to $16,246,000 for the same period last year, which is a decrease of $99,000, or 0.6%. Salary and employee benefits increased due to healthcare costs, profit sharing, vacation costs and other post-retirement benefits. ORE expenses decreased due to the recovery of legal fees on certain loans in the second quarter of 2025. The provision for income taxes increased $840,000 when comparing the three months ended June 30, 2025 to the same period in 2024. This increase was attributable to increase in income before provision for income taxes of $4,028,000. The effective tax rate was 18.8% and 17.4% for the three months ended June 30, 2025 and 2024, respectively. Balance Sheet and Other Information: At June 30, 2025, total assets were $2.97 billion compared to $3.03 billion at December 31, 2024 and $2.95 billion at June 30, 2024. The loan to deposit ratio as of June 30, 2025 was 97.78% compared to 97.21% as of December 31, 2024 and 99.24% as of June 30, 2024. Available for sale securities of $431.6 million at June 30, 2025 increased $5.7 million from December 31, 2024 and $29.0 million from June 30, 2024. The yield on the investment portfolio increased from 2.32% to 2.89% on a tax equivalent basis due to securities purchased during a higher market interest rate environment and lower yielding securities maturing. Investment activity for 2025 has focused on replacing securities as they mature. Net loans totaled $2.22 billion at June 30, 2025 and $2.29 billion at December 31, 2024, a decrease of $71.9 million. As of June 30, 2024, net loans totaled $2.23 billion. The decrease in net loans since year end and last year was due to the seasonality of the Company's student loan portfolio. This portfolio grows during the second half of the year and then pays down during the first half of the year. This seasonal behavior corresponds to the typical college semester and year. The allowance for credit losses - loans totaled $22,109,000 at June 30, 2025 which is an increase of $410,000 from December 31, 2024 and is due to increases in past due loans and changes in expected prepayment speeds and economic forecasts. The provision for credit losses on loans was $1,137,000 for the first half of 2025. Loan recoveries and charge-offs were $54,000 and $781,000, respectively, for the six months ended June 30, 2025. The allowance for credit losses as a percent of total loans was 0.99% as of June 30, 2025 and 0.94% as of December 31, 2024. Deposits decreased $89.4 million from December 31, 2024, to $2.29 billion at June 30, 2025. Competitive pressure for deposits remains high. Brokered CD's have decreased $33.1 million since December 31, 2024. Additionally, a school district in our southeastern Pennsylvania market saw a decrease in their balance of $68.3 million due to utilizing funds until they collect their local real estate taxes in the third quarter. Borrowed funds totaled $313.2 million as of June 30, 2025, a $15.5 million increase from December 31, 2024 to fund the investment growth since year-end. Stockholders' equity totaled $313.7 million at June 30, 2025, compared to $299.7 million at December 31, 2024, an increase of $13.9 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $11.4 million and totals $334.7 million (non-GAAP). The increase in stockholders' equity was attributable to net income for the six months ended June 30, 2025 totaling $16.1 million, offset by cash dividends for the six months ended June 30, 2025 totaling $4.6 million. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL decreased $2.5 million from December 31, 2024. Dividend Declared On June 3, 2025, the Board of Directors declared a cash dividend of $0.495 per share, which was paid on June 27, 2025 to shareholders of record at the close of business on June 13, 2025. This quarterly cash dividend is an increase of 2.1% over the regular cash dividend of $0.480 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2025, payable on June 28, 2024 to shareholders of record at the close of business on June 13, 2025. Citizens Financial Services, Inc. has nearly 1,850 shareholders, the majority of whom reside in markets where its offices are located. Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. (1) See reconciliation of GAAP and non-gaap measures at the end of the press release CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED) (Dollars in thousands, except per share data) As of or For The As of or For The Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Income and Performance Ratios Net Income $ 8,463 $ 5,275 $ 16,084 $ 12,299 Return on average assets (annualized) 1.13 % 0.72 % 1.07 % 0.83 % Return on average equity (annualized) 10.88 % 7.40 % 10.44 % 8.67 % Return on average tangible equity (annualized) (a) 15.19 % 10.76 % 14.65 % 12.64 % Net interest margin (tax equivalent) (a) 3.47 % 3.15 % 3.36 % 3.09 % Earnings per share - basic (b) $ 1.76 $ 1.10 $ 3.35 $ 2.56 Earnings per share - diluted (b) $ 1.76 $ 1.10 $ 3.35 $ 2.56 Cash dividends paid per share (b) $ 0.490 $ 0.480 $ 0.980 $ 0.961 Number of shares used in computation - basic (b) 4,797,716 4,796,000 4,797,642 4,795,596 Number of shares used in computation - diluted (b) 4,800,384 4,800,770 4,800,862 4,800,991 Asset quality Allowance for credit losses - loans $ 22,109 $ 22,797 Non-performing assets $ 27,376 $ 17,924 Allowance for credit losses - loans to total loans 0.99 % 1.01 % Non-performing assets to total loans 1.22 % 0.79 % Annualized net charge-offs to total loans 0.10 % 0.12 % 0.06 % 0.12 % Equity Book value per share (b) $ 65.25 $ 59.60 Tangible Book value per share (a) (b) $ 46.88 $ 41.08 Market Value per share (Last reported trade of month) $ 58.72 $ 44.94 Common shares outstanding 4,807,000 4,759,486 Other Average Full Time Equivalent Employees 381.4 389.7 380.6 391.9 Loan to Deposit Ratio 97.78 % 99.24 % Trust assets under management $ 188,844 $ 174,703 Brokerage assets under management $ 416,923 $ 368,379 Balance Sheet Highlights June 30, December 31, June 30, 2025 2024 2024 Assets $ 2,967,274 $ 3,025,724 $ 2,947,531 Investment securities 433,417 427,659 404,231 Loans (net of unearned income) 2,241,755 2,313,242 2,255,716 Allowance for credit losses - loans 22,109 21,699 22,797 Deposits 2,292,662 2,382,028 2,273,095 Stockholders' Equity 313,653 299,734 286,470 (a) See reconciliation of GAAP and Non-GAAP measures at the end of the press release (b) Prior period amounts were adjusted to reflect stock dividends. CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) June 30, December 31, June 30, (in thousands except share data) 2025 2024 2024 ASSETS: Cash and due from banks: Noninterest-bearing $ 26,799 $ 30,284 $ 22,023 Interest-bearing 22,685 11,918 16,410 Total cash and cash equivalents 49,484 42,202 38,433 Interest bearing time deposits with other banks 3,820 3,820 3,820 Equity securities 1,768 1,747 1,570 Available-for-sale securities 431,649 425,912 402,661 Loans held for sale 15,529 9,607 14,227 Loans (net of allowance for credit losses - loans: $22,109 at June 30, 2025; $21,699 at December 31, 2024 and $22,797 at June 30, 2024) 2,219,646 2,291,543 2,232,919 Premises and equipment 21,776 21,395 20,899 Accrued interest receivable 10,603 10,307 10,782 Goodwill 85,758 85,758 85,758 Bank owned life insurance 50,770 50,341 49,746 Other intangibles 2,530 2,892 3,244 Fair value of derivative instruments - asset 8,272 10,370 13,111 Deferred tax asset 13,913 15,199 17,185 Other assets 51,756 54,631 53,176 TOTAL ASSETS $ 2,967,274 $ 3,025,724 $ 2,947,531 LIABILITIES: Deposits: Noninterest-bearing $ 499,252 $ 532,776 $ 501,991 Interest-bearing 1,793,410 1,849,252 1,771,104 Total deposits 2,292,662 2,382,028 2,273,095 Borrowed funds 313,219 297,721 334,829 Accrued interest payable 2,741 4,693 5,482 Fair value of derivative instruments - liability 4,701 5,817 7,319 Other liabilities 40,298 35,731 40,336 TOTAL LIABILITIES 2,653,621 2,725,990 2,661,061 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 June 30, 2025, December 31, 2024 and June 30, 2024: issued 5,255,190 at June 30, 2025 and 5,207,577 at December 31, 2024 and 5,207,343 at June 30, 2024 5,255 5,208 5,207 Additional paid-in capital 147,878 144,984 144,985 Retained earnings 197,940 189,443 178,588 Accumulated other comprehensive loss (21,026) (23,521) (25,932) Treasury stock, at cost: 448,190 at June 30, 2025 and 447,965 shares at December 31, 2024 and 447,857 shares at June 30, 2024 (16,394) (16,380) (16,378) TOTAL STOCKHOLDERS' EQUITY 313,653 299,734 286,470 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,967,274 $ 3,025,724 $ 2,947,531 CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share and per share data) 2025 2024 2025 2024 INTEREST INCOME: Interest and fees on loans $ 35,227 $ 35,067 $ 70,783 $ 70,200 Interest-bearing deposits with banks 132 262 275 505 Investment securities: Taxable 2,397 1,663 4,736 3,287 Nontaxable 584 520 1,131 1,052 Dividends 409 390 838 791 TOTAL INTEREST INCOME 38,749 37,902 77,763 75,835 INTEREST EXPENSE: Deposits 11,449 12,655 23,743 24,976 Borrowed funds 3,652 3,947 7,370 8,601 TOTAL INTEREST EXPENSE 15,101 16,602 31,113 33,577 NET INTEREST INCOME 23,648 21,300 46,650 42,258 Provision for credit losses 750 2,002 1,375 2,787 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 22,898 19,298 45,275 39,471 NON-INTEREST INCOME: Service charges 1,303 1,385 2,594 2,757 Trust 183 201 407 445 Brokerage and insurance 627 563 1,310 1,228 Gains on loans sold 739 479 1,011 896 Equity security gains (losses), net 33 (87) 22 (32) Earnings on bank owned life insurance 355 328 701 996 Gain on sale of Braavo division - - - 1,102 Other 425 467 1,047 915 TOTAL NON-INTEREST INCOME 3,665 3,336 7,092 8,307 NON-INTEREST EXPENSES: Salaries and employee benefits 9,976 9,617 20,265 19,907 Occupancy 1,182 1,266 2,538 2,590 Furniture and equipment 318 295 583 531 Professional fees 525 698 1,042 1,401 FDIC insurance expense 495 509 945 1,034 Pennsylvania shares tax 305 330 624 640 Amortization of intangibles 127 147 254 296 Software expenses 453 494 885 1,008 Other real estate owned expenses 73 175 192 162 Other 2,693 2,715 5,247 5,320 TOTAL NON-INTEREST EXPENSES 16,147 16,246 32,575 32,889 Income before provision for income taxes 10,416 6,388 19,792 14,889 Provision for income tax expense 1,953 1,113 3,708 2,590 NET INCOME $ 8,463 $ 5,275 $ 16,084 $ 12,299 PER COMMON SHARE DATA: Net Income - Basic $ 1.76 $ 1.10 $ 3.35 $ 2.56 Net Income - Diluted $ 1.76 $ 1.10 $ 3.35 $ 2.56 Cash Dividends Paid $ 0.490 $ 0.480 $ 0.980 $ 0.961 Number of shares used in computation - basic 4,797,716 4,796,000 4,797,642 4,795,596 Number of shares used in computation - diluted 4,800,384 4,800,770 4,800,862 4,800,991 CITIZENS FINANCIAL SERVICES, INC. QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED) (in thousands, except per share data) Three Months Ended, June 30, March 31, Dec 31, Sept 30, June 30, 2025 2025 2024 2024 2024 Interest income $ 38,749 $ 39,014 $ 39,793 $ 38,689 $ 37,902 Interest expense 15,101 16,012 16,920 17,365 16,602 Net interest income 23,648 23,002 22,873 21,324 21,300 Provision (release) for credit losses 750 625 - (200) 2,002 Net interest income after provision (release) for credit losses 22,898 22,377 22,873 21,524 19,298 Non-interest income 3,632 3,438 3,321 3,596 3,423 Investment securities gains (losses), net 33 (11) 18 159 (87) Non-interest expenses 16,147 16,428 16,668 16,029 16,246 Income before provision for income taxes 10,416 9,376 9,544 9,250 6,388 Provision for income tax expense 1,953 1,755 1,561 1,714 1,113 Net income $ 8,463 $ 7,621 $ 7,983 $ 7,536 $ 5,275 Earnings Per Share - Basic $ 1.76 $ 1.59 $ 1.66 $ 1.57 $ 1.10 Earnings Per Share - Diluted $ 1.76 $ 1.59 $ 1.66 $ 1.57 $ 1.10 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 June 30, 2025 2024 Average Average Average Average Balance (1) Interest Rate Balance (1) Interest Rate (dollars in thousands) $ $ % $ $ % Interest-bearing deposits at banks 17,879 102 2.31 18,353 232 5.11 Interest bearing time deposits at banks 3,820 30 3.18 3,820 30 3.16 Investment securities: Taxable 381,141 2,806 2.95 355,321 2,053 2.31 Tax-exempt (3) 102,694 739 2.88 105,379 658 2.50 Investment securities 483,835 3,545 2.93 460,700 2,711 2.35 Loans: (2)(3)(4) Residential mortgage loans 347,408 5,212 6.08 358,448 5,232 5.87 Construction loans 165,056 2,967 7.29 184,103 3,367 7.36 Commercial Loans 1,269,944 19,956 6.37 1,251,484 20,154 6.48 Agricultural Loans 358,245 4,970 5.63 346,107 4,482 5.21 Loans to state & political subdivisions 53,051 517 3.95 56,290 556 3.97 Other loans 95,901 1,706 7.21 68,805 1,383 8.08 Loans, net of discount (2)(3)(4) 2,289,605 35,328 6.26 2,265,237 35,174 6.25 Total interest-earning assets 2,795,139 39,005 5.66 2,748,110 38,147 5.58 Cash and due from banks 9,665 9,199 Bank premises and equipment 21,836 21,053 Other assets 184,184 195,528 Total non-interest earning assets 215,685 225,780 Total assets 3,010,824 2,973,890 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Business Interest Checking 18,345 45 0.99 - - - NOW accounts 707,715 3,742 2.14 766,142 4,776 2.51 Savings accounts 288,198 329 0.46 299,318 391 0.53 Money market accounts 447,711 3,181 2.88 381,377 2,972 3.13 Certificates of deposit 454,893 4,152 3.70 457,570 4,516 3.97 Total interest-bearing deposits 1,916,862 11,449 2.42 1,904,407 12,655 2.67 Other borrowed funds 329,154 3,652 4.50 324,736 3,947 4.89 Total interest-bearing liabilities 2,246,016 15,101 2.73 2,229,143 16,602 3.00 Demand deposits 390,102 382,312 Other liabilities 41,369 49,051 Total non-interest-bearing liabilities 431,471 431,363 Stockholders' equity 333,337 313,384 Total liabilities & stockholders' equity 3,010,824 2,973,890 Net interest income 23,904 21,545 Net interest spread (5) 2.93 % 2.58 % Net interest income as a percentage of average interest-earning assets 3.47 % 3.15 % Ratio of interest-earning assets to interest-bearing liabilities 124 % 123 % (1) Averages are based on daily averages. (2) Includes loan origination and commitment fees. (3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the end of the press release (4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. (5) Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS (UNAUDITED) Six Months Ended June 30, 2025 2024 Average Average Average Average Balance (1) Interest Rate Balance (1) Interest Rate (dollars in thousands) $ $ % $ $ % ASSETS Interest-bearing deposits at banks 24,052 216 1.81 30,119 445 2.97 Interest bearing time deposits at banks 3,820 59 3.11 3,937 60 3.06 Investment securities: Taxable 381,886 5,574 2.92 359,142 4,078 2.27 Tax-exempt (3) 102,854 1,431 2.78 106,438 1,332 2.50 Investment securities 484,740 7,005 2.89 465,580 5,410 2.32 Loans: (2)(3)(4) Residential mortgage loans 349,226 10,312 5.95 358,472 10,291 5.77 Construction loans 164,252 5,888 7.23 187,001 6,858 7.38 Commercial Loans 1,262,225 39,383 6.29 1,243,546 39,674 6.42 Agricultural Loans 357,561 9,696 5.47 345,287 8,887 5.18 Loans to state & political subdivisions 53,389 1,034 3.91 56,469 1,106 3.94 Other loans 130,147 4,674 7.24 89,472 3,599 8.09 Loans, net of discount (2)(3)(4) 2,316,800 70,987 6.18 2,280,247 70,415 6.21 Total interest-earning assets 2,829,412 78,267 5.58 2,779,883 76,330 5.52 Cash and due from banks 9,643 9,511 Bank premises and equipment 21,691 21,171 Other assets 177,531 181,792 Total non-interest earning assets 208,865 212,474 Total assets 3,038,277 2,992,357 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: Business Interest Checking 17,995 85 0.95 - - - NOW accounts 723,673 7,796 2.17 783,055 9,999 2.57 Savings accounts 290,576 677 0.47 300,704 778 0.52 Money market accounts 432,891 6,206 2.89 381,209 5,765 3.04 Certificates of deposit 481,272 8,979 3.76 439,995 8,434 3.86 Total interest-bearing deposits 1,946,407 23,743 2.46 1,904,963 24,976 2.64 Other borrowed funds 337,737 7,370 4.40 350,354 8,601 4.94 Total interest-bearing liabilities 2,284,144 31,113 2.75 2,255,317 33,577 2.99 Demand deposits 381,048 376,632 Other liabilities 42,426 49,266 Total non-interest-bearing liabilities 423,474 425,898 Stockholders' equity 330,659 311,142 Total liabilities & stockholders' equity 3,038,277 2,992,357 Net interest income 47,154 42,753 Net interest spread (5) 2.83 % 2.53 % Net interest income as a percentage of average interest-earning assets 3.36 % 3.09 % Ratio of interest-earning assets to interest-bearing liabilities 124 % 123 % (1) Averages are based on daily averages. (2) Includes loan origination and commitment fees. (3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using a statutory federal income tax rate of 21% for 2025 and 2024. See reconciliation of GAAP and non-gaap measures at the end of the press release (4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. (5) Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR CREDIT LOSSES (UNAUDITED) (Excludes Loans Held for Sale) (In Thousands) June 30, March 31, December 31, September 30, June 30, 2025 2025 2024 2024 2024 Real estate: Residential $ 341,671 $ 350,221 $ 351,398 $ 353,254 $ 354,588 Commercial 1,151,585 1,117,240 1,121,435 1,110,548 1,110,269 Agricultural 331,995 329,985 327,722 331,734 327,057 Construction 138,307 168,896 164,326 178,706 180,157 Consumer 46,933 129,943 133,207 143,064 70,542 Other commercial loans 150,171 137,529 131,310 134,285 130,851 Other agricultural loans 28,366 28,488 29,662 24,537 26,247 State & political subdivision loans 52,727 53,361 54,182 54,874 56,005 Total loans 2,241,755 2,315,663 2,313,242 2,331,002 2,255,716 Less: allowance for credit losses - loans 22,109 22,081 21,699 21,695 22,797 Net loans $ 2,219,646 $ 2,293,582 $ 2,291,543 $ 2,309,307 $ 2,232,919 Past due and non-performing assets Total Loans past due 30-89 days and still accruing $ 18,554 $ 9,632 $ 8,015 $ 7,423 $ 20,652 Non-accrual loans $ 24,595 $ 23,545 $ 25,701 $ 20,858 $ 14,949 Loans past due 90 days or more and accruing 347 1,393 276 701 285 Non-performing loans $ 24,942 $ 24,938 $ 25,977 $ 21,559 $ 15,234 Other real estate owned 2,434 2,544 2,635 2,486 2,690 Total Non-performing assets $ 27,376 $ 27,482 $ 28,612 $ 24,045 $ 17,924 Three Months Ended Analysis of the Allowance for Credit Losses - Loans June 30, March 31, December 31, September 30, June 30, (In Thousands) 2025 2025 2024 2024 2024 Balance, beginning of period $ 22,081 $ 21,699 $ 21,695 $ 22,797 $ 21,598 Charge-offs (596) (185) (105) (1,212) (682) Recoveries 25 29 19 10 7 Net charge-offs (571) (156) (86) (1,202) (675) Provision for credit losses - loans 599 538 90 100 1,874 Balance, end of period $ 22,109 $ 22,081 $ 21,699 $ 21,695 $ 22,797 CITIZENS FINANCIAL SERVICES, INC. Reconciliation of GAAP and Non-GAAP Financial Measures (UNAUDITED) (Dollars in thousands, except per share data) As of June 30 2025 2024 Tangible Equity Stockholders Equity - GAAP $ 313,653 $ 286,470 Intangible Assets (88,288) (89,002) Tangible Equity - Non-GAAP 225,365 197,468 Shares outstanding adjusted for June 2024 stock Dividend 4,807,000 4,806,559 Tangible Book value per share - Non-GAAP $ 46.88 $ 41.08 As of June 30 2025 2024 Tangible Equity per share Stockholders Equity per share - GAAP $ 65.25 $ 59.60 Adjustment for intangible assets (18.37) (18.52) Tangible Book value per share - Non-GAAP $ 46.88 $ 41.08 For the Three Months Ended For the Six Months Ended June 30, June 30, 2025 2024 2025 2024 Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL) Average Assets - GAAP $ 2,988,727 $ 2,945,690 $ 3,015,695 $ 2,965,049 Average AOCL (22,098) (28,200) (22,581) (27,308) Average Assets, Excluding AOCL - Non-GAAP 3,010,825 2,973,890 3,038,276 2,992,357 Net Income - GAAP $ 8,463 $ 5,275 $ 16,084 $ 12,299 Annualized Return on Average Assets-GAAP 1.13 % 0.72 % 1.07 % 0.83 % Annualized Return on Average Assets, Excluding AOCL - Non-GAAP 1.12 % 0.71 % 1.06 % 0.82 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2025 2024 2025 2024 Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL) Average Stockholders Equity - GAAP $ 311,239 $ 285,184 $ 308,078 $ 283,834 Average AOCL (22,098) (28,200) (22,581) (27,308) Average Stockholder's Equity, Excluding AOCL - Non-GAAP 333,337 313,384 330,659 311,142 Net Income - GAAP $ 8,463 $ 5,275 $ 16,084 $ 12,299 Annualized Return on Average Stockholder's Equity-GAAP 10.88 % 7.40 % 10.44 % 8.67 % Annualized Return on Average Stockholder's Equity, Excluding AOCL - Non-GAAP 10.16 % 6.73 % 9.73 % 7.91 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2025 2024 2025 2024 Return on Average Tangible Equity Average Stockholders Equity - GAAP $ 311,239 $ 285,184 $ 308,078 $ 283,834 Average Intangible Assets (88,388) (89,119) (88,479) (89,220) Average Tangible Equity - Non-GAAP 222,851 196,065 219,599 194,614 Net Income - GAAP $ 8,463 $ 5,275 $ 16,084 $ 12,299 Annualized Return on Average Tangible Equity Non-GAAP 15.19 % 10.76 % 14.65 % 12.64 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2025 2024 2025 2024 Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees andprovision associated with Braavo loans remaining after sale Net Income - GAAP $ 8,463 $ 5,275 $ 16,084 $ 12,299 After tax gain on sale of Braavo, net of legal fees - - - (712) After tax provision associated with Braavo loans remaining after sale - 898 - 1,427 Net Income excluding sale of Braavo assets, net of legal fees and provision associated with Braavo loansremaining after sale - Non-GAAP $ 8,463 $ 6,173 $ 16,084 $ 13,014 Average Assets 2,988,727 2,945,690 3,015,695 2,965,049 Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provisionassociated with Braavo loans remaining after sale, net of tax - Non-GAAP 1.13 % 0.84 % 1.07 % 0.88 % Average Stockholders Equity - GAAP $ 311,239 $ 285,184 $ 308,078 $ 283,834 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 - Non-GAAP 10.88 % 8.66 % 10.44 % 9.17 % Average Tangible Equity - Non-GAAP 222,851 196,065 219,599 194,614 Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provisionassociated with Braavo loans remaining after sale, net of tax, - Non-GAAP 15.19 % 12.59 % 14.65 % 13.37 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2025 2024 2025 2024 Earnings per share, Excluding sale of Braavo assets, net of legal fees and provision associatedwith Braavo loans remaining after sale Net Income - GAAP $ 8,463 $ 5,275 $ 16,084 $ 12,299 After tax gain on sale of Braavo, net of legal fees - - - (712) After tax provision associated with Braavo loans remaining after sale - 898 - 1,427 Net income excluding one time items - Non-GAAP $ 8,463 $ 6,173 $ 16,084 $ 13,014 Number of shares used in computation - basic 4,797,716 4,796,000 4,797,642 4,795,596 Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associatedwith Braavo loans remaining after sale, net of tax - Non-GAAP $ 1.76 $ 1.29 $ 3.35 $ 2.71 For the Three Months Ended For the Six Months Ended June 30, June 30, Reconciliation of net interest income on fully taxable equivalent basis 2025 2024 2025 2024 Total interest income $ 38,749 $ 37,902 $ 77,763 $ 75,835 Total interest expense 15,101 16,602 31,113 33,577 Net interest income 23,648 21,300 46,650 42,258 Tax equivalent adjustment 256 245 504 495 Net interest income (fully taxable equivalent) - Non-GAAP $ 23,904 $ 21,545 $ 47,154 $ 42,753 SOURCE Citizens Financial Services, Inc. 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CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED SECOND QUARTER 2025 FINANCIAL RESULTS

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