#USA #Mansfield #Citizens Financial #First Citizens Community Bank #Q1 Financial Results

Citizens Financial Services, Inc. Reports Strong Financial Results for Q1 2026

MANSFIELD, Pa. — Citizens Financial Services, Inc. (NASDAQ: CZFS), the parent company of First Citizens Community Bank, has revealed its unaudited consolidated financial results for the first quarter ending March 31, 2026. The company reported a net income of $10.4 million, reflecting a substantial 36.2% increase compared to the same period last year. This notable rise was primarily driven by an impressive increase in net interest income, which surged by $3.1 million compared to the previous year.

Key Financial Highlights

• - Net Income: The total net income for Q1 2026 totaled $10,376,000, up from $7,621,000 in Q1 2025.
• - Earnings Per Share: Basic earnings per share rose to $2.16, compared to $1.59 in the year-ago quarter.
• - Return on Average Equity: The return on average equity surged to 12.03%, up from 10.00% in Q1 2025.

The effective tax rate for the reported quarter was 18.3%, slightly lower than the 19.1% in Q1 2025. This reduction was attributed to an increase in nontaxable interest income and revenues from additional bank-owned life insurance purchased at the beginning of 2026.

Detailed Analysis of Net Interest Income

Citizens Financial Services reported a net interest income before the provision for credit losses of $26,113,000 for the three months ending March 31, 2026. This marks a 13.5% increase from $23,002,000 in the previous year’s quarter. The rise was largely due to increased interest income from loans coupled with reduced interest expenses on deposits and borrowings.

The company also demonstrated efficient management of its loan portfolio. The yield on interest-earning assets increased by 14 basis points, reaching 5.71%, while the cost of interest-bearing liabilities dropped by 34 basis points to 2.46%.

Asset Quality and Provisions

While the financial results were largely positive, there was a noticeable increase in non-performing assets, which rose by $10.9 million since December 31, 2025, totaling $40.1 million as of March 31, 2026. The increase was influenced by four commercial real estate loans becoming non-accrual after being more than 90 days past due. The company remains focused on improving the credit metrics of these non-performing loans.

Despite the increase in non-performing assets, the provision for credit losses decreased from $625,000 in Q1 2025 to $500,000 in the reported quarter, indicating cautiously optimistic risks due to adjusted economic conditions.

Dividend Declared

Reflecting its robust financial performance, the Board of Directors declared a cash dividend of $0.50 per share, payable on March 27, 2026. This represents an increase of 2.0% over the dividend declared in the same period last year.

Outlook

As Citizens Financial Services moves forward, it remains poised for growth, with a strong focus on enhancing its market position and addressing challenges in non-performing asset management. The combination of strong earnings growth, efficient cost management, and a disciplined approach to risk will continue to be crucial as the company navigates changing market dynamics.

In conclusion, Q1 2026 has set a solid foundation for Citizens Financial Services, underlining its core strength in the competitive banking landscape.

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