CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FIRST QUARTER 2023 FINANCIAL RESULTS.

MANSFIELD, Pa: Citizens Financial Services, Inc (Nasdaq: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three months ended March 31, 2023.

Highlights

Citizens Financial Services, Inc. has received regulatory approval for the acquisition of HV Bancorp, Inc.("HVB"), with the transaction expected to close on June 16, 2023.

Net income was $6.9 million for the three months ended March 31, 2023, which is 1.9% more than the net income for 2022's comparable period. The increase was due to an increase in net interest income. The effective tax rate for the three months ended March 31, 2023 was 19.0% compared to 17.9% in the comparable period in 2022, with the increase being due an increase in income before the provision of income taxes of $264,000 and certain merger and acquisition expenses not being tax deductible.

Net interest income before the provision for credit losses was $18.1 million for the three months ended March 31, 2023, an increase of $1,818,000, or 11.2%, over the same period a year ago.

Return on average equity for the three months (annualized) ended March 31, 2023 was 11.49% compared to 12.46% for the three months (annualized) ended March 31, 2022.

Return on average tangible equity for the three months (annualized) ended March 31, 2023 was 13.30% compared to 14.70% for the three months (annualized) ended March 31, 2022 (non-GAAP). (1)

Return on average assets for the three months (annualized) ended March 31, 2023 was 1.16% compared to 1.26% for the three months (annualized) ended March 31, 2022.

Non-performing assets increased $1,952,000 since March 31, 2022 and total $10,905,000 as of March 31, 2023, which is $3.4 million higher than the balance at December 31, 2022, and is due to two commercial loan relationships, secured by real estate, being placed on non-accrual status during the first quarter of 2023. As a percent of loans, non-performing assets totaled 0.63%, 0.43% and 0.61% as of March 31, 2023, December 31, 2022 and March 31, 2022.

First Quarter of 2023 Compared to the First Quarter of 2022

For the three months ended March 31, 2023, net income totaled $6,867,000 which compares to net income of $6,740,000 for the comparable period of 2022, an increase of $127,000 or 1.9%. Basic earnings per share of $1.73 for the three months ended March 31, 2023 compares to $1.69 for the 2022 comparable period. Annualized return on equity for the three months ended...