CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FIRST QUARTER 2024 FINANCIAL RESULTS

About this update from Citizens Financial Services, Inc.

MANSFIELD, Penn. , April 25, 2024 /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 months ended March 31, 2024 . Highlights The financial results of the Company continue to benefit from the acquisition of HV Bancorp, Inc. ("HVB") that closed in the second quarter of 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 . Legal fees associated with the sale totaled approximately $201,000 . Net income was $7.0 million for the three months ended March 31, 2024 , which is 2.3% more than the net income for 2023's comparable period. The increase was driven by the gain on the sale of Braavo, which resulted in a pre-tax gain of approximately $900,000 , net of legal fees. The effective tax rate for the three months ended March 31, 2024 was 17.4% compared to 19.0% in the comparable period in 2023, with the decrease being due to an increase in earnings on bank owned life insurance due to the passing of a former executive, which is not subject to income tax, and certain merger and acquisition expenses from 2023 not being tax deductible. Net interest income before the provision for credit losses was $21.0 million for the three months ended March 31, 2024 , an increase of $2,878,000 , or 15.9%, over the same period a year ago and was primarily due to the HVB acquisition. Return on average equity for the three months (annualized) ended March 31, 2024 was 9.10% compared to 11.49% for the three months (annualized) ended March 31, 2023 . Return on average tangible equity for the three months (annualized) ended March 31, 2024 was 12.80% compared to 13.30% for the three months (annualized) ended March 31, 2023 (non-GAAP). (1) Return on average assets for the three months (annualized) ended March 31, 2024 was 0.93% compared to 1.16% for the three months (annualized) ended March 31, 2023 . Non-performing assets increased $4,833,000 since March 31, 2023 and total $15,713,000 as of March 31, 2024 , which is $2.5 million higher than the balance at December 31, 2023 . The increase from March 31, 2023 and December 2023 is due to loans acquired as part of the HVB acquisition. As a percent of loans, non-performing assets totaled 0.70%, 0.59% and 0.63% as of March 31, 2024 , December 31, 2023 and March 31, 2023 . First Quarter of 2024 Compared to the First Quarter of 2023 For the three months ended March 31, 2024 , net income totaled $7,024,000 which compares to net income of $6,867,000 for the comparable period of 2023, an increase of $157,000 or 2.3%. Basic earnings per share of $1.49 for the three months ended March 31, 2024 compares to $1.71 for the 2023 comparable period. Annualized return on equity for the three months ended March 31, 2024 and 2023 was 9.10% and 11.49%, while annualized return on assets was 0.93% and 1.16%, respectively. Net interest income before the provision for credit losses for the three months ended March 31, 2024 totaled $20,958,000 compared to $18,080,000 for the three months ended March 31, 2023 , resulting in an increase of $2,878,000 , or 15.9%. Average interest earning assets increased $545.6 million for the three months ended March 31, 2024 compared to the same period last year, primarily due to the HVB acquisition. Average loans increased $563.1 million , while average investment securities decreased $30.5 million . The tax effected net interest margin for the three months ended March 31, 2024 was 3.05% compared to 3.30% for the same period last year. The yield on interest earning assets increased 92 basis points to 5.48%, while the cost of interest bearing liabilities increased 1.34% to 2.99% due to the rise in market interest rates and competitive pressure. Due to the increase in non-performing loans and a change in estimated prepayment speeds on performing loans, a provision for credit losses of $785,000 was recorded in the first quarter of 2024. Due to limited loan origination activity in the first quarter of 2023, no provision was recorded for the first quarter of 2023. Total non-interest income was $4,971,000 for the three months ended March 31, 2024 , $2,797,000 more than the comparable period last year. 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 increased. Earnings on bank owned life insurance also increased due to the passing of a former employee in the first quarter of 2024. During the first quarter of 2024, the Company experienced a gain on its equity investment portfolio compared to a loss in the first quarter of 2023, both of which were due to market conditions at the time. Total non-interest expenses for the three months ended March 31, 2024 totaled $16,643,000 compared to $11,778,000 for the same period last year, which is an increase of $4,865,000 , or 41.3%. Salary and benefit costs increased $2,613,000 due to an additional 80.9 FTEs as a result of the acquisition and merit increases for 2024 as well as an increase in health insurance costs of $423,000 . The increases in occupancy, furniture and fixtures, software expenses and amortization expenses was due to the acquisition and additional branches as part of it. FDIC insurance expense increased $225,000 due to the Company's increased size and the Bank's lower leverage capital ratio. Professional fees increased due to various legal matters, of which $201,000 was related to the sale of certain Braavo assets. 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 acquisition, other expenses increased due to insurance reimbursement received in 2023 to cover amounts previously expensed. Merger and acquisitions costs for the merger with HVB totaled $244,000 in 2023 and include professional and consulting fees, printing and travel related expenses. The provision for income taxes decreased $132,000 when comparing the three months ended March 31, 2024 to the same period in 2023. This decrease was attributable to death benefits received upon the passing of a former employees and certain expenses in 2023 not being tax deductible. The effective tax rate was 17.4% and 19.0% for the three months ended March 31, 2024 and 2023, respectively. Balance Sheet and Other Information: At March 31, 2024 , total assets were $2.92 billion compared to $2.98 billion at December 31, 2023 and $2.34 billion at March 31, 2023 . The loan to deposit ratio as of March 31, 2024 was 97.25% compared to 96.87% as of December 31, 2023 and 95.77% as of March 31, 2023 . Available for sale securities of $404.9 million at March 31, 2024 decreased $12.7 million from December 31, 2023 and decreased $38.6 million from March 31, 2023 . The yield on the investment portfolio increased from 2.12% to 2.29% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. Investment activity has been limited in the first quarter of 2024. Net loans as of March 31, 2024 totaled $2.22 billion and decreased $9.6 million from December 31, 2023 , due to a decrease in the amount of student loans outstanding and selling loans as part of the Braavo disposition. In comparison to March 31, 2023 , loans have grown $509.8 million due to the HVB acquisition. The allowance for credit losses - loans totaled $21,598,000 at March 31, 2024 which is an increase of $445,000 from December 31, 2023 and is due to change in expected prepayment speeds and specific reserves on non-performing loans. The provision for credit losses on loans was $1,112,000 for the first quarter of 2024. Loan recoveries and charge-offs were $7,000 and $674,000 , respectively, for the three months ended March 31, 2024 with the majority of the charge-offs associated with loans acquired as part of the HVB acquisition. The allowance as a percent of total loans was 0.96% as of March 31, 2024 and 0.94% as of December 31, 2023 . Deposits decreased $18.7 million from December 31, 2023 , to $2.30 billion at March 31, 2024 . With the rise in interest rates, competitive pressure for deposits has increased. Additionally, we have numerous state and political organizations as customers who withdrew funds during the first quarter of 2024 to fund various projects and bond payments. Borrowed funds totaled $283.6 million as of March 31, 2024 , a $38.5 million decrease from December 31, 2023 . Stockholders' equity totaled $282.7 million at March 31, 2024 , compared to $279.7 million at December 31, 2023 , an increase of $3.0 million . Excluding accumulated other comprehensive loss (AOCI), stockholders equity increased $4.7 million and totals $309.3 million . The increase in stockholders equity, excluding AOCI, was attributable to net income for the three months ended March 31, 2024 totaling $7.0 million , offset by cash dividends for the first quarter totaling $2.3 million . As a result of changes in market interest rates impacting the fair value of investment securities and swaps, AOCI decreased $1.7 million from December 31, 2023 . Dividend Declared On March 5, 2024 , the Board of Directors declared a cash dividend of $0.49 per share, which was paid on March 29, 2024 to shareholders of record at the close of business on March 15, 2024 . This quarterly cash dividend is an increase of 2.1% over the regular cash dividend of $0.48 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2023 . Citizens Financial Services, Inc. has nearly 1,900 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 Three Months Ended March 31 , 2024 2023 Income and Performance Ratios Net Income $ 7,024 $ 6,867 Return on average assets (annualized) 0.93 % 1.16 % Return on average equity (annualized) 9.10 % 11.49 % Return on average tangible equity (annualized) (a) 12.80 % 13.30 % Net interest margin (tax equivalent)(a) 3.05 % 3.30 % Earnings per share - basic (b) $ 1.49 $ 1.71 Earnings per share - diluted (b) $ 1.49 $ 1.71 Cash dividends paid per share (b) $ 0.490 $ 0.480 Number of shares used in computation - basic (b) 4,701,853 4,005,370 Number of shares used in computation - diluted (b) 4,701,853 4,005,375 Asset quality Allowance for credit losses - loans $ 21,598 $ 15,250 Non-performing assets $ 15,713 $ 10,880 Allowance for credit losses - loans/total loans 0.96 % 0.88 % Non-performing assets to total loans 0.70 % 0.63 % Annualized net charge-offs to total loans 0.12 % 0.00 % Equity Book value per share (b) $ 65.71 $ 59.85 Tangible Book value per share (a) (b) $ 46.76 $ 51.73 Market Value (Last reported trade of month) $ 49.20 $ 83.55 Common shares outstanding 4,706,991 3,971,049 Other Average Full Time Equivalent Employees 394.1 313.2 Loan to Deposit Ratio 97.25 % 95.77 % Trust assets under management $ 173,716 $ 156,999 Brokerage assets under management $ 362,408 $ 294,925 Balance Sheet Highlights March 31 , December 31 , March 31 , 2024 2023 2023 Assets $ 2,921,103 $ 2,975,321 $ 2,335,398 Investment securities 406,523 419,539 445,338 Loans (net of unearned income) 2,239,659 2,248,836 1,723,475 Allowance for credit losses - loans 21,598 21,153 15,250 Deposits 2,302,881 2,321,481 1,799,687 Stockholders' Equity 282,674 279,666 213,238 (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) March 31 , December 31 , March 31 , (in thousands except share data) 2024 2023 2023 ASSETS: Cash and due from banks: Noninterest-bearing $ 14,047 $ 37,733 $ 24,249 Interest-bearing 15,572 15,085 1,924 Total cash and cash equivalents 29,619 52,818 26,173 Interest bearing time deposits with other banks 3,820 4,070 6,055 Equity securities 1,658 1,938 1,923 Available-for-sale securities 404,865 417,601 443,415 Loans held for sale 8,346 9,379 671 Loans (net of allowance for credit losses - loans: $21,598 at March 31, 2024 ; $21,153 at December 31, 2023 and $15,250 at March 31, 2023 ) 2,218,061 2,227,683 1,708,225 Premises and equipment 21,083 21,384 17,588 Accrued interest receivable 10,596 11,043 7,176 Goodwill 85,758 85,758 31,376 Bank owned life insurance 49,418 49,897 39,573 Other intangibles 3,450 3,650 1,181 Fair value of derivative instruments - asset 14,857 13,687 14,197 Deferred tax asset 17,672 17,339 10,786 Other assets 51,900 59,074 27,059 TOTAL ASSETS $ 2,921,103 $ 2,975,321 $ 2,335,398 LIABILITIES: Deposits: Noninterest-bearing $ 523,844 $ 523,784 $ 369,658 Interest-bearing 1,779,037 1,797,697 1,430,029 Total deposits 2,302,881 2,321,481 1,799,687 Borrowed funds 283,565 322,036 288,059 Accrued interest payable 4,123 4,298 1,768 Fair value of derivative instruments - liability 8,698 7,922 8,234 Other liabilities 39,162 39,918 24,412 TOTAL LIABILITIES 2,638,429 2,695,655 2,122,160 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 March 31, 2024 , December 31, 2023 and March 31, 2023 : issued 5,160,754 at March 31, 2024 and December 31, 2023 and 4,427,687 at March 31, 2023 5,161 5,161 4,428 Additional paid-in capital 143,227 143,233 80,926 Retained earnings 177,693 172,975 171,629 Accumulated other comprehensive loss (26,620) (24,911) (26,762) Treasury stock, at cost: 453,763 at March 31, 2024 and 453,760 shares at December 31, 2023 and 456,638 shares at March 31, 2023 (16,787) (16,792) (16,983) TOTAL STOCKHOLDERS' EQUITY 282,674 279,666 213,238 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,921,103 $ 2,975,321 $ 2,335,398 CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Three Months Ended March 31 , (in thousands, except share and per share data) 2024 2023 INTEREST INCOME: Interest and fees on loans $ 35,133 $ 22,549 Interest-bearing deposits with banks 243 71 Investment securities: Taxable 1,624 1,556 Nontaxable 532 617 Dividends 401 314 TOTAL INTEREST INCOME 37,933 25,107 INTEREST EXPENSE: Deposits 12,321 3,939 Borrowed funds 4,654 3,088 TOTAL INTEREST EXPENSE 16,975 7,027 NET INTEREST INCOME 20,958 18,080 Provision for credit losses 785 - Provision for credit losses - acquisition day 1 non-PCD - - NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 20,173 18,080 NON-INTEREST INCOME: Service charges 1,372 1,211 Trust 244 230 Brokerage and insurance 665 514 Gains on loans sold 417 45 Equity security gains (losses), net 55 (218) Available for sale security losses, net - - Earnings on bank owned life insurance 668 218 Gain on sale of Braavo division 1,102 - Other 448 174 TOTAL NON-INTEREST INCOME 4,971 2,174 NON-INTEREST EXPENSES: Salaries and employee benefits 10,290 7,677 Occupancy 1,324 835 Furniture and equipment 236 151 Professional fees 703 381 FDIC insurance expense 525 300 Pennsylvania shares tax 310 298 Amortization of intangibles 148 31 Software expenses 514 351 ORE (income) expenses (13) 26 Merger and acquisition expenses - 244 Other 2,606 1,484 TOTAL NON-INTEREST EXPENSES 16,643 11,778 Income before provision for income taxes 8,501 8,476 Provision for income tax expense 1,477 1,609 NET INCOME $ 7,024 $ 6,867 PER COMMON SHARE DATA: Net Income - Basic $ 1.49 $ 1.71 Net Income - Diluted $ 1.49 $ 1.71 Cash Dividends Paid $ 0.490 $ 0.480 Number of shares used in computation - basic 4,701,853 4,005,370 Number of shares used in computation - diluted 4,701,853 4,005,375 CITIZENS FINANCIAL SERVICES, INC. QUARTERLY CONDENSED, CONSOLIDATED INCOME (LOSS) STATEMENT INFORMATION (UNAUDITED) (in thousands, except per share data) Three Months Ended, March 31 , Dec 31 , Sept 30 , June 30 , March 31 , 2024 2023 2023 2023 2023 Interest income $ 37,933 $ 38,512 $ 36,689 $ 26,810 $ 25,107 Interest expense 16,975 16,657 14,285 8,889 7,027 Net interest income 20,958 21,855 22,404 17,921 18,080 Provision for credit losses 785 200 475 262 - Provision for credit losses - acquisition day 1 non-PCD - - - 4,591 - Net interest income after provision for credit losses 20,173 21,655 21,929 13,068 18,080 Non-interest income 4,916 3,410 3,593 2,405 2,392 Investment securities gains (losses), net 55 79 69 (125) (218) Non-interest expenses 16,643 15,920 16,444 20,680 11,778 Income (loss) before provision for income taxes 8,501 9,224 9,147 (5,332) 8,476 Provision for income tax expense (benefit) 1,477 1,684 1,599 (1,188) 1,609 Net income (loss) $ 7,024 $ 7,540 $ 7,548 $ (4,144) $ 6,867 Earnings (Loss) Per Share Basic $ 1.49 $ 1.60 $ 1.61 $ (1.01) $ 1.71 Earnings (Loss) Per Share Diluted $ 1.49 $ 1.60 $ 1.61 $ (1.01) $ 1.71 CITIZENS FINANCIAL SERVICES, INC. CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS (UNAUDITED) Three Months Ended March 31 , 2024 2023 Average Average Average Average Balance (1) Interest Rate Balance (1) Interest Rate (dollars in thousands) $ $ % $ $ % ASSETS Interest-bearing deposits at banks 29,184 212 2.92 14,129 27 0.78 Interest bearing time deposits at banks 4,054 31 3.08 6,055 44 3.00 Investment securities: Taxable 362,963 2,025 2.23 380,537 1,870 1.97 Tax-exempt (3) 107,497 674 2.51 120,413 781 2.59 Investment securities 470,460 2,699 2.29 500,950 2,651 2.12 Loans: (2)(3)(4) Residential mortgage loans 359,720 5,059 5.66 212,015 2,704 5.17 Construction loans 189,898 3,491 7.39 85,432 1,139 5.41 Commercial Loans 1,236,308 19,519 6.35 935,212 12,325 5.34 Agricultural Loans 344,468 4,405 5.14 344,291 4,253 5.01 Loans to state & political subdivisions 56,648 550 3.90 59,318 543 3.71 Other loans 110,140 2,217 8.10 97,833 1,692 7.01 Loans, net of discount (2)(3)(4) 2,297,182 35,241 6.17 1,734,101 22,656 5.30 Total interest-earning assets 2,800,880 38,183 5.48 2,255,235 25,378 4.56 Cash and due from banks 9,822 7,039 Bank premises and equipment 21,289 17,617 Other assets 178,841 90,409 Total non-interest earning assets 209,952 115,065 Total assets 3,010,832 2,370,300 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities: NOW accounts 799,968 5,223 2.63 510,198 1,517 1.21 Savings accounts 302,091 387 0.52 319,408 206 0.26 Money market accounts 381,042 2,793 2.95 321,178 1,274 1.61 Certificates of deposit 422,420 3,918 3.73 279,244 942 1.37 Total interest-bearing deposits 1,905,521 12,321 2.60 1,430,028 3,939 1.12 Other borrowed funds 375,972 4,654 4.98 299,119 3,088 4.19 Total interest-bearing liabilities 2,281,493 16,975 2.99 1,729,147 7,027 1.65 Demand deposits 370,951 375,003 Other liabilities 49,488 27,064 Total non-interest-bearing liabilities 420,439 402,067 Stockholders' equity 308,900 239,086 Total liabilities & stockholders' equity 3,010,832 2,370,300 Net interest income 21,208 18,351 Net interest spread (5) 2.49 % 2.91 % Net interest income as a percentage of average interest-earning assets 3.05 % 3.30 % Ratio of interest-earning assets to interest-bearing liabilities 123 % 130 % (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) March 31 , December 31 , September 30 , June 30 , March 31 , 2024 2023 2023 2023 2023 Real estate: Residential $ 357,779 $ 359,990 $ 356,381 $ 358,025 $ 212,793 Commercial 1,115,900 1,092,887 1,081,123 1,080,513 878,972 Agricultural 318,413 314,802 314,164 312,302 312,793 Construction 184,506 195,826 175,320 156,927 75,745 Consumer 53,101 61,316 115,753 42,701 87,101 Other commercial loans 129,438 136,168 120,347 120,288 64,133 Other agricultural loans 24,345 30,673 26,648 30,615 32,052 State & political subdivision loans 56,177 57,174 56,660 61,471 59,886 Total loans 2,239,659 2,248,836 2,246,396 2,162,842 1,723,475 Less: allowance for credit losses - loans 21,598 21,153 21,455 21,652 15,250 Net loans $ 2,218,061 $ 2,227,683 $ 2,224,941 $ 2,141,190 $ 1,708,225 Past due and non-performing assets Total Loans past due 30-89 days and still accruing $ 6,311 $ 10,457 $ 5,960 $ 4,828 $ 1,336 Non-accrual loans $ 14,693 $ 12,187 $ 13,139 $ 13,073 $ 10,404 Loans past due 90 days or more and accruing 820 516 8 139 48 Non-performing loans $ 15,513 $ 12,703 $ 13,147 $ 13,212 $ 10,452 OREO 200 474 474 426 428 Total Non-performing assets $ 15,713 $ 13,177 $ 13,621 $ 13,638 $ 10,880 Three Months Ended Analysis of the Allowance for Credit Losses - Loans March 31 , December 31 , September 30 , June 30 , March 31 , (In Thousands) 2024 2023 2023 2023 2023 Balance, beginning of period $ 21,153 $ 21,455 $ 21,652 $ 15,250 $ 18,552 Impact of Adopting ASC 326 - - - - (3,300) Charge-offs (674) (510) (808) (4) (7) Recoveries 7 8 10 26 5 Net (charge-offs) recoveries (667) (502) (798) 22 (2) PCD allowance for credit loss at acquisition - - - 1,689 - Provision for credit losses - loans 1,112 200 601 100 - Provision for credit losses - acquisition day 1 non-PCD - - - 4,591 - Balance, end of period $ 21,598 $ 21,153 $ 21,455 $ 21,652 $ 15,250 CITIZENS FINANCIAL SERVICES, INC. Reconciliation of GAAP and Non-GAAP Financial Measures (UNAUDITED) (Dollars in thousands, except per share data) As of March 31 2024 2023 Tangible Equity Stockholders Equity - GAAP $ 282,674 $ 213,238 Accumulated other comprehensive loss 26,620 26,762 Intangible Assets (89,208) (32,557) Tangible Equity - Non-GAAP 220,086 207,443 Shares outstanding adjusted for June 2023 stock Dividend 4,706,991 4,010,258 Tangible Book value per share - Non-GAAP $ 46.76 $ 51.73 As of March 31 2024 2023 Tangible Equity per share Stockholders Equity per share - GAAP $ 60.05 $ 53.17 Adjustments for accumulated other comprehensive loss 5.66 6.68 Book value per share 65.71 59.85 Adjustment for intangible assets (18.95) (8.12) Tangible Book value per share - Non-GAAP $ 46.76 $ 51.73 For the Three Months Ended March 31 2024 2023 Return on Average Tangible Equity Average Stockholders Equity - GAAP $ 282,484 $ 207,873 Average Accumulated Other Comprehensive Loss 26,416 31,213 Average Intangible Assets (89,321) (32,608) Average Tangible Equity - Non-GAAP 219,579 206,478 Net Income - GAAP $ 7,024 $ 6,867 Annualized Return on Average Tangible Equity Non-GAAP 12.80 % 13.30 % For the Three Months Ended March 31 2024 2023 Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs Net Income - GAAP $ 7,024 $ 6,867 Boli death benefits - - After tax gain on sale of Braavo, net of legal fees (712) - After tax merger and acquisition costs - 244 Net Income excluding merger and acquisition costs - Non-GAAP $ 6,312 $ 7,111 Average Assets 3,010,832 2,370,300 Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs - Non-GAAP 0.84 % 1.20 % Average Stockholders Equity - GAAP $ 308,900 $ 239,086 Annualized Return on Average stockholders equity, Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs - Non-GAAP 8.17 % 11.90 % Average Tangible Equity - Non-GAAP 219,579 206,478 Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs - Non-GAAP 11.50 % 13.78 % For the Three Months Ended March 31 2024 2023 Earnings per share, Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs Net Income - GAAP $ 7,024 $ 7,875 Boli death benefits - After tax gain on sale of Braavo, net of legal fees (712) - After Tax merger and acquisition costs - 244 Net income excluding one time items - Non-GAAP $ 6,312 $ 8,119 Number of shares used in computation - basic 4,701,853 4,005,375 Earnings per share, Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs - Non-GAAP $ 1.34 $ 2.03 For the Three Months Ended March 31 Reconciliation of net interest income on fully taxable equivalent basis 2024 2023 Total interest income $ 37,933 $ 25,107 Total interest expense 16,975 7,027 Net interest income 20,958 18,080 Tax equivalent adjustment 250 271 Net interest income (fully taxable equivalent) - Non-GAAP $ 21,208 $ 18,351 View original content: https://www.prnewswire.com/news-releases/citizens-financial-services-inc-reports-unaudited-first-quarter-2024-financial-results-302127935.html SOURCE CITIZENS FINANCIAL SERVICES, INC.

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