Citizens Financial Services Reports 31.5% Increase in Net Income for 2025

Citizens Financial Services, Inc. (CZFS), a Pennsylvania corporation, reported net income of $36.57 million for the year ended December 31, 2025, a 31.5% increase compared to $27.82 million in 2024. This growth was primarily driven by an $11.76 million increase in net interest income after the provision for credit losses. Basic and diluted earnings per share were both $7.62 for 2025, compared to $5.80 and $5.79, respectively, in the previous year. The company operates primarily through its subsidiary, First Citizens Community Bank, offering a range of banking activities and financial services across its market areas.

The company's net interest income, the difference between interest earned on assets and interest paid on liabilities, is a key driver of revenue. Net interest income on a tax-equivalent basis increased by 13.3% to $99.11 million in 2025, up from $87.45 million in 2024. This was due to a $4.97 million increase in total interest income, driven by a $1.72 million increase in loan interest income and a $3.25 million increase in total investment income, coupled with a $6.70 million decrease in interest expense. The tax equivalent net interest margin for 2025 was 3.50%, compared to 3.13% for 2024, reflecting an increase in the yield of interest-earning assets and a decrease in the cost of interest-bearing liabilities.

Non-interest income decreased by 6.9% to $14.34 million in 2025, compared to $15.40 million in 2024. This decrease was primarily due to a $1.1 million gain on the sale of the Braavo division in 2024, which did not recur in 2025. Non-interest expenses decreased by 1.0% to $64.73 million in 2025, compared to $65.39 million in 2024. The provision for income taxes was $8.67 million, representing an effective tax rate of 19.2%, compared to $6.07 million and a 17.9% effective tax rate in the previous year. At year-end, total assets reached $3.06 billion, a 1.3% increase from $3.03 billion in 2024, while total loans, net of the allowance for credit losses, increased by 1.6% to $2.33 billion.

Citizens Financial Services, Inc. continues to operate under extensive regulatory oversight by the Pennsylvania Department of Banking and Securities and the Federal Reserve System. As of December 31, 2025, the Bank's leverage ratio was 9.54%, exceeding the 9% threshold required to be considered "well-capitalized" under the community bank leverage ratio framework. The company's strategy includes managing interest rate risk, credit risk, and liquidity risk through established policies and guidelines. The company also monitors the impact of economic conditions in its market areas, which include north central, central, south-central, and south-eastern Pennsylvania, southern New York, and the cities of Wilmington and Dover, Delaware.