Citizens Financial Services, Inc. (CZFS) SEC Filings & Earnings Calls

Commercial real estate concentration risk

“As of June 30, 2026, non-owner-occupied commercial real estate loans (including construction, land and land development loans) represented 297.2% of consolidated risk based capital.” · word for word

Nonperforming loan increase

“Nonperforming loans increased $14.2 million during the first six months of 2026. The increase from December 31, 2025 is primarily due to six commercial real estate loan relationships and one construction real estate loan relationship, that total approximately $12.2 million, being placed on non-accrual status during the first half of 2026 due to becoming more” · word for word

Deposit mix shift to higher-cost CDs

“The increase in deposits was driven by an increase in certificates of deposits as customers look to maximize their interest return, which continues the pattern of customer funds being transferred to higher-yielding investment alternatives.” · word for word

Non-performing assets increased significantly, especially commercial real estate loans.

“Non-performing assets increased $14,176,000 since December 31, 2025; six commercial real estate loan relationships placed on non-accrual.” · word for word

Economic impact of Iran conflict on diesel and fertilizer prices may affect loan portfolio.

“Provision for 2026 driven by economic impact of the Iran conflict on diesel and fertilizer prices.”

Nonperforming Loan Surge

“Nonperforming loans increased $10.9 million during the first three months of 2026.” · word for word

Commercial Real Estate Concentration

“Non-owner-occupied commercial real estate loans represented 294.7% of consolidated risk based capital.” · word for word

Deposit Mix Shift to Brokered

“Brokered deposits increased $52.8 million since year end to $112.8 million.”

Credit quality deterioration: NPAs and NPLs increased, reserves coverage declined.

“NPAs/Assets 1.33% vs 0.95%, NPLs/Gross Loans 1.64% vs 1.14%, Reserves/NPLs 60.7% vs 85.0%.”

Significant increase in non-performing assets, primarily CRE loans.

“Non-performing assets increased $10,914,000 since December 31, 2025 due to four commercial real estate loan relationships being placed on non-accrual status.” · word for word

Potential dilution from equity plan, but limited to 250k shares.

“250,000 shares authorized under the 2026 Plan.”

Cybersecurity and fraud losses are increasing, with total fraudulent activity rising from 119 in 2023 to 202 in 2025.

“Fraudulent Activity Check Fraud $830,316 (2023) to $791,558 (2025); ACH Fraud $52,701 (2023) to $157,792 (2025); Combined Total $883,017 (2023) to $949,350 (2025).”

Potential deposit outflows to stablecoins could reduce lending capacity significantly.

“Potential deposit outflows from PA banks to stablecoins: $5.4 billion to $10.8 billion; Lost lending to PA households and businesses: $4.6 billion - $9.3 billion drop in loans.” · word for word

Deposit outflow risk

“Total deposits decreased $5.0 million, or 0.2%, to $2.38 billion at December 31, 2025 due to a decrease in brokered deposits of $33.1 million.” · word for word

Concentration in commercial real estate

“Net loans ended 2025 at $2.33 billion, an increase of 1.6%, or $36.3 million, which was primarily due to growth in commercial and agricultural real estate loans.” · word for word

Commercial real estate concentration

“As of December 31, 2025, non-owner-occupied commercial real estate loans (including construction, land and land development loans) represented 287.0% of consolidated risk based capital.” · word for word

Credit quality from acquired loans

“Net charge-offs for 2025 are driven by loans acquired as part of the HVBC acquisition due to collateral issues and the acquired medical student loan portfolio from HVBC.” · word for word

Interest rate risk

“Interest rate risk is the sensitivity of net interest income and the market value of financial instruments to the direction and frequency of changes in interest rates.” · word for word

Non-performing assets increased slightly, with specific reserves for non-accrual loans.

“Non-performing assets increased $578,000 since December 31, 2024 and totaled $29,190,000 as of December 31, 2025.” · word for word

No material risk identified from this routine board appointment.

Commercial real estate concentration

“As of September 30, 2025, non-owner-occupied commercial real estate loans (including construction, land and land development loans) represented 290.0% of consolidated risk based capital.” · word for word

Deposit competition and rate sensitivity

“We continue to see customer funds being transferred to higher-yielding investment alternatives.” · word for word

Exposure to agricultural and natural gas sectors; sensitivity to interest rate changes and economic conditions.

“The agricultural economy is subject to extreme swings... Companies providing support services related to the exploration and drilling of the natural gas reserves... may be affected by... regulations.” · word for word

Provision for credit losses remains elevated due to economic forecasts, though lower than prior year.

“The provision for credit losses for the nine months ended September 30, 2025 was $1,875,000 compared to $2,587,000 for the nine months ended September 30, 2024, a decrease of $712,000. The provision for 2025 was driven by the economic forecasts and the annual update of loss drivers.” · word for word