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[Georgia Bard]

(OTC Bulletin Board: CZFS) First Citizens Reports Second Quarter Earnings
MANSFIELD, Pa., July 27 /PRNewswire/ -- Citizens Financial Services, Incorporated President Richard E. Wilber has released its financial performance through June 30, 2001. Earnings for quarter ending June 30, 2001, were $1,037,000 as compared to $897,000 for the same quarter one year ago, representing a 15.6% increase.

Total assets for First Citizens surpassed $424.1 million on June 30, 2001. This figure increased 23.8% over the $342.5 million at June 30, 2000. Deposits grew 30.5% to a record $377.3 million while total loans increased 12.1% to $264.4 million (net of the reserve for loan losses).

Total stockholders' equity has grown 4.3% since year-end 2000 and by $4.4 million over the past year -- nearly $2.9 million of the $4.4 million growth was due to the after-tax increase in market value of the investment portfolio, a result of the dramatic decline in national interest rates.

A cash dividend of $0.16 per share along with a 1% stock dividend will be paid on July 27, 2001 to shareholders of record on July 13, 2000. This quarterly cash dividend is an increase of 6.7% over the dividend declared a year ago.

President Richard E. Wilber stated, "The new Banking Services Center and Corporate Headquarters facility is finally complete; with the completion of this facility and recent expansion of the Operations Center, we are now well prepared to support the growth we foresee in this decade. Our non-deposit services are now being offered and afford an opportunity to meet the full financial needs of our customers. We are very excited, also, with the introduction of employee benefit services under the very capable leadership of Nicholas Helf, Jr. Needless to say, in our opinion, this corporation is progressing very well in a highly competitive market and we continue to be optimistic about our future!"

Citizens Financial Services, Inc., has nearly 1,400 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties where their 15 offices are located.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.

(Dollars in thousands, except per share amounts)


2001
2000
Six Months Ended June 30
Net
income
$1,828
$1,835
Comprehensive
income
2,215
1,747
Per common share data:
Earnings per
share
0.66
0.66
Cash dividends
declared
0.31-1/2 0.29-1/2
Performance ratios:
Return on average
assets
0.89%
1.07%
Return on average
equity
11.97%
12.57%

Three Months Ended June 30
Net
income
$1,037
$897
Per common share data:
Earnings per
share
0.37
0.32
Cash dividends
declared
0.16
0.15
Performance ratios:
Return on average
assets
0.99%
1.04%
Return on average
equity
13.47%
12.22%

At June 30

Assets
$424,163 $342,507
Investment securities:

Available-for-sale
106,447
88,443
Loans (net of unearned
income)
267,490 238,260
Allowance for loan
losses
3,050
2,391

Deposits
377,298 289,119
Stockholders'
Equity
31,891
27,529
Non-performing
assets
2,647
1,554
Average Leverage
Ratio
5.34%
8.32%
Per common share data:
Book
value
$11.50
$10.01
Market value (average of bid/ask
price)
13.80
12.00
Market price to book value
ratio
120.00% 119.88%


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SOURCE Citizens Financial Services, Inc.

/CONTACT: Kathleen M. Campbell of Citizens Financial Services,
[phone]/

/Web site: http://www.firstcitizensbank.com /

(CZFS)




CITIZENS FINL SVCS INC - CZFS
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:=) Gary Swancey