UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number 0-13222
CITIZENS FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2265045
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15 South Main Street, Mansfield, Pennsylvania 16933
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 662-2121
Indicate by checkmark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes__X___ No_____
The number of shares outstanding of the Registrant's Common Stock, as of
April 26, 1995, 1,334,543 shares of Common Stock, par value $1.00.
<PAGE>
Citizens Financial Services, Inc.
Form 10-Q
INDEX
Page
Part I FINANCIAL INFORMATION (UNAUDITED)
Item 1-Financial Statements
Consolidated Balance Sheet as of March 31, 1995 and
December 31, 1994 1
Consolidated Statement of Income for the
Three months Ended March 31, 1995 and 1994 2
Consolidated Statement of Cash Flows for the Three months Ended
March 31, 1995 and 1994 3
Notes to Consolidated Financial Statements 4
Item 2-Management's Discussion and Analysis of Financial Condition
and Results of Operations 4-10
Part II OTHER INFORMATION AND SIGNATURES
Item 1-Legal Proceedings 11
Item 2-Changes in Securities 11
Item 3-Defaults upon Senior Securities 11
Item 4-Submission of Matters to a Vote of Security Holders 11
Item 5-Other Information 11
Item 6-Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, December 31,
1995 1994
ASSETS:
Cash and due from banks:
Noninterest-bearing $ 5,269,512 $ 5,479,295
Interest-bearing 46,342 32,005
Total cash and cash equivalents 5,315,854 5,511,300
Available-for-sale securities 15,003,258 14,639,874
Held-to-maturity securities (estimated
market value 1995, $48,027,000;
December 31, 1994, $47,897,000) 48,679,966 49,617,504
Loans (net of allowance for possible loan
losses 1995, $1,772,374; December 31, 1994,
$1,721,343) 155,158,320 154,847,712
Foreclosed assets held for sale 253,131 167,969
Premises and equipment 4,065,135 4,123,658
Accrued interest receivable and other assets 3,831,827 3,628,671
TOTAL ASSETS $232,307,491 $232,536,688
LIABILITIES:
Deposits:
Noninterest-bearing $ 13,760,342 $ 14,494,727
Interest-bearing 186,977,489 179,983,170
Total deposits 200,737,831 194,477,897
Borrowed funds 9,171,792 16,030,406
Accrued interest payable 1,295,171 1,691,646
Dividends payable 0 547,163
Other liabilities 1,342,451 886,444
TOTAL LIABILITIES 212,547,245 213,633,556
STOCKHOLDERS' EQUITY:
Common Stock
$1.00 par value; authorized 2,000,000 shares;
issued and outstanding 1,334,543 in
1995 and December 31, 1994 1,334,543 1,334,543
Additional paid-in capital 6,224,579 6,224,579
Retained earnings 12,316,648 11,708,435
TOTAL 19,875,770 19,267,557
Unrealized holding losses on
available-for-sale securities (115,524) (364,425)
TOTAL STOCKHOLDERS' EQUITY 19,760,246 18,903,132
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $232,307,491 $232,538,688
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED) Three Months Ended
March 31,
1995 1994
INTEREST INCOME:
Interest and fees on loans $3,552,760 $2,981,554
Interest on interest-bearing deposits
with banks 495 8,113
Interest and dividends on investments:
Taxable 1,005,650 978,869
Nontaxable 52,425 96,088
Dividends 17,165 16,533
Total interest and dividends on investments 1,075,240 1,091,490
TOTAL INTEREST INCOME 4,628,495 4,081,157
INTEREST EXPENSE:
Interest on deposits 2,109,416 1,778,689
Interest on borrowed funds 203,737 50,200
TOTAL INTEREST EXPENSE 2,313,153 1,828,889
NET INTEREST INCOME 2,315,342 2,252,268
Provision for possible loan losses 50,000 75,000
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 2,265,342 2,177,268
OTHER OPERATING INCOME:
Service charge income 163,339 154,346
Trust income 76,542 63,163
Other income 47,220 58,797
Realized securities gains, net 4,700 43,527
TOTAL OTHER OPERATING INCOME 291,801 319,833
OTHER OPERATING EXPENSES:
Salaries and employee benefits 807,990 760,738
Occupancy expenses 108,250 115,754
Furniture and equipment expenses 139,747 142,540
FDIC insurance expense 110,849 108,260
Other expenses 542,094 477,537
TOTAL OTHER OPERATING EXPENSES 1,708,930 1,604,829
Income before provision for income taxes 848,213 892,272
Provision for income taxes 240,000 270,000
NET INCOME $ 608,213 $ 622,272
Earnings per share $ 0.46 $ 0.47
Weighted average number of shares outstanding 1,334,543 1,334,543
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED) Three months Ended
March 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 608,213 $ 622,272
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses 50,000 75,000
Provision for depreciation 107,388 107,860
Amortization and accretion of
investment securities 55,609 28,213
Deferred income taxes (8,229) (40,198)
Realized gains on securities (4,700) (43,527)
Realized gains on loans sold (2,155) (7,261)
Gain on sales or disposals of premises
and equipment 0 (2,139)
(Gain) loss on sale of foreclosed assets
held for sale 0 (16,737)
(Increase) decrease in accrued
interest receivable and other assets (323,149) 203,434
Increase (decrease) in accrued
interest payable and other liabilities 59,531 (79,763)
Net cash provided by operating activities 542,508 847,154
CASH FLOWS FROM INVESTING ACTIVITIES:
Available-for-sale securities:
Proceeds from sales of securities 0 2,044,258
Purchase of securities 0 (3,002,812)
Held-to-maturity securities:
Proceeds from maturity and principal
repayments of securities 941,068 1,385,209
Purchase of securities (40,700) (1,589,994)
Net increase in loans (443,615) (754,697)
Capital expenditures (48,865) (67,598)
Proceeds from sales of premises and equipment 0 2,214
Proceeds from sale of foreclosed assets held
for sale 0 16,737
Net cash provided (used) by investing
activities 407,888 (1,966,683)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 6,259,934 (910,545)
Proceeds from long-term borrowings 440,358 186,524
Repayments of long-term borrowings (75,369) 0
(Decrease) increase in short-term borrowed
funds (7,223,602) 1,385,704
Dividends paid (547,163) (515,536)
Net cash provided (used) by financing
activities (1,145,842) 146,147
Net decrease in cash and cash equivalents (195,446) (973,382)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,511,300 5,612,269
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,315,854 $ 4,638,887
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The consolidated financial statements include the accounts of Citizens
Financial Services, Inc. and its wholly-owned subsidiary, First Citizens
National Bank (the "Bank"), (collectively, the "Company"). All material
intercompany balances and transactions have been eliminated in consolidation.
The accompanying interim financial statements have been prepared by the
Company without audit and, in the opinion of management, reflect all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the Company's financial position as of March 31, 1995, and the
results of operations for the interim periods presented. For further
information refer to the consolidated financial statements and footnotes
thereto incorporated by reference in the Company's Annual Report on Form 10-K
for the year ended December 31, 1994.
The results of operations for the three months ended March 31, 1995 and
1994 are not necessarily indicative of the results to be expected for the
full year.
Note 2 - Earnings per Share
Earnings per share calculations give retroactive effect to stock
dividends declared by the Company. The number of shares used in the earnings
per share and dividends per share calculation was 1,334,543 for 1995 and
1994.
Note 3 - Standby Letters of Credit
Outstanding standby letters of credit amounted to $607,000 and
$1,117,000 at March 31, 1995 and December 31, 1994, respectively.
Note 4 - Repurchase Agreements
As of March 31, 1995, the Company had no repurchase agreements that
exceeded 10% of stockholders' equity.
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods indicated in the accompanying
consolidated financial statements.
Financial Condition
For the three month period ended March 31, 1995, the assets of the
Company have decreased by $.2 million versus an increase of $.3 million in
1994.
Net loan growth was $.3 million for the current period, slightly less
than the $.7 million increase in 1994. Total investments decreased $.6
million compared to an increase of $.9 million in 1994.
4
<PAGE>
Total investments decreased a modest $.6 million during the period
compared to an increase of $.6 million in 1994. During 1994 U. S. Treasury
securities, held in the available-for-sale category, totaling $2 million with
maturities within one year were sold and reinvested in similar securities
with maturities of 4 to 6 years. Also during 1994 an additional $2.5 million
U. S. Treasury securities were purchased in the 4 to 6 year maturities and
classified as held-for-sale.
Cash and cash equivalents decreased $.2 million in 1995 compared to a
decrease of $1 million in 1994.
The Company's loan growth during 1994 and 1995 stems from its commitment
to the local communities and servicing their needs. The primary
concentration of loans continues to be in residential real estate-consisting
of loans to purchase and improve real estate, debt consolidation and home
equity lines of credit. Loan demand has slowed during the last 6 months
because of the approximately 300 basis point increase in interest rates
during 1994 with only a slight decline during the first quarter of 1995.
During the remainder of 1995, management expects that loan demand will
continue to be slow as interest rates remain high nationwide and in the local
market area.
The loan portfolio consists of the following (in thousands):
March 31, December 31, March 31,
1995 1994 1994
Real estate loans - residential $ 97,522 $ 98,630 $ 92,841
Real estate loans - commercial 22,729 21,915 17,758
Real estate loans - agricultural 7,020 7,125 6,483
Loans to individuals for household,
family and other purchases 12,430 11,886 11,724
Commercial and other loans 10,220 10,285 9,401
State and political
subdivision loans 7,500 7,303 5,528
157,421 157,144 143,735
Less: unearned income on loans 490 575 1,065
Loans net of unearned income $156,931 $156,569 $142,670
Deposits increased by $6.3 million or 3.2% during the first quarter of
1995 versus a decrease of $.9 million in 1994. The creation of some
promotional certificates of deposit with attractive rates resulted in the
deposit growth for 1995.
As discussed in the Management's Discussion and Analysis section of the
1994 annual report, during 1994 the rate paid on certificates of deposit
increased more rapidly that the rates paid on NOW and savings accounts. This
trend, which continued into 1995, increased the growth of certificates of
deposit and offset the decrease in NOW and savings accounts.
Borrowed funds decreased by a repayment of $6.9 million during 1995 (made
possible by the deposit growth discussed above) compared to an increase of
$1.6 million in 1994. This decrease was the result of a repayment of the
short term borrowing from the Federal Home Loan Bank. The Company's daily
cash requirements are now being met by using the financial instruments
available through the Federal Home Loan Bank rather than using federal funds
market. A modest increase in loan demand as well as a significant increase
in deposits for this period resulted in the decrease in short term borrowing.
5
<PAGE>
Capital
The Company has computed its risk-based capital ratios as follows
(dollars in thousands):
March 31, December 31,
1995 1994
Tier I - Total stockholders' equity $ 19,760 $ 18,903
Less: Unrealized holding (losses) gains
on available-for-sale securities (116) (364)
------------------------
Tier I, net 19,876 19,267
Tier II - Allowance for loan losses(1) 1,622 1,625
------------------------
Total qualifying capital $ 21,498 $ 20,892
========================
Risk-adjusted on-balance sheet assets $123,018 $123,077
Risk-adjusted off-balance sheet
exposure (2) 6,768 6,956
------------------------
Total risk-adjusted assets $129,786 $130,033
========================
March 31, December 31,
1995 1994
Ratios:
Tier I risk-based capital ratio 15.3% 14.8%
Federal minimum required 4.0 4.0
Total risk-based capital ratio 16.6% 16.1%
Federal minimum required 8.0 8.0
Leverage ratio (3) 8.6% 8.6%
Federal minimum required 4.0 4.0
(1) Allowance for loan losses is limited to 1.25% of total risk-adjusted
assets.
(2) Off-balance sheet exposure is caused primarily by standby letters of
credit and loan commitments with a remaining maturity exceeding one
year. These obligations have been converted to on-balance sheet credit
equivalent amounts and adjusted for risk.
(3) Tier I capital divided by average total assets.
Results of Operations
Net income for the three month period ending March 31, 1995 was $608,000
a decrease of $14,000 over the 1994 related period. Earnings per share was
$.46 during the first three months of 1995 compared to $.47 during the 1994
period.
Net interest income, the most significant component of earnings, is the
amount by which interest generated from earning assets exceeds interest
expense on liabilities. Net interest income for the 1995 period, after
provision for possible loan losses, was $2,265,000 an increase of $88,000 or
6
<PAGE>
4% compared to an increase of $185,000 or 9.3% during the same time period in
1994. Interest earning assets, not based on a tax-equivalent basis, was
8.43% and 8.08% (8.57% and 8.23% tax adjusted) in the first three months of
1995 and 1994, respectively, which resulted in a decrease of 35 basis points.
The cost of funds was 4.77% and 4.08% in the three months of 1995 and 1994,
respectively, as deposit costs increased 69 basis points. During the first
quarter of 1995, savings and NOW accounts were effected by the upward
pressure in interest rates as well as certificates of deposit. This trend
reflects the general increase in interest rates that occurred during 1994 and
the first quarter of 1995 resulted in a decrease in the net interest spread
of 35 basis points (tax adjusted).
As describe above, the Company has experienced a narrowing of it's
margin during the first quarter of 1995 as has a number of the banks
competing in the same market area. Upward pressure in the cost of funds is
expected in the near future. The Company continues to review various pricing
strategies to enhance deposit growth without margin compression.
Provision for possible loan losses decreased $25,000 to $50,000 in 1995,
compared to a provision of $75,000 in the same three month period of 1994.
This decrease was appropriate given management's quarterly review of the
allowance for loan and lease losses which is based on the following
information; migration analysis of delinquent and non-accrual loans,
estimated future losses on loans, recent review of large problem credits,
local economic conditions, historical loss experience, OCC qualitative
adjustments and peer comparisons.
Other operating income decreased by $28,000, primarily due to a decrease
in other income of $12,000. There was $5,000 realized securities gains
during 1995 as compared to realized gains of $44,000 in 1994 resulting in a
net decrease of $39,000.
Other operating expense was $1,709,000 in the first three months of 1995
which reflected an increase of $104,000 or 6.5% over the 1994 period.
Salaries and benefits increased 6.2% or $47,000 for the current three month
period reflecting normal merit increases when compared to the same period in
1994. Occupancy expense decreased by $8,000 or 6.5% and furniture and
equipment expenses remained nearly the same as 1994. Federal Deposit
Insurance Corporation(FDIC) insurance expense increased by $3,000 or 2.3%.
Other expenses increased $65,000 or 13.5% in the three months of 1995 over
the 1994 related period representing an increase in postage, recruitment and
marketing costs.
The FDIC (Federal Deposit Insurance Corporation) is currently evaluating
a significant premium reduction that may begin as early as September 1995.
The provision for income taxes was $240,000 during the first three
months of 1995 compared to $270,000 during the 1994 related period. Income
before taxes decreased $30,000 in the 1995 period as compared to the same
time period in 1994.
Liquidity
Liquidity is a measure of the Company's ability to efficiently meet
normal cash flow requirements of both borrowers and depositors. In order to
maintain proper liquidity, the Company uses funds management policies along
7
<PAGE>
with its investment policies to assure it can meet its financial obligations
to depositors, credit customers and shareholders. Liquidity is needed to
meet depositors' withdrawal demands, extend credit to meet borrowers' needs,
provide funds for normal operating expenses and cash dividends, as well as
fund other capital expenditures. Management projected that capital
expenditures for 1995 would increase approximately $495,000 for optical check
imaging and needed renovations to branches and capital expenditures to keep
pace with current technology requirements. During the first three months of
1995 $49,000 was expended as compared to capital acquisitions of $68,000
during the same period in 1994.
Management is currently renting three properties as a temporary solution
to the space limitations it has experienced at the main office. Efforts are
continuing to evaluate various long term alternatives.
Liquidity is achieved primarily by having temporary or short-term
investments in the Federal Home Loan Bank of Pittsburgh, PA , federal funds
sold and investments which mature in a relatively short time period (such as
under one year). The Company also maintains a credit line with the Federal
Home Loan Bank as an additional source of liquidity.
The objective of interest rate sensitivity management is to maintain an
appropriate balance between the stable growth of income and the risks
associated with maximizing income through interest sensitivity imbalances.An
asset or liability is considered to be interest-sensitive if the rate it
yields or bears is subject to change within a predetermined time period. If
interest-sensitive assets exceeds interest-sensitive liabilities during a
prescribed time period, a positive gap results. Conversely, when
interest-sensitive liabilities exceeds interest-sensitive assets during a
time period, a negative gap results.
A positive gap tends to indicate that earnings will be impacted
favorably if interest rates rise during the period and negatively when
interest rates fall during the time period. A negative gap tends to indicate
that earnings will be effected inversely to interest rate changes. In other
words, as interest rates fall, a negative gap should tend to produce a
positive effect on earnings and when interest rates rise, a negative gap
should tend to affect earnings negatively.
The primary components of interest-sensitive assets include adjustable
rate loans and investments, loan repayments, investment maturities and money
market investments. The primary components of interest-sensitive liabilities
include maturing certificates of deposit, money market deposits, savings
deposits, N.O.W. accounts and short-term borrowing.
The Company's six-month asset/liability position at March 31, 1995, was
asset sensitive, with a dollar gap of $8.7 million or 1.10, while at December
31, 1994 the Company's liability sensitivity was at $(9.6) million or .91.
Management was able to move to within its policy range (positive 1.25 to
negative .75) by the selection of assets to be purchased and the pricing of
liabilities acquired.
Gap analysis does not necessarily indicate the precise impact of
specific interest rate movements on the Company's net interest income because
the repricing of certain assets and liabilities is discretionary and is
subject to competitive and other pressures. In addition, assets and
8
<PAGE>
liabilities within the same period may, in fact, reprice at different times
and at different rate levels.
Another method used the by Company to measure the impact of interest
rate changes on net interest income is to simulate the potential effects of
changing interest rates through computer modeling. The Company is then able
to evaluate strategies which would include an acceleration of a deposit rate
reduction or rate increase and the related repricing strategies for loans.
Credit Quality Risk
The following table identifies amounts of loan losses and nonperforming
loans. Past due loans are those which were contractually past due 90 days or
more as to interest or principal payments.
<TABLE>
March 31, December 31,
-----------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
(dollars in thousands)
Loans in nonaccrual status $ 1,300 $ 1,557 $ 1,566 $ 689 $ 154
Accrual loans - 90 days or
more past due 124 267 418 439 977
Total non-performing loans $ 1,424 $ 1,824 $ 1,984 $ 1,128 $ 1,131
Other real estate owned $ 253 $ 168 $ 231 $ 330 $ 188
Loans outstanding at end of period $156,931 $156,569 $141,907 $129,527 $121,743
Nonperforming loans as percent
of total loans .91% 1.16% 1.40% .87% .87%
Provision for possible loan losses $ 1,772 $ 1,721 $ 1,516 $ 1,201 $ 906
Net charge-offs $ (1) $ 50 $ 0 $ 119 $ 88
Provision for possible loan losses as
percent of loans outstanding 1.13% 1.10% 1.07% .93% .82%
Total non-performing assets as a
percent of loans, net of unearned
income, and foreclosed assets held
for sale 1.07% 1.27% 1.56% 1.12% 1.08%
</TABLE>
Transactions in the allowance for possible loan losses were as follows (in
thousands):
<TABLE>
At March 31, Years Ended December 31,
1995 1994 1993 1992
<S> <C> <C> <C> <C>
Balance, beginning of year $ 1,721 $1,516 $1,201 $ 996
Provision charged to income 50 255 315 324
Recoveries on loans previously
charged against the allowance 1 18 71 32
1,772 1,789 1,587 1,352
Loans charged against the allowance 0 (68) (71) (151)
Balance, end of year $ 1,772 $1,721 $1,516 $1,201
</TABLE>
9
<PAGE>
General
The Reigle Community Development and Regulatory Improvement Act which
was signed into law on September 23, 1994 included a reduction in the
regulatory burden of the banking industry. Management believes that the
effect of the provisions of this legislation on liquidity, capital resources,
and the results of operations of the company will be immaterial.
Aside from those matters described above, management does not believe
that there are any trends or uncertainties which would have a material impact
on future operating results, liquidity or capital resources nor is it aware
of any current recommendations by the regulatory authorities which if they
were to be implemented would have such an effect, although the general cost
of compliance with numerous and multiple federal and state laws and
regulations does have and in the future may have a negative impact on the
company's results of operations.
In May, 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors
for Impairment of a Loan," which was adopted by the Company January 1, 1995.
SFAS 114 applies to loans other than groups of smaller-balance homogenous
loans (generally consumer loans) that are collectively evaluated for
impairment. The standard requires that impairment of such loans be measured
generally based on the present value of expected future principal and
interest cash flows, discounted at the loan's effective interest rate, and
that a valuation allowance related to those impaired loans be established.
Under SFAS 114, a loan is considered impaired when, based on current
information and events, it is probable that a creditor will be unable to
collect all amounts due. Presently, credit losses on all loans are accounted
for through the allowance for credit losses, which is maintained at a level
adequate to absorb losses inherent in the portfolio.
In October, 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosures" an
amendment of SFAS No. 114. This statement amends SFAS 114 to allow a
creditor to use existing methods for recognizing interest income on impaired
loans and the disclosure requirements regarding the recorded investment in
certain impaired loans and how a creditor recognizes interest income related
to those impaired loans. The Company has no loans meeting the definition of
impairment as of March 31, 1995. The effect of adopting the new standards
did not have a significant impact on earnings, capital, etc.
10
<PAGE>
PART II - OTHER INFORMATION AND SIGNATURES
Item 1 - Legal Proceedings
Management is not aware of any litigation that would have a material
adverse effect on the consolidated financial position of the Company. Any
pending proceedings are ordinary, routine litigation incidental to the
business of the Company and its subsidiary. In addition, no material
proceedings are pending or are known to be threatened or contemplated against
the Company and its subsidiary by government authorities.
Item 2 - Changes in Securities - Nothing to report.
Item 3 - Defaults Upon Senior Securities - Nothing to report.
Item 4 - Submission of Matters to a Vote of Security Holders:
Results of the voting at the Annual Meeting of Shareholders April 18,
1995:
1. Election of Class 2 Directors whose term will expire in 1998:
For Withhold Authority
Robert E. Dalton 1,071,995 22,085
John E. Novak 1,063,824 30,256
Rudolph J. van der Heil 1,067,969 26,111
Robert J. Landy 1,071,308 22,772
2. Proposal to amend Article 4 of the Corporation's amended
Articles of Incorporation to increase the number of authorized
shares, from 2,000,000 shares to 5,000,000 shares.
1,051,184 FOR 14,350 AGAINST 28,543 ABSTAIN
Current Class 1 Directors whose term expires in 1996:
Carol J. Bond
R. Lowell Coolidge
Richard E. Wilber
John M. Thomas, M.D.
Larry J. Croft
Current Class 3 Directors whose term expires in 1997:
Bruce L. Adams
William D. Van Etten
Item 5 - Other Information - Nothing to report.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits - None.
(b) Reports - None.
11
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
undersigned Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Citizens Financial Services, Inc.
(Registrant)
May 10, 1995 /s/ Richard E. Wilber
-------------------------------------
By: Richard E. Wilber
President and Chief Financial Officer
(Principal Executive Officer)
May 10, 1995 /s/ Thomas C. Lyman
-------------------------------------
By: Thomas C. Lyman
Treasurer
(Principal Financial &
Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 5,270
<INT-BEARING-DEPOSITS> 46
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 15,003
<INVESTMENTS-CARRYING> 48,680
<INVESTMENTS-MARKET> 48,027
<LOANS> 155,158
<ALLOWANCE> 1,772
<TOTAL-ASSETS> 232,308
<DEPOSITS> 200,738
<SHORT-TERM> 3,300
<LIABILITIES-OTHER> 2,638
<LONG-TERM> 1,874
<COMMON> 1,335
0
0
<OTHER-SE> 18,426
<TOTAL-LIABILITIES-AND-EQUITY> 232,308
<INTEREST-LOAN> 3,553
<INTEREST-INVEST> 1,075
<INTEREST-OTHER> 1
<INTEREST-TOTAL> 4,629
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</TABLE>
