Citizens Financial Services (CZFS) 8-K Citizens Financial Services, Inc. Reports First Quarter 2007 Earnings

Exhibit 99.1

Contact:  Kathleen Campbell, Marketing Director

 First Citizens National Bank

 15 South Main Street

 Mansfield, PA 16933

 570-662-0422

 570-662-8512 (fax)

Citizens Financial Services, Inc. Reports First Quarter 2007 Earnings

MANSFIELD, PENNSYLVANIA— April 19, 2007 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the first quarter of 2007.

Net income for the three months ended March 31, 2007 was $1,380,000, which compares to $1,276,000 for the first quarter last year. This is an increase of $104,000, or 8.2%. Earnings per share for the first quarter are $.49 compared with $.44 last year, representing an increase of 11.4%. Return on equity for the three months ended March 31, 2007 and 2006 was 12.10% and 11.84%, respectively. Non-interest expenses have decreased $113,000 or 2.9% from a year ago.

CEO and President Randall E. Black stated, “Throughout this very difficult and abnormal yield curve environment, we have been able to achieve improved financial performance through cost control and deposit pricing discipline.”

Since last year, total assets have increased $26.2 million, or 4.8%. At the end of March, total assets were $566.4 million compared to $540.2 million last March. Net loans have increased $23.2 million since last March, an increase of 6.0%. Deposits have increased $29.6 million while borrowed funds have decreased $8.4 million.

Stockholders’ Equity, excluding accumulated other comprehensive income, has increased $2.8 million, or 6.4% since last March. Book value per share at March 31, 2007 was $16.31 compared with $15.32 last year, an increase of 6.5%. In April, a cash dividend of $.22 ½ per share was declared and will be paid to shareholders on April 27, 2007 to record holders as of April 13, 2007. This represents an increase of 4.7% over the dividend paid last April.

Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 16 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.

CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
	March 31			December 31			March 31
(in thousands except share data)	2007			2006			2006
ASSETS:
Cash and due from banks:
Noninterest-bearing	$	7,491		$	10,007		$	9,781
Interest-bearing		2			8			21
Total cash and cash equivalents		7,493			10,015			9,802
Available-for-sale securities		109,320			109,743			105,220
Loans (net of allowance for loan losses:
2007, $3,972; December 31, 2006, $3,876; and March 31, 2006, $3,709)		408,285			410,897			385,116
Premises and equipment		12,898			12,892			12,195
Accrued interest receivable		2,577			2,458			2,316
Goodwill		8,605			8,605			8,605
Bank owned life insurance		8,126			8,047			7,815
Other assets		9,064			9,511			9,134
TOTAL ASSETS	$	566,368		$	572,168		$	540,203
LIABILITIES:
Deposits:
Noninterest-bearing	$	50,865		$	48,509		$	52,360
Interest-bearing		406,183			398,006			375,087
Total deposits		457,048			446,515			427,447
Borrowed funds		58,686			75,775			67,042
Accrued interest payable		2,167			2,287			1,657
Other liabilities		4,081			4,091			2,786
TOTAL LIABILITIES		521,982			528,668			498,932
STOCKHOLDERS' EQUITY:
Common Stock
$1.00 par value; authorized 10,000,000 shares;
issued 2,992,896 shares in 2007 and at December 31, 2006
and 2,965,257 shares at March 31, 2006		2,993			2,993			2,965
Additional paid-in capital		11,933			11,933			11,359
Retained earnings		34,767			34,007			31,930
Accumulated other comprehensive loss		(1,605	)		(1,737	)		(1,942	)
Treasury Stock, at cost: 173,204 shares for
2007, 172,954 shares at December 31, 2006
and 144,088 shares at March 31, 2006		(3,702	)		(3,696	)		(3,041	)
TOTAL STOCKHOLDERS' EQUITY		44,386			43,500			41,271
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	566,368		$	572,168		$	540,203

CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
	Three Months Ended
	March 31,
(in thousands, except per share data)	2007		2006
INTEREST INCOME:
Interest and fees on loans	$	7,357	$	6,519
Investment securities:
Taxable		1,014		819
Nontaxable		224		226
Dividends		91		67
TOTAL INTEREST INCOME		8,686		7,631
INTEREST EXPENSE:
Deposits		3,309		2,601
Borrowed funds		926		663
TOTAL INTEREST EXPENSE		4,235		3,264
NET INTEREST INCOME		4,451		4,367
Provision for loan losses		120		60
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		4,331		4,307
NON-INTEREST INCOME:
Service charges		748		706
Trust		138		129
Brokerage		15		58
Insurance		4		36
Investment securities losses, net		-		(6	)
Earnings on bank owned life insurance		79		72
Other		143		137
TOTAL NON-INTEREST INCOME		1,127		1,132
NON-INTEREST EXPENSES:
Salaries and employee benefits		2,093		2,036
Occupancy		301		308
Furniture and equipment		128		152
Professional fees		165		140
Amortization		36		144
Other		1,055		1,111
TOTAL NON-INTEREST EXPENSES		3,778		3,891
Income before provision for income taxes		1,680		1,548
Provision for income taxes		300		272
NET INCOME	$	1,380	$	1,276
Earnings Per Share	$	0.49	$	0.44
Cash Dividends Paid	$	0.22	$	0.21
Weighted average number of shares outstanding		2,819,775		2,867,964

FINANCIAL HIGHLIGHTS
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
	2007			2006
Three Months Ended March 31
Net Income	$	1,380		$	1,276
Comprehensive Income		1,512			875
Per common share data:
Earnings per share	$	0.49		$	0.44
Cash dividends paid per share	$	0.22		$	0.21
Performance Ratios:
Return on average assets (annualized)		0.96	%		0.96	%
Return on average equity (annualized)		12.10	%		11.84	%
At March 31
Assets	$	566,368		$	540,203
Investment securities:
Available for sale		109,320			105,220
Loans (net of unearned income)		412,257			388,825
Allowance for loan losses		3,972			3,709
Deposits		457,048			427,447
Stockholders' Equity		44,386			41,271
Non-performing assets		2,946			3,007
Average Leverage Ratio		7.90	%		7.91	%
Per common share data:
Book value	$	16.31		$	15.32
Market value (average of bid/ask price)	$	22.77		$	22.30
Market price to book value ratio		139.60	%		145.59	%
Per share calculations give retroactive effect to stock dividends declared by the Company

						Cash Dividends
Common Stock Information:	Bid			Ask		Paid Per Share
Quarter Ended:
March 31, 2007	$	22.55		$	23.00	$	0.220
December 31, 2006	$	22.00		$	23.50	$	0.220
September 30, 2006	$	22.00		$	23.00	$	0.215
June 30, 2006	$	21.60		$	23.00	$	0.215
March 31, 2006	$	21.35		$	23.25	$	0.210
December 31, 2005	$	20.80		$	21.00	$	0.210
September 30, 2005	$	20.10		$	20.50	$	0.205
June 30, 2005	$	21.00	��	$	21.70	$	0.205