SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

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Check the appropriate box:

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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

CITIZENS FINANCIAL CORPORATION
--------------------------------
(Name of Registrant as Specified In Its Charter)

Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
-------------------

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CITIZENS FINANCIAL CORPORATION
The Marketplace, Suite 300
12910 Shelbyville Road
Louisville, Kentucky 40243

NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS

Dear Shareholder:

You are cordially invited to attend this year's Annual Meeting of
Shareholders of Citizens Financial Corporation.

DATE: Thursday, May 24, 2001

TIME: 4:00 p.m., EDT (Louisville time)

PLACE: The Marketplace, Suite 300
12910 Shelbyville Road
Louisville, Kentucky 40243

AGENDA: The agenda for meeting includes:

o The election of eight directors for a term of one year; and

o The transaction of such other business as may properly come
before the meeting.

RECORD DATE: The record date for determining shareholders entitled to vote
at the meeting is the close of business on April 18, 2001.

Even if you plan to attend the meeting, please complete, sign, date and
return the enclosed proxy. You may attend even though you have returned the
proxy. If you decide to revoke your proxy for any reason, you may do so at any
time before the voting as described in the accompanying Proxy Statement.

By Order of the Board of Directors

DARRELL R. WELLS
PRESIDENT AND CHIEF
EXECUTIVE OFFICER

Louisville, Kentucky
April 25, 2001

PLEASE VOTE PROMPTLY

CITIZENS FINANCIAL CORPORATION
THE MARKETPLACE, SUITE 300
12910 SHELBYVILLE ROAD
LOUISVILLE, KENTUCKY 40243

PROXY STATEMENT

This statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Citizens Financial Corporation. The proxies
we receive will be voted at the Annual Meeting of Shareholders of Citizens
Financial on Thursday, May 24, 2001, beginning at 4:00 p.m., EDT. The Annual
Meeting will be held at our offices in Suite 300, The Marketplace, 12910
Shelbyville Road, Louisville, Kentucky.

Your vote is important. Please complete, date and sign the enclosed
proxy and return it in the enclosed postage-paid return envelope so your shares
are represented at the Annual Meeting.

This proxy statement provides information about Citizens Financial, the
proposals on the agenda for the Annual Meeting and this proxy solicitation. The
terms "we", "our", "Citizens Financial" and the "Company" used in this statement
refer to Citizens Financial Corporation. This statement and the enclosed proxy
are first being sent to shareholders on or about April 25, 2001.

VOTING

VOTING RIGHTS. You are entitled to notice of the Annual Meeting and to
vote your Class A Stock if our records showed that you owned your shares as of
the close of business on April 18, 2001. At that time, there were 1,758,215
shares of Class A Stock outstanding and entitled to vote. You have one vote for
each share of Class A Stock you own on all proposals other than the election of
directors. In the election of directors, you have "cumulative" voting rights
under Kentucky law. This means that you have as many votes as equals the number
of shares you own multiplied by the number of directors to be elected, and you
may give all your votes to a single nominee or distribute your votes among
nominees in any manner you desire.

USING A PROXY CARD TO VOTE. If you hold your shares in your own name,
you may indicate on the enclosed proxy how you want your shares voted and sign,
date and mail the proxy card in the enclosed postage-paid envelope. The persons
named on the proxy will vote your shares in accordance with those instructions.
If you give us a proxy card without giving specific voting instructions, your
shares will be voted for the director nominees named in this statement. We are
not aware of any other matters to be presented at the meeting except for those
described in this statement. If any other matters not described in this
statement are properly presented at the meeting, the persons named on the proxy
will have the authority to vote your shares in their discretion and will vote
them in accordance with the recommendations of the Board of Directors. If the
meeting is adjourned to a later time, they may vote your shares at the new time
as well, unless you revoke your proxy. The persons named on the proxy may vote
cumulatively in the election of directors.

If your Class A Stock is held in "street name," the broker, bank or
other nominee holding your shares will send you directions you must follow in
order to give instructions on how to vote your shares.

HOW TO REVOKE YOUR PROXY. If you return the proxy before the Annual
Meeting, you may revoke it at any time before it is voted. You may revoke the
proxy by (1) delivering written notice of revocation to the Secretary of
Citizens Financial or (2) delivering a later-dated proxy or (3) voting in person
at the meeting.

If your Class A Stock is held in "street name," the broker, bank or
other nominee holding your shares will send you directions you must follow in
order to revoke or change your prior instructions on how to vote your shares.

VOTES REQUIRED. To transact business at the Annual Meeting, a majority
of the outstanding Class A Stock entitled to vote must be represented at the
meeting in person or by proxy. If you have returned a properly executed proxy or
attend the meeting in person, your Class A Stock will be counted for the purpose
of determining whether a majority is represented, even if you wish to abstain
from voting on some or all matters introduced at the meeting. A "broker
non-vote" can occur if shares are held by a broker, bank or other nominee who
does not have authority to vote on a particular matter. Like abstentions, broker
non-votes will be counted for determining if a majority is represented at the
meeting. We do not count abstentions or broker non-votes as votes for or against
a proposal. As a result, they will not affect the outcome of the vote on the
election of directors. In the election of directors, the eight nominees
receiving the greatest number of votes will be elected.

YOUR VOTE IS IMPORTANT

YOU MAY SAVE US THE EXPENSE OF A SECOND MAILING BY PROMPTLY RETURNING THE
ENCLOSED PROXY. PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE REQUIRED NUMBER OF SHARES MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF IT IS MAILED WITHIN THE UNITED STATES.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table reflects the beneficial ownership of our Class A
Stock as of April 18, 2001 [i] by Darrell R. Wells, a director and officer who
is the only person we know to own beneficially more than five percent (5%) of
our Class A Stock, [ii] by each of our other directors individually, [iii] by
each of the other named officers reflected in the Summary Compensation Table
individually and [iv] by all of our directors and executive officers as a group.
We believe that each person named or included below has the sole voting and
investment power with respect to the amount of Class A Stock listed, unless
otherwise indicated.

OWNERSHIP OF CLASS A STOCK
PERCENT OF
SHAREHOLDER SHARES CLASS
----------- ------ -----

Darrell R. Wells(1) 956,694(2) 54.31%
Suite 310, 4350 Brownsboro Road
Louisville, Kentucky 40207

John H. Harralson, Jr. 12,468 *
Lane A. Hersman 3,700 *
Frank T. Kiley 24,303 1.38%
Charles A. Mays 2,500 *
Earle V. Powell 16,465 *
Thomas G. Ward 24,169 1.37%
Margaret A. Wells(1) 956,694(2) 54.31%
Brent L. Nemec 0 *
Stephen L. Marco 100 *
Robert N. Greenwood 2,979 *
15 Directors and Executive
Officers as a Group 1,044,085 59.38%

- ------------------
* Less than 1%.
(1)Margaret A. Wells, a director, is the wife of Darrell R. Wells. Under the
federal securities laws, a person is presumed to be the beneficial owner of
securities held by members of the person's immediate family sharing the same
household. Accordingly, the shares reported as beneficially owned by Mr. Wells
and Ms. Wells are the same shares.
(2)Mr. Wells shares voting and investment power with respect to 67,315 shares
of the Class A Stock.

PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting, a full Board of Directors will be elected to
serve until the next Annual Meeting of Shareholders and until their respective
successors are elected and qualify. The terms of all present directors will
expire at the conclusion of the election of directors at the Annual Meeting.
Under the Company's Bylaws, the Board of Directors consists of eight (8)
persons.

The Board of Directors has nominated the following persons for election
as directors. All of them were elected at the 2000 Annual Meeting of
Shareholders and in previous years as shown in the following table.

DIRECTOR PRINCIPAL OCCUPATION(S)
NAME, AGE, AND PRESENT OF THE OR EMPLOYMENT(S) DURING
POSITIONS WITH THE COMPANY COMPANY PAST FIVE OR MORE YEARS
AND THE INSURANCE SUBSIDIARIES(1) SINCE AND CERTAIN DIRECTORSHIPS(2)
------------------------------ ----- -------------------------
John H. Harralson, Jr. 1990 Publisher, Southern Publishing d/b/a
73 THE VOICE TRIBUNE (suburban newspaper),
Director of the Company Louisville, Kentucky
and the Insurance Subsidiaries

Lane A. Hersman 1995 Present principal positions with the Company
49 and Citizens Security since July, 1995;
Executive Vice President and Chief formerly senior financial management
Operating Officer and Director of the positions with the Company since 1991 and
Company; President and Chief Citizens Security since 1988
Executive Officer and Director of the
Insurance Subsidiaries

Frank T. Kiley 1990 Principal, Security Management Company
54 (investments and investment management),
Director of the Company Louisville, Kentucky

Charles A. Mays 1994 Executive Vice President and Chief
62 Financial Officer, Commonwealth Bank and
Director of the Company Trust Company, Louisville, Kentucky
and the Insurance Subsidiaries

Earle V. Powell 1990 Retired; Trustee, Kentucky Teachers
84 Retirement Board, Frankfort, Kentucky
Director of the Company
and the Insurance Subsidiaries

Thomas G. Ward 1990 President, Third Kentucky Cellular
63 Corporation (telecommunications),
Director of the Company Lexington, Kentucky
and the Insurance Subsidiaries

Darrell R. Wells 1990 General Partner, Security Management
58 Company (investments and investment
President and Chief Executive Officer, management), Louisville, Kentucky.
Director and Chairman of the Board of Director, Churchill Downs Incorporated
the Company and Jundt Growth Fund

Margaret A. Wells 1993 Homemaker and civic volunteer,
54 Louisville, Kentucky
Director of the Company
- -------------------------
(1) The Company's Insurance Subsidiaries are Citizens Security Life Insurance Company ("Citizens Security"), the Company's
corporate predecessor; United Liberty Life Insurance Company ("United Liberty"); and Kentucky Insurance Company
("Kentucky Insurance"), which is presently inactive. The Company's other subsidiary is not significant to its overall business.
(2) Directorships in publicly-held companies other than the Company, in registered investment companies and, in the discretion
of the nominees, other organizations.

The persons named on the enclosed proxy intend to vote for the eight
nominees, unless you indicate on the proxy that your votes should be withheld
from any or all such nominees, subject to the matters described in
"Discretionary Authority in Election of Directors," below. If there are more
nominees at the meeting than there are directorships, the nominees receiving the
highest number of votes will be elected to the available directorships.

DISCRETIONARY AUTHORITY IN ELECTION OF DIRECTORS

All of the nominees have agreed to serve if elected. If, however, any
nominee is unable to serve, the persons named on the proxy, or their
substitutes, reserve the right to vote for a substitute nominee selected by our
Board of Directors. In addition, if any shareholder or shareholders vote their
shares for the election of a director or directors other than the nominees named
above, the persons named on the proxy, or their substitutes, reserve the right
to vote cumulatively for less than all of the nominees named above or any
substitute nominees, as they may choose.

If for any reason more than eight (8) people are to be elected to our
Board of Directors, the persons named on the proxy, or their substitutes, are
not permitted to vote for more than eight (8) nominees. If for any reason less
than eight (8) persons are to be elected directors, the persons named on the
proxy reserve the right to vote such shares for a reduced number of nominees
from among those named above, or any substitute nominees.

BOARD MEETINGS AND COMMITTEES

Our Board of Directors held five (5) meetings during 2000. Each of the
directors attended at least 75% of the total number of meetings of the Board and
the committees on which she or he served.

Our Board of Directors has delegated certain functions to standing
committees of the Board, including the Executive and Audit Committees. We have
not established standing nominating or compensation committees or committees
performing similar functions.

THE EXECUTIVE COMMITTEE: Held one (1) meeting in 2000.

CURRENT MEMBERS: Messrs. Wells, Hersman, Kiley and Mays.

FUNCTIONS: This committee is authorized to perform all of
the functions of the Board except as limited by
the Company's Articles of Incorporation and
Bylaws and by certain provisions contained in the
resolution of the Board that created the
Executive Committee.

THE AUDIT COMMITTEE: Held four (4) meetings during 2000.

CURRENT MEMBERS: Messrs. Harralson, Powell and Ward.

FUNCTIONS: This committee operates under a written charter
adopted by the Board of Directors, a copy of
which is included as Appendix A. Its members are
independent as defined under the listing
standards of the National Association of
Securities Dealers.

The following is the report of the Audit Committee for the current
year.

The Audit Committee of the Board of Directors is currently composed of
three (3) independent directors. The Committee recommends to the Board of
Directors the selection of the Company's independent accountants.

Management is responsible for the Company's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The Committee's responsibility is to monitor and oversee these
processes.

In this context, the Committee has met and held discussions with
management and the independent accountants. Management represented to the
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee has
reviewed and discussed the consolidated financial statements with management and
the independent accountants. The Committee discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees).

5
8

The Company's independent accountants also provided to the Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent accountants their independence.

Based upon the Committee's discussion with management and the
independent accountants and the Committee's review of the representation of
management and the report of the independent accountants to the Committee, the
Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2000 filed with the Securities and Exchange
Commission.

Earle V. Powell
John H. Harralson, Jr.
Thomas G. Ward

DIRECTOR COMPENSATION

Each member of the Board of Directors who is not a full-time employee
of the Company or its subsidiaries or who is not otherwise compensated as such
receives a fee of $1,900 per quarter if she or he attends all meetings of the
Board of Directors. Five hundred dollars is deducted from each quarterly payment
for each meeting missed by the director for that quarter.

EXECUTIVE OFFICERS OF THE COMPANY

Our executive officers, as listed below, are elected annually and serve
at the pleasure of our Board of Directors.

PRESENT POSITIONS WITH THE COMPANY PRINCIPAL OCCUPATION(S) OR EMPLOYMENT(S)
NAME/AGE AND THE INSURANCE SUBSIDIARIES (1) DURING PAST FIVE OR MORE YEARS
-------- ----------------------------------- ------------------------------
Darrell R. Wells President and Chief Executive Officer General Partner, Security
58 (since 1995), Director and Chairman of Management Company (investments
the Board of the Company and investments management),
Louisville, Kentucky

Lane A. Hersman Executive Vice President and Chief Present principal positions with the
49 Operating Officer and Director of the Company and with Citizens Security
Company; President and Chief Executive since 1995 and with United Liberty
Officer and Director of the Insurance since 1998; formerly senior financial
Subsidiaries management positions with the Company
since 1991 and with Citizens Security
since 1988

Robert N. Greenwood Vice President, Operations, of the Present position with the Company
66 Company; Senior Vice President, since 1992, with Citizens Security
Operations, of Citizens Security and since 1989 and with United Liberty
United Liberty since 1998

James L. Head Vice President, Administration, of the Present positions with the Company
67 Company; Senior Vice President, since 1992, with Citizens Security
Administration, of Citizens Security and since 1990, and with United Liberty
United Liberty since 1998

Stephen L. Marco Vice President and Chief Actuary of the Present positions with the Company
50 Company; Senior Vice President and since 1993, with Citizens Security
Chief Actuary of Citizens Security and since 1992, and with United Liberty
United Liberty since 1998

PRESENT POSITIONS WITH THE COMPANY PRINCIPAL OCCUPATIONS(S) OR EMPLOYMENT(S)
NAME/AGE AND THE INSURANCE SUBSIDIARIES (1) DURING PAST FIVE OR MORE YEARS
-------- ---------------------------------- ------------------------------

Paul M. Marquess Vice President, Agency, of the Present positions with the Company
63 Company; Senior Vice President, and Citizens Security since 1996 and
Agency, of Citizens Security and United with United Liberty since 1998
Liberty

Brent L. Nemec Vice President, Accounting and Chief Present positions with the Company
46 Financial Officer, and Treasurer of the and Citizens Security since 1996 and
Company; Senior Vice President, with United Liberty since 1998
Accounting and Chief Financial Officer
and Treasurer of the Insurance Subsidiaries

Tonya G. Crawford Vice President, Pre-Need, of the Present positions with the Company
38 Company and Senior Vice President, since 1999 and with Citizens
Pre-Need, of Citizens Security and Security and United Liberty since
United Liberty 1998; formerly Director of
Operations of United Liberty
(acquired in 1998)
- -------------------------
(1) The Company's Insurance Subsidiaries are Citizens Security Life Insurance Company ("Citizens Security"), the Company's
corporate predecessor; United Liberty Life Insurance Company ("United Liberty"); and Kentucky Insurance Company
("Kentucky Insurance"), which is presently inactive. The Company's other subsidiary is not significant to its business.
- -------------------------------------------------------------------------------------------------------------------

EXECUTIVE COMPENSATION

The following table provides a profile of our executive compensation
and shows, among other things, salaries and bonuses paid during the last three
years to the persons named, who include our President and Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION

OTHER
NAME AND PRINCIPAL POSITIONS ANNUAL ALL OTHER
WITH THE COMPANY YEAR SALARY BONUS COMPENSATION COMPENSATION(4)
Darrell R. Wells, President and Chief 2000 $ 0 $ 0 $6,979(2) $ 0
Executive Officer and Chairman of the 1999 $ 0 $ 0 $0 $ 0
Board(1) 1998 $ 0 $ 0 $0 $ 0

Lane A. Hersman, Executive Vice 2000 $124,330 $ 0 $0(3) $4,465
President and Chief Operating Officer 1999 $118,412 $1,000 $0(3) $3,673
and Director 1998 $109,779 $ 0 $0(3) $2,933

Brent L. Nemec, Vice President, 2000 $108,429 $ 0 $0 $3,297
Accounting and Chief Financial 1999 $103,289 $1,000 $0 $3,131
Officer and Treasurer 1998 $ 96,208 $ 0 $0 $2,578

Stephen L. Marco 2000 $106,289 $ 0 $0 $3,821
Vice President and Chief Actuary 1999 $101,816 $1,000 $0 $3,450
1998 $ 94,946 $ 0 $0 $2.544

Robert N. Greenwood 2000 $104,923 $ 0 $0 $3,240
Vice President, Operations 1999 $100,924 $1,000 $0 $3,124
1998 $ 94,362 $ 0 $0 $2,516
- -------------------------

(1) Mr. Wells has not received any salary or bonus for serving as an officer in a part-time capacity.
(2) Other Annual Compensation consists of personal use of an airplane partly owned by the Company.
(3) Other Annual Compensation consists of personal use of a Company-leased automobile. The aggregate cost to us of such
personal benefits did not exceed the lesser of $50,000 or 10% of the annual salary received by Mr. Hersman.
(4) The amounts shown in this column represent Company contributions to the Company's 401(k) plan and term life insurance
premiums, as follows:

Mr. Wells Mr. Hersman Mr. Nemec Mr. Marco Mr. Greenwood

401(K)
2000 $0 $2,948 $1,967 $2,519 $2,486
1999 $0 $2,235 $1,870 $1,924 $1,907
1998 $0 $1,556 $1,363 $1,345 $1,337

LIFE INSURANCE PREMIUMS
2000 $0 $1,517 $1,330 $1,302 $ 754
1999 $0 $1,438 $1,261 $1,526 $1,217
1998 $0 $1,377 $1,215 $1,199 $1,179

EMPLOYMENT AGREEMENTS

Mr. Hersman, Mr. Marco and Mr. Greenwood have employment agreements
with the Company and Citizens Security that provide for a severance payment of
one year's current salary unless such officer is terminated by reason of death,
voluntary resignation, or for "cause" as described in the employment agreements.

BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION

Each year, the Board of Directors, other than Mr. Hersman, sets the
compensation and benefits of executive officers of the Company at one of its
meetings held after completion of the Company's financial statements for the
preceding year. The Board has not adopted a formal compensation policy and does
not regularly employ compensation consultants. In 2000, the only material
component of executive officer compensation was salary, in addition to benefits
generally available to all employees. The decision process begins with a salary
proposal by Mr. Hersman for each executive officer. In general, the Board
intends that salary levels will be near the median for executives with
comparable responsibilities at comparable companies in the insurance industry,
although reliable industry data is difficult to obtain, and that they will be
competitive with other opportunities available to Company executives. Salaries
are indirectly related to corporate performance in that improved Company
performance improves the climate for annual salary increases, but no portion of
executive salaries is contingent upon meeting specific criteria. The Company has
not adopted a bonus plan or other incentive compensation plan, other than the
1999 Stock Option Plan. No options have as yet been granted under the Plan.

Mr. Wells, the Company's president and chief executive officer, has not
received any salary or bonus or benefits generally provided to employees of the
Company. Mr. Wells is the Company's largest beneficial shareholder and has
responsibilities for various other businesses not otherwise connected with the
Company.

John H. Harralson, Jr.
Frank T. Kiley
Charles A. Mays
Earle V. Powell
Thomas G. Ward
Darrell R. Wells
Margaret A. Wells

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and 10% shareholders to file reports of holdings
and transactions in our shares with the SEC. Based on our records and other
information, we believe that our directors, executive officers and 10%
shareholders met all applicable SEC filing requirements in 2000 except that Paul
M. Marquess, an officer, filed a late report with respect to his purchase of 50
shares of the Company's Class A Stock.

PERFORMANCE GRAPH

This graph compares our total shareholder returns with like data for
the Russell 2000 Index and the Total Return Industry Index for NASDAQ Insurance
Stocks prepared by Center for Research in Securities Prices ("CRSP"). The graph
assumes $100 invested at the per share closing price of the Class A Stock on the
NASDAQ SmallCap Market on December 31, 1995, in Citizens Financial and each of
the indices. All data assumes reinvestment of dividends. The Company has not
historically paid dividends.

[GRAPHIC_OMITTED]

1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Citizens Financial $100.00 $ 99.11 $113.27 $155.75 $207.66 $221.82
Russell 2000 Index $100.00 $116.49 $142.55 $138.92 $168.45 $163.36
NASDAQ Insurance $100.00 $113.99 $167.21 $148.95 $115.57 $145.12
Index

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Board of Directors who participate in decisions
regarding the compensation of our executives are John H. Harralson, Jr., Frank
T. Kiley, Charles A. Mays, Earle V. Powell, Thomas G. Ward, Darrell R. Wells and
Margaret A. Wells. Mr. Wells is a current executive officer of the Company and
Mr. Powell was president of Citizens Security until his retirement in 1989.

Mr. Wells has responsibilities for other businesses including those
that employ Mr. Kiley and Mr. Mays, and either determines or participates in the
determination of the compensation received by them from their respective
employers.

Mr. Wells and Mr. Kiley are affiliated with other entities that are
involved in continuing transactions with the Company. These transactions are
described in the next section.

CERTAIN TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS

Darrell R. Wells, the Company's President and Chairman of the Board,
provides us with securities portfolio management services under four separate
contracts, one with us and one with each of our three insurance subsidiaries. He
does so through SMC Advisors, Inc., an investment advisor entity of which he is
the principal officer, a director, and the sole shareholder. Frank T. Kiley, a
Director of the Company, is also an officer and director of SMC Advisors. Each
contract with SMC Advisors provides for us to pay a fixed annual fee plus
incentive compensation equal to five percent (5%) of any net gain from net
realized and net unrealized capital gains and losses in the bond and stock
portfolios of the particular company involved for the year. The aggregate fees
we incurred under the four contracts as a group last year were as follows: fixed
fees of $48,000 (0.04% of average cash and invested assets for the year); and
incentive fees of $207,369 (0.17% of average cash and invested assets for the
year). Any excess of net realized and unrealized capital losses over net
realized and unrealized capital gains at the end of a year is not carried
forward to the next year. Each contract provides for automatic renewal for
successive one-year periods unless we or SMC Advisors notifies the other, at
least 30 days prior to the end of the current contract period, that we or it
intends to terminate the contract. The contracts have been renewed for 2001. The
contracts are also subject to termination in certain events of default or
insolvency. Portfolio investments are limited to investments that comply with
the Kentucky Insurance Code and regulations and the overall investment policies
of the Company and our insurance subsidiaries.

Insurance laws require the Company's insurance subsidiaries to deposit
portions of their assets in bank custodial accounts for the protection of
policyholders. The principal custodian for such statutory deposits and other
assets is Shelby County Trust Bank, which is controlled by Mr. Wells. The fees
we pay the bank are based on the amount of assets held. In 2000, we paid $94,660
in fees to the bank. Mr. Kiley is also a director of the bank.

Our subsidiary Corporate Realty Service, Inc. manages our home office
building, as well as two office buildings owned by partnerships controlled by
Mr. Wells. These partnerships pay management fees to Corporate Realty Service
based upon a percentage of rental income and leasing commissions according to a
prescribed schedule, and also reimburse certain salary expenses of Corporate
Realty Service. During 2000, the partnerships paid Corporate Realty Service
$150,672, consisting of $73,029 in management fees, $22,165 in leasing
commissions and $55,478 in salary reimbursement. Mr. Kiley also owns interests
in the partnerships.

OTHER MATTERS

We are not aware of any other matters requiring a vote of shareholders
at the Annual Meeting (except for procedural matters), and we do not expect any
such other matters to arise. If, however, any such other matters are presented,
the persons named on the enclosed proxy, or any substitutes, will vote on these
matters according to their judgment of the best interests of the Company.

INDEPENDENT PUBLIC ACCOUNTANTS

Ernst & Young, LLP has served as our independent accountant and the
auditor of our annual financial statements since the Company was organized in
1990. The Board of Directors ordinarily selects our independent accountant and
auditor in the last half of the year. It has not yet made a selection for the
current year.

The Company paid or accrued fees payable to Ernst & Young, LLP for the
year ending December 31, 2000 as follows:

AUDIT FEES. Fees for professional services for the audit of the
Company's annual consolidated financial statements and the review
of the consolidated financial statements included in the
Company's quarterly reports were $75,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES.
There were no fees for services of this kind during the year.

ALL OTHER FEES. Fees for all other services were $66,831,
including $56,600 for audits of the separate annual financial
statements of the Insurance Subsidiaries submitted to insurance
regulatory authorities and $6,600 for preparation of income tax
returns.

The Audit Committee has determined that the provision by Ernst & Young,
LLP of the services covered by All Other Fees is compatible with maintaining its
independence.

We expect that a representative of Ernst & Young, LLP will be present
at the Annual Meeting, will have the opportunity to make a statement if the
representative desires to do so, and will be available to respond to appropriate
questions.

FINANCIAL STATEMENTS

Our most recent annual financial statements are contained in the 2000
Annual Report to Shareholders, which may be enclosed with this proxy statement.
You may obtain additional copies of the Annual Report by writing to the
President, The Marketplace, Suite 300, 12910 Shelbyville Road, Louisville,
Kentucky 40243. Although enclosed, you should not consider the Annual Report and
such financial statements as part of this statement because we do not consider
the information contained in the Annual Report or financial statements material
for purposes of exercising your judgment regarding the matters considered at the
Annual Meeting.

PROPOSALS BY SHAREHOLDERS

If you wish to include a proposal in the Board of Directors' proxy
statement and form of proxy for presentation at the 2002 Annual Meeting of
Shareholders, your proposal must be received by the Company not later than
December 28, 2001. Any other proposal that you intend to bring before that
meeting must be received by the Company not later than March 11, 2002. You
should send your notice of any proposal to the Secretary of the Company at The
Marketplace, Suite 300, 12910 Shelbyville Road, Louisville, Kentucky 40243.

GENERAL INFORMATION

Our Board of Directors is conducting this solicitation of proxies
primarily by mail. The Company will bear the costs of the solicitation, which
may include reimbursement to brokerage firms and others for expenses involved in
forwarding this solicitation material for the Annual Meeting to you and other
shareholders on our behalf. Certain officers, directors, and regular employees
of the Company may also solicit proxies on behalf of the Board of Directors by
means of telephone calls, personal interviews, and mail at no additional expense
to the Company, except any actual out-of-pocket communications charges.

Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and promptly return the enclosed proxy in the enclosed envelope. No
postage is required for mailing in the United States.

By Order of the Board of Directors,

DARRELL R. WELLS
PRESIDENT AND CHIEF EXECUTIVE OFFICER

APPENDIX A

AUDIT COMMITTEE CHARTER

ORGANIZATION

This Charter governs the operation of the Audit Committee of the Board of
Directors of Citizens Financial Corporation and subsidiaries. The Committee
shall review and reassess the adequacy of the Charter at least annually and
obtain the approval of the Board of Directors for any revisions. The Committee
shall be appointed by the Board of Directors who at its discretion will
determine the number of members given, however, that at all times there must be
at least three directors who are independent of management and the Company.
Additionally, the composition of the Committee will comply with the rules and
regulations then in effect of the National Association of Securities Dealers and
Securities and Exchange Commission governing such committees. Members of the
Committee shall be considered independent if they have no relationship that may
interfere with the exercise of their independence from management and the
Company. All Committee members shall be financially literate and at least one
member shall have accounting or related financial management expertise. At least
two-thirds of the Committee must be present to form a quorum.

STATEMENT OF POLICY

The Audit Committee shall provide assistance to the Board of Directors in
fulfilling its oversight responsibility to the shareholders relating to the
Company's financial statements and the financial reporting process, the systems
of internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and legal
compliance and ethics programs as may be established by management and the Board
of Directors. In so doing, it is the responsibility of the Committee to maintain
free and open communication between the Committee, independent auditors, any
internal auditors who may be appointed, and management of the Company. In
discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company and the power to retain outside counsel
or other experts for this purpose.

RESPONSIBILITIES AND PROCESSES

The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board of Directors and report the
results of its activities to the Board of Directors. Management is responsible
for preparing the Company's financial statements, and the independent auditors
are responsible for auditing those financial statements. The policies and
procedures of the Committee in carrying out its responsibilities should remain
flexible, in order to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.

The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide, with the understanding that the Committee may supplement them as
appropriate.

o The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board of Directors and the Committee, as
representatives of the Company's shareholders. Annually, the Committee
shall review and recommend to the Board of Directors the selection of
the Company's independent auditors. The Committee shall have the
ultimate authority and responsibility to evaluate and, where
appropriate, recommend that the Board of Directors replace the
independent auditors.

o The Committee shall ensure that it receives from the independent
auditors a formal written statement delineating all relationships
between the independent auditors and the Company, consistent with ISB
Standard 1, and shall actively engage in a dialogue with the
independent auditor with respect to any disclosed relationships or
services that may impact the objectivity and

A-1

independence of the independent auditors, and shall recommend to the
Board of Directors appropriate action to oversee the independence of
the independent auditors.

o The Committee shall discuss with any internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and compensation. Also, the
Committee shall discuss with management, any internal auditors, and the
independent auditors the adequacy and effectiveness of the accounting
and financial controls, including the Company's system to monitor and
manage business risk and any legal and ethical compliance programs.
Further, the Committee shall meet separately with any internal auditors
and the independent auditors, with and without management present, to
discuss the results of their examinations.

o The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of each of
the Company's quarterly reports on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards. The chair of the
Committee may represent the entire Committee for the purposes of this
review.

o The Committee shall review with management and the independent auditors
the financial statements to be included in each of the Company's Annual
Reports on Form 10-K (or the Annual Report to Shareholders if
distributed prior to the filing of Form 10-K), including their
judgments about the quality, not just acceptability, of accounting
principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements. Also, the
Committee shall discuss the results of the annual audit and any other
matters required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards.

A-2

APPENDIX TO PROXY STATEMENT
FORM OF PROXY CARD

(Front)

PROXY

CITIZENS FINANCIAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR SHAREHOLDERS MEETING ON MAY 24, 2001

The undersigned hereby appoints James L. Head and Len E. Schweitzer and
each or either of them, as true and lawful agents and proxies, with full power
of substitution in each, to represent the undersigned in all matters coming
before the 2001 Annual Meeting of Shareholders of Citizens Financial Corporation
to be held at the office of the Company, The Marketplace, Suite 300, 12910
Shelbyville Road, Louisville, Kentucky on Thursday, May 24, 2001 at 4:00 p.m.
Eastern Daylight Time, and any adjournments thereof, and to vote all shares
owned of record by the undersigned as follows:

1. ELECTION OF DIRECTORS
Nominees: John H. Harralson, Jr., Lane A. Hersman, Frank T.
Kiley, Charles A. Mays, Earle V. Powell, Thomas G. Ward, Darrell R. Wells and
Margaret A. Wells.

[ ] VOTE FOR all nominees listed above, except vote withheld
from the following nominees (if any):

----------------------------------------------------------------------

[ ] VOTE WITHHELD from all nominees listed above.

2. OTHER MATTERS

In their discretion, to vote with respect to any other matters that may
come before the Meeting or any adjournments thereof, including matters incident
to its conduct.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
SPECIFIED ABOVE BY THE SHAREHOLDER. TO THE EXTENT CONTRARY SPECIFICATIONS ARE
NOT GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1 WITH THE
DISCRETIONARY AUTHORITY SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.

PLEASE DATE AND SIGN ON THE REVERSE SIDE

(Back)

Dated:_______________, 2001
PLEASE SIGN EXACTLY AS
NAME APPEARS BELOW

____________________________Signature

(JOINT OWNERS SHOULD EACH SIGN.
ATTORNEYS-IN-FACT, EXECUTORS,
ADMINISTRATORS, CUSTODIANS,
PARTNERS, OR CORPORATION
OFFICERS SHOULD GIVE FULL TITLE).

PLEASE DATE, SIGN, AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE PROMPTLY.
NO POSTAGE IS NECESSARY IF MAILED
IN THE UNITED STATES.