<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549
                                    FORM 10-K
                       ----------------------------------


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 for the fiscal year ended     DECEMBER 31, 2000
                                          ------------------------

                                    or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                          Commission File No:  2-96144
                                               -------


                            CITIZENS FINANCIAL CORP.
          -----------------------------------------------------------
             (exact name of registrant as specified in its charter)

        DELAWARE                                        55-0666598
------------------------                 ---------------------------------------
(State of Incorporation)                 (I.R.S. Employer Identification Number)

213 Third St.
Elkins, West Virginia                                      26241
---------------------                    ---------------------------------------
(Address of Principal                                   (Zip Code)
 Executive Offices)

Registrant's Telephone Number,                        (304) 636-4095
                                         ---------------------------------------
     Including Area Code:


Securities Registered Pursuant to Section 12(b) of the Act:  None
                                                             ----

Securities Registered Pursuant to Section 12(g) of the Act:  None
                                                             ----

     Indicate by check mark whether the registrant (1) has filed all reports
required 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 _______
                   -------


     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

               Yes    X           No _______
                   -------


     The aggregate market value of Citizens Financial Corp. common stock,
representing all of its voting stock that was held by nonaffiliates on February
28, 2001, was approximately $15,552,000.

     As of February 28, 2001, Citizens Financial Corp. had 750,000 shares of
common stock outstanding with a par value of $2.00.

                         This report contains 65 pages.

                                       1
<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE

(1)  The Company's Form S-4, dated February 19, 1987, is incorporated by
reference in Item 1 of Part I and Item 14(c) of Part IV of this report to the
extent stated herein.

(2)  The Bank's Executive Supplemental Income Agreement, previously filed as an
Exhibit to the Company's Form 10-K dated December 31, 1996, and amended as filed
in the December 31, 1997 Form 10-K, is also incorporated by reference in Item 11
of Part IV of this report.

(3)  The Company's Bylaws, which were previously filed on pages 64-71 of its
Form 10-K dated December 31, 1998, are incorporated by reference in Item 14(c)
of Part IV of this report.

(4)  The Company's Articles of Incorporation, previously filed on pages 66-70 of
its Form 10-K dated December 31, 1999 are incorporated by reference in Item
14(c) of Part IV of this report.

                            CITIZENS FINANCIAL CORP.
                                FORM 10-K INDEX

<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                  <C>
Part I   Item 1   Business.........................................................................................     3
         Item 2   Properties.......................................................................................     4
         Item 3   Legal Proceedings................................................................................     7
         Item 4   Submission of Matters to a Vote of Security Holders..............................................     7

Part II  Item 5   Market for the Registrant's Common Stock and Related Shareholders Matters.........................    7
         Item 6   Selected Financial Data...........................................................................    9
         Item 7   Management's Discussion and Analysis of Financial Condition and Results of Operations.............   15
         Item 8   Financial Statements and Supplementary Data.......................................................   25
         Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..............   49

Part III Item 10  Directors and Executive Officers of the Registrant................................................   49
         Item 11  Executive Compensation............................................................................   51
         Item 12  Security Ownership of Certain Beneficial Owners and Management....................................   53
         Item 13  Certain Relationships and Related Transactions....................................................   54

Part IV  Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K...................................   55
</TABLE>

                                       2
<PAGE>

Citizens Financial Corp.
Form 10-K, Part I
-----------------

Item 1.  Business
-----------------
Item 2.  Properties
-------------------

     The following discussion satisfies the reporting requirements of Items
1 and 2.


                            DESCRIPTION OF CITIZENS
                            -----------------------

Organizational History and Subsidiaries
---------------------------------------

     Citizens Financial Corp., ("Citizens" or "the Company"), was organized as a
Delaware business corporation on September 29, 1986, and its Certificate of
Incorporation was filed with the Delaware Secretary of State on October 2, 1986.
Citizens Financial Corp. was formed at the request of the Board of Directors of
Citizens National Bank of Elkins, Randolph County, West Virginia, for the
purpose of becoming a bank holding company within the meaning of applicable
statutory and regulatory authority.

     Citizens National Bank, ("the Bank"), a wholly-owned subsidiary of Citizens
Financial Corp., was organized on November 19, 1923 and has operated in Elkins,
Randolph County, West Virginia, as a national banking association continuously
since that time.  On March 21, 1987, the stockholders of Citizens National Bank
approved an Agreement and Plan of Reorganization whereby Citizens National Bank
would become a wholly-owned subsidiary of Citizens Financial Corp.  This
reorganization became effective on April 30, 1987.

     On July 17, 2000, Citizens Financial Services, LLC, also a wholly-owned
subsidiary of Citizens Financial Corp. was established for the purpose of
investing in ProServ Insurance Agency, LLC, a general insurance agency selling
primarily property and casualty insurance and whose members are member banks of
the West Virginia Bankers Association.  Citizens' ownership in ProServ is less
than 5%.

Employees
---------

     As of December 31, 2000 neither Citizens Financial Corp. or Citizens
Financial Services, LLC, had any paid employees.  Citizens National Bank
employed 89 full-time equivalent employees at that date.  The Bank's employees
are not represented by any union or other collective bargaining agreement and
the Bank believes its employee relations are good.

Business of Citizens and Citizens National Bank
-----------------------------------------------

     As a bank holding company registered under the Bank Holding Company Act of
1956, as amended, Citizens' present business is the operation of its banking and
insurance subsidiaries.  As of December 31, 2000 Citizens' consolidated assets
approximated $153,532,000 and total shareholders' equity approximated
17,390,000.

     Citizens National Bank is a full-service commercial bank and, as such,
engages in most types of business permitted by law or regulation.  Among these
services are the acceptance of time, demand and savings deposits including NOW
accounts, regular savings accounts, money market deposit accounts, fixed-rate
certificates of deposit and club accounts.  In addition safe deposit box
rentals, wire transfer services, telebanking services and 24-hour Automated
Teller Machine (ATM) services through a regional network known as MPACT are
provided.  MPACT is a  participant in the nationwide Cirrus and Plus networks.

                                       3
<PAGE>

     The  Bank offers a full spectrum of lending services to its customers,
including commercial loans and lines of credit, residential real estate loans,
consumer installment loans and other personal loans.  Commercial loans are
generally secured by various collateral, including commercial real estate,
accounts receivable and business machinery and equipment.  Residential real
estate loans consist primarily of mortgages on the borrower's personal
residence, and are typically secured by a first lien on the subject property.
Consumer and personal loans are generally secured, often by first liens on
automobiles, consumer goods or depository accounts.  A special effort is made to
keep loan products as flexible as possible within the guidelines of prudent
banking practices in terms of interest rate risk and credit risk.  Bank lending
personnel adhere to established lending limits and authorities based on each
individual's lending expertise and experience.

     When considering loan requests, the primary factors taken into
consideration by the Bank are the cash flow and financial condition of the
borrower, the value of the underlying collateral, if any, and the character and
integrity of the borrower.  These factors are evaluated in a number of ways
including an analysis of financial statements, credit reviews and visits to the
borrower's place of business.

     The Bank also maintains a trust department which acts as trustee under
wills, as executor and administrator of estates, as guardian for estates of
minors and incompetents and serves in various corporate trust capacities.

     As a bank holding company Citizens is permitted to engage in certain
nonbanking activities which are closely related to banking under the provisions
of the Bank Holding Company Act, the Federal Reserve Boards' Regulation Y and
the Gramm Leach Bliley Act.  Beginning in January, 1999, the Bank began
providing brokerage services through a contractual agreement with PrimeVest
Financial Services, Inc. (PrimeVest).  Products and services offered through
PrimeVest include stocks, bonds, mutual funds and annuities.  These services are
not bank deposits and do not carry FDIC insurance. As such, they do carry a risk
of loss and are intended only for those customers who understand and accept such
risk.  Citizens nonbanking subsidiary, Citizens Financial Services, LLC, offers
insurance products to customers as permitted by applicable regulations.  As a
member of ProServ Insurance Agency, LLC, Citizens Financial Services, along with
all other ProServ members, shares in the income generated by ProServ.

Statistical Information
-----------------------

     The disclosures required by Securities Act Guide 3 - "Statistical
Disclosure by Bank Holding Companies", are included in Item 6 - Selected
Financial Data, on pages 9 through 15 of this report.

Properties
----------

     The services described above are offered from offices owned by the Bank
including its approximately 16,940 square foot main office located at 213 Third
Street, Elkins, West Virginia.  In addition the Bank owns a drive-in facility
directly across from its main office on Third Street and it has owned and
operated a 5,000 square foot full service branch in Parsons, West Virginia since
1984.  In 1992 a branch facility was opened in Beverly, West Virginia which
contains approximately 1,840 square feet.  This facility, which is also owned,
provides drive-in and ATM service in addition to traditional deposit and teller
services.  Loan services, however, are not provided at the Beverly branch.
During 2000 the Bank acquired and opened a full service facility in Petersburg,
West Virginia containing 2,280 square feet and also constructed another full
service facility in Slatyfork, West Virginia containing 3,200 square feet.  All
of these facilities are fully utilized for banking purposes except the Parsons
branch

                                       4
<PAGE>

which leases approximately 800 square feet to a cable television company.

     Neither Citizens Financial Corp. or Citizens Financial Services, LLC, owns
or leases any property.  To date they have utilized the Bank's facilities and
have not occupied more than a minimal amount of space.  Neither company
compensates the Bank in any way for such usage as it is deemed to be
insignificant. Management believes the existing facilities are adequate and
suitable to conduct its business activities into the foreseeable future.

Competition
-----------

     Citizens faces a high degree of competition for all of its services
including five banks in Randolph County, three in Tucker County, five in Grant
and nearby Hardy Counties, and two in Pocahontas County.  As of June 30, 2000,
the most recent date for which data is available, Citizens deposits represented
28.3%, 23.4%, and 4.3% of total deposits in Randolph, Tucker, and Grant Counties
respectively.  No presence had been established in Pocahontas County at that
time.

     Nonbank competition has increased in recent years locally by the
establishment of brokerage companies and the expansion of insurance operations
and credit unions as well as from mutual funds located throughout the country.
The Company has found its brokerage unit has helped it better meet this
competition.

     West Virginia banks are allowed unlimited branch banking throughout the
State.  The Interstate Banking and Branch Efficiency Act of 1994 also authorizes
interstate branching by acquisition and consolidation nationwide.  These and
similar provisions impacting both the banking and thrift industries may serve to
intensify future competition within Citizens' market.

Supervision and Regulation
--------------------------

     Citizens, as a bank holding company, is subject to the restrictions of the
Bank Holding Company Act of 1956, as amended, and is registered pursuant to its
provisions.  As such, Citizens is subject to the reporting requirements of and
examination by the Board of Governors of the Federal Reserve System ("Board of
Governors").

     The Bank Holding Company Act prohibits the acquisition by a bank holding
company of direct or indirect ownership of more than five percent of the voting
shares of any bank within the United States without prior approval of the Board
of Governors.  With certain exceptions, a bank holding company also is
prohibited from acquiring direct or indirect ownership or control of more than
five percent of the voting shares of any company which is not a bank, and from
engaging directly or indirectly in business unrelated to the business of
banking, or managing or controlling banks.

     As a bank holding company doing business in West Virginia, Citizens is also
subject to regulation and examination by the West Virginia Department of Banking
and must submit annual reports to the Department.  Further, any acquisition
application which Citizens must submit to the Board of Governors must also be
submitted to the West Virginia Banking Board for approval.

     In 1994, Congress passed the Reigle-Neal Interstate Banking Bill (the
"Interstate Bill").  The Interstate Bill permits certain interstate banking
activities through a holding company structure, effective September 30, 1995.
It permits interstate branching by merger effective June 1, 1997 unless states
"opt-in" sooner, or "opt-out" before that date.  States may elect to permit de
novo branching by specific legislative election.  In March, 1996, West Virginia
adopted changes to its banking laws so as to permit interstate banking and

                                       5
<PAGE>

branching to the fullest extent permitted by the Interstate Bill.  The
Interstate Bill will permit consolidation of banking institutions across state
lines and, perhaps, de novo entry.  As its provisions become effective, it is
likely that the resulting restructurings and interstate activities will result
in the realization of economies of scale within those institutions with entities
in more than one state.  One result could be increased competitiveness, due to
the realization of economies of scale and/or, where permitted, due to de novo
market entrants.

     Under West Virginia banking law, an acquisition or merger is not permitted
if the resulting depository institution or its holding company, including any
depository institutions affiliated therewith, would assume additional deposits
to cause it to control deposits in the State of West Virginia in excess of
twenty five percent (25%) of such total amount of all deposits held by insured
depository institutions in West Virginia.  This limitation may be waived by the
Commissioner of Banking for good cause shown.

     Citizens National Bank, as a national banking association, is subject to
supervision, examination and regulation by the Office of the Comptroller of the
Currency.  It is also a member of the Federal Reserve System, and as such is
subject to applicable provisions of the Federal Reserve Act and regulations
issued thereunder.

     The deposits of the Bank are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the extent provided by law.  Accordingly, the Bank is
also subject to regulation by the FDIC.

     Under the Community Reinvestment Act of 1977, the Comptroller of the
Currency is required to assess the record of all financial institutions
regulated by it to determine if such institutions meet the credit needs of the
community (including low-to-moderate income neighborhoods) served by them and to
take this record into account in its evaluation of any application made by any
such institution for, among other things, approval of a branch or other deposit
facility, office relocation, or the merger with or acquisition of assets of
another bank.  The state of West Virginia has a similar statutory regulation.
In its most recent examination the Bank received a satisfactory CRA rating.

     The Bank is subject to various capital requirements under federal banking
regulations including the Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA). Quantitative measures established by those regulations ensure
minimum capital levels are maintained.  Those measures are summarized in Note 13
to the Consolidated Financial Statements which begins on page 44 of this report.
Also contained in that Note are the Bank's regulatory capital ratios at December
31, 2000.  Those ratios show that the Bank satisfied the requirements necessary
to be categorized as well capitalized which is the highest category established
under the regulations.  As a well capitalized institution Citizens is permitted
to engage in a wider range of banking activities than may be permitted
otherwise.

     Another requirement of FDICIA is that federal banking agencies must
prescribe regulations relating to various operational areas of banks and bank
holding companies.  These include standards for internal audit systems, loan
documentation, information systems, internal controls, credit underwriting,
interest rate exposure, asset growth, compensation, and such other standards as
the agency deems appropriate.

     As a subsidiary bank of a bank holding company, Citizens National Bank is
also subject to certain restrictions imposed by the Federal Reserve Act upon any
extensions of credit to Citizens Financial Corp. or any of its other
subsidiaries, on investments in the stock or other securities of that bank
holding company or its subsidiaries, and on the taking of such stock or
securities as collateral for loans to any borrower.

                                       6
<PAGE>

Item 3.  Legal Proceedings
--------------------------

     As of December 31, 2000 Citizens Financial Corp. was not involved in any
material legal proceedings.  The Bank is currently involved in various legal
proceedings which occur in the normal course of business.  After consultation
with legal counsel, management believes that all such litigation will be
resolved without materially affecting the Company's financial position or
results of operations.  In addition, there are no material proceedings known to
be threatened or contemplated against the Company or its subsidiaries.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

     No matters were submitted to a vote of security holders of Citizens
Financial Corp. during the fourth quarter of 2000.

Part II
-------

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters
-----------------------------------------------------------------------------

     Historically, the stock of Citizens Financial Corp. and, prior to its
formation, the stock of Citizens National Bank, has traded only sporadically.
The stock is not listed on any security exchange, however, a number of brokerage
firms provide an efficient and orderly market for transactions involving its
shares. There are no further plans, understandings, arrangements or agreements
to list the stock on any exchange at this time.

     Citizens has only one class of stock, that being common stock, and all
voting rights are vested in its holders.  The shareholders of Citizens are
entitled to one vote for each share of common stock owned on all matters subject
to a vote of shareholders.  At February 28, 2000 shareholders of record numbered
460.  The Company has no plans to issue senior securities.

     Citizens maintains a policy under which it may purchase shares of its' own
stock for treasury, subject to certain limitations, when it is deemed to be in
the best interest of the Company to do so.  Such shares are purchased on the
open market through independent brokers.  At December 31, 1999 and 2000 the
number of treasury shares was 94,168 and 99,388, respectively.  These shares are
included in the total number of shares issued, as disclosed above, and no plans
currently exist regarding their use and there are no plans regarding future
purchases.

     The following table presents the high and low market prices for Citizens'
common stock for the periods indicated.


                              High       Low
                             ------     ------
First Quarter through
February 28, 2001            $27.50     $27.00

2000
----
First Quarter                $40.00     $35.00
Second Quarter               $33.00     $25.00
Third Quarter                $31.50     $25.00
Fourth Quarter               $31.00     $26.25

1999
----
First Quarter                $54.00     $45.00
Second Quarter               $50.00     $44.00
Third Quarter                $45.00     $41.00
Fourth Quarter               $46.00     $40.00

                                       7
<PAGE>

     The prices listed above are based upon information available to Citizens'
management through those brokers which deal in the Company's stock as well as
through certain Internet quotation services and are believed to accurately
represent the amount at which its stock was traded during the periods indicated.
Prices reflect amounts paid by purchasers of the stock and, therefore, may
include commissions or fees paid to brokers.  The amounts of such commissions or
fees, if any, are not known to management.  No attempt was made by management to
ascertain the prices for every sale made during these periods.  The decrease in
stock price which occurred in 2000 is discussed in the management's discussion
and analysis section of this report.

     Citizens shareholders are entitled to receive dividends when and as
declared by its Board of Directors.  Dividends are typically paid quarterly.
Aggregate dividends were $1.20 per share in 2000 and $1.10 per share in 1999.
Dividends are paid out of funds legally available for the payment of dividends
as set forth in the West Virginia Corporation Act.

     Payment of dividends by Citizens is dependent upon payment of dividends to
it by the subsidiary bank.  The ability of the Bank to pay dividends is subject
to certain limitations imposed by national banking laws as outlined in Note 13
to the Consolidated Financial Statements on page 44 of this report.

                                       8
<PAGE>

Item 6.  Selected Financial Data
--------------------------------

     Selected financial data for the five years ended December 31, 2000 is
presented in the following table.  This summary should be read in conjunction
with the consolidated financial statements and related notes included in Item 8
of this report.

<TABLE>
<CAPTION>
Citizens Financial Corp.
-----------------------------------------------------------------------------------------
Selected Financial Data Five Year Summary
(in thousands of dollars, except per share data)
-----------------------------------------------------------------------------------------
                                     2000         1999       1998       1997      1996
-----------------------------------------------------------------------------------------
<S>                                   <C>       <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Total assets....................... $ 153,532   $ 137,297  $ 136,701  $ 132,132 $ 128,760
Securities.........................    42,337      41,562     43,812     38,519    34,134
Loans, net.........................   101,033      85,665     85,709     86,400    88,235
Deposits...........................   121,519     110,232    113,464    110,401   109,570
Total shareholders' equity.........    17,390      15,954     16,649     16,095    14,943

SUMMARY OF OPERATIONS:
Total interest income..............  $ 11,154   $  10,058  $  10,336  $  10,314 $  10,145
Total interest expense.............     4,425       3,963      4,108      4,014     3,880
                                     --------   ---------  ---------  --------- ---------

Net interest income................     6,729       6,095      6,228      6,300     6,265
Provision for loan losses..........       264         714        120        236       168
                                     --------   ---------  ---------  --------- ---------

Net interest income after
  provision for loan losses........     6,465       5,381      6,108      6,064     6,097
Noninterest income.................       979         701        555        563       546
Noninterest expense................     4,582       4,491      4,242      4,052     4,178
                                     --------   ---------  ---------  --------- ---------

Income before income taxes.........     2,862       1,591      2,421      2,575     2,465
Income taxes.......................       973         490        821        934       834
                                     --------   ---------  ---------  --------- ---------
Net income.........................  $  1,889   $   1,101  $   1,600  $   1,641 $   1,631
                                     ========   =========  =========  ========= =========

PER SHARE DATA:
Net income:........................  $   2.90   $    1.67  $    2.41  $    2.40 $    2.39
                                     ========   =========  =========  ========= =========


Cash dividends.....................  $   1.20   $    1.10  $    1.00  $     .90       .80
                                     ========   =========  =========  ========= =========
</TABLE>

     Additional information required under Securities Act Industry Guide 3 for
Bank Holding Companies follows:

                                       9
<PAGE>

          Distribution of Assets, Liabilities & Shareholders' Equity;
                    Interest Rates and Interest Differential

<TABLE>
<CAPTION>
                                          2000                               1999                                1998
                             --------------------------------   ---------------------------------  --------------------------------
                             Avg Bal    Interest   Yield/Rate    Avg Bal   Interest    Yield/Rate   Avg Bal    Interest  Yield/Rate
                             --------------------------------   ---------------------------------   -------------------------------
                                 (in thousands of dollars)           (in thousands of dollars)         (in thousands of dollars)
<S>                          <C>        <C>        <C>          <C>       <C>          <C>         <C>         <C>       <C>
Interest Earning Assets:
Federal funds sold           $    965    $    61        6.32%   $  1,432    $    73        5.10%   $  1,261    $    69        5.47%
Securities:
 Taxable                       37,165      2,281        6.14      35,438      2,117        5.97      33,545      2,061        6.14
 Tax-exempt (1)                 6,847        503        7.35       7,543        551        7.31       7,474        559        7.48
Loans (net of unearned
 interest) (1) (2)             93,339      8,510        9.12      86,630      7,521        8.68      85,670      7,837        9.15
                             --------------------------------   ---------------------------------   -------------------------------
Total interest earning
 assets  (1)                  138,316     11,355        8.21     131,043     10,262        7.83     127,950     10,526        8.23

Nonearning assets:
  Cash and due from banks       3,800                              4,153                              2,914
  Bank premises and
   equipment, net               1,635                              1,445                              1,530
  Other assets                  1,651                              1,955                              2,309
  Allowance for loan losses    (1,085)                            (1,001)                            (1,101)
                             --------                           --------                           --------
Total assets                 $144,317                           $137,595                           $133,602
                             ========                           ========                           ========

Interest Bearing
 Liabilities:
  Savings deposits           $ 28,640    $   833        2.91%   $ 26,857    $   707        2.63%   $ 26,096    $   756        2.90%
  Time deposits                52,044      2,644        5.08      52,294      2,546        4.87      51,796      2,622        5.06
  NOW accounts                 14,567        244        1.68      14,515        242        1.67      13,561        282        2.08
  Money market accounts         5,964        123        2.06       5,780        116        2.01       5,984        145        2.42
  Borrowings                   10,481        581        5.54       6,903        352        5.10       5,426        303        5.58
                             --------------------------------   ---------------------------------   -------------------------------
  Total interest bearing
   liabilities                111,696      4,425        3.96     106,349      3,963        3.73     102,863      4,108        3.99

Noninterest bearing
 liabilities:
  Demand deposits              15,357                             13,923                             13,424
  Other liabilities               768                                767                              1,029
  Shareholders' equity         16,496                             16,556                             16,286
                             --------                           --------                           --------
Total liabilities and
  shareholder's equity       $144,317                           $137,595                           $133,602
                             ========                           ========                           ========
                                         -------                             --------                           --------
Net interest income (1)                  $ 6,930                             $  6,300                           $  6,418
                                         =======                             ========                           ========

Net interest income to average earning assets
 (1)                                                    5.01%                              4.81%                              5.02%
                                                        ====                               ====                               ====
 </TABLE>

(1) Yields on tax-exempt holdings are expressed on a tax equivalent basis using
a 34% tax rate.

(2) For the purpose of these computations, nonaccruing loans are included in the
amounts of average loans outstanding.

                                       10
<PAGE>

                         Rate Volume Analysis

The following table sets forth a summary on the changes in interest earned and
interest expense  detailing the amounts attributable to (i) changes in volume
(change in the average volume times the prior year's average rate), (ii) changes
in rate (change in the average rate times the prior year's average volume).  The
changes in rate/volume (change in the average volume times the change in the
average rate), has been allocated to the changes in volume and  changes in rate
in proportion to the relationship of the absolute dollar amounts of the change
in each.

<TABLE>
<CAPTION>
                                           2000 Compared to 1999                1999 Compared to 1998
                                          Increase (Decrease) Due to          Increase (Decrease) Due to
                                          ---------------------------          -------------------------
                                                             (in thousands of dollars)
                                          Volume      Rate      Total          Volume     Rate      Total
                                          ---------------------------          --------------------------
<S>                                       <C>         <C>      <C>             <C>       <C>        <C>
Interest earned on:
 Federal funds sold                        $(27)      $ 15     $  (12)         $  9      $  (5)     $   4
 Taxable securities                         103         61        164           116        (60)        56
 Tax-exempt securities                      (51)         3        (48)            5        (13)        (8)
 Loans                                      598        391        989            88       (403)      (315)
                                           --------------------------          --------------------------
Total interest earned                       623        470      1,093           218       (481)      (263)
                                           --------------------------          --------------------------

Interest expense on:
 Savings deposits                            48         78        126            22        (71)       (49)
 Time deposits                              (12)       110         98            25       (101)       (76)
 NOW accounts                                 1          1          2            19        (59)       (40)
 Money market accounts                        4          3          7            (5)       (24)       (29)
 Other borrowing                            185         44        229            77        (27)        50
                                           --------------------------          --------------------------
Total interest expense                      226        236        462           138       (282)      (144)

                                           --------------------------          --------------------------
Net interest income                        $397       $234     $  631          $ 80      $(199)     $(119)
                                           ==========================          ==========================
</TABLE>

                                       11
<PAGE>

                         Securities Portfolio

     Presentation of the amortized cost of securities as of December 31, 2000
and 1999 may be found in Note 4 to the Consolidated Financial Statements which
begins on page 34 of this report.

     The following table sets forth the maturities of securities as of December
31, 2000 and the weighted average yields of such securities (calculated on the
basis of the amortized cost and effective yields weighted for the scheduled
maturity of each security).

<TABLE>
<CAPTION>
                              Within One          After One but          After Five but       After Ten               Total
                                 Year           Within Five Years       Within Ten Years        Years
                         -----------------------------------------------------------------------------------------------------------
                           Amount    Yield    Amount         Yield      Amount    Yield      Amount    Yield     Amount     Yield
                         ----------------------------------------------------------------------------------------------------------
                                                             (in thousands of dollars)
<S>                      <C>         <C>      <C>            <C>       <C>       <C>          <C>        <C>      <C>         <C>
U.S. Treasury and other
   U.S. government
   agencies and
   corporations          $ 8,302     6.08%     $13,096        6.00%     $    -          -%   $    -        -%    $21,398     6.03%
State and political
   subdivisions (1)        2,026     7.44        2,901        7.06         409       9.16         -        -       5,336     7.37
Other securities               -        -       14,895        6.59           -          -       732     7.13      15,627     6.61
                         -------     -----     -------        ----      ------      -----    ------     ----     -------    -----
   Total                 $10,328     6.33%     $30,892        6.39%     $  409       9.16%   $  732     7.13%    $42,361     6.41%
                         =======               =======                  ======               ======              =======
</TABLE>

 The portfolio contains no securities of any single issuer in which the
aggregate amortized cost of such securities exceeds ten percent of shareholders'
equity.

 (1) Tax-equivalent adjustments, using a rate of 34%, have been made in
     calculating yields on obligations of state and political subdivisions.

                                       12
<PAGE>

Loan Portfolio
--------------

Types of Loans
--------------

     The distribution of loans by major category as of December 31, 2000 and
1999 may be found in Note 5 to the Consolidated Financial Statements which
begins on page 35 of this report.  All loans in the portfolio are domestic in
nature.

Loan Maturities and Interest Rate Sensitivity
---------------------------------------------

     Note 5 to the Consolidated Financial Statements also provides data
concerning the contractual maturities of loans, including commercial, financial
and agricultural loans as well as real estate construction loans, as of December
31, 2000.  Also provided are the amounts due after one year classified as fixed
rate and variable rate loans.

Risk Elements
-------------

Nonperforming Loans
-------------------

     Nonperforming loans consist of loans in nonaccrual status, loans which are
past due 90 days or more and still accruing interest and restructured loans.
The following table sets forth the amounts of such loans as of the dates
indicated:

                                           December 31
                                    -----------------------
                                     2000              1999
                                    -----------------------
                                    (in thousands of dollars)
Nonaccrual loans                    $ 181             $  57
Loans past due 90 days or more
   still accruing interest             22                51
Restructured loans                      -                 -
                                    -----             -----
 Total                              $ 203             $ 108
                                    =====             =====

     Loans are generally placed on nonaccrual status when they are past due 90
days as to principal or interest unless they are both well secured and in the
process of collection.  The following table provides a summary of information
pertaining to nonaccrual loans as of December 31, 2000:

                                                (in thousands)
Total nonaccrual loans                               $181
Interest income which would have been
  recorded under original terms                         5
Interest income recorded during the year               20

Potential Problem Loans
-----------------------

     As of December 31, 2000, the Company identified approximately $591,000 of
loans which it classified as impaired due to doubts about the borrowers ability
to repay as called for in the loan documents.  These loans are further discussed
in Note 6 to the Consolidated Financial Statements found on page 37 of this
report.

                                       13
<PAGE>

Loan Concentrations
-------------------

     Information concerning loan concentrations is provided in Note 5 to the
Consolidated Financial Statements which begins on page 35 of this report.

Summary of Loan Loss Experience
-------------------------------

     Note 6 to the Consolidated Financial Statements, which begins on page 37 of
this report, presents an analysis of the allowance for loan losses for the years
ended December 31, 2000, 1999 and 1998.

     The amount charged to the provision for loan losses and the related balance
in the allowance for loan losses is based upon periodic evaluations of the loan
portfolio by management.  These evaluations consider several factors including,
but not limited to, its analysis of overall loan quality, changes in the mix and
size of the loan portfolio, previous loss experience, general economic
conditions and information about specific borrowers.

     The ratio of net losses to average loans outstanding was .13% in 2000, .94%
in 1999 and .12% in 1998.

     The following table shows an allocation of the allowance for loan losses
for the two years ended December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                          December 31
                                     -----------------------------------------------------
                                             2000                       1999
                                     -----------------------------------------------------
                                                  Percent of                   Percent of
                                                 Loans in Each                Loans in Each
                                                  Category to                 Category to
                                     Amount       Total Loans     Amount      Total Loans
                                     -----------------------------------------------------
                                                     (in thousands of dollars)
<S>                                  <C>          <C>             <C>          <C>
Commercial, financial and
 agricultural                        $  313             15%       $  283          16%
Real estate - construction               35              2            20           2
Real estate - mortgage                  438             69           191          70
Installment and other                    62             14            71          12
Unallocated                             303            N/A           446         N/A
                                     ------            ---        ------         ---
 Total                               $1,151            100%       $1,011         100%
                                     ======            ===        ======         ===
</TABLE>

Deposits
--------

     The average daily amount of deposits and the rates paid on those deposits
for the years ended December 31, 2000, 1999 and 1998 were previously presented
in the Distribution of Assets, Liabilities and Shareholders' Equity; Interest
Rates and Interest Differential.  That table may be found on page 10 of this
report.

     A table summarizing the maturities of time certificates of deposit,
including individual retirement accounts, of $100,000 or more as of December 31,
2000 may be found in Note 8 to the Consolidated Financial Statements which
begins on page 38 of this report.  There were no other time deposits of $100,000
or more at that date.

                                       14
<PAGE>

Return on Equity and Assets
---------------------------


     The following table shows consolidated operating and capital ratios for the
   periods indicated.

                                            Year Ended December 31
                                          --------------------------
                                           2000     1999      1998
                                          --------------------------
 Return on average assets                  1.31%      .80%     1.20%
 Return on average equity                 11.45      6.65      9.86
 Dividend payout ratio                    41.38     65.87     41.49
 Average equity to assets ratio           11.43     12.03     12.19


Short-term Borrowing
--------------------

     Information concerning the Company's short-term borrowing is presented in
Note 11 to the Consolidated Financial Statements which begins on page 43 of this
report.


Item 7.  Management's  Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
          Results of Operations
          ---------------------

     The following discussion and analysis presents the significant changes in
the financial condition and results of operations of Citizens Financial Corp.
and its subsidiaries, Citizens National Bank of Elkins, and Citizens Financial
Services, LLC, for the periods indicated.  This discussion and analysis should
be read in conjunction with the Company's 2000 Annual Report to Shareholders and
Form 10-K.  Since the primary business activities of Citizens Financial Corp.
are conducted through the Bank, this discussion focuses primarily on the
financial condition and operations of the Bank.  This discussion may contain
forward looking statements based upon management's current expectations.  Such
forward looking information may involve uncertainties including those associated
with interest rate and general economic environments, regulations, competitive
changes, and other risks.  When provided, forward looking information is
intended to assist readers in understanding anticipated future operations and
are included pursuant to applicable safe harbor provisions; actual results may
differ. Amounts and percentages used in this discussion have been rounded.

Acquisition and Branching Activity
----------------------------------

     On May 27, 2000, Citizens National Bank of Elkins acquired a branch banking
facility in Petersburg, West Virginia. The acquisition was accounted for as a
purchase.

     As a result of this acquisition Citizens National Bank assumed $7,490,000
in deposits including $1,922,000 in demand deposits, $743,000 in savings
deposits and $4,825,000 in time deposits.  The Bank also acquired loans totaling
$6,203,000 including $2,542,000 in variable rate mortgage loans, $3,449,000 in
consumer loans and $212,000 in commercial loans.  No loans of a long-term, fixed
rate nature were acquired.  The fair values of the loans and deposits acquired
approximated their carrying values at the date of acquisition.  The Bank paid
$201,000 in excess of the fair value of the net assets acquired. This amount is
reflected as a component of other

                                       15
<PAGE>

assets and is being amortized over 15 years. At December 31, 2000 deposits at
this facility were $6,996,000 while loans totaled $7,322,000.

     The Bank also opened a de novo branch in Slatyfork, West Virginia on
November 20, 2000.  Construction of this branch required a capital outlay of
approximately $807,000 which was financed internally.  Commonly referred to as
the Snowshoe branch, this facility had $1,281,000 in deposits and $1,521,000 in
loans at December 31, 2000.

Results of Operations
---------------------

Earnings Summary
----------------

     The Company enjoyed its most profitable year in 2000 with earnings of
$1,889,000 compared to $1,101,000 in 1999 and $1,600,000 in 1998.  On a per
share basis earnings were $2.90 in 2000, $1.67 in 1999 and $2.41 in 1998. The
return on average assets for the three years, respectively, was 1.31%, .80% and
1.20% while the return on average equity was 11.45%, 6.65% and 9.86%.

     Results in 2000 benefited from strong net interest income and an
improvement in noninterest income.  Unusually high loan charge offs caused
income in 1999 to fall below typical levels.  These and other factors
influencing the Company's results of operations and financial condition are
addressed in the following sections of this report.

Net Interest Income
-------------------

     Net interest income is the primary component of Citizens' earnings. It is
the difference between interest and fee income generated by interest earning
assets and interest expense incurred to carry interest bearing liabilities.  Net
interest income is affected by changes in balance sheet composition and interest
rates.  The Bank attempts to maximize net interest income by determining the
optimal product mix in light of current and expected yields on assets, cost of
funds and economic conditions while maintaining an acceptable degree of risk.

     Net interest income, on a tax-equivalent basis, totaled $6,930,000,
$6,300,000 and $6,419,000 for the years ended December 31, 2000, 1999 and 1998,
respectively, resulting in a net interest margin of 5.01%, 4.81% and 5.02%,
respectively.  The improvement in 2000 reflects an increase in tax equivalent
interest income of $1,093,000 to $11,355,000.  Several factors made this
possible.  The addition of two new facilities increased the size of the average
earning asset portfolio, and the average loan portfolio in particular which
increased by $6,709,000.  This increase in the earning asset base accounted for
approximately $623,000 of increased interest income.  In addition, the yield on
the earning asset portfolio increased 38 basis points to 8.21%. This was most
pronounced in the loan portfolio which experienced a yield increase of 44 basis
points to 9.12% reflecting not only the higher interest rates seen throughout
the economy in 2000 but also the need in 1999 to place several large commercial
loans on a nonaccrual status prior to their eventual charge-off.  In total,
improved yields

                                       16
<PAGE>

contributed $470,000 toward the improvement in interest income.

     The remaining component of net interest income, interest expense, likewise
increased in 2000 but by just $462,000.  This, too, may be traced to an increase
in average interest bearing liabilities of $5,347,000 as well as to a 23 basis
point increase in the rates paid on such liabilities. The most significant
factor in the increase in interest expenses, however, was a $3,578,000 increase
in the average amount of borrowings the Bank held in 2000.  These borrowings
consist of repurchase agreements with several local entities and are further
discussed in the Deposits and Other Funding Sources section of this report.

     The lower net interest income and net interest margin in 1999 are primarily
the result of a 40 basis point decline in the yield on earning assets to 7.83%
and specifically a 47 basis point drop in the yield on loans due to the
nonaccruals noted earlier.  Fortunately, management was able to control the
rates paid on its interest bearing liabilities in a manner which reduced the
cost of those funds by 26 basis points to 3.73%.

     Citizens ability to maintain its level of net interest income is key to its
financial performance and is also discussed later in this report.

Noninterest Income
------------------

     Noninterest income includes all revenues not included in interest and fee
income related to earning assets.  Total noninterest income was $979,000 in
2000, up 40% from $701,000 in 1999 and 76% from the $555,000 recognized in 1998.
As a percentage of total income noninterest income increased to 8.1% in 2000
from 6.5% in 1999.

     Noninterest income has now risen significantly for two consecutive years.
The improved performance in 2000 is due to several factors including a $30,000
increase in trust fees resulting from the settlement of several large estates
and a revision of the trust fee schedule in late 1999.  The Bank's service fees
were also revised during 1999 leading to improved fee income in 2000.  Most
notably, fees on overdrafts increased $87,000 in 2000.  Other noninterest income
increased 122% to $345,000 as a result of a $36,000 increase in fees from the
Bank's brokerage service, $49,000 from the sale of promotional coins, $30,000
received when the insurance carrier used for one of the Bank's employee benefit
plans converted from a mutual company to a stock company, and $68,000 in gains
from the sale of repossessed properties.  Absent nonrecurring items, namely the
sale of repossessed properties, the insurance conversion and $14,000 in security
losses, noninterest income would have totaled $895,000 for the year.  Recurring
items, including trust, brokerage and service fees, should continue to improve
in the future.

     The improvement of $146,000, or 26.3% in 1999 in part reflects the same
adjustments to the fee schedules, improved trust income and the opening of the
brokerage unit which generated $59,000 in revenue in its first year of
operation.

                                       17
<PAGE>

Noninterest Expenses
--------------------

     Noninterest expense includes all items of expense other than interest
expense, the provision for loan losses, and income taxes.  Total noninterest
expense was $4,582,000 in 2000, $4,491,000 in 1999 and $4,242,000 in 1998.  The
increase of $91,000 in 2000, just 2.0%, is minimal considering the addition of
two new branches during the year which added $102,000 in personnel expense and
$25,000 in occupancy and equipment expenses.

     The most significant increase in this category was other noninterest
expense which was $1,304,000, up $96,000 from $1,208,000 in 1999.  This increase
is due to increases in normal operating costs such as postage, stationery and
supplies and telephone which as a group increased by $99,000 in part due to the
new branch facilities.  Other significant changes included a $33,000 increase in
losses from the sale of repossessed asset which was offset by a decrease in
professional fees of a similar amount.

     Among the remaining components of noninterest expense, occupancy expense
increased as would be expected while equipment costs, data processing,
advertising and FDIC insurance showed smaller changes.  Despite the Company's
success at controlling these expenses in 2000, noninterest expense is expected
to increase by 10% or more in 2001 as the full year impact of the newer branches
is felt.

     During 1999, noninterest expense increased $249,000, or 5.9%, due to
increases in personnel expense, including a $94,000 or 5.5%, increase in
salaries and a $50,000 increase in group insurance costs, a $110,000 increase in
cost for the upkeep and sale of foreclosed properties as well as fees incurred
to retain professional consultants in the areas of trust services and
operational efficiency.

Income Taxes
------------

     Income tax expense for the three years ended December 31, 2000, 1999, and
1998 totaled $973,000, $490,000, and $821,000 respectively.  Effective tax rates
for the three respective years were 34.0%, 30.8% and 33.9%.  Note 9 of the
accompanying consolidated financial statements provides further information and
additional disclosure of the significant components influencing the Company's
effective income tax rates.

Financial Condition
-------------------

Summary
-------

     Total assets at December 31, 2000 of $153,532,000 are approximately
$16,235,000 more than at December 31, 1999 due largely to the addition of the
two new branches and higher levels of repurchase agreements.  On average, total
assets for the year were $144,317,000, of which $138,316,000, or 95.8%, were
earning assets.  A further discussion of the Bank's major balance sheet
categories follows.

                                       18
<PAGE>

Loan Portfolio
--------------

     Total loans at December 31, 2000 of $102,281,000 are $15,469,000 more than
at year-end 1999 and include $8,843,000 from the two new branches. Like local
business conditions, management found loan demand to be good in 2000 despite the
increases in interest rates that occurred during the year. At December 31, 2000,
the Bank's loan to deposit ratio had risen to 84.2%. Should the more recent
signs of economic weakness result in a slowdown in business activity or a
weakening in consumer confidence within the Banks' markets, loan demand could
slow in 2001.

     The Company's mortgage portfolio, which is its largest, increased by
$8,822,000 in 2000, or 14.4%, including $5,098,000 from the two new facilities.
Demand for residential mortgage loans, which now total $49,142,000, was
particularly strong during the last half of the year. Approximately 95% of these
residential loans have variable interest rates.

     Also included in mortgage loans are loans to commercial entities which are
secured by real property.  During 2000, the Bank made efforts to increase its
commercial lending business.  Consequently commercial mortgage loans increased
by $3.1 million to $20.9 million at December 31, 2000. Other forms of commercial
lending also increased during the year from $14,035,000 to $15,747,000.

     Although consumer loans increased by $4,255,000, or 41.9% during the year,
$3.5 million of that growth was from the new branch locations. Competition from
auto manufacturers and dealers, as well as the proliferation of alternative
financing sources available to consumers, have made it difficult for the Bank to
successfully increase this portfolio in recent years.

     Note 5 to the accompanying financial statements contains additional data
concerning the Company's loan portfolio including loan mix and maturities.

     The Bank also makes various commitments to meet the financing needs of its
customers in the normal conduct of its business.  Such commitments, which are
not reflected in the accompanying financial statements, include lines of credit
and letters of credit.  The Bank evaluates these instruments for risk consistent
with its credit policies and anticipates no material losses as a result.
Additional data on these off-balance-sheet items is presented in Note 12 to the
financial statements.

Allowance for Loan Losses
-------------------------

     Management maintains an allowance for possible loan losses at a level it
considers adequate to provide for losses that can be reasonably anticipated.
This is done by a process of continual review of the loan portfolio, specific
loans, and various factors which may impact them.  A discussion of these
factors, and the process by which they are used, is presented in Note 1 to the
financial statements.

     At December 31, 2000, 1999 and 1998, the allowance for loan losses was
$1,151,000, $1,011,000, and $1,110,000, respectively.  At these levels the

                                       19
<PAGE>

allowance represented 1.13%, 1.17%, and 1.28% of total loans.  Nonaccrual loans
and loans past due 90 days or more which were still accruing interest totaled
$203,000 at year-end 2000.

     After an unusual year in 1999, net charge offs returned to a more normal
level of $125,000 in 2000.  Provisions for loan losses for the year 2000 were
$264,000.  Note 6 to the financial statements contains a detailed analysis of
the allowance for loan losses for each of the last three years.

Securities Portfolio and Federal Funds Sold
-------------------------------------------

     The Bank's securities portfolio uses funds not needed to satisfy loan
demand to improve earnings while at the same time providing liquidity and
balancing interest sensitivity concerns.  All securities are classified as
available for sale.

     Unlike the loan and deposit portfolios, the size of the security portfolio
did not significantly increase during the year; its amortized cost of
$42,361,000 being just $4,000 more than at December 31, 1999.  This reflects not
only strong loan demand but also the fact that no securities were added to the
Bank's balance sheet as a result of the two branch openings.  The carrying value
of the portfolio, however, did increase by $775,000 due to the decrease in
market interest rates which occurred in late 2000. At December 31, 2000, the
portfolio's market value was approximately $24,000 less than its amortized cost.

     The portfolio continues to be primarily comprised of fixed rate debt
securities issued by US government agencies, state and municipal authorities,
and investment grade domestic corporations.  The Company does not own securities
of any state, municipality or corporation which exceed 10% of shareholders'
equity.

     Although callable securities are utilized from time to time, most of the
securities held have known maturity dates which management prefers as it
attempts to ladder security maturities to provide a steady stream of liquidity.
This ladder typically is not longer than 5 years and at December 31, 2000 the
weighted average maturity of the portfolio was 2.26 years.

     At December 31, 2000 securities with an amortized cost of $18,327,000 were
pledged to secure deposits and securities sold under agreements to repurchase.
The need to replace these pledged securities upon their maturity may limit the
ability of the portfolio to generate liquidity. This is particularly true in
2001 when $8,357,000 of the $10,328,000 in maturing securities are pledged.  A
discussion of the Bank's liquidity position may be found later in this report.
For additional information about the Company's security portfolio, refer to Note
4 to the financial statements.

     The Bank generally tries to minimize its involvement in the overnight
federal funds sold market.  Nonetheless, at any given time the execution of
specific investing or funding strategies, or fluctuations in deposit and loan
balances, may require the bank to sell, or buy, funds on an overnight basis.
During the year 2000 the Bank maintained average fed funds sold of $965,000
although no overnight funds were sold as of December 31, 2000.

                                       20
<PAGE>

Deposits and Other Funding Sources
----------------------------------

     Over the past several years, deposit growth has been a major challenge for
banks including Citizens.  While total deposits of $121,519,000 at December 31,
2000 are $11,287,000 more than at December 31, 1999, absent the two new
branches, growth was $3,009,000 or 2.7%.  Average deposits exclusive of the new
branches actually decreased $1,327,000 to $112,042,000.

     Competition for deposit dollars, not just from other banks, but also from
savings institutions, credit unions, mutual funds, insurance and annuity
providers, brokerage firms, and others, continues to increase. During 2000 this
impacted Citizens deposit base particularly in the lower yielding interest
bearing checking and money market portfolios which, on a same office basis, lost
$2,559,000, or 12.7%, of their year end 1999 total. Similarly, regular savings
accounts, excluding higher paying sweep accounts offered to certain higher
balance customers, also fell from their 1999 level.

     The Bank expects to make a concerted effort to attract deposits in 2001 by
utilizing more effective marketing and sales efforts and market specific pricing
practices.  Through January, deposit growth at the Snowshoe branch has exceeded
management's expectations while the recent trend toward lower interest rates is
likely to reduce the negative impact on the Bank's interest bearing checking,
money market and savings portfolios.

     In the event deposit growth is not sufficient to satisfy loan demand, or
otherwise fund the Bank's earning assets, the Bank has the ability to borrow
funds from its correspondent banks, and, as a member of the Federal Home Loan
Bank of Pittsburgh, also has access to a variety of its credit products.  At
December 31, 2000, the Bank has unused lines of credit with these sources
totaling $49,121,000.

     The Bank's short-term borrowings include overnight borrowings from the
Federal Home Loan Bank and several repurchase agreements with local customers.
These items totaled $12,367,000 at December 31, 2000 comprised of $3,226,000 in
overnight borrowings and $9,141,000 in repurchase agreements.  On average,
overnight borrowings were $630,000 during the year while repurchase agreements
averaged $8,947,000.  Two of the repurchase agreements, with year-end balances
totaling $4.4 million, mature on June 30, 2001 while the remaining agreement is
open-ended and carries no maturity.  Throughout 2000, these customers maintained
higher balances in their repurchase agreements than previously as their average
balance in 1999 was $5,693,000.

     Long-term borrowings of $868,000 and $943,000 at December 31, 2000 and
1999, respectively, are used to fund certain loan projects.  The Bank did not
acquire any additional long-term debt in 2000 and financed the construction of
its Snowshoe branch internally.  Currently, no plans to acquire additional long-
term financing exist.

                                       21
<PAGE>

Capital Resources
-----------------

     Citizens' capital kept pace with its asset growth in 2000 being 11.3% of
total assets, or $17,390,000 at December 31, 2000 and 11.6% of total assets,
$15,954,000, at December 31, 1999.  The year's strong earnings and improvement
in the market value of the available for sale securities portfolio helped
support the capital base.  Dividends paid to shareholders were again increased
by $.10 per share to $1.20 which represents a dividend payout ratio of 41.4%.
As previously noted, the Company utilized its own capital to construct the new
Snowshoe branch.

     The Federal Reserve's risk-based capital guidelines provide for the
relative weighting of both on-balance-sheet and off-balance-sheet items based on
their degree of risk.  The Company continues to exceed all regulatory capital
requirements as shown in Note 13 to the financial statements.  Management is
unaware of any trends or uncertainties, nor do any plans exist, which may
materially impair or alter its capital position.

     The Company's stock remains thinly traded on the over the counter market
under the symbol CIWV.  The stock traded on just 55 days during the year with
88,700 shares changing hands including the Company's purchase of 5,220 shares of
treasury stock.  Like many banks, the value of the Company's stock fell during
the first half of 2000 as investors continued their movement toward other
sectors including, technology.  While the collapse of the technology sector in
the later half of the year did cause many investors to return to bank stocks,
generally only very liquid bank stocks were rewarded.  Consequently, Citizens
stock, which opened the year at $38 per share, ended the year at $27.50 per
share.

Liquidity and Interest Rate Sensitivity
---------------------------------------

     The objective of the Company's liquidity management program is to ensure
the continuous availability of funds to meet the withdrawal demands of
customers, the credit needs of borrowers, and to provide for other operational
needs.  Liquidity is provided by various internal sources including unpledged
investment securities, federal funds sold, loan repayments and the ability to
maintain a stable or growing deposit base.  In addition, external sources of
liquidity are also available as discussed earlier in the section on Deposits and
Other Funding Sources.

     Each quarter, management tests the Bank's ability to satisfy its
anticipated liquidity demands over the next twelve months.  Strong loan demand,
the high degree of competition for deposits, and the need to pledge a
significant portion of the security portfolio to secure the deposits of local
governmental units and for repurchase agreements has reduced the Company's
liquidity position.  Should recent loan and deposit trends continue, it is
probable the Company will need to access its external funding sources to provide
liquidity.  Such a need would more than likely be short-term in nature as the
security portfolio provides significant liquidity in 2002.

     While sufficient sources of liquidity are readily available, management is
dedicating significant resources toward the gathering of deposits in 2001.  In
addition, should we experience an economic slowdown

                                       22
<PAGE>

as many economists predict, loan demand, and the resultant need for liquidity,
is likely to be reduced.

     The objective of the Company's interest rate sensitivity management program
also known as asset/liability management, is to maximize net interest income
while minimizing the risk of adverse effects from changing interest rates.  This
is done by controlling the mix and maturities of interest sensitive assets and
liabilities.  The Bank has established an asset/liability committee for this
purpose.  The Bank uses several techniques to monitor and control interest rate
risk including gap analysis, interest rate shock testing and other forms of
simulation modeling.

     Gap analysis is a static measure and does not consider future changes in
volume of rate sensitive assets or liabilities or the possibility that interest
rates of various products may not change by the same amount or at the same time.
Therefore, certain assumptions must be made in constructing the gap.  The
Company monitors its gap on a monthly basis.  As of December 31, 2000, the
Company's one year gap is negative.  This indicates that more liabilities than
assets are subject to repricing over the next year. Traditional theory indicates
that in a falling interest rate environment this could result in increased
earnings.

     On a quarterly basis the Company utilizes interest rate shock testing to
further manage interest rate risk.  Such tests project net interest income given
an immediate and sustained change in interest rates applied to all interest
earning assets and interest sensitive liabilities.  Although such tests contain
some of the same shortcomings as gap analysis, they are very useful in defining
boundaries of interest rate risk exposure.  As of December 31, 2000, these tests
project that an immediate and sustained increase in rates of 200 basis points
would cause net interest income to fall 8.79%.  Conversely, a 200 basis point
decrease in rates is estimated to cause net interest income to increase 7.97%.
These measures are within management's parameters.

     In addition to these tests, the Bank also uses simulation models to monitor
interest rate risk and prepare income projections.

Impact of Inflation
-------------------

     The consolidated financial statements and related data included in this
report were prepared in accordance with generally accepted accounting
principles, which require the Company's financial position and results of
operations to be measured in terms of historical dollars except for the
available for sale security portfolio.  Consequently, the relative value of
money generally is not considered.  Nearly all of the Company's assets and
liabilities are monetary in nature and, as a result, interest rates and
competition in the market area tend to have a more significant impact on the
Company's performance than the effect of inflation.

     However, inflation does affect noninterest expenses such as personnel costs
and the cost of services and supplies used by the Company. Management attempts
to offset such increases by controlling the level of noninterest

                                       23
<PAGE>

expenditures and increasing levels of noninterest income. Because inflation
rates have generally been low during the time covered by the accompanying
financial statements, the impact of inflation on the Company's earnings has not
been significant.

                                       24
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999

ASSETS                                                               2000               1999
                                                                ------------       ------------
<S>                                                             <C>                <C>
Cash and due from banks                                         $  4,540,327       $  5,698,937
Securities available for sale                                     42,337,429         41,561,821
Loans, less allowance for loan losses of $1,150,900 and
  $1,011,479, respectively                                       101,032,931         85,664,538
Bank premises and equipment, net                                   2,356,202          1,391,128
Accrued interest receivable                                        1,214,805          1,035,183
Other assets                                                       2,049,923          1,945,326
                                                                ------------       ------------

     Total Assets                                               $153,531,617       $137,296,933
                                                                ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
Deposits:
  Noninterest bearing                                           $ 16,694,201       $ 12,945,480
  Interest bearing                                               104,824,670         97,286,833
                                                                ------------       ------------
     Total deposits                                              121,518,871        110,232,313
Short-term borrowings                                             12,366,699          9,172,961
Long-term borrowings                                                 867,686            942,645
Other liabilities                                                  1,388,189            994,722
                                                                ------------       ------------

     Total liabilities                                           136,141,445        121,342,641
                                                                ------------       ------------

Commitments and Contingencies

Shareholders' equity
Common stock, $2.00 par value, authorized
  2,250,000 shares, issued 750,000 shares                          1,500,000          1,500,000
Additional paid-in capital                                         2,100,000          2,100,000
Retained earnings                                                 15,830,556         14,722,747
Accumulated other comprehensive income                               (15,817)          (524,873)
Treasury stock at cost, 99,388 and
  94,168 shares, respectively                                     (2,024,567)        (1,843,582)
                                                                ------------       ------------

     Total shareholders' equity                                   17,390,172         15,954,292
                                                                ------------       ------------

     Total liabilities and shareholders' equity                 $153,531,617       $137,296,933
                                                                ============       ============
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       25
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME
For The Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                        2000          1999         1998
                                                     -----------   -----------  -----------
<S>                                                  <C>           <C>          <C>
Interest income
  Interest and fees on loans                         $ 8,479,351   $ 7,504,063  $ 7,836,571
  Interest and dividends on securities:
     Taxable                                           2,281,492     2,117,266    2,061,442
     Tax-exempt                                          332,024       363,941      369,216
  Interest on federal funds sold                          61,113        72,919       69,008
                                                     -----------   -----------  -----------
     Total interest income                            11,153,980    10,058,189   10,336,237
                                                     -----------   -----------  -----------

Interest expense
  Interest on deposits                                 3,843,844     3,610,532    3,805,054
  Interest on short-term borrowings                      530,119       340,047      242,813
  Interest on long-term borrowings                        50,557        12,351       59,967
                                                     -----------   -----------  -----------
     Total interest expense                            4,424,520     3,962,930    4,107,834
                                                     -----------   -----------  -----------

     Net interest income                               6,729,460     6,095,259    6,228,403
  Provision for loan losses                              263,969       714,152      120,000
                                                     -----------   -----------  -----------
     Net interest income after provision
       for loan losses                                 6,465,491     5,381,107    6,108,403
                                                     -----------   -----------  -----------

Noninterest income
  Trust income                                           206,345       176,014      136,995
  Service fees                                           424,264       324,449      264,447
  Insurance commissions                                   17,653        28,629       20,641
  Securities (losses) gains                              (14,201)       16,437          900
  Other                                                  344,512       155,062      132,344
                                                     -----------   -----------  -----------
     Total noninterest income                            978,573       700,591      555,327
                                                     -----------   -----------  -----------

Noninterest expense
  Salaries and employee benefits                       2,312,076     2,334,317    2,144,275
  Net occupancy expense                                  199,098       177,417      247,279
  Equipment rentals, depreciation and maintenance        311,786       314,808      290,224
  Data processing                                        354,166       369,590      411,782
  Advertising                                             76,547        73,859       82,637
  FDIC insurance                                          23,560        13,091       13,086
  Other                                                1,304,476     1,207,989    1,052,757
                                                     -----------   -----------  -----------
     Total noninterest expense                         4,581,709     4,491,071    4,242,040
                                                     -----------   -----------  -----------

Income before income taxes                             2,862,355     1,590,627    2,421,690

  Income tax expense                                     973,112       489,970      821,284
                                                     -----------   -----------  -----------

     Net income                                      $ 1,889,243   $ 1,100,657  $ 1,600,406
                                                     ===========   ===========  ===========

Basic earnings per common share                      $      2.90   $      1.67  $      2.41
                                                     ===========   ===========  ===========

Average common shares outstanding                        651,995       658,910      663,487
                                                     ===========   ===========  ===========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       26
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
                                                                  2000          1999         1998
                                                               ----------   -----------   ----------
<S>                                                            <C>          <C>           <C>
Net Income                                                     $1,889,243   $ 1,100,657   $1,600,406
                                                               ----------   -----------   ----------

Other comprehensive income:
  Gross unrealized gains/(losses) arising during the period       757,100    (1,220,223)     299,044
  Adjustment for income tax (expense)/benefit                    (257,417)      419,290     (104,960)
                                                               ----------   -----------   ----------
                                                                  499,683      (800,933)     194,084
                                                               ----------   -----------   ----------

  Less:  Reclassification adjustment for losses/(gains)
          included in net income                                   14,201       (16,437)         (98)
  Adjustment for income tax (benefit)/expense                      (4,828)        5,588           33
                                                               ----------   -----------   ----------
                                                                    9,373       (10,849)         (65)
                                                               ----------   -----------   ----------

  Other comprehensive income, net of tax                          509,056      (811,782)     194,019
                                                               ----------   -----------   ----------

Comprehensive Income                                           $2,398,299   $   288,875   $1,794,425
                                                               ==========   ===========   ==========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       27
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>

                                                                                       Accumulated
                                                                                          Other                      Total
                                          Common Stock        Additional                 compre-                     Share-
                                    ------------------------   Paid-in      Retained      hensive    Treasury       Holders'
                                       Shares       Amount     Capital      Earnings      Income       Stock         Equity
                                    ------------  ----------  ----------  ------------  ----------  ------------  ------------
<S>                                 <C>           <C>         <C>         <C>           <C>         <C>           <C>
Balance, December 31, 1997               750,000  $1,500,000  $2,100,000  $13,406,973   $  92,890   $(1,004,955)  $16,094,908
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------

  Net income                                   -           -           -    1,600,406           -             -     1,600,406

  Cost of 20,386 shares acquired
     as treasury stock                         -           -           -            -           -      (577,939)     (577,939)

  Cash dividends declared
     ($1.00 per share)                         -           -           -     (662,078)          -             -      (662,078)

  Net change in unrealized
     gain (loss) on available
     for sale securities                       -           -           -            -     194,019             -       194,019
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------
Balance, December 31, 1998               750,000   1,500,000   2,100,000   14,345,301     286,909    (1,582,894)   16,649,316
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------

  Net income                                   -           -           -    1,100,657           -             -     1,100,657

  Cost of 5,735 shares acquired
     as treasury stock                         -           -           -            -           -      (260,688)     (260,688)

  Cash dividends declared
     ($1.10 per share)                         -           -           -     (723,211)          -             -      (723,211)

  Net change in unrealized
     gain (loss) on available
     for sale securities                       -           -           -            -    (811,782)            -      (811,782)
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------
Balance, December 31, 1999               750,000   1,500,000   2,100,000   14,722,747    (524,873)   (1,843,582)   15,954,292
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------

  Net income                                   -           -           -    1,889,243           -             -     1,889,243

  Cost of 5,220 shares acquired
     as treasury stock                         -           -           -            -           -      (180,985)     (180,985)

  Cash dividends declared
     ($1.20 per share)                         -           -           -     (781,434)          -             -      (781,434)

  Net change in unrealized
     gain (loss) on available
     for sale securities                       -           -           -            -     509,056             -       509,056
                                    ------------  ----------  ----------  -----------   ---------   -----------   -----------
Balance, December 31, 2000               750,000  $1,500,000  $2,100,000  $15,830,556   $ (15,817)  $(2,024,567)  $17,390,172
                                    ============  ==========  ==========  ===========   =========   ===========   ===========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       28
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                      2000           1999           1998
                                                                  ------------   ------------   ------------
<S>                                                               <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                      $  1,889,243   $  1,100,657   $  1,600,406
  Adjustments to reconcile net income to net
     cash provided by operating activities:
  Depreciation                                                         210,400        194,079        246,664
  Provision for loan losses                                            263,969        714,152        120,000
  Deferred income tax (benefit) expense                                 (7,961)        16,224        (21,849)
  Amortization of security premiums, net
     of accretion of security discounts                                 (7,891)       158,118        184,139
  Amortization of goodwill and organization costs                        7,816          5,283         63,400
  Securities losses (gains)                                             14,201        (16,437)          (900)
  Other (gains) losses                                                  (3,214)        36,441          5,285
  (Increase) decrease in accrued interest receivable                  (179,622)       226,410        (64,495)
  (Increase) in other assets                                          (357,815)      (314,246)      (117,570)
  Increase (decrease) in other liabilities                             393,467         46,349        (11,807)
                                                                  ------------   ------------   ------------

  Net cash provided by operating activities                          2,222,593      2,167,030      2,003,273
                                                                  ------------   ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from maturities and calls of securities
     held to maturity                                                        -      1,190,000      1,045,000
  Purchases of securities held to maturity                                   -              -     (3,138,101)
  Proceeds from sales of securities available for sale               4,452,748      3,527,373        502,225
  Proceeds from maturities and calls of securities
     available for sale                                              7,465,000      9,470,000      5,773,120
  Principal payments received on securities available for sale         272,317        370,338        406,439
  Purchases of securities available for sale                       (12,200,682)   (13,686,085)   (10,089,633)
  Loans made to customers, net                                     (16,575,751)    (2,043,858)       809,455
  Purchases of bank premises and equipment                          (1,175,474)      (134,030)      (117,375)
  Proceeds from sale of other real estate and other assets             937,721      1,078,252          6,110
                                                                  ------------   ------------   ------------

  Net cash used in investing activities                            (16,824,121)      (228,010)    (4,802,760)
                                                                  ------------   ------------   ------------
 </TABLE>

                                  (Continued)

                                       29
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
For the Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                  2000          1999         1998
                                                               -----------   -----------   ----------
<S>                                                            <C>           <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in demand deposit, NOW, money
     market and savings accounts                                 5,301,152      (376,564)   1,406,910
  Net increase (decrease) in time deposits                       5,985,406    (2,854,768)   1,655,268
  Net increase in short-term borrowings                          3,193,738     1,401,994    1,029,335
  Proceeds from long-term borrowings                                     -     3,144,278            -
  Repayments of long-term borrowings                               (74,959)      (70,096)     (65,549)
  Dividends paid                                                  (781,434)     (723,211)    (662,078)
  Acquisition of treasury stock                                   (180,985)     (260,688)    (577,939)
                                                               -----------   -----------   ----------

  Net cash provided by financing activities                     13,442,918       260,945    2,785,947
                                                               -----------   -----------   ----------

  Increase (decrease) in cash and cash equivalents              (1,158,610)    2,199,965      (13,540)

Cash and cash equivalents:
  Beginning                                                      5,698,937     3,498,972    3,512,512
                                                               -----------   -----------   ----------

  Ending                                                       $ 4,540,327   $ 5,698,937   $3,498,972
                                                               ===========   ===========   ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash payments for:
     Interest on deposits and on other borrowings              $ 4,373,238   $ 3,984,921   $4,127,529
                                                               ===========   ===========   ==========

     Income taxes                                              $   883,000   $   530,975   $  835,183
                                                               ===========   ===========   ==========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES

  Other real estate and other assets acquired in
     settlement of loans                                       $   943,389   $ 1,373,829   $   84,620
                                                               ===========   ===========   ==========

  Transfer of securities from held to maturity to available
     for sale                                                  $         -   $ 7,180,676   $        -
                                                               ===========   ===========   ==========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       30
<PAGE>

                            CITIZENS FINANCIAL CORP.
                                AND SUBSIDIARIES


Notes to Consolidated Financial Statements

Note 1.  Significant Accounting Policies

  Nature of business:  Citizens Financial Corp. (Citizens) was incorporated on
April 30, 1987.  The wholly owned bank subsidiary, Citizens National Bank of
Elkins, is a commercial bank with operations in Randolph, Tucker, Grant and
Pocahontas Counties of West Virginia.  The Bank provides retail and commercial
loans, deposit, trust and brokerage services to customers in those counties and
nearby areas.  During the year ended December 31, 2000, Citizens Financial Corp.
established a wholly owned insurance subsidiary, Citizens Financial Services,
LLC, for the purpose of investing in ProServ Insurance Agency, LLC.  ProServ is
a general insurance agency selling primarily property and casualty insurance and
was established by the West Virginia Bankers Association.  Along with the other
member banks, Citizens shares in the income and commissions of ProServ.
Citizens' ownership in ProServ is less than 5%.

  Basis of financial statement presentation and accounting estimates:  The
accounting and reporting policies of Citizens Financial Corp. and its wholly
owned subsidiaries conform to generally accepted accounting principles and to
general practices within the banking industry.  The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from those
estimates.

  Principles of consolidation:  The accompanying consolidated financial
statements include the accounts of Citizens Financial Corp. and its wholly owned
subsidiaries, Citizens National Bank of Elkins and Citizens Financial Services,
LLC.  All significant intercompany accounts and transactions have been
eliminated in consolidation.

  Presentation of cash flows:  For purposes of reporting cash flows, cash and
cash equivalents includes cash on hand, balances due from banks (including cash
items in process of clearing) and federal funds sold.  Cash flows from demand
deposits, NOW accounts and savings accounts are reported net since their
original maturities are less than three months.  Cash flows from loans and
certificates of deposit and other time deposits are also reported net.

  Securities:  Debt and equity securities are classified as "held to maturity",
"available for sale" or "trading" according to management's intent.  The
appropriate classification is determined at the time of purchase of each
security and re-evaluated at each reporting date.

  Securities held to maturity - There are no securities classified as "held to
  ---------------------------
maturity" in the accompanying financial statements.

  Securities available for sale - Securities not classified as "held to
  -----------------------------
maturity" or as "trading" are classified as "available for sale".  Securities
classified as "available for sale" are those securities the Company intends to
hold for an indefinite period of time, but not necessarily to maturity.
"Available for sale" securities are reported at fair value.  Unrealized gains or
losses, adjusted for applicable income taxes, are reported as a separate
component of shareholders' equity.

  Trading securities - There are no securities classified as "trading" in the
  ------------------
accompanying financial statements.

  Realized gains and losses on sales of securities are recognized on the
specific identification method.  Amortization of premiums and accretion of
discounts are computed using the effective interest method.

  Loans and allowance for loan losses:  Loans are stated at the amount of unpaid
principal, reduced by unearned discount and an allowance for loan losses.
Interest is recognized on an amortized basis.

                                       31
<PAGE>

  The allowance for loan losses is maintained at a level considered adequate to
provide for losses that can be reasonably anticipated.  The allowance is
increased by provisions charged to operating expense and reduced by net charge-
offs.  The subsidiary bank makes continuous credit reviews of the loan portfolio
and considers current economic conditions, historical loan loss experience,
review of specific problem loans and other factors in determining the adequacy
of the allowance for loan losses.  Loans are charged against the allowance for
loan losses when management believes that the collectibility of the principal is
unlikely.

  A loan is impaired when, based on current information and events, it is
probable that the Company will be unable to collect all amounts due in
accordance with the contractual terms of the specific loan agreement.  Impaired
loans, other than certain large groups of smaller-balance homogeneous loans that
are collectively evaluated for impairment, are reported at the present value of
expected future cash flows discounted using the loan's original effective
interest rate or, alternatively, at the loan's observable market price, or at
the fair value of the loan's collateral if the loan is collateral dependent.
The method selected to measure impairment is made on a loan-by-loan basis,
unless foreclosure is deemed to be probable, in which case the fair value of the
collateral method is used.

  Interest is accrued daily on impaired loans unless the loan is placed on non-
accrual status.  Impaired loans are placed on non-accrual status when the
payments of principal and interest are in default for a period of 90 days,
unless the loan is both well-secured and in the process of collection.  Interest
on non-accrual loans is recognized primarily using the cost-recovery method.

  Loan origination fees and certain direct loan origination costs are deferred
and amortized as adjustments of the related loan yield over its contractual
life.

  Bank premises and equipment:  Bank premises and equipment are stated at cost
less accumulated depreciation.  Depreciation is computed primarily by the
straight-line method over the estimated useful lives of the assets.  Repairs and
maintenance expenditures are charged to operating expense as incurred.  Major
improvements and additions to premises and equipment are capitalized.

  Other real estate:  Other real estate consists of real estate held for resale
which was acquired through foreclosure on loans secured by such real estate.  At
the time of acquisition, these properties are recorded at fair value with any
writedown being charged to the allowance for loan losses.  After foreclosure,
valuations are periodically performed by management and the real estate is
carried at the lower of carrying amount or fair value less cost to sell.
Expenses incurred in connection with operating these properties are charged to
operating expenses as incurred.  Charging such expenses to income rather than
including them in loss on foreclosed real estate does not materially affect
financial statement reporting.  Gains and losses on the sales of these
properties are credited or charged to operating income in the year of the
transaction.

  Sales of these properties which are financed by the subsidiary bank and meet
the criteria of covered transactions remain classified as other real estate
until such time as principal payments have been received to warrant
classification as a real estate loan.

  Goodwill:  Goodwill is being amortized on a straight-line basis over a period
of fifteen years.  Unamortized goodwill totaled $193,170 and  $0 at December 31,
2000 and 1999, respectively.

  Pension plan:  The subsidiary bank has a defined benefit pension plan covering
substantially all employees.  Pension costs are actuarially determined and
charged to expense.

  Postretirement benefits:  The subsidiary bank provides certain health care and
life insurance benefits for all retired employees that meet certain eligibility
requirements.  The Company's share of the estimated costs that will be paid
after retirement is generally being accrued by charges to expense over the
employees' active service periods to the dates they are fully eligible for
benefits, except that the Company's unfunded cost at January 1, 1993 is being
accrued primarily on a straight-line basis through the year ending 2013.

                                       32
<PAGE>

  Income Taxes:  Deferred tax assets and liabilities are determined based on
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income.  Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

  Valuation allowances are established when deemed necessary to reduce deferred
tax assets to the amount expected to be realized.

  The consolidated provision for income taxes includes federal and state income
taxes and is based on pretax income reported in the consolidated financial
statements, adjusted for transactions that may never enter into the computation
of income taxes payable.

  Basic earnings per share:  Basic earnings per common share is computed based
upon the weighted average shares outstanding.  The weighted average shares
outstanding were 651,995, 658,910 and 663,487 for the years ended December 31,
2000, 1999 and 1998, respectively.  During the years ended December 31, 2000,
1999 and 1998, the Company did not have any potentially dilutive securities.

  Trust department:  Assets held in an agency or fiduciary capacity by the
subsidiary bank's trust department are not assets of the Bank and are not
included in the accompanying balance sheets.  Trust department income is
recognized on the cash basis in accordance with customary banking practice.
Reporting such income on a cash basis rather than the accrual basis does not
affect net income materially.

  Derivative Instruments and Hedging Activities:  During 2000, the Company
adopted Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities.  The Statement requires the Bank
to recognize all derivatives on the balance sheet at fair value.  Derivatives
that are not hedges must be adjusted to fair value through income.  If the
derivative is a hedge, depending on the nature of the hedge, changes in the fair
value of derivatives will either be offset against the change in fair value of
the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings.  The ineffective portion of a derivative's change in fair value will
be immediately recognized in earnings.

The Company was not a party to any derivative instruments during the year ended
December 31, 2000, and accordingly the adoption of this pronouncement had no
effect on the Company's earnings or financial position.

  Reclassifications:  Certain accounts in the consolidated financial statements
for 1999 and 1998, as previously presented, have been reclassified to conform to
current year classifications.

Note 2.  Branch Acquisition

On May 27, 2000, Citizens National Bank purchased a branch banking facility in
Petersburg, West Virginia from South Branch Valley National Bank.  As a result
of this acquisition, Citizens National Bank assumed $1,922,000 in demand
deposits, $743,000 in savings deposits and $4,825,000 in time deposits.  The
Bank also acquired loans totaling $6,203,000.  Included in these loans were
$2,542,000 in variable rate mortgage loans and $3,449,000 in consumer loans.  No
loans of a long-term, fixed rate nature were acquired.  The fair value of the
loans and deposits acquired approximated their carrying value at the date of
acquisition.  The Bank paid $201,000 over the fair value of the net assets
acquired.  This amount is reflected as goodwill and is being amortized over 15
years.

Note 3.  Cash Concentrations

  At December 31, 2000 and 1999, the subsidiary bank had no cash concentrations.

                                       33
<PAGE>

Note 4.  Securities

  The amortized cost, unrealized gains, unrealized losses and estimated fair
values of securities at December 31, 2000 and 1999, are summarized as follows:

<TABLE>
<CAPTION>
                                                                              2000
                                                          ---------------------------------------------
                                                                                              Carrying
                                                                                               Value
                                                                                             (Estimated
                                                          Amortized         Unrealized          Fair
                                                                         ------------------
                                                             Cost          Gains    Losses      Value)
                                                          -----------    --------  --------  -----------
<S>                                                       <C>          <C>         <C>       <C>
Available for sale:
 U.S. Government agencies and corporations                $20,232,537    $107,161  $ 81,701  $20,257,997
 Mortgage-backed securities - U.S. Government
  agencies and corporations                                 1,165,972           -    23,276    1,142,696
 Federal Reserve Bank stock                                   108,000           -         -      108,000
 Federal Home Loan Bank stock                                 623,800           -         -      623,800
 Corporate debt securities                                 14,895,043     147,510   192,588   14,849,965
 Tax exempt state and political subdivisions                5,336,041      33,267    14,337    5,354,971
                                                          -----------    --------  --------  -----------

  Total securities available for sale                     $42,361,393    $287,938  $311,902  $42,337,429
                                                          ===========    ========  ========  ===========

<CAPTION>
                                                                                1999
                                                          -----------------------------------------------
                                                                                              Carrying
                                                                                               Value
                                                                                             (Estimated
                                                          Amortized            Unrealized       Fair
                                                                         ------------------
                                                             Cost          Gains    Losses      Value)
                                                          -----------    --------  --------  -----------
<S>                                                       <C>            <C>       <C>       <C>
Available for sale:
 U.S. Treasury securities                                 $   500,844    $    721  $      -  $   501,565
 U.S. Government agencies and corporations                 18,820,952           -   367,623   18,453,329
 Mortgage-backed securities - U.S. Government
  agencies and corporations                                 1,441,649           -    63,321    1,378,328
 Federal Reserve Bank stock                                   108,000           -         -      108,000
 Federal Home Loan Bank stock                                 623,800           -         -      623,800
 Corporate debt securities                                 13,678,016         970   355,270   13,323,716
 Tax exempt state and political subdivisions                7,183,822      38,203    48,942    7,173,083
                                                          -----------    --------  --------  -----------

  Total securities available for sale                     $42,357,083    $ 39,894  $835,156  $41,561,821
                                                          ===========    ========  ========  ===========
</TABLE>

  The maturities, amortized cost and estimated fair values of the Company's
securities at December 31, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                                                            Available for Sale
                                                       -------------------------------
                                                                            Carrying
                                                                             Value
                                                                           (Estimated
                                                       Amortized              Fair
                                                          Cost               Value)
                                                       -----------        ------------
     <S>                                               <C>                 <C>
     Due within one year                               $10,327,977         $10,333,167
     Due after one through five years                   30,892,234          30,865,468
     Due after five through ten years                      409,382             406,994
     Due after ten years                                         -                   -
     Equity securities                                     731,800             731,800
                                                       -----------         -----------

       Total                                           $42,361,393         $42,337,429
                                                       ===========         ===========
</TABLE>

                                       34
<PAGE>

Mortgage backed securities have remaining contractual maturities ranging from 4
to 4.5 years and are reflected in the maturity distribution schedule based on
their anticipated average life to maturity, which ranges from 2.5 to 3 years.
Accordingly, discounts are accreted and premiums are amortized over the
anticipated life to maturity of the specific obligation.

  The proceeds from sales, calls and maturities of securities, including
principal payments received on mortgage-backed  securities, and the related
gross gains and losses realized are as follows:

<TABLE>
<CAPTION>
                                                    Proceeds From                 Gross Realized
                                        ------------------------------------  -----------------------
                Years Ended                           Calls and    Principal
                December 31,              Sales      Maturities    Payments       Gains       Losses
------------------------------------    ----------  -------------  ---------  --------------  -------
<S>                                     <C>         <C>            <C>        <C>             <C>
2000
       Securities available for sale    $4,452,748    $ 7,465,000   $272,317       $     -    $14,201
                                        ==========    ===========   ========       =======    =======

1999
       Securities held to maturity      $        -    $ 1,190,000   $      -       $     -    $     -
       Securities available for sale     3,527,373      9,470,000    370,338        16,437          -
                                        ----------    -----------   --------       -------    -------

                                        $3,527,373    $10,660,000   $370,338       $16,437    $     -
                                        ==========    ===========   ========       =======     ======
1998
       Securities held to maturity      $        -    $ 1,045,000   $      -       $     -    $     -
       Securities available for sale       502,225      5,773,120    406,439           900          -
                                        ----------    -----------   --------       -------    -------

                                        $  502,225    $ 6,818,120   $406,439       $   900    $     -
                                        ==========    ===========   ========       =======    =======
</TABLE>

  At December 31, 2000 and 1999 securities carried at $18,326,562 and
$17,573,740, respectively, with estimated fair values of $18,351,047 and
$17,078,942, respectively, were pledged to secure public deposits, securities
sold under agreements to repurchase, and for other purposes required or
permitted by law.

  At December 31, 2000, the Company had a concentration within its corporate
debt securities classification which included obligations of financial services
industry companies with global operations having an approximate carrying value
of $5,016,986 and an estimated fair value of $4,998,600.  There were no
concentrations with any one issuer.

  Federal Reserve Bank stock and Federal Home Loan Bank stock are equity
securities which are included in securities available for sale in the
accompanying financial statements.  Such securities are carried at cost, since
they may only be sold back to the respective issuer or another member at par
value.


Note 5. Loans

  Loans are summarized as follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                          --------------------------
                                                              2000          1999
                                                          ------------   -----------
          <S>                                             <C>            <C>
          Commercial, financial and agricultural          $ 15,746,846   $14,035,319
          Real estate - construction                         2,032,381     1,368,664
          Real estate - mortgage                            70,064,727    61,242,583
          Installment loans                                 14,401,988    10,146,898
          Other                                                 35,323        18,324
                                                          ------------   -----------
          Total loans                                      102,281,265    86,811,788

          Net deferred loan origination fees and costs         (60,901)     (105,599)
          Less unearned income                                 (36,533)      (30,172)
                                                          ------------   -----------
            Total loans net of unearned income and net
            deferred loan origination fees and costs       102,183,831    86,676,017
          Less allowance for loan losses                     1,150,900     1,011,479
                                                          ------------   -----------

            Loans, net                                    $101,032,931   $85,664,538
                                                          ============   ===========
</TABLE>

                                       35
<PAGE>

  Included in the above balance of net loans are nonaccrual loans amounting to
$180,535 and $56,938 at December 31, 2000 and 1999, respectively.  If interest
on nonaccrual loans had been accrued, such income would have approximated
$4,974, $3,777 and $5,107 for the years ended December 31, 2000, 1999 and 1998,
respectively.

  In the past, the subsidiary bank has made loans, in the normal course of
business, to its directors, executive officers and their related interests, and
will continue to make such loans in the future.  At December 31, 2000 and 1999,
outstanding loans of this nature totaled $4,866,436 and $4,355,969,
respectively.

  The following presents the activity with respect to related party loans
aggregating $60,000 or more to directors, executive officers, and their related
interests of Citizens Financial Corp. and subsidiaries during the years ended
December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                    2000          1999
                                 -----------   -----------
          <S>                    <C>           <C>
          Balance, beginning     $ 4,338,985   $ 3,200,057
            Additions              4,240,661     5,259,579
            Amounts collected     (3,779,489)   (4,120,651)
                                 -----------   -----------

          Balance, ending        $ 4,800,157   $ 4,338,985
                                 ===========   ===========
</TABLE>

  The following represents contractual loan maturities at December 31, 2000
without regard to scheduled periodic principal repayments on amortizing loans:

<TABLE>
<CAPTION>
                                                        Due After 1
                                              Due      But Within       Due
                                          Within 1 Yr     5 Yrs     After 5 Yrs     Total
                                          -----------  -----------  -----------  ------------
<S>                                       <C>          <C>          <C>          <C>

Commercial, financial and agricultural    $ 2,374,771  $ 4,604,365  $ 8,767,710  $ 15,746,846
Real estate - construction                    792,443      890,200      349,738     2,032,381
Real estate - mortgage                      1,469,662    6,200,088   62,394,977    70,064,727
Net installment loans                       1,295,525   12,481,854      624,609    14,401,988
Other                                               -       23,789       11,534        35,323
                                          -----------  -----------  -----------  ------------
                                          $ 5,932,401  $24,200,296  $72,148,568  $102,281,265
                                          ===========  ===========  ===========  ============

Loans due after one year with:

       Variable rates                     $71,249,879
       Fixed rates                         25,098,985
                                          -----------
        Total                             $96,348,864
                                          ===========
</TABLE>

  Concentrations of credit risk:  The Company's banking subsidiary, Citizens
National Bank of Elkins, grants installment, commercial and residential loans to
customers in central and eastern, West Virginia in striving to maintain a
diversified loan portfolio.

  As of December 31, 2000, Citizens National Bank had direct and indirect
extensions of credit to automobile dealers totaling approximately $8,100,000.
These loans consist of automobile floor plan loans and commercial loans which
are generally secured by liens on the pledges of accounts receivable,
inventories or personal guarantees.  The Bank evaluates each such customer's
credit worthiness on a case-by-case basis.  The amount of collateral obtained is
based upon management's credit evaluation.

                                       36
<PAGE>

Note 6.  Allowance for Loan Losses

  An analysis of the allowance for loan losses for the years ended December 31,
2000, 1999 and 1998, is as follows:

<TABLE>
<CAPTION>
                                                       2000        1999        1998
                                                    ----------  ----------  ----------
          <S>                                       <C>         <C>         <C>
          Balance, beginning of year                $1,011,479  $1,109,595  $1,094,185
                                                    ----------  ----------  ----------

          Losses:
          Commercial, financial and agricultural        42,750     760,374       2,864
          Real estate - mortgage                        67,248      88,526      12,204
          Installment                                   62,409      76,363      81,502
          Credit cards                                       -      51,713      57,210
                                                    ----------  ----------  ----------
             Total                                     172,407     976,976     153,780
                                                    ----------  ----------  ----------

          Recoveries:
          Commercial, financial and agricultural        22,689      99,476       3,731
          Real estate - mortgage                         4,824      43,680      20,314
          Installment                                   20,346      14,762      14,817
          Credit cards                                       -       6,790      10,328
                                                    ----------  ----------  ----------

            Total                                       47,859     164,708      49,190
                                                    ----------  ----------  ----------

          Net losses                                   124,548     812,268     104,590
          Provision for loan losses                    263,969     714,152     120,000
                                                    ----------  ----------  ----------

          Balance, end of year                      $1,150,900  $1,011,479  $1,109,595
                                                    ==========  ==========  ==========
</TABLE>

  The Company's total recorded investment in impaired loans at December 31, 2000
and 1999 approximated $591,056 and $661,341, respectively, for which the
required allowance for loan losses was $100,000 and $100,000, respectively, as
determined in accordance with generally accepted accounting principles.  The
Company's average investment in such loans was $627,512 for the year ended
December 31, 2000.  All impaired loans at December 31, 2000, were collateral
dependent, and accordingly, the fair value of the loan's collateral was used to
measure the impairment of each.

  For purposes of SFAS Nos. 114 and 118, the Company considers groups of
smaller-balance, homogeneous loans to include:  mortgage loans secured by
residential property, other than those which significantly exceed the subsidiary
bank's typical residential mortgage loan amount (currently those in excess of
$100,000); small balance commercial loans (currently those less than $50,000);
and installment loans to individuals, exclusive of those loans in excess of
$50,000.

  For the years ended December 31, 2000, 1999 and 1998, the Company recognized
approximately $62,889, $59,060 and $144,602, respectively, in interest income on
impaired loans.  Using the cash basis-method of accounting, the Company would
have recognized approximately the same amount of interest income on such loans.

Note 7.  Bank Premises and Equipment

  The major categories of bank premises and equipment and accumulated
depreciation at December 31, 2000 and 1999, are summarized as follows:

<TABLE>
<CAPTION>
                                            2000        1999
                                         ----------  ----------
     <S>                                 <C>         <C>
     Land                                $  397,092  $  309,029
     Buildings and improvements           3,444,636   2,658,299
     Furniture and equipment              1,850,759   1,623,703
                                         ----------  ----------
                                          5,692,487   4,591,031

     Less accumulated depreciation        3,336,285   3,199,903
                                         ----------  ----------

     Bank premises and equipment, net    $2,356,202  $1,391,128
                                         ==========  ==========
</TABLE>

  Depreciation expense for the years ended December 31, 2000, 1999 and 1998,
totaled $210,400, $194,079 and $246,664, respectively.

                                       37
<PAGE>

Note 8.  Deposits

  The following is a summary of interest bearing deposits by type as of December
31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                         2000          1999
                                                     ------------   -----------
     <S>                                             <C>            <C>
     NOW and Super NOW accounts                      $ 13,855,723   $13,737,203
     Money market accounts                              5,187,510     6,457,709
     Savings accounts                                  30,211,119    27,507,009
     Certificates of deposit under $100,000            42,383,730    38,968,294
     Certificates of deposit of $100,000 or more       13,186,588    10,616,618
                                                     ------------   -----------

       Total                                         $104,824,670   $97,286,833
                                                     ============   ===========
</TABLE>

Interest expense on deposits is summarized below:

<TABLE>
<CAPTION>
                                                         2000           1999         1998
                                                     ------------    -----------   ----------
     <S>                                             <C>             <C>           <C>
     NOW and Super NOW accounts                      $    244,148    $   241,943   $  281,897
     Money market accounts                                123,397        115,536      145,026
     Savings accounts                                     832,725        707,127      760,135
     Certificates of deposit under $100,000             2,000,343      1,924,776    2,003,196
     Certificates of deposit of $100,000 or more          643,231        621,150      614,800
                                                     ------------    -----------   ----------

       Total                                         $  3,843,844    $ 3,610,532   $3,805,054
                                                     ============    ===========   ==========
</TABLE>

  The following is a summary of the maturity distribution of certificates of
deposit in amounts of $100,000 or more as of December 31, 2000:

<TABLE>
<CAPTION>
                                                       Amount     Percent
                                                     -----------  --------
<S>                                                  <C>          <C>

       Three months or less                          $ 2,782,055       21%
       Three through six months                        2,078,432       16%
       Six through twelve months                       3,039,341       23%
       Over twelve months                              5,286,760       40%
                                                     -----------      ---

          Total                                      $13,186,588      100%
                                                     ===========      ===
</TABLE>

A summary of the maturities for all time deposits as of December 31, 2000,
follows:

<TABLE>
<CAPTION>

          Year                                         Amount
          ----                                       -----------
<S>                                                  <C>

          2001                                       $33,843,087
          2002                                        13,735,827
          2003                                         6,039,538
          2004                                         1,154,815
          2005                                           797,051
                                                     -----------

                                                     $55,570,318
                                                     ===========
</TABLE>

  At December 31, 2000, deposits of related parties including directors,
executive officers, and their related interests of Citizens Financial Corp. and
subsidiaries approximated $6,300,000.

                                       38
<PAGE>

Note 9.  Income Taxes

  The components of applicable income tax expense (benefit) for the years ended
December 31, 2000, 1999 and 1998, are as follows:
<TABLE>
<CAPTION>
                                                           2000       1999      1998
                                                         --------   --------  --------
     <S>                                                 <C>        <C>       <C>
     Current:
       Federal                                           $848,650   $390,037  $717,630
       State                                              132,423     83,709   125,503
                                                         --------   --------  --------

                                                          981,073    473,746   843,133
                                                         --------   --------  --------
     Deferred
       Federal                                             (7,123)    14,517   (20,834)
       State                                                 (838)     1,707    (1,015)
                                                         --------   --------  --------

                                                           (7,961)    16,224   (21,849)
                                                         --------   --------  --------

         Total                                           $973,112   $489,970  $821,284
                                                         ========   ========  ========
</TABLE>

  Deferred income taxes reflect the impact of "temporary differences" between
amounts of assets and liabilities for financial reporting purposes and such
amounts as measured for tax purposes.  Deferred tax assets and liabilities
represent the future tax return consequences of temporary differences, which
will either be taxable or deductible when the related assets and liabilities are
recovered or settled.

  The tax effects of temporary differences which give rise to the Company's
deferred tax assets and liabilities as of December 31, 2000 and 1999, are as
follows:

<TABLE>
<CAPTION>
                                                           2000       1999
                                                         --------   --------
     <S>                                                 <C>        <C>
       Deferred tax assets:
          Allowance for loan losses                      $278,216   $234,735
          Employee benefit plans                            8,844     27,485
          Accrued income and expenses                      19,883     19,008
          Depreciation                                     26,330     29,930
          Net loan origination fees and costs              23,142     40,128
          Net unrealized loss on securities                 8,148    270,389
                                                         --------   --------
                                                          364,563    621,675
                                                         --------   --------

       Deferred tax liabilities:
          Accretion on securities                         (57,581)   (60,413)
                                                         --------   --------

          Net deferred tax asset                         $306,982   $561,262
                                                         ========   ========
</TABLE>

  A reconciliation between the amount of reported income tax expense and the
amount computed by multiplying the statutory income tax rate by book pretax
income for the years ended December 31, 2000, 1999 and 1998, is as follows:
<TABLE>
<CAPTION>
                                                           2000                  1999                  1998
                                                   -------------------   -------------------   -------------------
                                                    Amount     Percent    Amount     Percent    Amount     Percent
                                                   ---------   -------   ---------   -------   ---------   -------
<S>                                                <C>         <C>       <C>         <C>       <C>         <C>
 Computed tax at applicable statutory rate         $ 973,201      34.0   $ 540,813      34.0   $ 823,374      34.0
   Increase (decrease) in taxes resulting from:
   Tax-exempt interest                              (132,983)     (4.7)   (135,043)     (8.5)   (132,395)     (5.5)
   Amortization of organization costs                      -         -       1,796       0.1      21,556       0.9
   State income taxes, net of federal
      tax benefit                                     87,399       3.1      55,248       3.5      82,832       3.4
   Other, net                                         45,495       1.6      27,156       1.7      25,917       1.1
                                                   ---------      ----   ---------      ----   ---------      ----

     Applicable income taxes                       $ 973,112      34.0   $ 489,970      30.8   $ 821,284      33.9
                                                   =========      ====   =========      ====   =========      ====
</TABLE>

                                       39
<PAGE>

Note 10.  Employee Benefit Plans

  Pension Plan:  Citizens National Bank has a defined benefit pension plan
covering all employees who meet the eligibility requirements.  To be eligible,
an employee must be 21 years of age and have completed one year of continuous
service.  The Plan provides benefits based on the participant's years of service
and highest consecutive five year average annual earnings.  The Bank's funding
policy is to make the minimum annual contribution that is required by applicable
regulations.
<TABLE>
<CAPTION>
                                                    Pension      Pension      Pension
                                                    Benefit      Benefit      Benefit
                                                     2000         1999         1998
                                                  ----------   ----------   ----------
<S>                                               <C>          <C>          <C>
Change in benefit obligation

Benefit obligation at beginning of year           $2,917,738   $3,091,266   $2,654,130
Service cost                                          79,857       97,536       81,678
Interest cost                                        216,029      214,210      201,790
Change in discount rate                                    -     (385,160)      98,203
Experience (gain) loss                              (210,520)      37,578      196,399
Benefits paid                                       (133,809)    (137,692)    (140,934)
                                                  ----------   ----------   ----------
Benefit obligation at end of year                 $2,869,295   $2,917,738   $3,091,266
                                                  ==========   ==========   ==========

Change in plan assets

Fair value of plan assets at beginning of year    $4,227,792   $4,150,004   $4,046,829
Actual return on plan assets                         250,538      215,480      244,109
Employer contribution                                      -            -            -
Plan participants' contributions                           -            -            -
Benefits paid                                       (133,809)    (137,692)    (140,934)
                                                  ----------   ----------   ----------
Fair value of plan assets at end of year          $4,344,521   $4,227,792   $4,150,004
                                                  ==========   ==========   ==========


Funded status                                     $1,475,226   $1,310,054   $1,058,738
Unrecognized net actuarial gain                     (694,288)    (612,407)    (396,256)
Unrecognized prior service benefit                  (149,527)    (167,895)    (186,263)
Unrecognized net obligation at transition            (70,051)     (93,172)    (116,293)
                                                  ----------   ----------   ----------
Prepaid benefit cost                              $  561,360   $  436,580   $  359,926
                                                  ==========   ==========   ==========
Weighted-average assumptions as of December 31

Discount rate                                           8.00%        8.00%        7.00%
Expected return on plan assets                          8.50%        8.50%        8.50%
Rate of compensation increase                           5.00%        5.00%        5.00%

Components of net periodic benefit cost

Service cost                                      $   79,857   $   97,536   $   81,678
Interest cost                                        216,029      214,210      201,790
Expected return on plan assets                      (353,329)    (346,911)    (335,969)
Net amortization and deferral                        (67,337)     (41,489)     (58,727)
                                                  ----------   ----------   ----------
Net periodic benefit cost                         $ (124,780)  $  (76,654)  $ (111,228)
                                                  ==========   ==========   ==========
</TABLE>

  401(k) Plan:  The Bank has a 401(k) profit-sharing plan for the benefit of all
employees who have attained the age of 21 and completed one year of continuous
service.  The Plan as amended allows participating employees to contribute up to
15% of their annual compensation and permits the Bank to make discretionary non-
matching contributions to the Plan in such amount as the Board may determine to
be appropriate.  Contributions made to the Plan by the Bank for the years ended
December 31, 2000, 1999 and 1998, were $59,000, $23,000 and $39,139,
respectively.

                                       40
<PAGE>

     Postretirement Benefit Plans: Citizens National Bank sponsors a
postretirement healthcare plan and a postretirement life insurance plan for all
retired employees that meet certain eligibility requirements. Both plans are
contributory with retiree contributions that are adjustable based on various
factors, some of which are discretionary. The plans are unfunded. Other
information relative to these plans follows:

<TABLE>
<CAPTION>

                                                   Health Care   Health Care   Health Care
                                                       Plan          Plan          Plan
                                                       2000          1999          1998
                                                    ---------     ---------     ---------
<S>                                                <C>            <C>           <C>
Change in benefit obligation

Benefit obligation at beginning of year             $ 387,693     $ 399,876     $ 371,424
Service cost                                           16,883        16,119        14,916
Interest cost                                          25,811        25,201        24,152
Change in discount rate                                     -             -             -
Experience loss/(gain)                                    811       (25,245)       12,184
Net amortization and deferral                               -             -             -
Benefits paid                                         (25,985)      (28,258)      (22,800)
                                                    ---------     ---------     ---------
Benefit obligation at end of year                   $ 405,213     $ 387,693     $ 399,876
                                                    =========     =========     =========

Change in plan assets

Fair value of plan assets at beginning of year      $       -     $       -     $       -
Actual return on plan assets                                -             -             -
Employer contribution                                       -             -             -
Plan participants' contributions                       25,985        28,258        22,800
Experience (loss)/gain                                      -             -             -
Benefits paid                                         (25,985)      (28,258)      (22,800)
                                                    ---------     ---------     ---------
Fair value of plan assets at end of year            $       -     $       -     $       -
                                                    =========     =========     =========

Funded status                                       $(405,213)    $(387,693)    $(399,876)
Unrecognized net actuarial gain                       (85,761)      (89,860)      (66,277)
Unrecognized prior service benefit                          -             -             -
Unrecognized net obligation at transition             205,327       222,438       239,549
                                                    ---------     ---------     ---------
Prepaid (accrued) benefit cost                      $(285,647)    $(255,115)    $(226,604)
                                                    =========     =========     =========

Weighted-average assumptions as of december 31

Discount rate                                            7.25%         6.75%         7.00%
Expected return on plan assets                           7.00%         7.00%         7.00%
Rate of compensation increase                               -             -             -

Components of net periodic benefit cost

Service cost                                        $  16,883     $  16,119     $  14,916
Interest cost                                          25,811        25,201        24,152
Expected return on plan assets                         (3,288)       (1,662)       (2,820)
Net amortization and deferral                          17,111        17,111        17,111
Recognized net actuarial loss                               -             -             -
                                                    ---------     ---------     ---------
Net periodic benefit cost                           $  56,517     $  56,769     $  53,359
                                                    =========     =========     =========
</TABLE>

                                       41
<PAGE>

        Life          Life        Life
     Insurance     Insurance   Insurance
        Plan          Plan        Plan       Total       Total        Total
        2000          1999        1998       2000        1999         1998
        ----          ----        ----       ----        ----         ----

      $ 93,331      $ 93,697    $ 84,724   $ 481,024   $ 493,573   $ 456,148
         4,018         3,860       3,373      20,901      19,979      18,269
         6,506         6,048       5,648      32,317      31,249      29,800
             -             -           -           -           -           -
       (16,539)       (6,854)      3,898     (15,728)    (32,099)     16,082
             -             -           -           -           -           -
        (3,776)       (3,420)     (3,946)    (29,761)    (31,678)    (26,746)
      --------      --------    --------   ---------   ---------   ---------
      $ 83,540      $ 93,331    $ 93,697   $ 488,753   $ 481,024   $ 493,573
      ========      ========    ========   =========   =========   =========

      $      -      $      -    $      -   $       -   $       -   $       -
             -             -           -           -           -           -
             -             -           -           -           -           -
         3,776         3,420       3,946      29,761      31,678      26,746
             -             -           -           -           -           -
        (3,776)       (3,420)     (3,946)    (29,761)    (31,678)    (26,746)
      --------      --------    --------   ---------   ---------   ---------
      $      -      $      -    $      -   $       -   $       -   $       -
      ========      ========    ========   =========   =========   =========

      $(83,540)     $(93,331)   $(93,697)  $(488,753)  $(481,024)  $(493,573)
       (32,664)      (16,592)     (9,763)   (118,425)   (106,452)    (76,040)
             -             -           -           -           -           -
        46,012        49,847      53,682     251,339     272,285     293,231
       --------      --------    --------  ---------   ---------   ---------
      $(70,192)     $(60,076)   $(49,778)  $(355,839)  $(315,191)  $(276,382)
       ========      ========    ========  =========   =========   =========

          7.25%         6.75%       7.00%
          7.00%         7.00%       7.00%
          4.00%         4.00%       4.00%


      $  4,018      $  3,860    $  3,373   $  20,901   $  19,979   $  18,289
         6,506         6,048       5,648      32,317      31,249      29,800
          (467)          (25)       (354)     (3,755)     (1,687)     (3,174)
         3,835         3,835       3,835      20,946      20,946      20,946
             -             -           -           -           -           -
      --------      --------    --------   ---------   ---------   ---------
      $ 13,892      $ 13,718    $ 12,502   $  70,409   $  70,487   $  65,861
      ========      ========    ========   =========   =========   =========

                                       42
<PAGE>

     For measurement purposes, the maximum monthly benefit of $100 payable per
eligible retiree under the postretirement health care plan was assumed with no
future increases. Accordingly, an assumed 1 percentage point annual increase or
decrease in health care cost trend rates would not impact the health care plan's
accumulated postretirement benefit obligation at December 31, 2000 or the
aggregate of the service and interest cost components of the health care plan's
net postretirement benefit cost for the year ended December 31, 2000.

     Executive Supplemental Income Plan The liability accrued for the Executive
Supplemental Income Plan at December 31, 2000 and 1999 was $221,918 and
$197,838, respectively, which is included in other liabilities. In addition, the
Bank has purchased certain insurance contracts to fund the liabilities arising
under this plan. At December 31, 2000 and 1999, the cash surrender value of
these insurance contracts was $232,246 and $196,568, respectively. Expenses
associated with the Plan at December 31, 2000, 1999 and 1998 were $32,348,
$27,842 and $14,760, respectively.

Note 11.  Other Borrowings

     Short-Term Borrowings:  During 2000 and 1999, the Company's short-term
borrowings consisted of securities sold under agreements to repurchase
(repurchase agreements) and advances under a line of credit with the Federal
Home Loan Bank of Pittsburgh (FHLB). Interest is paid on the repurchase
agreements based on either fixed or variable rates as determined upon
origination. At December 31, 2000 and 1999, securities with an amortized cost of
$12,480,939 and $7,508,567, respectively, and estimated fair values of
$12,482,350 and $7,414,358, respectively, were pledged to secure the repurchase
agreements.

     As a member of the FHLB, the subsidiary bank has access to various lines of
credit under programs administered by the FHLB. Borrowings under these
arrangements bear interest at the interest rate posted by the FHLB on the day of
the borrowing and are subject to change daily. The lines of credit are secured
by a blanket lien on all unpledged and unencumbered assets.

     The following information is provided relative to these obligations:

<TABLE>
<CAPTION>
                                                                  2000                           1999
                                                      --------------------------      --------------------------
                                                       Repurchase       Line of       Repurchase        Line of
                                                       Agreement        Credit        Agreement         Credit
                                                      -----------    -----------      -----------    -----------
     <S>                                              <C>            <C>              <C>            <C>
     Amount outstanding at December 31                $ 9,040,699     $3,326,000      $7,156,961     $2,016,000

     Weighted average interest rate at December 31           5.71%          6.81%           5.14%          5.65%

     Maximum month-end amount outstanding             $10,370,965     $3,765,000      $9,185,993     $2,016,000

     Average daily amount outstanding                 $ 8,946,696     $  630,109      $5,693,136     $  231,112

     Weighted average interest rate for the year             5.46%          6.56%           5.00%          5.34%
</TABLE>

     Long-Term Borrowings:  The Company's long-term borrowings of $867,686 and
$942,645 at December 31, 2000 and 1999, respectively, consist of advances from
the FHLB which are used to finance specific lending activities. Interest is paid
at the rate of 5.66%

     A summary of the maturities of the Company's long-term borrowings for the
next five years is as follows:


                        Year                    Amount
                        ----                   --------
                        2001                   $ 80,162
                        2002                    486,093
                        2003                      5,719
                        2004                      6,011
                        2005                      6,319
                        2006 and thereafter     283,382
                                               --------

                                               $867,686
                                               ========

                                       43
<PAGE>

Note 12.  Commitments and Contingencies

  At December 31, 2000 and 1999, the subsidiary bank maintained required reserve
balances with the Federal Reserve Bank of Richmond approximating $940,000 and
$854,000, respectively. The Bank does not earn interest on such reserve
balances.

  Litigation:  The Company is involved in various legal actions arising in the
ordinary course of business.  In the opinion of counsel, the outcome of these
matters will not have a significant adverse effect on the Company.

  Financial Instruments With Off-Balance-Sheet Risk: The subsidiary bank is a
party to financial instruments with off-balance-sheet risk in the normal course
of business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit.
Those instruments involve, to varying degrees, elements of credit and interest
rate risk in excess of the amount recognized in the consolidated balance sheets.
The contract amounts of those instruments reflect the extent of involvement the
Bank has in particular classes of financial instruments.

                                                         Contract Amount
      Financial Instruments Whose Contract               ---------------
        amounts represent credit risk                  2000            1999
        -----------------------------               -----------     -----------
        Commitments to extend credit                $16,544,127     $12,252,622
        Standby letters of credit                       167,452         247,852
                                                    -----------     -----------

                                                    $16,711,579     $12,500,474
                                                    ===========     ===========

  The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
The Bank uses the same credit policies in making commitments and conditional
obligations as it does for on-balance sheet instruments.

  Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. The Bank evaluates each customer's credit worthiness
on a case-by-case basis. The amount of collateral obtained, if deemed necessary
by the Bank upon extension of credit, is based on management's credit
evaluation. Collateral held varies but may include accounts receivable,
inventory, equipment or real estate.

  Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support private borrowing arrangements. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans. These letters of credit are generally uncollateralized.

Note 13.  Shareholders' Equity and Restrictions on Dividends

  The primary source of funds for the dividends paid by Citizens Financial Corp.
is dividends received from its banking subsidiary, Citizens National Bank.
Dividends paid by the subsidiary bank are subject to restrictions by banking
regulations. The most restrictive provision requires approval by the Office of
the Comptroller of the Currency if dividends declared in any year exceed the
year's net income, as defined, plus the retained net profits of the two
preceding years. During 2001, the net retained profits available for
distribution to Citizens Financial Corp. as dividends without regulatory
approval approximate $1,033,193 plus net income of the subsidiary bank for the
interim periods through the date of declaration.

  The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings and other factors.

                                       44
<PAGE>

  Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to risk-
weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 2000, that the Bank
meets all capital adequacy requirements to which it is subject.

  The most recent notification from the Office of the Comptroller of the
Currency categorized the Bank as well capitalized under the regulatory framework
for prompt corrective action. To be categorized as well capitalized the Bank
must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage
ratios as set forth in the table below. There are no conditions or events since
that notification that management believes have changed the institution's
category.

  The Bank's actual capital amounts and ratios are presented in the following
table (in thousands).

<TABLE>
<CAPTION>
                                                                                       To Be Well Capitalized
                                                              For Capital              Under Prompt Corrective
                                    Actual                 Adequacy Purposes              Action Provisions
                            -------------------          ----------------------       ------------------------
                              Amount      Ratio           Amount          Ratio        Amount           Ratio
                            ---------    ------          --------        ------       -------         --------
<S>                         <C>          <C>             <C>             <C>          <C>             <C>
As of December 31,
  2000:
Total Capital                $18,351      17.25%           $8,508         8.00%        $10,635         10.00%
  (to Risk Weighted
  Assets)
Tier I Capital                17,200      16.17%            4,254         4.00%          6,381          6.00%
  (to Risk Weighted
  Assets)
Tier I Capital                17,200      11.46%            6,006         4.00%          9,009          6.00%
  (to Average Assets)

As of December 31,
  1999:
Total Capital                $17,486      19.10%           $7,525         8.00%         $9,157         10.00%
  (to Risk Weighted
  Assets)
Tier I Capital                16,475      17.99%            3,663         4.00%          5,464          6.00%
  (to Risk Weighted
  Assets)
Tier I Capital                16,475      11.82%            5,576         4.00%          8,364          6.00%
  (to Average Assets)
</TABLE>

NOTE 14.  Fair Value of Financial Instruments

  The following summarizes the methods and significant assumptions used by the
Company in estimating its fair value disclosures for financial instruments.

  Cash and due from banks:  The carrying values of cash and due from banks
approximate their estimated fair values.

  Federal funds sold:  The carrying values of federal funds sold approximate
their estimated fair values.

  Securities:  Estimated fair values of securities are based on quoted market
prices, where available. If quoted market prices are not available, estimated
fair values are based on quoted market prices of comparable securities.

  Loans:  The estimated fair values for loans are computed based on scheduled
future cash flows of principal and interest, discounted at interest rates
currently offered for loans with similar terms to borrowers of similar credit
quality. No prepayments of principal are assumed.

  Accrued interest receivable and payable:  The carrying values of accrued
interest receivable and payable approximate their estimated fair values.

                                       45
<PAGE>

  Deposits:  The estimated fair values of demand deposits (i.e. noninterest
bearing checking, NOW, Super NOW) money market, savings and other variable rate
deposits approximate their carrying values.  Fair values of fixed maturity
deposits are estimated using a discounted cash flow methodology at rates
currently offered for deposits with similar remaining maturities.  Any
intangible value of long-term relationships with depositors is not considered in
estimating the fair values disclosed.

  Short-term borrowings:  The carrying values of short-term borrowings
approximate their estimated fair values.

  Long-term borrowings:  The fair values of long-term borrowings are estimated
by discounting scheduled future payments of principal and interest at current
rates available on borrowings with similar terms.

  Off-balance-sheet instruments:  The fair values of commitments to extend
credit and standby letters of credit are estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining
terms of the agreements and the present credit standing of the counterparties.
The amounts of fees currently charged on commitments and standby letters of
credit are deemed insignificant, and therefore, the estimated fair values and
carrying values are not shown below.

  The carrying values and estimated fair values of the Company's financial
instruments are summarized below:

<TABLE>
<CAPTION>
                                             December 31, 2000           December 31, 1999
                                         --------------------------  --------------------------
                                                        Estimated                   Estimated
                                           Carrying        Fair        Carrying        Fair
                                            Value         Value         Value         Value
                                         ------------  ------------  ------------  ------------
  <S>                                    <C>           <C>           <C>           <C>
  Financial assets:
     Cash and due from banks             $  4,540,327  $  4,540,327  $  5,698,937  $  5,698,937
     Securities available for sale         42,337,429    42,337,429    41,561,821    41,561,821
     Loans                                101,032,931    96,780,225    85,664,538    80,742,640
     Accrued interest receivable            1,214,805     1,214,805     1,035,183     1,035,183
                                         ------------  ------------  ------------  ------------
                                         $149,125,492  $144,872,786  $133,960,479  $129,038,581
                                         ============  ============  ============  ============

  Financial liabilities:
     Deposits                            $121,518,871  $121,517,690  $110,232,313  $110,484,231
     Short-term borrowings                 12,366,699    12,366,699     9,172,961     9,172,961
     Long-term borrowings                     867,686       867,686       942,645       942,645
     Accrued interest payable                 400,399       400,399       350,502       350,502
                                         ------------  ------------  ------------  ------------
                                         $135,153,655  $135,152,474  $120,698,421  $120,950,339
                                         ============  ============  ============  ============
</TABLE>

Note 15.  Condensed Financial Statements of Parent Company

  Information relative to the Parent Company's balance sheets at December 31,
2000 and 1999, and the related statements of income and cash flows for the years
ended December 31, 2000, 1999 and 1998, are presented below.

<TABLE>
<CAPTION>
                                                                              December 31,
                                                                      -------------------------
                                                                          2000          1999
                                                                      -----------   -----------
     <S>                                                              <C>           <C>
     Balance sheets
     --------------
     Assets
     Cash                                                             $     6,265   $     3,724
     Investment in subsidiaries                                        17,383,907    15,950,568
                                                                      -----------   -----------

       Total assets                                                   $17,390,172   $15,954,292
                                                                      ===========   ===========
     Shareholders' equity
     Common stock, $2.00 par value, 2,250,000
       shares authorized, issued 750,000 shares                       $ 1,500,000   $ 1,500,000
     Additional paid-in capital                                         2,100,000     2,100,000
     Retained earnings                                                 15,830,556    14,722,747
     Accumulated other comprehensive income                               (15,817)     (524,873)
     Treasury stock at cost, 99,388 and
       94,168 shares, respectively                                     (2,024,567)   (1,843,582)
                                                                      -----------   -----------

       Total shareholders' equity                                     $17,390,172   $15,954,292
                                                                      ===========   ===========
</TABLE>


                                       46
<PAGE>

<TABLE>
<CAPTION>
                                                         For the Years Ended December 31,
                                                      --------------------------------------
Statements of Income                                     2000          1999          1998
---------------------                                 ----------   -----------   -----------
<S>                                                   <C>          <C>           <C>
Income - dividends from subsidiary bank               $  976,360   $   989,047   $ 1,244,881
Expenses - operating                                       4,300         4,400         4,894
                                                      ----------   -----------   -----------
Income before equity in undistributed
  income of subsidiary bank                              972,060       984,647     1,239,987
Equity in undistributed income of subsidiary bank        917,183       116,010       360,419
                                                      ----------   -----------   -----------
Net income
                                                      $1,889,243   $ 1,100,657   $ 1,600,406
                                                      ==========   ===========   ===========

                                                         For the Years Ended December 31,
                                                      --------------------------------------
Statements of Cash Flows                                 2000          1999          1998
------------------------                              ----------   -----------   -----------
Cash Flows from Operating Activities
Net income                                            $1,889,243   $ 1,100,657   $ 1,600,406
Adjustments to reconcile net income to net
  cash provided by operating activities:
Equity in undistributed income of subsidiary bank       (917,183)     (116,010)     (360,419)
                                                      ----------   -----------   -----------

Cash provided by operating activities                    972,060       984,647     1,239,987
                                                      ----------   -----------   -----------

Cash Flows from Investing Activities
Investment in insurance subsidiary                        (7,100)            -             -
                                                      ----------   -----------   -----------

Cash (used in) investing activities                       (7,100)            -             -
                                                      ----------   -----------   -----------

Cash flows from Financing Activities
Dividends paid to shareholders                          (781,434)     (723,211)     (662,078)
Acquisition of treasury stock                           (180,985)     (260,688)     (577,939)
                                                      ----------   -----------   -----------

Cash (used in) financing activities                     (962,419)     (983,899)   (1,240,017)
                                                      ----------   -----------   -----------

Increase (decrease) in cash                                2,541           748           (30)

Cash:
   Beginning                                               3,724         2,976         3,006
                                                      ----------   -----------   -----------

   Ending                                             $    6,265   $     3,724   $     2,976
                                                      ==========   ===========   ===========
</TABLE>

                                       47
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
Citizens Financial Corp.
  and Subsidiaries
Elkins, West Virginia

  We have audited the accompanying consolidated balance sheets of Citizens
Financial Corp. and its subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, comprehensive income, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Citizens
Financial Corp. and its subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000, in conformity with generally accepted
accounting principles.

                                            ARNETT & FOSTER, P.L.L.C.



Charleston, West Virginia
January 12, 2001

                                       48
<PAGE>

Item 9.  Changes in and Disagreements with Accountants on Accounting and
-------------------------------------------------------------------------
          Financial Disclosure
          --------------------

     No reportable items.


PART III
--------

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

     The number of directors of the Company may consist of not less than five
nor more than twenty-five persons in accordance with the Company's Articles of
Incorporation. The number of directors is fixed by resolution of a majority vote
of the shareholders. Currently, the number of directors of the Company is fixed
at nine. Directors are divided into three classes and serve a staggered three
year term. The following table sets forth the names of the persons who have
served as directors of Citizens Financial Corp. for the year ended December 31,
2000, as well as those appointed to serve in that capacity subsequent to
December 31, 2000, their ages and principal occupations, the length of their
service to Citizens Financial Corp. and the expiration of their present term.

<TABLE>
<CAPTION>
                         Principal
                         Occupation                                           Present
                         During Past                  Director                Term
Name and Age             Five Years                   Since (1)               Expires
------------             -----------                  ----------              -------
<S>                      <C>                          <C>                     <C>
Robert N. Alday          President,                   September, 1986         April, 2003
85                       Phil Williams
                         Coal Company

Max L. Armentrout        President, and               September, 1986         April, 2002
63                       Chairman of the Board
                         Laurel Lands Corp.;
                         Chairman of the
                         Board, Citizens
                         Financial Corp.

William J. Brown         President, Hess              February, 2000          April, 2001  (2)
54                       Oil Co., Inc.

Edward L. Campbell       Co-Owner,                    February, 2000          April, 2001  (2)
61                       Campbell's Market

Raymond L. Fair          Attorney-at-Law              September, 1986         April, 2002
73

John F. Harris           Retired,                     September, 1986         April, 2002
73                       Transportation
                         Industry; Senior
                         Vice President,
                         Citizens National Bank
</TABLE>

                                       49
<PAGE>

<TABLE>
<CAPTION>
                         Principal
                         Occupation                                           Present
                         During Past                  Director                Term
Name and Age             Five Years                   Since (1)               Expires
------------             -----------                  ---------               -------
<S>                      <C>                          <C>                     <C>
Cyrus K. Kump            President,                   June, 1992              April, 2003
54                       Kump Enterprises
                         Broker, Kerr
                         Real Estate

Robert J. Schoonover     President and                April, 1998             April, 2001 (2)
61                       Chief Executive
                         Officer, Citizens
                         Financial Corp.
                         and Citizens
                         National Bank

L. T. Williams           Consultant,                  September, 1986         April, 2002
70                       Elkins Builders
                         Supply
</TABLE>

(1)  All of the above named directors, with the exception of Mr. Alday, have
     also served as directors of Citizens National Bank for the past five years
     on a continuous basis. Mr. Alday has not served Citizens National Bank in
     any official capacity.

(2)  Messrs. Brown, Campbell and Schoonover have been nominated to stand for
     reelection to an additional 3 year term expiring in April, 2004.

     Set forth below are the executive officers of Citizens Financial Corp.,
their age, present position and relations that have existed with affiliates and
others during the past five years.

                                             Principal Occupation and
                         Present             Banking Experience During
Name and Age             Position            the Last Five Years
------------             --------            -------------------------

Max L. Armentrout        Chairman of         President and Chairman of
63                       the Board           the Board, Laurel Lands Corp.;
                                             Chairman of the Board,
                                             Citizens Financial Corp.

Robert J. Schoonover     President and       President and Chief Executive
61                       Chief Executive     Officer, Citizens National Bank
                         Officer

Raymond L. Fair          Vice President      Attorney-at-Law; Director,
73                       and Secretary       Citizens Financial Corp.

Thomas K. Derbyshire     Vice President      Vice President and Chief Financial
42                       and Treasurer       Officer, Citizens National Bank


                                       50
<PAGE>

Item 11.  Executive Compensation
--------------------------------

     The executive officers of Citizens Financial Corp. serve without
compensation from the Company.  They are, however, compensated by Citizens
National Bank for serving as Bank officers with the exception of Messrs.
Armentrout and Fair who are not employed by the Bank. The following table sets
forth the compensation of the Company's CEO for the years 2000, 1999 and 1998.
No executive officers received total annual salary and bonus exceeding $100,000.

                          SUMMARY COMPENSATION TABLE

                                                      Other Annual
        Name and                    Salary            Compensation
    Principal Position        Year    $      Bonus     $
--------------------------------------------------------------------

Robert J. Schoonover,         2000   88,144      -     16,981 (1) (2)
President & CEO (1)           1999   85,077      -     13,377 (1) (2)
                              1998   81,308      -     10,766 (1) (2)

(1)  The Bank's group life and health insurance program, which is paid for  by
     the Bank, is made available to all full-time employees and does not
     discriminate in favor of directors or officers; however, in accordance with
     IRS Code Section 79, the cost of group term life insurance coverage for an
     individual in excess of $50,000 is added to the individual's earnings and
     is included in this figure. Also included in this figure are board fees
     earned and the Company's contributions to the individuals 401(k) retirement
     savings program to which the individual has a vested interest.

(2)  The Bank's contributions to the pension plan, a defined benefit plan, are
     not and cannot be calculated separately for specific participants.  No
     contributions were made by the Bank in the years presented.  The Bank's
     executive supplemental income plan provides retirement benefits conditioned
     upon continued employment until retirement or the satisfaction of early
     retirement criteria.  Participants are deemed to receive no compensation
     until such conditions are satisfied.

     Neither the Company nor the Bank maintain any form of stock option, stock
appreciation rights, or other long-term compensation plans.  Directors of the
registrant are compensated for meetings attended in the amount of $100 per
meeting. Directors of the Bank receive $400 per meeting.  Under normal
circumstances, the Board of Citizens Financial Corp. meets quarterly while the
Citizens National Bank Board meets monthly. Directors who are members of the
Bank's loan committee, which meets weekly, receive $400 per month.  In addition,
the chairman of Citizens Financial Corp. receives $1,350 per month for service
in that capacity, while the vice-president receives $550. The senior vice-
president of the Bank receives $1,100 monthly for his services.  No employment
contracts or change in control arrangements exist  between any executive
officer and the registrant, or it's subsidiaries.

     Compensation of the bank's executive officers, including its president, is
determined by the personnel committee.  The committee is comprised of five
outside directors.  Compensation levels are determined after consideration is
given to net income objectives and cost of living factors.  This process is
consistent with that used to determine the compensation levels of all other
employees.  No specific criteria exist which relates executive compensation to
corporate performance and executives receive no preferential consideration in
the establishment of compensation.

                                       51
<PAGE>

Pension Benefits
----------------

     Citizens Financial Corp. and Citizens Financial Services, LLC, having no
employees, have no retirement program, but Citizens National Bank has a pension
program for its eligible employees.  This pension plan is a qualified retirement
plan and is available to all full-time employees, including officers, who meet
the eligibility requirements.  Directors do not participate in this plan.
Pensions for all participants are based on five-year average final compensation.
Annual compensation for the pension plan includes overtime pay and bonuses.
Credits are received for each year of participation at the following rates:  1
percent of the first $9,600.00 of the 5-year average final compensation and 1.5
percent of such average final compensation in excess of $9,600.00, all
multiplied by years of service up to a 25-year maximum.  The pension benefits
are payable to participants on a monthly basis in the form of a joint and 50
percent survivor annuity for all married participants who do not elect
otherwise, or in the form of a single life annuity for all other participants or
survivors.  Joint and 100 percent survivorship, single life annuity or 120
payments guaranteed are other optional forms of distribution.

     The following table represents the normal pension, beginning at age  sixty-
five, based upon assumed final pay and years of credited services:

                                   Annual Benefits
                     -------------------------------------------
                     15 yrs.          20 yrs.           25 yrs.
Assumed              Credited         Credited          Credited
Remuneration         Service          Service           Service
----------------------------------------------------------------
$ 20,000              $ 3,780          $ 5,040           $ 6,300
  40,000                8,280           11,040            13,800
  60,000               12,780           17,040            21,300
  80,000               17,280           23,040            28,800
 100,000               21,780           29,040            36,300
 120,000               26,280           35,040            43,800

     The estimated credited years of service for the executive officers of
Citizens Financial Corp. in the pension plan of Citizens National Bank are as
follows:

                            Years of Credited Service*
                            --------------------------

     Robert J. Schoonover               27
     Thomas K. Derbyshire                9

     * Max L. Armentrout and Raymond L. Fair are not participants in the pension
plan of Citizens National Bank.

401-(k) Plan
------------

     The Bank has established a 401-(k) plan for the benefit of all employees
who meet eligibility requirements.  A description of the Plan, the eligibility
requirements and the contributions made to the Plan by the Bank for the years
ended December 31, 2000, 1999 and 1998 may be found in Note 10 to the
Consolidated Financial Statements which begins on page 40 of this report.

Executive Supplemental Income Plan
----------------------------------

     The Bank has entered into a nonqualified supplemental income plan with
certain senior officers as described in Note 10 to the Consolidated Financial
Statements which

                                       52
<PAGE>

begins on page 40 of this report. A copy of the Plan, and the amendments
thereto, are incorporated herein by reference to the exhibits contained in the
Company's Forms 10-K dated December 31, 1997 and 1996.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

     The following table lists each shareholder who is the beneficial owner of
more than 5% of the Company's common stock, the only class of stock outstanding,
as of February 28, 2001.

Name and Address                 Amount and Nature of     Percent
of Beneficial Owner              Beneficial Ownership     of Class
-------------------              -------------------      --------

Cede & Co.                             165,410             25.29%
P. O. Box 20
Bowling Green Station
New York, NY  10004

     The following table sets forth the amount and percentage of stock of
Citizens Financial Corp. beneficially owned by each director and executive
officer of the Company, and by all directors and executive officers as a group,
as of February 28, 2001.


                          Shares of Stock Beneficially Owned
                          ----------------------------------      Percent of
Name                      Direct       Indirect       Total       Ownership
---------------------     ------       --------       -----       ---------

Robert N. Alday                500     20,200 (1)     20,700           3.18
Max L. Armentrout           23,740      4,000 (2)     27,740           4.26
William J. Brown               750        750 (3)      1,500            .23
Edward L. Campbell             500        150 (4)        650            .10
Raymond L. Fair              3,800      4,200 (5)      8,000           1.23
John F. Harris                 500      5,500 (6)      6,000            .92
Cyrus K. Kump                  500      1,750 (7)      2,250            .35
Robert J. Schoonover           500        100 (8)        600            .09
L. T. Williams               1,750          -          1,750            .27
Thomas K. Derbyshire            70          -             70            .01
Directors and
 executive officers of
 the Bank                    8,113      7,720         15,833 (9)       2.43
All Directors and
executive officers
as a group                  40,723     44,370         85,093          13.07

(1)  Mr. Alday's indirect ownership includes 6,800 shares owned by his wife and
     13,400 shares which he votes for the Phil Williams Coal Company.

(2)  These 4,000 shares are owned by Mr. Armentrout's wife.

(3)  Includes 250 shares owned jointly with his wife and 500 shares held in
     custody for their children.

(4)  Includes 100 shares owned jointly with his wife and 50 shares owned by his
     wife.

(5)  These 4,200 shares are owned by Mr. Fair's wife.

                                       53
<PAGE>

(6)  These 5,500 shares are owned jointly with his wife.

(7)  Includes 1,000 shares owned by his wife and 750 shares held in custody for
     their children.

(8)  These 100 shares are owned jointly with his wife.

(9)  This figure represents the ownership of persons who are directors or
     officers of the subsidiary bank but not of the Company. Such persons number
     eleven.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

     Management personnel of Citizens Financial Corp. have had and expect to
continue to have banking transactions with Citizens National Bank in the
ordinary course of business. Extensions of credit to such persons are made in
the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons.  It is the opinion of management that these
transactions do not involve more than a normal risk of collectibility or present
other unfavorable features.

     During the year 2000, the highest aggregate indebtedness of all executive
officers and directors of the holding company, its subsidiaries, and their
related interest was $6,370,000 or 36.6 percent of the equity capital of
Citizens Financial Corp.  As of December 31, 2000, outstanding loan balances to
related parties totaled $6,142,000 or 35.3 percent of equity capital with
unused lines of credit of $1,193,000 or 6.9 percent of the equity capital of
Citizens Financial Corp. outstanding to these parties.

     Other than loans originated in the normal course of business by the Bank,
none of the directors, executive officers, 5 percent or more beneficial
stockholders or their immediate family members have an interest or are involved
in any transactions with Citizens Financial Corp. or Citizens National Bank in
which the amount involved exceeds $60,000, or was not subject to the usual terms
or conditions, or was not determined by competitive bids.  Information related
to loans granted to related parties in excess of $60,000 is contained in Note 5
to the Consolidated Financial Statements, which begins on page 35 of this
report.  Similarly, no director, executive officer or 5 percent or more
beneficial stockholder has an equity interest in excess of 10 percent in a
business or professional entity that has made payments to or received payments
from Citizens Financial Corp. or Citizens National Bank in 2000 which exceeds 5
percent of either party's gross revenue.

                                       54
<PAGE>

Part IV
-------

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------------------------------------------------------------------------

(a)  (1) and (2) Financial Statements and Financial Statement Schedules.
     All financial statements and financial statement schedules required to be
     filed by Item 8 of this Form or by Regulation S-X which are applicable to
     the registrant have been presented in the financial statements, notes
     thereto, in management's discussion and analysis of financial condition and
     results of operations or elsewhere where appropriate. (3) Listing of
     Exhibits - see Index to Exhibits on page 55.

(b)  Reports on Form 8-K - No reports on Form 8-K were filed during the fourth
     quarter of 2000.

(c)  Exhibits - see index to Exhibits on page 55 of this Form 10-K.

(d)  Consolidated Financial  Statement Schedules - All other schedules for which
     provision is made in the applicable accounting regulation of the Securities
     and Exchange Commission are not required under the related instructions or
     are inapplicable or pertain to items as to which the required disclosures
     have been made elsewhere in the financial statements and notes thereto, and
     therefore have been omitted.


Item 14(c)  Index to Exhibits
-----------------------------

<TABLE>
<CAPTION>
                                                        S-K 601          Sequential
Description                                         Table Reference      Page Number
-----------                                         ---------------      -----------
<S>                                                 <C>                  <C>
Plan of acquisition, reorganization,
 arrangement, liquidation or succession                     2               N/A
Articles or incorporation and bylaws:                       3               N/A
 (a) Articles of Incorporation                                              (e)
 (b) Bylaws                                                                 (d)
Instruments defining the rights of security
  holders including indentures                              4               N/A
Voting trust agreements                                     9               N/A
Material contracts                                         10               (c)
Statement Re: Computation of per
 share earnings                                            11               (a)
Statements Re: Computation of ratios                       12               (a)
Letter re: change in certifying accountant                 16               N/A
Letter re: change in accounting principles                 18               N/A
Subsidiaries of the registrant                             21               59
Published report regarding matters submitted
 to vote of security holders                               22              60,61
Consents of experts and counsel                            23               62
Power of attorney                                          24               N/A
Financial data schedules                                   27              63-65
Additional exhibits                                        99               (b)
</TABLE>

(a)  The computation of minimum standard capital ratios, which are shown on page
     45 of this filing, was done as specified in applicable regulatory
     guidelines. All other ratios presented may be clearly determined from the
     material contained in this filing.

(b)  List of permitted nonbanking activities previously filed on pages 47-49 of
     Form S-4 Registration Statement of Citizens Financial Corp., SEC File No.
     33-11423, dated February 19, 1987 is incorporated by reference into this
     filing.

                                       55
<PAGE>

(c)  The Bank's Executive Supplemental Income Agreement as previously filed on
     pages 74 -80 of its Form 10-K dated December 31, 1995 and thereafter
     amended and filed on page 62 of the Company's Form 10-K dated December 31,
     1996, is incorporated by reference into this filing. Also incorporated by
     reference in the Company's Purchase and Assumption Agreement with South
     Branch Valley National Bank for the purchase of its banking facilities,
     assets and liabilities located in Petersburg, West Virginia dated December
     17, 1999 and filed on pages 71-113 of the Company's Form 10-K dated
     December 31, 1999.

(d)  The Company's Bylaws, which were previously filed on pages 64-71 of its
     Form 10-K dated December 31, 1998, are incorporated by reference into this
     filing.

(e)  The Company's Articles of Incorporation, which were previously filed on
     pages 66-70 of its Form 10-K dated December 31, 1999, are incorporated by
     reference into this filing.

                                       56
<PAGE>

                                   Signatures

     Pursuant to the requirements of Section 15(d) of the Securities  Exchange
Act of 1934, the registrant has duly  caused this  report to be  signed on its
behalf by the undersigned, thereunto duly authorized.

                                   Citizens Financial Corp.


                                 By  /s/ Robert J. Schoonover
                                   -----------------------------------------
                                    Robert J. Schoonover
                                    President and Chief Executive Officer

                                 By  /s/ Thomas K. Derbyshire
                                   -----------------------------------------
                                    Thomas K. Derbyshire
                                    Treasurer and Principal Financial Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

      Signature                    Title                          Date
      ---------                    -----                          ----

 /s/ Max L. Armentrout            Chairman of the Board           3/14/01
--------------------------                                        -------
     Max L. Armentrout            and Director


__________________________        Director                        _______
     Robert N. Alday


__________________________        Director                        _______
     William J. Brown


 /s/ Edward L. Campbell           Director                        3/14/01
--------------------------                                        -------
     Edward L. Campbell


 /s/ Raymond L. Fair              Director                        3/14/01
--------------------------                                        -------
     Raymond L. Fair


 /s/ John F. Harris               Director                        3/14/01
--------------------------                                        -------
     John F. Harris


 /s/ Cyrus K. Kump                Director                        3/14/01
--------------------------                                        -------
     Cyrus K. Kump


 /s/ Robert J. Schoonover         Director                        3/14/01
--------------------------                                        -------
     Robert J. Schoonover


 /s/ L. T. Williams               Director                        3/14/01
-------------------------                                         -------
     L. T. Williams

                                       57
<PAGE>

    SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
 SECTION 15 (D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
                       PURSUANT TO SECTION 12 OF THE ACT
                       ---------------------------------

The entire annual report and proxy materials mailed to the Company's
stockholders has been furnished to the Commission for its information under
separate cover, in paper format, concurrent with submission to stockholders on
March 16, 2001.

                                       58