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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period ended June 30, 2005



Commission file
number 2-96144



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CITIZENS FINANCIAL CORP.

(Exact name
of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 55-0666598                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



213 Third Street,
Elkins, West Virginia 26241

(Address of principal executive offices) (Zip Code)



(304) 636-4095

(Registrants telephone number, including area code)



Not Applicable

(Former name, former
address and former fiscal year, if changed since last report.)



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                            |  |                             
|--------------------------- |  | ----------------------------
|Class                       |  | Outstanding at July 29, 2005
|Common Stock ($2 par value) |  | 620,813                     



This report contains 29
pages.



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##### Table of Contents

FORM 10-Q

CITIZENS FINANCIAL CORP.

Quarter Ended June 30, 2005



INDEX



|         |  |                                                                                                                                                   |  |         
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|         |  |                                                                                                                                                   |  | Page No.
|Part I.  |  | Financial Information                                                                                                                             |  |         
|         |  |                                                                                                                                                  
|         |  | Item 1. Financial Statements                                                                                                                      |  |         
|         |  |                                                                                                                                                  
|         |  | Condensed Consolidated Balance SheetsJune 30, 2005 and December 31, 2004                                                                          |  | 3       
|         |  |                                                                                                                                                  
|         |  | Condensed Consolidated Statements of IncomeThree Months Ended June 30, 2005 and June 30, 2004 andSix Months Ended June 30, 2005 and June 30, 2004 |  | 4       
|         |  |                                                                                                                                                  
|         |  | Statements of Comprehensive Income/LossThree Months Ended June 30, 2005 and June 30, 2004 andSix Months Ended June 30, 2005 and June 30, 2004     |  | 5       
|         |  |                                                                                                                                                  
|         |  | Condensed Consolidated Statements of Changes in Shareholders EquitySix Months Ended June 30, 2005 and June 30, 2004                              |  | 6       
|         |  |                                                                                                                                                  
|         |  | Condensed Consolidated Statements of Cash FlowsSix Months Ended June 30, 2005 and June 30, 2004                                                   |  | 7       
|         |  |                                                                                                                                                  
|         |  | Notes to Condensed Consolidated Financial Statements                                                                                              |  | 8-14    
|         |  |                                                                                                                                                  
|         |  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                                                     |  | 15-22   
|         |  |                                                                                                                                                  
|         |  | Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                                                |  | 22      
|         |  |                                                                                                                                                  
|         |  | Item 4. Controls and Procedures                                                                                                                   |  | 22-23   
|         |  |                                                                                                                                                  
|Part II. |  | Other Information and Index to Exhibits                                                                                                           |  |         
|         |  |                                                                                                                                                  
|         |  | Items 1 through 6                                                                                                                                 |  | 23-24   
|         |  |                                                                                                                                                  
|         |  | Signatures                                                                                                                                        |  | 25      
|         |  |                                                                                                                                                  
|         |  | Certification by Executive Officers Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002                                            |  |         



2



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##### Table of Contents

PART I ITEM I - FINANCIAL INFORMATION

CITIZENS FINANCIAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)



|                                                                                  |  |              |         |   |               |   |         |  
|--------------------------------------------------------------------------------- |  | ------------ | ------- | - | ------------- | - | ------- | -
|                                                                                  |  | June 30,2005 |         |   | Dec. 31, 2004 |  
|                                                                                  |  | (Unaudited)  |         |   | *             |  
|ASSETS                                                                            |  |              |         |   |               |   |         |  
|                                                                                  |  |             
|Cash and due from banks                                                           |  | $            | 4,981   |   |               | $ | 5,476   |  
|Federal funds sold                                                                |  |              | 2,594   |   |               |   |        |  
|Securities available for sale                                                     |  |              | 59,674  |   |               |   | 53,038  |  
|Loans, less allowance for loan losses of $1,542 and $1,378, respectively          |  |              | 147,705 |   |               |   | 145,423 |  
|Premises and equipment                                                            |  |              | 4,186   |   |               |   | 4,224   |  
|Accrued interest receivable                                                       |  |              | 1,143   |   |               |   | 1,118   |  
|Other assets                                                                      |  |              | 4,469   |   |               |   | 4,504   |  
|                                                                                  |  |              |         |   |               |   |         |  
|Total Assets                                                                      |  | $            | 224,752 |   |               | $ | 213,783 |  
|                                                                                  |  |              |         |   |               |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                              |  |              |         |   |               |   |         |  
|                                                                                  |  |             
|Deposits:                                                                         |  |              |         |   |               |   |         |  
|Noninterest bearing                                                               |  | $            | 22,703  |   |               | $ | 23,462  |  
|Interest bearing                                                                  |  |              | 155,150 |   |               |   | 141,839 |  
|                                                                                  |  |              |         |   |               |   |         |  
|Total deposits                                                                    |  |              | 177,853 |   |               |   | 165,301 |  
|Short-term borrowings                                                             |  |              | 18,535  |   |               |   | 22,510  |  
|Long-term borrowings                                                              |  |              | 6,339   |   |               |   | 4,146   |  
|Other liabilities                                                                 |  |              | 1,757   |   |               |   | 1,603   |  
|                                                                                  |  |              |         |   |               |   |         |  
|Total liabilities                                                                 |  |              | 204,484 |   |               |   | 193,560 |  
|                                                                                  |  |              |         |   |               |   |         |  
|Commitments and contingencies                                                     |  |              |         |   |               |   |         |  
|                                                                                  |  |             
|SHAREHOLDERS EQUITY                                                              |  |              |         |   |               |   |         |  
|                                                                                  |  |             
|Common stock, $2.00 par value, authorized 2,250,000 shares, issued 750,000 shares |  |              | 1,500   |   |               |   | 1,500   |  
|Additional paid in capital                                                        |  |              | 2,100   |   |               |   | 2,100   |  
|Retained earnings                                                                 |  |              | 20,090  |   |               |   | 19,650  |  
|Accumulated other comprehensive income/loss                                       |  |              | (189    | ) |               |   | 58      |  
|Treasury stock at cost, 129,187 and 126,087 shares, respectively                  |  |              | (3,233  | ) |               |   | (3,085  | )
|                                                                                  |  |              |         |   |               |   |         |  
|Total shareholders equity                                                        |  |              | 20,268  |   |               |   | 20,223  |  
|                                                                                  |  |              |         |   |               |   |         |  
|Total Liabilities and Shareholders Equity                                        |  | $            | 224,752 |   |               | $ | 213,783 |  
|                                                                                  |  |              |         |   |               |   |         |  

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|* | From audited financial statements.
|- | ----------------------------------



The accompanying notes are an integral part of these financial statements.



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##### Table of Contents

CITIZENS FINANCIAL CORP.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands of dollars, except per share data)



|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|--------------------------------------------------- |  | -------------------------- | ------- | ------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                                                    |  | Three Months EndedJune 30, |         | Six Months Ended June 30,
|                                                    |  | 2005                       |         | 2004                      |   | 2005    |  | 2004
|                                                    |  | (Unaudited)                |         | (Unaudited)              
|INTEREST INCOME                                     |  |                            |         |                           |   |         |  |      |         |  |   |        
|                                                    |  |                            |         |                          
|Interest and fees on loans                          |  | $                          | 2,595   |                           | $ | 2,311   |  | $    | 5,060   |  | $ | 4,605  
|Interest and dividends on securities:               |  |                            |         |                           |   |         |  |      |         |  |   |        
|Taxable                                             |  |                            | 409     |                           |   | 415     |  |      | 801     |  |   | 875    
|Tax-exempt                                          |  |                            | 81      |                           |   | 83      |  |      | 163     |  |   | 165    
|Interest on federal funds sold                      |  |                            | 15      |                           |   | 1       |  |      | 41      |  |   | 6      
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Total interest income                               |  |                            | 3,100   |                           |   | 2,810   |  |      | 6,065   |  |   | 5,651  
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|INTEREST EXPENSE                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|                                                    |  |                            |         |                          
|Interest on deposits                                |  |                            | 788     |                           |   | 650     |  |      | 1,479   |  |   | 1,297  
|Interest on short-term borrowings                   |  |                            | 106     |                           |   | 70      |  |      | 196     |  |   | 131    
|Interest on long-term borrowings                    |  |                            | 46      |                           |   | 33      |  |      | 71      |  |   | 56     
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Total interest expense                              |  |                            | 940     |                           |   | 753     |  |      | 1,746   |  |   | 1,484  
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Net interest income                                 |  |                            | 2,160   |                           |   | 2,057   |  |      | 4,319   |  |   | 4,167  
|Provision for loan losses                           |  |                            | 103     |                           |   | 595     |  |      | 206     |  |   | 685    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Net interest income after provision for loan losses |  |                            | 2,057   |                           |   | 1,462   |  |      | 4,113   |  |   | 3,482  
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|NONINTEREST INCOME                                  |  |                            |         |                           |   |         |  |      |         |  |   |        
|                                                    |  |                            |         |                          
|Trust department income                             |  |                            | 42      |                           |   | 38      |  |      | 93      |  |   | 71     
|Brokerage fees                                      |  |                            | 14      |                           |   | 16      |  |      | 36      |  |   | 30     
|Service fees                                        |  |                            | 190     |                           |   | 186     |  |      | 361     |  |   | 351    
|Insurance commissions                               |  |                            | 9       |                           |   | 9       |  |      | 10      |  |   | 14     
|Security gains/(losses)                             |  |                            | 0       |                           |   | 0       |  |      | 0       |  |   | 19     
|Secondary market loan fees                          |  |                            | 44      |                           |   | 19      |  |      | 58      |  |   | 28     
|Other                                               |  |                            | 56      |                           |   | 70      |  |      | 120     |  |   | 132    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Total noninterest income                            |  |                            | 355     |                           |   | 338     |  |      | 678     |  |   | 645    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|NONINTEREST EXPENSE                                 |  |                            |         |                           |   |         |  |      |         |  |   |        
|                                                    |  |                            |         |                          
|Salaries and employee benefits                      |  |                            | 876     |                           |   | 895     |  |      | 1,844   |  |   | 1,766  
|Net occupancy expense                               |  |                            | 101     |                           |   | 63      |  |      | 186     |  |   | 128    
|Equipment rentals, depreciation and maintenance     |  |                            | 120     |                           |   | 111     |  |      | 238     |  |   | 224    
|Data processing                                     |  |                            | 146     |                           |   | 135     |  |      | 312     |  |   | 270    
|Director fees                                       |  |                            | 62      |                           |   | 56      |  |      | 118     |  |   | 113    
|Postage                                             |  |                            | 41      |                           |   | 31      |  |      | 85      |  |   | 82     
|Professional service fees                           |  |                            | 85      |                           |   | 33      |  |      | 144     |  |   | 78     
|Stationery                                          |  |                            | 39      |                           |   | 45      |  |      | 79      |  |   | 82     
|Software expense                                    |  |                            | 58      |                           |   | 32      |  |      | 124     |  |   | 57     
|Other                                               |  |                            | 259     |                           |   | 224     |  |      | 488     |  |   | 449    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Total noninterest expense                           |  |                            | 1,787   |                           |   | 1,625   |  |      | 3,618   |  |   | 3,249  
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Income before income taxes                          |  |                            | 625     |                           |   | 175     |  |      | 1,173   |  |   | 878    
|Income tax expense                                  |  |                            | 187     |                           |   | 22      |  |      | 360     |  |   | 191    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Net income                                          |  | $                          | 438     |                           | $ | 153     |  | $    | 813     |  | $ | 687    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Basic and fully diluted earnings per common share   |  | $                          | .70     |                           | $ | .24     |  | $    | 1.31    |  | $ | 1.09   
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        
|Weighted average shares outstanding                 |  |                            | 621,665 |                           |   | 631,378 |  |      | 622,783 |  |   | 631,378
|                                                    |  |                            |         |                          
|Dividends per common share                          |  | $                          | .30     |                           | $ | .30     |  | $    | .60     |  | $ | .60    
|                                                    |  |                            |         |                           |   |         |  |      |         |  |   |        



The accompanying notes are an integral
part of these financial statements.



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##### Table of Contents

CITIZENS FINANCIAL CORP.

STATEMENTS OF COMPREHENSIVE INCOME/LOSS

(In thousands of dollars)



|                                                                            |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  
|--------------------------------------------------------------------------- |  | ------------------------- | ------ | - | ----------------------- | - | ------ | ---- |  | - | ---- | - |  | - | ------ | -
|                                                                            |  | Three Months EndedJune 30 |        |   | Six Months EndedJune 30 |  
|                                                                            |  | 2005                      |        |   | 2004                    |   |        | 2005 |  |   | 2004 |  
|                                                                            |  | (Unaudited)               |        |   | (Unaudited)             |  
|Net income                                                                  |  | $                         | 438    |   |                         | $ | 153    |      |  | $ | 813  |   |  | $ | 687    |  
|Other comprehensive income:                                                 |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  
|Gross unrealized gains/(losses) arising during the period                   |  |                           | (1,094 | ) |                         |   | (1,354 | )    |  |   | (398 | ) |  |   | (1,128 | )
|Adjustment for income tax (expense)/benefit                                 |  |                           | 415    |   |                         |   | 538    |      |  |   | 151  |   |  |   | 428    |  
|                                                                            |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  
|                                                                            |  |                           | (679   | ) |                         |   | (816   | )    |  |   | (247 | ) |  |   | (700   | )
|Less: Reclassification adjustment for (gains)/losses included in net income |  |                           | 0      |   |                         |   | 0      |      |  |   | 0    |   |  |   | (19    | )
|Adjustment for income tax expense/(benefit)                                 |  |                           | 0      |   |                         |   | 0      |      |  |   | 0    |   |  |   | 7      |  
|                                                                            |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  
|                                                                            |  |                           | 0      |   |                         |   | 0      |      |  |   | 0    |   |  |   | (12    | )
|Other comprehensive income, net of tax                                      |  |                           | (679   | ) |                         |   | (816   | )    |  |   | (247 | ) |  |   | (688   | )
|                                                                            |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  
|Comprehensive income/(loss)                                                 |  | $                         | (241   | ) |                         | $ | (663   | )    |  | $ | 566  |   |  | $ | (1     | )
|                                                                            |  |                           |        |   |                         |   |        |      |  |   |      |   |  |   |        |  



The accompanying notes are an integral
part of these financial statements.



5



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##### Table of Contents

CITIZENS FINANCIAL CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(In thousands of dollars)



|                                                 |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   |        |   |  |   |        |  
|------------------------------------------------ |  | --------------------------------------- |  | ------------------------ | ------------------------- | ---------------- | - | ----- | ----------------------------------- | - | ------ | ------------- |  | - | ---- | - |  | - | ------ | - |  | - | ------ | -
|                                                 |  | Six Months Ended June 30, 2005 and 2004 |  |                          | TotalShare-holdersEquity |                 
|                                                 |  | (unaudited)                             |  |                         
|                                                 |  | Common Stock                            |  | AdditionalPaid-inCapital |                           | RetainedEarnings |   |       | AccumulatedOtherComprehensiveIncome |   |        | TreasuryStock |  |  
|                                                 |  | Shares                                  |  | Amount                   |                           |                  |   |       |                                    
|Balance, January 1, 2004                         |  | 750,000                                 |  | $                        | 1,500                     |                  | $ | 2,100 |                                     | $ | 18,966 |               |  | $ | 675  |   |  | $ | (2,762 | ) |  | $ | 20,479 |  
|Net income                                       |  |                                         |  |                          |                           |                  |   |       |                                     |   | 687    |               |  |   |      |   |  |   |        |   |  |   | 687    |  
|Net change in unrealized gain/loss on securities |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   | (688 | ) |  |   |        |   |  |   | (688   | )
|Cash dividends declared ($.60 per share)         |  |                                         |  |                          |                           |                  |   |       |                                     |   | (379   | )             |  |   |      |   |  |   |        |   |  |   | (379   | )
|                                                 |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   |        |   |  |   |        |  
|Balance June 30, 2004                            |  | 750,000                                 |  | $                        | 1,500                     |                  | $ | 2,100 |                                     | $ | 19,274 |               |  | $ | (13  | ) |  | $ | (2,762 | ) |  | $ | 20,099 |  
|                                                 |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   |        |   |  |   |        |  
|Balance, January 1, 2005                         |  | 750,000                                 |  | $                        | 1,500                     |                  | $ | 2,100 |                                     | $ | 19,650 |               |  | $ | 58   |   |  | $ | (3,085 | ) |  | $ | 20,223 |  
|Net income                                       |  |                                         |  |                          |                           |                  |   |       |                                     |   | 813    |               |  |   |      |   |  |   |        |   |  |   | 813    |  
|Net change in unrealized gain/loss on securities |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   | (247 | ) |  |   |        |   |  |   | (247   | )
|Cash dividends declared ($.60 per share)         |  |                                         |  |                          |                           |                  |   |       |                                     |   | (373   | )             |  |   |      |   |  |   |        |   |  |   | (373   | )
|Purchase of treasury stock                       |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   | (148   | ) |  |   | (148   | )
|                                                 |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   |        |   |  |   |        |  
|Balance June 30, 2005                            |  | 750,000                                 |  | $                        | 1,500                     |                  | $ | 2,100 |                                     | $ | 20,090 |               |  | $ | (189 | ) |  | $ | (3,233 | ) |  | $ | 20,268 |  
|                                                 |  |                                         |  |                          |                           |                  |   |       |                                     |   |        |               |  |   |      |   |  |   |        |   |  |   |        |  



The accompanying notes are an integral
part of these financial statements.



6



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##### Table of Contents

CITIZENS FINANCIAL CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)



|                                                                              |  |                           |         |   |      |   |        |  
|----------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------ | -
|                                                                              |  | Six Months Ended June 30, |        
|                                                                              |  | 2005                      |         |   | 2004 |  
|                                                                              |  | (Unaudited)               |        
|Cash flows from operating activities:                                         |  |                           |         |   |      |   |        |  
|Net Income                                                                    |  | $                         | 813     |   |      | $ | 687    |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                           |         |   |      |   |        |  
|Provision for loan losses                                                     |  |                           | 206     |   |      |   | 685    |  
|Depreciation and amortization                                                 |  |                           | 204     |   |      |   | 188    |  
|Amortization and (accretion) on securities                                    |  |                           | 123     |   |      |   | 151    |  
|Loss on disposal of equipment                                                 |  |                           | 1       |   |      |   | 3      |  
|(Gain)on sale of securities                                                   |  |                           | 0       |   |      |   | (19    | )
|(Gain) on sale of OREO                                                        |  |                           | 0       |   |      |   | (4     | )
|(Increase)/decrease in accrued interest receivable                            |  |                           | (24     | ) |      |   | 27     |  
|(Increase)/decrease in other assets                                           |  |                           | 29      |   |      |   | (289   | )
|Increase in other liabilities                                                 |  |                           | 305     |   |      |   | 347    |  
|                                                                              |  |                           |         |   |      |   |        |  
|Cash provided by operating activities                                         |  |                           | 1,657   |   |      |   | 1,776  |  
|                                                                              |  |                           |         |   |      |   |        |  
|Cash flows from investing activities:                                         |  |                           |         |   |      |   |        |  
|Principal payments, available for sale securities                             |  |                           | 1,105   |   |      |   | 1,705  |  
|Proceeds from sales of available for sale securities                          |  |                           | 440     |   |      |   | 1,041  |  
|Proceeds from maturities and calls, available for sale securities             |  |                           | 4,576   |   |      |   | 7,810  |  
|Purchases of available for sale securities                                    |  |                           | (12,442 | ) |      |   | (6,403 | )
|Purchases of premises and equipment                                           |  |                           | (161    | ) |      |   | (812   | )
|(Increase) in loans                                                           |  |                           | (3,325  | ) |      |   | (7,488 | )
|Purchase of real estate                                                       |  |                           | 0       |   |      |   | (105   | )
|Proceeds from sale of other real estate owned                                 |  |                           | 0       |   |      |   | 75     |  
|                                                                              |  |                           |         |   |      |   |        |  
|Cash used in investing activities                                             |  |                           | (9,807  | ) |      |   | (4,177 | )
|                                                                              |  |                           |         |   |      |   |        |  
|Cash flows from financing activities:                                         |  |                           |         |   |      |   |        |  
|Cash dividends paid                                                           |  |                           | (373    | ) |      |   | (379   | )
|Acquisition of treasury stock                                                 |  |                           | (148    | ) |      |   | 0      |  
|(Decrease) in short-term borrowing                                            |  |                           | (3,975  | ) |      |   | (4,654 | )
|Acquisition of long-term borrowing                                            |  |                           | 3,500   |   |      |   | 3,100  |  
|Repayment of long-term borrowing                                              |  |                           | (1,307  | ) |      |   | (1,003 | )
|Increase in time deposits                                                     |  |                           | 7,876   |   |      |   | 1,069  |  
|Increase in other deposits                                                    |  |                           | 4,676   |   |      |   | 3,667  |  
|                                                                              |  |                           |         |   |      |   |        |  
|Cash provided by financing activities                                         |  |                           | 10,249  |   |      |   | 1,800  |  
|                                                                              |  |                           |         |   |      |   |        |  
|Net increase/(decrease) in cash and cash equivalents                          |  |                           | 2,099   |   |      |   | (601   | )
|Cash and cash equivalents at beginning of period                              |  |                           | 5,476   |   |      |   | 5,952  |  
|                                                                              |  |                           |         |   |      |   |        |  
|Cash and cash equivalents at end of period                                    |  | $                         | 7,575   |   |      | $ | 5,351  |  
|                                                                              |  |                           |         |   |      |   |        |  
|Supplemental disclosure of cash flow information:                             |  |                           |         |   |      |   |        |  
|Cash paid during the period for:                                              |  |                           |         |   |      |   |        |  
|Interest                                                                      |  | $                         | 1,686   |   |      | $ | 1,504  |  
|Income taxes                                                                  |  | $                         | 347     |   |      | $ | 314    |  
|Supplemental Schedule of Noncash Investing and Financing Activities:          |  |                           |         |   |      |   |        |  
|Other real estate and other assets acquired in settlement of loans            |  | $                         | 170     |   |      | $ | 83     |  



The accompanying notes are an integral
part of these financial statements.



7



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##### Table of Contents

CITIZENS FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - BASIS OF PRESENTATION



The accounting and reporting policies of Citizens Financial Corp. and
Subsidiary (Citizens, the company or we) conform to accounting principles generally accepted in the United States of America and to general policies within the financial services industry. The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates.



The condensed consolidated statements contained herein include the accounts
of Citizens Financial Corp. and its wholly-owned subsidiary Citizens National Bank (the bank). All significant intercompany balances and transactions have been eliminated. The information contained in the financial statements is
unaudited except where indicated. In the opinion of management, all adjustments for a fair presentation of the results of the interim periods have been made. All such adjustments were of a normal, recurring nature. The results of operations for the
six months ended June 30, 2005 are not necessarily indicative of the results to be expected for the full year. The financial statements and notes included herein should be read in conjunction with those included in Citizens 2004 Annual Report
to Shareholders and Form 10-K.



NOTE 2 - SIGNIFICANT NEW ACCOUNTING
PRONOUNCEMENTS



In May 2005, the Financial Accounting
Standards Board (FASB) issued Statement No. 154, (SFAS No. 154) Accounting Changes and Error Corrections - A Replacement of APB Opinion No. 20 and FASB Statement No. 3. The new standard changes the requirements
for the accounting for and reporting of a change in accounting principle. Among other changes, SFAS No. 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on
the new accounting principle, unless it is impracticable to do so. SFAS No. 154 also provides that (1) a change in method of depreciating or amortizing a long-lived nonfinancial asset be accounted for as a change in estimate (prospectively) that was
effected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a restatement.  The new standard is effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2005. The Corporation does not anticipate this revision will have a material effect on its financial statements.



On December 16, 2004, FASB issued Statement No. 123R (revised 2004), Share-Based Payment, (FAS 123R) that addresses the accounting for
share-based payment transactions in which a company receives employee services in exchange for either equity instruments of the company or liabilities that are based on the fair value of the companys equity instruments or that may be settled
by the issuance of such equity instruments. FAS 123R eliminates the ability to account for share-based compensation transactions using the intrinsic method and requires that such transactions be accounted for using



8



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##### Table of Contents

a fair-value-based method and recognized as expense in the consolidated statement of income. The effective date of FAS 123R (as amended by the SEC) is for
annual periods beginning after June 15, 2005. The provisions of FAS 123R do not have an impact on the Corporations results of operations at the present time.



In March 2005, the SEC issued Staff Accounting Bulleting No. 107 (SAB 107). SAB 107 expresses the views of the SEC staff
regarding the interaction of FAS 123R and certain SEC rules and regulations and provides the SEC staffs view regarding the valuation of share-based payment arrangements for public companies. SAB 107 does not impact the Corporations
results of operations at the present time.



In November 2004, the Emerging
Issues Task Force (EITF) published Issue 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. The Task Force discussed the meaning of other-than-temporary impairment and its
application to certain investments carried at cost. The Task Force requested that the FASB staff consider other impairment models within U.S. Generally Accepted Accounting Principles (GAAP) when developing its views. The Task Force also
requested that the scope of the impairment issue be expanded to include equity investments and investments subject to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, and that the issue be
addressed by the Task Force as a separate EITF issue. At the EITF meeting, the Task Force reached a consensus on one issue that certain quantitative and qualitative disclosures should be required for securities accounted for under Statement 115 that
are impaired at the balance sheet date but for which an other-than-temporary impairment has not been recognized. The Board ratified the consensus on that one issue at its November 25, 2004 meeting. In September 2004, the Financial Accounting
Standards Board (FASB) directed the FASB staff to issue two proposed FASB Staff Positions (FSP): Proposed FSP EITF Issue 03-1-a, which provides guidance for the application of paragraph 16 of EITF Issue 03-1 to debt
securities that are impaired because of interest rate and/or sector spread increases, and Proposed FSP EITF Issue 03-1-b, which delays the effective date of Issue 03-1 for debt securities that are impaired because of interest rate and/or sector
spread increases. In June 2005, the FASB reach a decision whereby they declined to provide additional guidance on the meaning of other-than-temporary impairment. The Board directed the FASB staff to issue EITF 03-1a as final and to draft a new FSP
that will replace EITF 03-01. The final FSP (retitled FAS 115-1, The Meaning of Other-Than-Temporary Impairment and it Application to Certain Investments) would be effective for other-than-temporary impairment analysis conducted in
periods beginning after September 15, 2005. The Corporation does not anticipate this revision will have a material effect on its financial statements



NOTE 3  RECLASSIFICATIONS



Certain accounts in the condensed consolidated financial statements for 2004, as previously presented, have been reclassified to conform with current year
classifications.



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NOTE 4 - SECURITIES



The amortized cost, unrealized gains, unrealized losses and estimated fair values of securities at June 30, 2005 and December 31, 2004 are summarized as
follows (in thousands):



|                                                                       |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|---------------------------------------------------------------------- |  | ------------------ | ------ | --------------- | - | ---------------- |  | ---------------------------------- | --- |  | - | ------
|                                                                       |  | June 30, 2005     
|                                                                       |  | AmortizedCost      |        | UnrealizedGains |   | UnrealizedLosses |  | CarryingValue(EstimatedFair Value)
|                                                                       |  | (Unaudited)       
|Available for sale:                                                    |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|U.S. Government agencies and corporations                              |  | $                  | 41,497 |                 | $ | 50               |  | $                                  | 308 |  | $ | 41,239
|Mortgage backed securities - U.S. Government agencies and corporations |  |                    | 7,438  |                 |   | 4                |  |                                    | 100 |  |   | 7,342 
|Corporate debt securities                                              |  |                    | 1,288  |                 |   | 0                |  |                                    | 24  |  |   | 1,264 
|Tax exempt state and political subdivisions                            |  |                    | 9,006  |                 |   | 103              |  |                                    | 29  |  |   | 9,080 
|Federal Reserve Bank stock                                             |  |                    | 108    |                 |   | 0                |  |                                    | 0   |  |   | 108   
|Federal Home Loan Bank stock                                           |  |                    | 641    |                 |   | 0                |  |                                    | 0   |  |   | 641   
|                                                                       |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|Total securities available for sale                                    |  | $                  | 59,978 |                 | $ | 157              |  | $                                  | 461 |  | $ | 59,674
|                                                                       |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|                                                                       | 
|                                                                       |  | December 31, 2004*
|                                                                       |  | AmortizedCost      |        | UnrealizedGains |   | UnrealizedLosses |  | CarryingValue(EstimatedFairValue) 
|                                                                       |  | *                 
|Available for sale:                                                    |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|U.S. Government agencies and corporations                              |  | $                  | 34,535 |                 | $ | 174              |  | $                                  | 178 |  | $ | 34,531
|Mortgage-backed securities - U.S. Government agencies and corporations |  |                    | 6,441  |                 |   | 11               |  |                                    | 75  |  |   | 6,377 
|Corporate debt securities                                              |  |                    | 3,087  |                 |   | 5                |  |                                    | 34  |  |   | 3,058 
|Tax exempt state and political subdivisions                            |  |                    | 7,979  |                 |   | 203              |  |                                    | 13  |  |   | 8,169 
|Federal Reserve Bank stock                                             |  |                    | 108    |                 |   | 0                |  |                                    | 0   |  |   | 108   
|Federal Home Loan Bank stock                                           |  |                    | 795    |                 |   | 0                |  |                                    | 0   |  |   | 795   
|                                                                       |  |                    |        |                 |   |                  |  |                                    |     |  |   |       
|Total securities available for sale                                    |  | $                  | 52,945 |                 | $ | 393              |  | $                                  | 300 |  | $ | 53,038
|                                                                       |  |                    |        |                 |   |                  |  |                                    |     |  |   |       



The tables below
provide summaries of securities available for sale which were in an unrealized loss position at June 30, 2005 and December 31, 2004. As of June 30, 2005, these securities had a total fair value of $39,084,000 and carried unrealized losses of
$461,000, or 1.18%. Securities which have been in a loss position for the past year total $19,623,000. The unrealized loss pertaining to these securities is $342,000, or 1.74%. The majority of these losses are on securities which carry the implied
faith and credit of the U.S. government. Those which do not include corporate and municipal instruments. With the exception of one municipal which is not rated, all of these instruments carry A ratings from the major credit rating agencies. We
intend to hold the nonrated issue, as well as all the others, to maturity. No losses have been recognized on the $27,317,000 of securities that carried unrealized losses at December 31, 2004.



|                                                                      |  |                               |        |                   |   |           |  |                  |        |            |   |                  |  |   |        |  |   |    
|--------------------------------------------------------------------- |  | ----------------------------- | ------ | ----------------- | - | --------- |  | ---------------- | ------ | ---------- | - | ---------------- |  | - | ------ |  | - | ---
|                                                                      |  | June 30, 2005                
|                                                                      |  | Securities Available for Sale
|                                                                      |  | Less Than 12 Months           |        | 12 Months or More |   | Total    
|                                                                      |  | FairValue                     |        | UnrealizedLosses  |   | FairValue |  | UnrealizedLosses |        | Fair Value |   | UnrealizedLosses
|U.S. Government agencies and corporations                             |  | $                             | 17,434 |                   | $ | 113       |  | $                | 11,573 |            | $ | 195              |  | $ | 29,007 |  | $ | 308
|Mortgage backed securities- U.S. Government agencies and corporations |  |                               | 1,633  |                   |   | 5         |  |                  | 4,983  |            |   | 95               |  |   | 6,616  |  |   | 100
|Federal Reserve Bank stock                                            |  |                               | 0      |                   |   | 0         |  |                  | 0      |            |   | 0                |  |   | 0      |  |   | 0  
|Federal Home Loan Bank stock                                          |  |                               | 0      |                   |   | 0         |  |                  | 0      |            |   | 0                |  |   | 0      |  |   | 0  
|Corporate debt securities                                             |  |                               | 0      |                   |   | 0         |  |                  | 1,264  |            |   | 24               |  |   | 1,264  |  |   | 24 
|Tax exempt state and political subdivisions                           |  |                               | 394    |                   |   | 1         |  |                  | 1,803  |            |   | 28               |  |   | 2,197  |  |   | 29 
|                                                                      |  |                               |        |                   |   |           |  |                  |        |            |   |                  |  |   |        |  |   |    
|Total securities available for sale                                   |  | $                             | 19,461 |                   | $ | 119       |  | $                | 19,623 |            | $ | 342              |  | $ | 39,084 |  | $ | 461
|                                                                      |  |                               |        |                   |   |           |  |                  |        |            |   |                  |  |   |        |  |   |    



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|                                                                      |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |    
|--------------------------------------------------------------------- |  | ------------------- | ------ | ----------------- | - | --------- |  | ---------------- | ----- | --------- | - | ---------------- |  | - | ------ |  | - | ---
|                                                                      |  | December 31, 2004* 
|                                                                      |  | Less Than 12 Months |        | 12 Months or More |   | Total    
|                                                                      |  | FairValue           |        | UnrealizedLosses  |   | FairValue |  | UnrealizedLosses |       | FairValue |   | UnrealizedLosses
|U.S. Government agencies and corporations                             |  | $                   | 19,381 |                   | $ | 178       |  | $                |      |           | $ |                 |  | $ | 19,381 |  | $ | 178
|Mortgage backed securities- U.S. Government agencies and corporations |  |                     | 841    |                   |   | 3         |  |                  | 3,673 |           |   | 72               |  |   | 4,514  |  |   | 75 
|Federal Reserve Bank stock                                            |  |                     |       |                   |   |          |  |                  |      |           |   |                 |  |   |       |  |   |   
|Federal Home Loan Bank stock                                          |  |                     |       |                   |   |          |  |                  |      |           |   |                 |  |   |       |  |   |   
|Corporate debt securities                                             |  |                     | 2,052  |                   |   | 34        |  |                  |      |           |   |                 |  |   | 2,052  |  |   | 34 
|Tax exempt state and political subdivisions                           |  |                     | 1,370  |                   |   | 13        |  |                  |      |           |   |                 |  |   | 1,370  |  |   | 13 
|                                                                      |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |    
|Total securities available for sale                                   |  | $                   | 23,644 |                   | $ | 228       |  | $                | 3,673 |           | $ | 72               |  | $ | 27,317 |  | $ | 300
|                                                                      |  |                     |        |                   |   |           |  |                  |       |           |   |                  |  |   |        |  |   |    



The maturities,
amortized cost and estimated fair values of the banks securities at June 30, 2005 are summarized as follows (in thousands):



|                                |  |                    |         |                     |   |       
|------------------------------- |  | ------------------ | ------- | ------------------- | - | ------
|                                |  | Available for sale
|                                |  | AmortizedCost      |         | EstimatedFair Value
|Due within 1 year               |  | $                  | 12,140  |                     | $ | 12,139
|Due after 1 but within 5 years  |  |                    | 45,440  |                     |   | 45,107
|Due after 5 but within 10 years |  |                    | 1,649   |                     |   | 1,679 
|Equity securities               |  |                    | 749     |                     |   | 749   
|                                |  |                    |         |                     |   |       
|                                |  |                    | $59,978 |                     | $ | 59,674
|                                |  |                    |         |                     |   |       



Mortgage backed
securities have remaining contractual maturities ranging from 1.5 years to 11 years and are reflected in the maturity distribution schedule shown above based on their anticipated average life to maturity, which ranges from 1.06 to 3.55 years. The
companys equity securities are required to be held for membership in the Federal Reserve and Federal Home Loan Bank and are shown at cost since they may only be sold to the respective issuer or another member at par.



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 for the six month periods ended June 30, 2005 and 2004 are as follows (in thousands):



|                              |  |               |       |                     |   |                   |  |       |       |        |   |    |  |   |  
|----------------------------- |  | ------------- | ----- | ------------------- | - | ----------------- |  | ----- | ----- | ------ | - | -- |  | - | -
|                              |  | Proceeds From |       | Gross Realized     
|                              |  | Sales         |       | Calls andMaturities |   | PrincipalPayments |  | Gains |       | Losses
|June 30, 2005:                |  |               |       |                     |   |                   |  |       |       |        |   |    |  |   |  
|Securities available for sale |  | $             | 440   |                     | $ | 4,576             |  | $     | 1,105 |        | $ | 0  |  | $ | 0
|                              |  |               |       |                     |   |                   |  |       |       |        |   |    |  |   |  
|June 30, 2004:                |  |               |       |                     |   |                   |  |       |       |        |   |    |  |   |  
|Securities available for sale |  | $             | 1,041 |                     | $ | 7,810             |  | $     | 1,705 |        | $ | 19 |  | $ | 0
|                              |  |               |       |                     |   |                   |  |       |       |        |   |    |  |   |  



At June 30, 2005 and
December 31, 2004 securities with an amortized cost of $26,480,000 and $26,557,000, respectively, with estimated fair values of $26,314,000 and $26,629,000, respectively, were pledged to secure public deposits, securities sold under agreements to
repurchase, and for other purposes required or permitted by law.



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##### Table of Contents

As of June 30, 2005, our securities portfolio contained no concentrations within any specific industry or
issuer. A concentration did exist at December 31, 2004 when securities of companies engaged in the banking and financial services sector had an approximate amortized cost of $2,305,000 and an estimated fair value of $2,291,000. There were, however,
no concentrations within any one issuer.



---

|* | From audited financial statements.
|- | ----------------------------------



NOTE 5 - LOANS



Total loans are summarized as follows (in thousands):



|                                             |  |               |         |   |                   |   |         |  
|-------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                             |  | June 30, 2005 |         |   | December 31, 2004 |  
|                                             |  | (Unaudited)   |         |   | *                 |  
|Commercial, financial and agricultural       |  | $             | 24,970  |   |                   | $ | 22,831  |  
|Real estate - construction                   |  |               | 10,493  |   |                   |   | 8,759   |  
|Real estate - mortgage                       |  |               | 102,464 |   |                   |   | 101,083 |  
|Installment loans                            |  |               | 9,871   |   |                   |   | 10,734  |  
|Other                                        |  |               | 1,522   |   |                   |   | 2,472   |  
|                                             |  |               |         |   |                   |   |         |  
|Total loans                                  |  |               | 149,320 |   |                   |   | 146,879 |  
|Net deferred loan origination fees and costs |  |               | (73     | ) |                   |   | (78     | )
|                                             |  |               |         |   |                   |   |         |  
|Total                                        |  |               | 149,247 |   |                   |   | 146,801 |  
|Less allowance for loan losses               |  |               | (1,542  | ) |                   |   | (1,378  | )
|                                             |  |               |         |   |                   |   |         |  
|Loans, net                                   |  | $             | 147,705 |   |                   | $ | 145,423 |  
|                                             |  |               |         |   |                   |   |         |  

---

|* | From audited financial statements
|- | ---------------------------------



At June 30, 2005 our recorded investment in impaired loans was $655,000. The valuation allowance assigned to these loans totaled $301,000. Our average
investment in the impaired loans was $641,000 during the quarter. The amount of interest income recorded on them in the second quarter was $13,000 while the amount of interest collected was $11,000.



Impaired loans at December 31, 2004 were $48,000.



Loans in a nonaccrual status were $151,000 and $0 at June 30, 2005 and
December 31, 2004, respectively.



NOTE 6 - ALLOWANCE FOR LOAN LOSSES



Analyses of the allowance for loan losses are presented below
(in thousands):



|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|------------------------------ |  | -------------------------- | ----- | ------------------------ | - | ----- |  | ---- | ----- |  | - | -----
|                               |  | Three Months EndedJune 30, |       | Six Months EndedJune 30,
|                               |  | 2005                       |       | 2004                     |   | 2005  |  | 2004
|Balance at beginning of period |  | $                          | 1,447 |                          | $ | 1,474 |  | $    | 1,378 |  | $ | 1,396
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Loans charged off:             |  |                            |       |                          |   |       |  |      |       |  |   |      
|Commercial and industrial      |  |                            | 0     |                          |   | 935   |  |      | 0     |  |   | 935  
|Real estate - mortgage         |  |                            | 0     |                          |   | 0     |  |      | 0     |  |   | 0    
|Consumer and other             |  |                            | 21    |                          |   | 9     |  |      | 64    |  |   | 29   
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Total                          |  |                            | 21    |                          |   | 944   |  |      | 64    |  |   | 964  
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Recoveries:                    |  |                            |       |                          |   |       |  |      |       |  |   |      
|Commercial and industrial      |  |                            | 5     |                          |   | 42    |  |      | 5     |  |   | 44   
|Real estate - mortgage         |  |                            | 0     |                          |   | 0     |  |      | 1     |  |   | 0    
|Consumer and other             |  |                            | 8     |                          |   | 3     |  |      | 16    |  |   | 9    
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Total recoveries               |  |                            | 13    |                          |   | 45    |  |      | 22    |  |   | 53   
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Net losses                     |  |                            | 8     |                          |   | 899   |  |      | 42    |  |   | 911  
|Provision for loan losses      |  |                            | 103   |                          |   | 595   |  |      | 206   |  |   | 685  
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      
|Balance at end of period       |  | $                          | 1,542 |                          | $ | 1,170 |  | $    | 1,542 |  | $ | 1,170
|                               |  |                            |       |                          |   |       |  |      |       |  |   |      



12



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NOTE 7 - DEPOSITS



The following is a summary of interest bearing deposits by type (in thousands):



|                                            |  |               |         |                   |   |        
|------------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                                            |  | June 30, 2005 |         | December 31, 2004
|                                            |  | (Unaudited)   |         | *                
|Interest bearing checking                   |  | $             | 37,995  |                   | $ | 31,231 
|Money market accounts                       |  |               | 7,030   |                   |   | 7,000  
|Savings accounts                            |  |               | 25,303  |                   |   | 26,662 
|Certificates of deposit under $100,000      |  |               | 52,807  |                   |   | 48,619 
|Certificates of deposit of $100,000 or more |  |               | 32,015  |                   |   | 28,327 
|                                            |  |               |         |                   |   |        
|Total                                       |  | $             | 155,150 |                   | $ | 141,839
|                                            |  |               |         |                   |   |        

---

|* | From audited financial statements
|- | ---------------------------------



NOTE 8 - BORROWINGS



Short-term borrowings consist of securities sold under agreements to repurchase (repurchase agreements) and, when required, overnight advances under a
line of credit with the Federal Home Loan Bank of Pittsburgh (FHLB).



Long-term borrowings are also obtained from the FHLB to finance specific lending activities.



NOTE 9 - EMPLOYEE BENEFIT PLANS



The components of net periodic benefit cost of our pension and other benefit plans are presented below (in thousands):



|                               |  |                           |      |   |                |   |      |      |  |      |    |  |   |   
|------------------------------ |  | ------------------------- | ---- | - | -------------- | - | ---- | ---- |  | ---- | -- |  | - | --
|                               |  | Six Months Ended June 30,
|                               |  | Pension Benefits          |      |   | Other Benefits
|                               |  | 2005                      |      |   | 2004           |   |      | 2005 |  | 2004
|Service cost                   |  | $                         | 49   |   |                | $ | 32   |      |  | $    | 12 |  | $ | 14
|Interest cost                  |  |                           | 134  |   |                |   | 83   |      |  |      | 15 |  |   | 16
|Expected return on plan assets |  |                           | (171 | ) |                |   | (116 | )    |  |      | 0  |  |   | 0 
|Net amortization and deferral  |  |                           | 16   |   |                |   | (1   | )    |  |      | 8  |  |   | 9 
|                               |  |                           |      |   |                |   |      |      |  |      |    |  |   |   
|Net periodic (benefit) cost    |  | $                         | 28   |   |                | $ | (2   | )    |  | $    | 35 |  | $ | 39
|                               |  |                           |      |   |                |   |      |      |  |      |    |  |   |   



We expect to
contribute approximately $65,000 to our pension plan in 2005. No contributions are expected to be made to our other postretirement plans, however.



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NOTE 10 - COMMITMENTS AND CONTINGENCIES



The company is not aware of any commitments or contingencies which may reasonably be expected to have a material impact on
operating results, liquidity or capital resources. Known commitments and contingencies include the maintenance of reserve balances with the Federal Reserve, various legal actions arising in the normal course of business and commitments to extend
credit.



NOTE 11 - 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.



|                                                                                  |             |               |        |                   |   |       
|--------------------------------------------------------------------------------- | ----------- | ------------- | ------ | ----------------- | - | ------
|Financial instruments whose contract amounts represent credit risk (in thousands) |             | June 30, 2005 |        | December 31, 2004
|                                                                                  | (unaudited) |               | *     
|Commitments to extend credit                                                      |             | $             | 24,142 |                   | $ | 29,967
|Standby letters of credit                                                         |             |               | 441    |                   |   | 468   
|                                                                                  |             |               |        |                   |   |       
|Total                                                                             |             | $             | 24,583 |                   | $ | 23,435
|                                                                                  |             |               |        |                   |   |       



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.



---

|* | From audited financial statements.
|- | ----------------------------------



NOTE 12 - EARNINGS PER SHARE



Basic earnings per share is based on the weighted average number of shares outstanding during the period. For the six months ended June 30, 2005 and 2004
the weighted average number of shares were 622,783 and 631,378, respectively. The weighted average number of shares outstanding during the three month periods then ended were 621,665 and 631,378. During the periods ended June 30, 2005 and 2004 the
company did not have any dilutive securities.



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Part 1 Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS



INTRODUCTION



The
following discussion and analysis presents the significant changes in financial condition and results of operations of Citizens Financial Corp. and its subsidiary, Citizens National Bank of Elkins, for the periods indicated. It should be read in
conjunction with the consolidated financial statements and accompanying notes thereto, which are included elsewhere in this document. Readers are also encouraged to obtain our Annual Report on Form 10-K for additional information. You may obtain our
Form 10-K through various internet sites including www.cnbelkins.com.



Description of Business



Citizens Financial
Corp. is a $225 million Delaware corporation headquartered in Elkins, WV. From there our wholly-owned subsidiary, Citizens National Bank of Elkins, provides loan, deposit, trust, brokerage and other banking and banking related services to customers
in northcentral and eastern West Virginia and nearby areas through six branch offices. We conduct no business other than the ownership of our subsidiary bank.



FORWARD LOOKING STATEMENTS



This report contains forward looking statements which reflect our current expectations based on information available to us. These forward looking
statements involve uncertainties related to the general economic conditions in our nation and other broad based issues such as interest rates and regulations as well as to other factors which may be more specific to our own operations. Examples of
such factors may include our ability to attract and retain key personnel, implementing new technological systems, providing new products to meet changing customer and competitive demands, our ability to successfully manage growth strategies,
controlling costs, maintaining our net interest margin, maintaining good credit quality, and others. Forward looking statements can be identified by words such as may, will, expect, anticipate,
believe, estimate, plans, intends, or similar words. We do not attempt to update any forward looking statements. When provided, we intend forward looking information to assist readers in understanding
anticipated future operations and we include them pursuant to applicable safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in our forward looking statements are reasonable,
actual results could differ materially.



RECENT ACCOUNTING
PRONOUNCEMENTS



No accounting pronouncements were issued
during the first half of 2005 which are expected to have a material impact on Citizens. Readers may refer to our December 31, 2004 Form 10-K, or our 2004 annual report to shareholders, for a discussion of significant new pronouncements issued during
2003 and 2004.



CRITICAL ACCOUNTING POLICIES



Our consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America and follow general practices within the financial services industry.



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Application of these principles requires us to make estimates, assumptions, and judgments that affect the amounts
reported in our financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements and could change as new information becomes available.
Consequently, later financial statements could reflect different estimates, assumptions, and judgments.



Some policies rely more heavily on the use of estimates, assumptions, and judgments than others and, therefore, have a greater possibility of producing
results that could be materially different than originally reported. Our most significant accounting policies, including an explanation of how assets and liabilities are valued, may be found in Note 1 to the consolidated financial statements in our
2004 Annual Report on Form 10-K.



The allowance for loan losses
represents our estimate of probable credit losses inherent in the loan portfolio. Determining the amount of the allowance requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on
impaired loans, the estimated amount of losses in pools of homogeneous loans and the effect of various economic and business factors, all of which may be subject to significant change. Due to these uncertainties, as well as the sensitivity of our
financial statements to the assumptions and estimates needed to determine the allowance, we have identified the determination of the allowance for loan losses as a critical accounting estimate. As such, it could be subject to revision as new
information becomes available. Should this occur, changes to the provision for loan losses, which may increase or decrease future earnings, may be necessary. A discussion of the methods we use to determine our allowance for loan losses is presented
later in this report.



OVERVIEW



During the first half of 2005 our assets grew by approximately $11,000,000
to $224,752,000. This was primarily the result of our efforts to market time deposits which have increased $7.9 million this year. Another factor contributing to our growth is the use of debt to fund certain loans where the ability to lock in our
cost of funds and control interest rate risk is available. A more recent rise in our interest bearing checking account balances may be temporary, however.



Our expectation was to utilize these funds to satisfy loan demand. During early 2005 we experienced several large loan payoffs which suppressed our loan
totals. In the second quarter loan demand picked up and quarterly growth exceeded $4.5 million. We believe that opportunities to sustain this loan growth are available to us throughout the remainder of the year. In the interim, much of our deposit
inflow has been invested in short-term securities.



Income for
the first half of 2005 was $813,000. This is $126,000 more than the first half of last year when we incurred unusually high provisions for loan losses. We have also generated higher levels of net interest income and noninterest income. Higher
noninterest expense, however, has partially offset those improvements. For the second quarter, income rose from $153,000 to $438,000 again due to a decrease in our provision for loan losses.



These higher income levels have allowed earnings per share for the six



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months to increase from $1.09 to $1.31. Return on average assets also improved to .75%. A more detailed discussion of the
factors influencing our results of operations and financial condition follows.



RESULTS OF OPERATIONS



NET INTEREST INCOME



Net interest income is the primary component of our 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. We
attempt 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.



For the first half of 2005 net interest income was $4,319,000,up $152,000
from the first half of last year. Net interest income also increased for the second quarter rising $103,000 to $2,160,000.



These results were driven by higher levels of interest income due to an increase in our earning asset base of $9.5 million as well as a 15 basis point
improvement in the yield we earned on those assets. At the same time, however, an $8.5 million increase in our interest bearing liabilities along with 16 basis point rise in our cost of funds caused our interest expense to rise.



Frequently, net interest income is expressed as a percentage of average
interest earning assets and referred to as net interest margin. For the first half of 2005 our net interest margin of 4.33% was little changed from the 4.37% recorded in the first half of 2004. This is slightly higher than the most recent peer group
average and indicates we have done a satisfactory job of managing the growth and interest rate changes which have occurred on both sides of our balance sheet. The likely impact of continued changes is discussed in Part I, Item 3 of this report.



PROVISION FOR LOAN LOSSES



The provision for loan losses is managements estimate of the amount
which must be charged against current earnings in order to maintain the allowance for loan losses at a level considered adequate to provide for losses which are inherent in the loan portfolio. This amount is determined through quarterly evaluations
of the loan portfolio.



In 2005 we have made provisions of
$206,000. By contrast, the need to charge-off a large commercial loan in the second quarter of last year caused our provision through June 30, 2004 to be $685,000 including $595,000 in the second quarter. This is a significant cost saving to the
bank and has helped support the increased earnings recorded to date in 2005. The factors we consider in establishing the provision for loan losses, and in analyzing the allowance for loan losses, are discussed later in this report.



NONINTEREST INCOME



Noninterest income, which includes all revenues other than those related to earning assets, increased slightly from $338,000
in the second quarter of 2004 to $355,000 in the second quarter this year. For the full six month period noninterest income increased $33,000 to $678,000.



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Absent last years $19,000 gain on the sale of securities, which is not a recurring item, the
year-to-date increase would have totaled $52,000. This may be attributed to two items: a $30,000 improvement in fees from our secondary market mortgage program, and a $22,000 increase in trust fees where assets under management have risen
significantly.



In general, we believe our level of noninterest
income will be largely dependent on the success of these two programs, as well as our brokerage activities and the service fee income generated by our deposit base.



NONINTEREST EXPENSE



Noninterest expense includes all items of expense other than interest expense, the provision for loan losses, and income taxes. Total noninterest expense
through mid-year has increased $369,000, or 11.4% to $3,618,000. On a quarterly basis expense increased $162,000, which is 10.0%, to $1,787,000. This rising expense level has limited the improvements we have made in the net interest income,
provision for loan losses, and noninterest income areas.



Personnel costs are the largest component of noninterest expense and also accounts for the largest increase when compared to June 30 of last year rising $78,000. The cost of our group insurance programs, including our self-funded medical
plan, the cost of which is entirely borne by the bank, have increased $45,000. Our pension plan which has not produced expense under the applicable accounting guidelines for many years, is now doing so thereby adding $28,000 to expense while
salaries have risen $23,000. Our lower than expected loan volumes have also reduced the amount of labor expense we deferred in the loan origination process by $46,000. However, these increases were partially offset by a reduction in the cost of
retirement programs benefiting directors and certain officers. These savings totaled $59,000.



For the second quarter personnel costs were better contained and actually fell $19,000 from the same quarter of last year due to lower salaries and retirement plan costs and fewer medical plan costs. Although our
medical costs are largely a function of claims incurred stop loss provisions are in place.



Our third party data processing costs as well as the cost of purchasing, licensing and maintaining various software programs we utilize have also risen significantly, up $109,000 year-to-date and $37,000 for the
quarter. These increases may be traced to recent upgrades to several of our computer systems and the offering of new services like internet banking. Ongoing negotiations with our primary processor may help limit these costs in the future.



Occupancy and equipment expenses have also risen, increasing
$58,000 for the six month period and $38,000 in the second quarter reflecting higher repairs, property tax and depreciation expense.



While these costs are a significant factor in determining our income, they are not unexpected. Through June 30, total noninterest expense is actually
$26,000 under budget. Nonetheless, we are currently studying methods to limit our overhead expenditures.



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INCOME TAXES



Our provision for income tax expense includes both federal and state income taxes. Total taxes for the six months of 2005 were $360,000, or 30.7% of
pretax income. Quarterly taxes were $187,000, or 29.9%. With the exception of income earned on loans to and bonds issued by municipalities and income from certain life insurance policies, all of our income is taxable. We have not been subject to the
alternative minimum tax during any of the periods covered by this report.



FINANCIAL CONDITION



LOAN PORTFOLIO



After experiencing a $2 million decrease in the first quarter, loans
increased by just under $4.6 million in the second quarter to $149,320,000. As has been the case recently, this growth was centered in commercial lending.



Many of our commercial loans are secured by real property and are classified as nonresidential real estate loans. Demand for these types of loans has been
good for several years, particularly in our Snowshoe and Elkins markets. In addition, from time to time we may participate in nonlocal commercial loan syndications. These loans are subject to extensive credit analysis prior to being granted. The
high credit quality of these loans allow us to offset reduced consumer and residential lending activity while maintaining the portfolios risk profile. In total, nonresidential real estate lending increased $1.7 million in the second quarter
and is up $1.5 million year-to-date. Also related to this is our construction loan portfolio which has also risen $1.7 million this year.



Other types of commercial loans, those not secured by real property, have also increased as we continue to develop more complete relationships with some
of our best commercial customers. Growth in these loans totaled $1,987,000 in the second quarter and is now $2,139,000 for the year. As of June 30, our commercial loan portfolio was $24,970,000.



Because the fixed rate residential mortgage market continues to offer
favorable rates, our variable rate mortgage loans continue to face stiff competition. We attempt to offset this by offering faster processing, lower closing costs and personalized service. While this strategy is certainly appealing to a segment of
our customers, others still prefer the certainty of a fixed rate product. As a result, our variable rate mortgage portfolio has decreased to $53.7 million. For those who do desire a fixed rate, we offer fixed rate loans through the Federal Home Loan
Bank of Pittsburgh. Originations of these loans, which are not retained in our portfolio, totaled $6,999,000 in the first half of 2005.



Regardless of where their mortgage is obtained, many customers are visiting their local bank for home equity loans. These loans offer many advantages to
customers and allow us to increase relationships with responsible homeowners whose home values are rising. At June 30, our home equity portfolio of $8.5 million was approximately $300,000 more than at year-end. This product will also be the subject
of our sales efforts during the third quarter. Certainly, home equity lending is now a key component in our overall mortgage offerings.



Consumer lending, however, continues to suffer in the face of special



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programs from auto manufacturers, credit card companies, and, perhaps ironically, from the popularity of home equity
loans. At June 30 our consumer portfolio of $9.9 million is down $863,000 from year-end and almost $2.3 million, which is more than 18%, from $12,131,000 at June 30, 2004.



CREDIT QUALITY AND ALLOWANCE FOR LOAN LOSSES



We maintain our allowance for loan losses at a level we consider adequate to provide for losses that we believe to be
inherent in the loan portfolio. This determination is based on quarterly evaluations in which a specific analysis and a pooled analysis are computed. The specific analysis is used to individually assign an allowance to larger balance, nonhomogenous
loans; typically commercial loans. The pooled analysis is used to quantify the loss on pools of smaller balance, homogenous loans such as residential mortgages and consumer loans. The pooled analysis considers such factors as historical loss
experience, delinquency levels, current and anticipated economic conditions, concentrations of credit and changes in lending policies and staff. Because these analyses determine the adequacy of the allowance for loan losses they also determine the
provision for loans losses that must be charged to earnings.



As of June 30, 2005, our allowance for loan losses was $1,542,000, or 1.03% of gross loans. Based on our analysis, we believe this allowance properly addresses the risk contained in our portfolio. Our allowance includes $331,000 for
estimated losses assigned to loans specifically analyzed, $465,000 for losses estimated in various pools of loans, and $395,000 for loan concentrations in the auto, lumber and lodging industries as well as considerations for various other factors.
Through June 30, net loan losses of just $42,000 have been minimal.



While we believe our analysis is comprehensive and our allowance is adequate, there can be no assurance that additional provisions for loan losses will not be required in the future as a result of changes in the assumptions which underlie
our estimates and judgments, changes in economic conditions, or to the circumstances of particular borrowers.



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.



Available for sale securities are shown on the balance sheet at their estimated fair value, which was $59,674,000 at June 30. Because we maintain a short maturity ladder in our portfolio, many of our securities were
purchased in the last few years when interest rates were at historic lows. Recent rises in interest rates have caused the fair value of the portfolio to be $304,000 less than its amortized cost. This, however, has had no impact on income as none of
our securities are other than temporarily impaired and we have the intent and ability to hold our securities until such time as our investment is fully recovered. Our portfolio continues to be comprised of U.S. Agency securities, bank qualified
municipal debt, government agency backed mortgage securities and investment grade corporate debt.



Because increases in funding from deposits have exceeded loan demand, the investment portfolio has grown significantly in 2005, rising by more than $6.6
million. The securities we have purchased have typically been



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callable agency issues which offer relatively higher yields and mortgage backed securities which provide cash flow for
reinvestment. The flat nature of the yield curve has also prompted us to look to shorter term issues and the average life of the portfolio is now just over 2 years. While the yield on such investments is not high compared to historical levels, these
investments reduce our interest rate risk exposure and position us to take advantage of loan opportunities that arise.



While we typically try to minimize our activity in the overnight funds markets, the circumstances and considerations noted above have caused us to carry
higher overnight balances than we otherwise would. Our average balance in overnight funds sold for the year has been $3,098,000 while the selling of overnight funds has been a low $247,000.



DEPOSITS AND OTHER FUNDING SOURCES



In the first half of the year we successfully raised over $12.5 million in
deposits by focusing our efforts on mid and long term time deposits with selective pricing promotions and unique product features. We also acquired a significant new relationship with a local county agency. In addition to this, several million
dollars were deposited into an interest bearing checking account just prior to quarter end. This deposit is likely to be temporary, however.



Although we had ample liquid resources, we also obtained $3.5 million in external debt financing to fund several loans when the opportunity to lock in an
interest rate spread was available. In general, however, we expect to continue to fund our activities through internal sources.



CAPITAL RESOURCES



At $20,268,000, or 9.0% of assets, our capital base remains strong and has easily supported our asset growth. In addition, our risk based capital
measures, as established by banking regulations, are also well in excess of required levels.



Our largest expected capital outlays for the year were expected to be the payment of dividends and the purchase of certain operational equipment including check imaging systems. It now appears we will delay the
implementation of the imaging systems until 2006. At the current time we are not aware of any commitments or contingencies which are likely to materially change our strong capital position.



LIQUIDITY



The objective of our 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 sources including unpledged investment securities, federal funds sold, loan repayments, a stable and growing deposit
base and, when necessary, external borrowings.



We monitor
liquidity on a regular basis by preparing projected balance sheets and analyzing our sources and uses of funds. Historically, we have satisfied our liquidity needs through internal sources of funds with the exception of certain loans which have been
funded by borrowing funds from the Federal Home Loan Bank of Pittsburgh. Currently, we have access to approximately $93 million through various FHLB programs.



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Our current projections indicate we have ample liquidity to meet our anticipated funding needs through
internal sources such as those noted above.



IMPACT OF INFLATION



The consolidated financial statements and related data
included in this report were prepared in accordance with accounting principles generally accepted in the United States of America, which require our financial position and results of operations to be measured in terms of historical dollars except
for the available for sale securities portfolio. Consequently, the relative value of money generally is not considered. Nearly all of our 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 our performance than the effect of inflation.



However, inflation does affect noninterest expenses such as personnel costs and the cost of services and supplies we use. We attempt to offset increasing costs by controlling the level of noninterest expenditures and
increasing levels of noninterest income. Because inflation rates have generally been low during the time covered by the accompanying consolidated financial statements, the impact of inflation on our earnings has not been significant.



Part I Item 3

Quantitative and Qualitative Disclosures About Market Risk



Market risk is the risk of loss arising from adverse changes in the fair
value of financial instruments due to changes in interest rates, exchange rates and equity prices. Our primary market risk is interest rate risk which results from timing differences in the repricing of assets, liabilities and off-balance-sheet
instruments. Some amount of interest rate risk is inherent and appropriate in banking. We attempt to control interest rate risk through our asset/liability committee which is comprised of members of senior management and other management personnel.



Several techniques are used to manage our interest rate risk.
On a weekly basis we examine our loan and deposit rates relative to those of our competitors and to our goals. We compute our repricing gap monthly to provide general guidance as to the impact rising or falling interest rates may have on earnings.
However, interest rate shock testing and simulation modeling, which are prepared quarterly, are our primary interest rate risk management tools.



At June 30, 2005, we measured the impact an immediate and sustained change in interest rates of 100, 200 and 300 basis points, applied to all of our
earning assets and interest bearing liabilities, would have on our net interest income. These tests indicate that net interest income can be expected to change by approximately 2% for each 100 basis point change in interest rates in our current
rising rate environment.



Part I Item 4

Controls and Procedures



As of the end of the period covered by this Quarterly Report on Form 10-Q, the company, under the supervision and with the
participation of management, including the chief executive officer and principal financial



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officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the chief executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material
information relating to the company which is required to be included in our periodic SEC filings. Subsequent to the date of that evaluation, there have been no significant changes in our internal controls or in other factors that could significantly
offset internal controls, nor were any corrective actions required with regard to significant deficiencies or material weaknesses.



PART II - OTHER INFORMATION



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |             |  |                                                                                                  
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- |  | -------------------------------------------------------------------------------------------------
|Item 1. |  | Legal Proceedings :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |             |  |                                                                                                  
|        | 
|        |  | As of June 30, 2005 Citizens Financial Corp. was not involved in any material legal proceedings. We are, however, involved in various legal proceedings
which occur in the normal course of business. Based on consultation with legal counsel, management believes that all such litigation will be resolved without materially affecting our financial position or results of operations. In addition, there
are no material proceedings known to be threatened or contemplated against Citizens Financial Corp. or Citizens National Bank.
|        | 
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds: None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 
|Item 3. |  | Defaults upon Senior Securities: None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 
|Item 4. |  | Submission of Matters to a Vote of Security Holders: The annual meeting of shareholders of Citizens Financial Corp. was held on April 16, 2005. The shareholders determined
that the maximum number of directors would be fixed at ten and that directors Armentrout, Harris, Johnson and Williams will serve three year terms ending in April, 2008. Each of these directors was unopposed.                                                                                                                                                 
|        | 
|        |  | In addition to the foregoing nominees, the following six (6) persons presently are serving as members of the Board of Directors, for terms to expire in the year indicated for each
member: Robert N. Alday (2006); William J. Brown (2007); Edward L. Campbell (2007); Cyrus K. Kump (2006); Robert J. Schoonover (2007); and John A. Yeager (2006).                                                                                                                                                                                        
|        | 
|Item 5. |  | Other Information: None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 
|Item 6. |  | Exhibits and Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 
|        |  | (a)    Exhibits: The following exhibits are filed with this report:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Exhibit No. |  | Description of Exhibit                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 31.1        |  | Certification Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002, 18 U.S.C. Section 1350
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 31.2        |  | Certification Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002, 18 U.S.C. Section 1350
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 32.1        |  | Certification Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002, 18 U.S.C. Section 1350
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 32.2        |  | Certification Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002, 18 U.S.C. Section 1350



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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  | 
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
| | 
| |  | (b)    On March 1, 2005, we reported several expected changes involving our board of directors as well as
the board of directors and executive management of the subsidiary bank under Items 1.02 and 5.02 of Form 8-K. These changes were then confirmed and reported as complete by filing of Form 8-K on April 18, 2005. In addition, we reported our first
quarter 2005 earnings and related financial data under Item 2.02 of Form 8-K on April 13, 2005 while on May 12, 2005 we filed our quarterly report to shareholders under Item 2.02 of Form 8-K.



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SIGNATURES



Pursuant to the
requirements 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.             
|                      | 
|Date: August 10, 2005 |  | /s/ Robert J. Schoonover             
|                      |  | Robert J. Schoonover                 
|                      |  | President and Chief Executive Officer
|                      | 
|Date: August 10, 2005 |  | /s/ Thomas K. Derbyshire             
|                      |  | Thomas K. Derbyshire                 
|                      |  | Vice President, Treasurer and        
|                      |  | Principal Financial Officer          



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