<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549



                                   FORM 10-Q



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

For the quarterly period ended                 JUNE 30, 1998
                              ------------------------------------------------

Commission file number 2-96144
                       -------


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



                   Delaware                        55-0666598
 -----------------------------------------------------------------------------
           (State or other jurisdiction of       (I.R.S. Employer
           incorporation or organization)       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.)



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


                                                     Outstanding at
                       Class                         June 30, 1998
                       -----                       -----------------

               Common Stock ($2.00 par value)            662,703



                        This report contains 29 pages.

                                       1
<PAGE>
 
                                   FORM 10-Q
                           CITIZENS FINANCIAL CORP.
                          Quarter Ended June 30, 1998



                                     INDEX



                                                            Page No.
                                                            --------

Part I.   Financial Information

     Condensed Consolidated Balance Sheets
      June 30, 1998 and December 31, 1997................       3

     Condensed Consolidated Statements of Income
      Three Months Ended
      June 30, 1998 and June 30, 1997
      and Six Months Ended
      June 30, 1998 and June 30, 1997....................       4

     Condensed Consolidated Statements of
      Changes in Shareholders' Equity
      Six Months Ended
      June 30, 1998 and June 30, 1997....................       5

     Condensed Consolidated Statements of
      Cash Flows
      Six Months Ended
      June 30, 1998 and June 30, 1997....................       6

     Statements of Comprehensive Income
      Three Months Ended
      June 30, 1998 and June 30, 1997
      and Six Months Ended
      June 30, 1998 and June 30, 1997....................       7

     Notes to Condensed Consolidated
      Financial Statements...............................  8 - 12

     Management's Discussion and Analysis
      of Financial Condition and Results
      of Operations...................................... 13 - 20

Part II.  Other Information and Index to Exhibits........      21

     Signatures..........................................      22

                                       2
<PAGE>
 
                        PART I - FINANCIAL INFORMATION
                           CITIZENS FINANCIAL CORP.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                           (In thousands of dollars)

<TABLE>
<CAPTION>
                                                       June 30,    December 31,
                                                         1998          1997
                                                      -----------  ------------
                                                      (Unaudited)        *
<S>                                                   <C>          <C>
ASSETS
------
Cash and due from banks                                 $  4,731       $  3,312
Federal funds sold                                           100            200
Securities available for sale (Note 2)                    33,958         31,921
Securities held to maturity (estimated fair value
   $7,832 and $6,690, respectively) (Note 2)               7,756          6,598
Loans, less allowance for loan losses of
   $1,117 and $1,094, respectively (Notes 3 and 4)        84,131         86,400
Premises and equipment                                     1,513          1,588
Accrued interest receivable                                  745          1,197
Other assets                                               1,516            916
                                                        --------       --------
     Total Assets                                       $134,450       $132,132
                                                        ========       ========
 
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Deposits:
   Noninterest bearing                                  $ 14,848       $ 13,163
   Interest bearing                                       96,334         97,239
                                                        --------       --------
     Total deposits                                      111,182        110,402
Short-term borrowings                                      4,996          3,597
Long-term borrowings                                       1,046          1,078
Other liabilities                                          1,010            960
                                                        --------       --------
     Total liabilities                                   118,234        116,037
                                                        --------       --------
 
Commitments and contingencies (Note 5)
 
 
 
SHAREHOLDERS' EQUITY
--------------------
 
Common stock, authorized 2,250,000 and
    1,250,000 shares of $2.00 par value,
    respectively; issued 750,000 shares                    1,500          1,500
Additional paid in capital                                 2,100          2,100
Retained earnings                                         14,013         13,407
Net unrealized gain on available for
   sale securities                                           142             93
Treasury stock, at cost, 87,297 and 68,047
   shares, respectively                                   (1,539)        (1,005)
                                                        --------       --------
     Total shareholders' equity                           16,216         16,095
                                                        --------       --------
     Total Liabilities and Shareholders' Equity         $134,450       $132,132
                                                        ========       ========
</TABLE>
*From audited financial statements.

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

                                       3
<PAGE>
 
                           CITIZENS FINANCIAL CORP.
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (In thousands of dollars, except per share data)

<TABLE>
<CAPTION>
                                      Three Months Ended   Six Months Ended
                                            June 30,           June 30,
                                      ------------------   ----------------
                                         1998      1997     1998     1997
                                          (Unaudited)        (Unaudited)
<S>                                   <C>         <C>      <C>      <C>
INTEREST INCOME
---------------
 
Interest and fees on loans                $1,938   $2,021   $3,894   $4,007
Interest and dividends on
 securities:
  Taxable                                    510      428    1,017      878
  Tax-exempt                                  93       67      168      134
Interest on federal funds sold                14       20       30       22
                                          ------   ------   ------   ------
  Total interest income                    2,555    2,536    5,109    5,041
                                          ------   ------   ------   ------
 
INTEREST EXPENSE
----------------
 
Interest on deposits                         941      929    1,893    1,845
Interest on short-term borrowings             60       35      110       71
Interest on long-term borrowings              15       17       30       25
                                          ------   ------   ------   ------
  Total interest expense                   1,016      981    2,033    1,941
                                          ------   ------   ------   ------
  Net interest income                      1,539    1,555    3,076    3,100
Provision for loan losses                     30       42       60      102
                                          ------   ------   ------   ------
  Net interest income after
    provision for loan losses              1,509    1,513    3,016    2,998
                                          ------   ------   ------   ------
 
NONINTEREST INCOME
------------------
 
Trust department income                       42       26       69       26
Service fees                                  74       61      139      115
Insurance commissions                          8        8       14       15
Other                                         34       29       73      127
                                          ------   ------   ------   ------
  Total noninterest income                   158      124      295      283
                                          ------   ------   ------   ------
 
NONINTEREST EXPENSE
-------------------
 
Salaries and employee benefits               551      526    1,064    1,033
Net occupancy expense                         71       70      142      142
Equipment rentals, depreciation
  and maintenance                             71       60      146      116
Data processing                               94       88      195      176
Advertising                                   24       27       48       54
Other                                        269      252      518      522
                                          ------   ------   ------   ------
  Total noninterest expense                1,080    1,023    2,113    2,043
                                          ------   ------   ------   ------
 
Income before income taxes                   587      614    1,198    1,238
Income tax expense                           192      221      393      446
                                          ------   ------   ------   ------
Net income                                $  395   $  393   $  805   $  792
                                          ======   ======   ======   ======

Basic earnings per common
 share (Note 6)                           $  .60   $  .57   $ 1.21   $ 1.16
                                          ======   ======   ======   ======

Weighted average shares outstanding      662,703  683,553  664,830  683,553
Dividends per common share                $  .15   $  .10   $  .30   $  .20
                                          ======   ======   ======   ======
</TABLE> 

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

                                       4
<PAGE>
 
                           CITIZENS FINANCIAL CORP.
     CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                           (In thousands of dollars)



<TABLE>
<CAPTION>
                                              Six Months Ended June 30, 1998 and 1997
                                         -------------------------------------------------
                                                            (Unaudited)
                                                                              Net                      Total
                                   Common Stock    Additional              Unrealized                  Share-         
                                   ------------      Paid In    Retained   Gain/(Loss) on  Treasury   holders' 
                                  Shares   Amount    Capital    Earnings   Securities       Stock      Equity
--------------------------------------------------------------------------------------------------------------

<S>                               <C>      <C>     <C>         <C>         <C>             <C>        <C>
Balance, January 1, 1997          750,000  $1,500    $2,100     $12,381      $ (77)        $  (961)   $14,943
Net income                                                          792                                   792
Net change in unrealized gain/
  (loss) on securities                                                          12                         12
Cash dividends declared
  ($.20 per share)                                                 (136)                                 (136)
                                  ----------------------------------------------------------------------------
Balance, June 30, 1997            750,000  $1,500    $2,100     $13,037      $ (65)        $  (961)   $15,611
                                  ============================================================================
 
 
Balance, January 1, 1998          750,000  $1,500    $2,100     $13,407      $  93         $(1,005)   $16,095
Net income                                                          805                                   805
Net change in unrealized gain/
  (loss) on securities                                                          49                         49
Cash dividends declared
  ($.30 per share)                                                 (199)                                 (199)
Purchase of 19,250 shares
  of treasury stock                                                                           (534)      (534)
                                  ----------------------------------------------------------------------------
Balance, June 30, 1998            750,000  $1,500    $2,100     $14,013      $ 142         $(1,539)   $16,216
                                  ============================================================================
 
</TABLE>

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

                                       5
<PAGE>
 
                           CITIZENS FINANCIAL CORP.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands of dollars)

<TABLE>
<CAPTION>
                                                       Six Months Ended
                                                           June 30,
                                                      ------------------
                                                        1998      1997
                                                         (Unaudited)
<S>                                                   <C>       <C>
Cash flows from operating activities:
  Net Income                                          $   805   $   792
  Adjustments to reconcile net income to
  cash provided by operating activities:
    Provision for loan losses                              60       102
    Depreciation and amortization                         171       152
    Amortization and accretion on securities               86        60
    Decrease (increase) in accrued
      interest receivable                                 452       (14)
    (Increase) decrease in other assets                  (632)       70
    Increase (decrease) in other liabilities               24      (191)
                                                      -------   -------
      Cash provided by operating activities               966       971
                                                      -------   -------
 
 
Cash flows from investing activities:
  Proceeds from principal payments received
    on securities available for sale                       28        83
  Proceeds from principal payments received
    on securities held to maturity                          0       449
  Proceeds from maturities and calls of securities
    available for sale                                  1,500     1,000
  Proceeds from maturities and calls of
    securities held to maturity                         1,045     3,362
  Proceeds from sales of securities
    available for sale                                    502         0
  Purchases of securities available for sale           (4,083)   (4,638)
  Purchases of securities held to maturity             (2,198)        0
  Purchases of premises and equipment                     (64)     (111)
  Decrease in loans                                     2,209       809
                                                      -------   -------
     Cash provided (used) by investing activities      (1,061)      954
                                                      -------   -------
 
Cash flows from financing activities:
  Cash dividends paid                                    (199)     (136)
  Acquisition of treasury stock                          (534)        0
  Increase (decrease) in short-term borrowing           1,399      (459)
  (Decrease) increase in long-term borrowing              (32)      779
  Increase (decrease) in time deposits                    817      (232)
  Decrease in other deposits                              (37)     (177)
                                                      -------   -------
Cash provided (used) by financing activities            1,414      (225)
                                                      -------   -------
 
Net increase in cash and cash equivalents               1,319     1,700
 
Cash and cash equivalents at beginning of period        3,512     2,774
                                                      -------   -------
 
Cash and cash equivalents at end of period            $ 4,831   $ 4,474
                                                      =======   =======
 
Supplemental disclosure of non cash investing
  and financing activities:
  Cash paid during the period for:
     Interest                                         $ 2,057   $ 1,971
     Income Taxes                                     $   423   $   487
  Acquisition of other real estate owned and
     other repossessed assets                         $    43   $   134
</TABLE>

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

                                       6
<PAGE>
 
                           CITIZENS FINANCIAL CORP.
                      STATEMENTS OF COMPREHENSIVE INCOME
                           (In thousands of dollars)

<TABLE>
<CAPTION>
                                              Three Months Ended       Six Months Ended
                                                   June 30                   June 30
                                              ------------------     --------------------
                                               1998       1997         1998         1997
                                                 (Unaudited)             (Unaudited)
<S>                                           <C>        <C>         <C>          <C>
Net income                                     $395       $ 393       $ 805        $ 792
Other comprehensive income,                                                      
  net of tax:                                                                    
  Unrealized gains/(losses) on                                                   
    securities                                                                   
    Gain/(loss)arising during                                                    
      the period                                 49         101          49           12
    Reclassification adjustment                   0           0           0            0
  Other comprehensive income,                                                    
    net of tax                                    0           0           0            0
                                               ----       -----       -----        -----
Comprehensive income                           $444       $ 494       $ 854        $ 804
                                               ====       =====       =====        =====
</TABLE>

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

                                       7
<PAGE>
 
                    CITIZENS FINANCIAL CORP. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - BASIS OF PRESENTATION
         ---------------------


     The accounting and reporting policies of Citizens Financial Corp. and
Subsidiary ("Citizens" or "the Company") conform to generally accepted
accounting principles and to general policies within the financial services
industry.  The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from these estimates.

     The consolidated statements 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, 1998 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' 1997
Annual Report to Shareholders and Form 10-K.

     The Company was required to adopt Statement of Financial Accounting
Standards No. 130, (SFAS No. 130) "Reporting of Comprehensive Income" for fiscal
year 1998. Comprehensive income includes any change in equity of the Company
during the period resulting from transactions and other events and circumstances
from nonowner sources.  A statement of Comprehensive Income has been included in
these condensed consolidated financial statements to comply with SFAS No. 130.
Prior interim periods have been reclassified to provide comprehensive
information.

                                       8
<PAGE>
 
NOTE 2 - SECURITIES
         ----------


     The amortized cost, unrealized gains, unrealized losses and estimated fair
values of securities at June 30, 1998 and December 31, 1997 are summarized as
follows (in thousands):

<TABLE> 
<CAPTION> 
                                                     June 30, 1998
                                  ---------------------------------------------------
                                    Carrying
                                      Value                                 Estimated
                                   (Amortized   Unrealized     Unrealized     Fair
                                      Cost)       Gains          Losses       Value
-------------------------------------------------------------------------------------
                                                       (Unaudited)
<S>                                <C>          <C>            <C>          <C> 
Held to maturity:
Tax-exempt state and political
 subdivisions..................      $ 7,756     $    94        $    18      $ 7,832
                                     -------     -------        -------      -------
 Total securities
  held to maturity.............      $ 7,756     $    94        $    18      $ 7,832
                                     =======     =======        =======      =======
</TABLE> 

<TABLE>
<CAPTION>
                                                                                    Carrying
                                                                                    Value
                                                                                   (Estimated
                                      Amortized    Unrealized      Unrealized         Fair
                                        Cost          Gains          Losses          Value)
----------------------------------------------------------------------------------------------
<S>                                    <C>         <C>             <C>             <C>
Available for sale:                                                       
U.S. Treasury securities............    $ 4,534     $    31         $  0            $ 4,565
U.S. Government agencies                                                  
 and corporations...................     10,794          87            3             10,878
Mortgage backed securities-                                               
 U.S. Government agencies                                                
 and corporations...................        583           0            1                582
Corporate debt securities...........     15,752          85           18             15,819
Obligations of state and political                                        
 subdivisions-taxable...............      1,534          36            0              1,570
Federal Reserve Bank stock..........        108           0            0                108
Federal Home Loan Bank stock........        436           0            0                436
                                       --------     -------         ----           --------
  Total securities available                                              
   for sale.........................   $ 33,741     $   239         $ 22           $ 33,958
                                       ========     =======         ====           ========
</TABLE>

<TABLE> 
<CAPTION> 
                                                       December 31, 1997*
                                      ----------------------------------------------------
                                       Carrying
                                        Value                                   Estimated
                                      (Amortized   Unrealized       Unrealized     Fair
                                        Cost)        Gains            Losses      Value
                                      ---------------------------------------------------
-----------------------------------------------------------------------------------------
<S>                                   <C>          <C>              <C>         <C> 
Held to maturity:
Taxable corporate
 debt securities..............        $   999      $     2          $     0     $  1,001
Tax-exempt state and political
 subdivisions.................          5,599          102               12        5,689
                                      -------      -------          -------     --------
Total securities
 held to maturity.............        $ 6,598      $   104          $    12     $  6,690
                                      =======      =======          =======     ========
</TABLE> 

*From audited financial statements.

                                       9
<PAGE>
 
<TABLE>
<CAPTION>
                                                                         Carrying
                                                                          Value
                                                                        (Estimated
                                   Amortized    Unrealized  Unrealized     Fair
                                      Cost        Gains       Losses      Value)
                                   ------------------------------------------------
                                                          *
-----------------------------------------------------------------------------------
<S>                               <C>           <C>         <C>         <C>
Available for sale:                                                 
U.S. Treasury securities........     $ 4,542       $ 39         $ 0        $ 4,581
U.S. Government agencies                                            
 and corporations...............      11,805         60          15         11,850
Mortgage-backed securities -                                        
 U.S. Government                                                    
 agencies and corporations......         612          0           5            607
Corporate debt securities.......      12,719         71          24         12,766
Taxable state and                                                   
 political subdivisions.........       1,556         17           0          1,573
Federal Reserve Bank stock......         108          0           0            108
Federal Home Loan Bank stock....         436          0           0            436
                                     -------       ----         ---        -------
Total securities available for                                      
 sale...........................     $31,778       $187         $44        $31,921
                                     =======       ====         ===        =======
</TABLE>

     The maturities, amortized cost and estimated fair values of the Bank's
securities at June 30, 1998 are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                    Held to maturity      Available for sale
                                  ---------------------  ---------------------
                                  Amortized  Estimated   Amortized  Estimated
                                    Cost     Fair Value    Cost     Fair Value
                                  ---------  ----------  ---------  ----------
<S>                               <C>        <C>         <C>        <C>
Due within 1 year                    $  394      $  399    $ 7,516     $ 7,529
Due after 1 but within 5 years        5,415       5,488     25,162      25,332
Due after 5 but within 10 years       1,947       1,945        519         553
Due after 10 years                        0           0          0           0
Equity securities                         0           0        544         544
                                     ------      ------    -------     -------
                                     $7,756      $7,832    $33,741     $33,958
                                     ======      ======    =======     =======
</TABLE>

     Mortgage backed and other securities not due at a single maturity date have
been allocated in the above maturity categories based on their anticipated
average lives to maturity.  The Company's equity securities are required to be
held for membership in the Federal Reserve and Federal Home Loan Bank.

     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, 1998 and 1997
are as follows (in thousands):

<TABLE> 
<CAPTION>
                                          Proceeds From             Gross Realized
                                 ----------------------------      ----------------
                                         Calls and   Principal
                                  Sales  Maturities  Payments      Gains      Losses
                                 ----------------------------      ----------------
<S>                              <C>     <C>         <C>           <C>         <C> 
June 30, 1998:
Securities held to maturity      $   0   $   1,045   $      0      $  0        $  0
Securities available for sale      503       1,000         28         0           0
                                  ----   ---------   --------      ----        ----
                                 $ 503   $   2,045   $     28      $  0        $  0
                                 =====   =========   ========      ====        ====
June 30, 1997:
Securities held to maturity      $   0   $   3,362   $    449      $  0        $  0
Securities available for sale        0       1,000         83         0           0
                                  ----   ---------   --------      ----        ----
                                 $   0   $   4,362   $    532      $  0        $  0
                                 =====   =========   ========      ====        ====
</TABLE> 

     At June 30, 1998 and December 31, 1997 securities carried at $9,073,000 and
$9,543,0000 respectively, with estimated fair values of $9,080,000 and
$9,593,000, respectively, were pledged to secure public deposits, securities
sold under agreements to repurchase, and for other purposes required or
permitted by law.

  At June 30, 1998, the company has a concentration within its corporate debt
securities classification which included obligations of financial services
industry companies having an approximate amortized cost of $9,115,000 and an
estimated fair value of $9,154,000.  There were no concentrations with any one
issuer.

*From audited financial statements.

                                       10
<PAGE>
 
NOTE 3 - LOANS
         -----

     Total loans are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                            June 30, 1998   December 31, 1997
                                            --------------  -----------------
                                             (Unaudited)            *
<S>                                         <C>             <C>
Commercial, financial and agricultural            $11,001             $12,927
Real estate - construction                          1,178               1,715
Real estate - mortgage                             59,011              56,382
Installment loans to individuals                   13,010              15,387
Credit card loans                                     928               1,018
Other                                                 134                  28
                                                  -------             -------
  Total loans                                      85,262              87,457
Net deferred loan origination costs                    24                  77
Less unearned income                                   38                  40
                                                  -------             -------
  Total loans net of unearned income and
    net deferred loan origination costs            85,248              87,494
Less allowance for loan losses                      1,117               1,094
                                                  -------             -------
  Loans, net                                      $84,131             $86,400
                                                  =======             =======
</TABLE>

NOTE 4 - ALLOWANCE FOR LOAN LOSSES
         -------------------------

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

<TABLE>
<CAPTION>
                                   Three Months Ended  Six Months Ended
                                         June 30,           June 30,
                                  -------------------  -----------------
                                     1998       1997     1998     1997
<S>                               <C>         <C>      <C>      <C>
Balance at beginning of period       $1,080    $1,008   $1,094   $  990
Loans charged off:
  Commercial and industrial               0         0        3        0
  Real estate - mortgage                  1         0        1        3
  Consumer and other                     15        17       45       39
  Credit card                             2         7       21       28
                                     ------    ------   ------   ------
    Total                                18        24       70       70
                                     ------    ------   ------   ------
 
Recoveries:
  Commercial and industrial               0         1        1        1
  Real estate - mortgage                 20         0       20        0
  Consumer and other                      4         3        7        6
  Credit card                             1         0        5        1
                                     ------    ------   ------   ------
    Total recoveries                     25         4       33        8
                                     ------    ------   ------   ------
 
Net (recoveries) losses                  (7)       20       37       62
 
Provision for loan losses                30        42       60      102
                                     ------    ------   ------   ------
Balance at end of period             $1,117    $1,030   $1,117   $1,030
                                     ======    ======   ======   ======
</TABLE>
*From audited financial statements.

                                       11
<PAGE>
 
NOTE 5- 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 6 - EARNINGS PER SHARE
         ------------------

     Earnings per share is based on the weighted average number of shares
outstanding during the period.  For the six month periods ended June 30, 1998
and 1997 the weighted average number of shares were 664,830 and 683,553,
respectively. The weighted average number of shares outstanding during the three
month periods then ended were 662,703 and 683,553, respectively.

                                       12
<PAGE>
 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



     The following discussion and analysis presents the significant changes  in
financial condition and the results of operations of Citizens Financial Corp.
and Subsidiary for the periods indicated.  This discussion and analysis should
be read in conjunction with the Company's 1997 Annual Report to Shareholders and
Form 10-K. Since the primary business activities of Citizens Financial Corp. are
conducted through the Bank, this discussion focuses primarily on the financial
condition and operations of the Bank.  This discussion may include forward
looking statements based upon management's expectations, actual results may
differ.

EARNINGS SUMMARY
----------------

     Net income for the second quarter of 1998 of $395,000 was nearly unchanged
from the $393,000 earned during the second quarter of 1997.  On a year-to-date
basis net income of $805,000 is approximately 1.6% in excess of last year's
$792.000.  Among the other key earnings measures return on average assets has
decreased slightly from 1.25% to 1.23% as has return on average equity which
decreased from 10.49% to 10.18% for the first six months of the year.  Earnings
per share for the six month periods increased from $1.16 to $1.21.  Details
concerning these and other aspects of the Company's results of operations are
addressed in the following sections of this report.

NET INTEREST INCOME
-------------------

     Net interest income represents the primary component of Citizens' earnings.
It is the difference between interest and fee income related to earning assets
and interest expense incurred to carry interest bearing liabilities. Net
interest income is impacted by changes in the volume and mix of interest earning
assets and interest bearing liabilities, as well as by changing interest rates.
In order to manage these changes, their impact on net interest income and the
risks associated with them, the Company utilizes an ongoing asset/liability
management program. This program includes analysis of the Company's gap,
earnings sensitivity to rate changes, and sources and uses of funds. A
discussion of net interest income and the factors impacting it is presented
below.

     Net interest income for the second quarter fell from $1,555,000 in 1997 to
$1,539,000 in 1998.  This reflects an increase in interest expense of $35,000
due to an increase in the average volume of interest bearing liabilities of $3.6
million to $101,739,000.  Although these funds were utilized to increase the
average earning asset base by more than $3.4 million, total interest income for
the quarter increased by only $19,000 to $2,555,000.  This is due to a change in
the relative mix of earning assets.  On average, the earning asset base
consisted of 67% loans and 33% securities and other investments during the
second quarter of 1998.  This compares to 72% loans and 28% securities in the
second quarter of 1997. On a tax equivalent basis, net interest income of
$1,587,000 produced a net interest margin of 5.02% for the three months ended
June 30, 1998.  During the second quarter of 1997 these figures were $1,590,000
and 5.19%, respectively.

     On a year to date basis net interest income decreased $24,000 to
$3,076,000. The factors which caused this decrease are similar to those
impacting the second quarter. An increase in average interest bearing
liabilities of $3.7 million resulted in higher interest expense of $2,033,000,
up $92,000. However, the consequent rise in interest earning assets of $3.4
million produced only $68,000 in additional interest income due to the shifting
of assets from higher yielding loans to lower yielding investment securities. A
discussion of the Company's funding base, as well as its' loan and investment
portfolios, may be found elsewhere in this report.

     Despite the changes noted above, tax equivalent net interest income for the

                                       13
<PAGE>
 
six month period was nearly unchanged at $3,163,000 in 1998 and $3,169,000 in
1997 due to increased holdings of tax exempt securities.  The tax equivalent net
interest margin, however, still fell from 5.20% to 5.04% again reflecting an
earning asset mix which includes more securities and fewer loans than in the
first half of 1997.

NONINTEREST INCOME
------------------

     Noninterest income includes all revenues which are not included in interest
and fee income relating to earning assets.  Total noninterest income for the
second quarter of 1998 and 1997 was $158,000 and $124,000, respectively.  The
biggest change in this area was trust department income, up $16,000 to $42,000.
Trust income is reported on the cash basis of accounting in keeping with
industry practices.  This does not effect income materially.  Despite the change
in reported trust income, neither the scope or the nature of trust operations
have changed. Annual trust income, however, is now expected to surpass the 1997
total.  Among the other components of noninterest income service fees increased
by $13,000 to $74,000 due to higher overdraft fees and charges assessed to
noncustomers for the use of Citizens' ATMs.

     On a year-to-date basis noninterest income of $295,000 exceeded the 1997
total of $283,000 by $12,000. Included in the 1997 total, however, was a one
time item of $60,000 as explained in prior reports. Absent this, the total
increase in noninterest income would have been $72,000.

     As with the quarterly analysis, the largest contributor to this improvement
is trust income.  Total trust income for the six months of $69,000 is $43,000 in
excess of the June, 1997 total.  The increase of $24,000 in service fees is
again mostly due to higher levels of overdraft and ATM fees.  Overdrafts are up
by $16,000 to $73,000 while ATM fees have risen approximately $6,000 to $9,000.
Another component of service fees, commercial account analysis, totaled
approximately $13,000 through June 30, 1998.  However, due to the loss of one
commercial deposit account this source of income is expected to drop by
approximately $2,000 per month.

     The remaining components of noninterest income, when adjusted for the one
time $60,000 item, have not changed significantly.

NONINTEREST EXPENSE
-------------------

     Noninterest expense includes all items of expense other than interest
expense, the provision for loan losses and income taxes. Total noninterest
expense for the second quarter of $1,080,000 were $57,000, or 5.6%, higher than
in the same quarter of 1997. The largest contributor to this increase was a
$25,000 increase in salaries and benefits, nearly all of which may be linked to
higher salaries.

     The category of other noninterest expense increased $17,000, or 6.7%, to
$269,000.  This was due to several factors including higher costs for legal
services, telephone expense, subscriptions and memberships, costs associated
with other real estate owned, state franchise tax expense, and fees related to
the Bank's credit card program.  Several of these items, including legal
services, franchise tax, and other real estate costs, reflect one time expenses.

     Data processing costs continue to rise as noted in the March 31, 1998 Form
10-Q. For the second quarter data processing costs totaled $94,000, up from
$88,000 in the second quarter of 1997. In addition, depreciation expense
increased by nearly $10,000 over its second quarter 1997 level. This reflects
the purchase of several items after June 30, 1997 including new teller machines
and an ATM. The remaining components of noninterest expense, including
advertising and net occupancy expense, were little changed during the quarter.

                                       14
<PAGE>
 
     On a year-to-date basis total noninterest expense increased $70,000, or
3.4%, to $2,113,000. This increase may be traced to several items including
salaries and benefits, the maintenance and depreciation of equipment, and data
processing. Occupancy expenses, advertising, and other noninterest expense were
all stable or slightly less than in the first half of 1997.

     Salaries expense increased by 5.6%,or $43,000, to $774,000 during the first
six months.  The cost of some benefits, particularly pension costs, decreased to
partially offset the higher salaries.  Depreciation exceeded its mid year 1997
total by approximately $20,000 for the reasons cited earlier while maintenance
costs rose by more than $9,000 reflecting price changes on certain maintenance
contracts as well as maintenance on certain newly acquired items including the
teller machines.

     As discussed earlier in this report, as well as in previous reports, data
processing costs have continued to increase due to the installation of new
systems and products.  Additional costs are expected as a result of the Year
2000 Issue. The Bank has devoted significant resources to this issue and has
formed a year 2000 task team.  This team has inventoried all computer related or
dependent hardware and software and assessed its compliancy with year 2000
needs.  Although this task is ongoing it is now estimated that capital
expenditures of approximately $100,000 and noncapital expenditures of
approximately $41,000 are needed to ensure compliancy.   The testing of both
primary and backup systems will continue as Citizens National Bank remains
committed to making the transition into the next century as smoothly as
possible.

INCOME TAXES
------------

     The Company's provision for income taxes during the second quarter of 1998
and 1997 was $192,000 and $221,000, respectively.  Included in these figures are
both federal and state income taxes.  For the year-to-date period total income
tax expense, including deferred tax benefits, was $393,000, in 1998 and $446,000
in 1997.  This represents 32.8% of pretax income in 1998 and 36.0% in 1997,
partially reflecting an increase in tax exempt income.  The Company is not
currently subject to the federal alternative minimum tax.

FINANCIAL CONDITION
-------------------

     Total assets of $134,450,000 at June 30, 1998 were $2,318,000, or
approximately 1.8%, in excess of their year end 1997 total of $132,132,000.
Average assets for the first six months of 1998 were $131,825,000.  A detailed
discussion of the Bank's financial condition follows.

LOAN PORTFOLIO
--------------

     The loan portfolio, which represents Citizens' largest earning asset,
decreased by 2.5%, or approximately $2.2 million, during the first half of 1998
to $85,262,000.  Included in this decrease is the payoff of one commercial loan
with a balance of approximately $1.6 million.  Absent this item decreases in
both the total portfolio and the commercial portfolio would have been minimal.

     During 1995 and 1996 the Bank increased the size of its loan portfolio by
focusing on installment lending, particularly the financing of automobiles.  In
1997 management reduced the emphasis on auto lending as certain strategic goals
relative to that type of lending activity were satisfied.  Throughout 1998
emphasis has been placed on developing better commercial loan relationships.
Despite the loan payoff noted earlier, management believes the effort will be
successful and recognizes that a considerable amount of time and resources will
be required. Excluding the payoff of $1.6 million, the commercial loan portfolio
has fallen approximately $326,000 in the first half of 1998.  However, some
loans to commercial enterprises may be secured by real property.  As such they
are

                                       15
<PAGE>
 
considered to be mortgage loans secured by nonfarm, nonresidential property;
these loans have increased by $2.2 million in the first six months of 1998.

     As management de-emphasized the installment loan portfolio it began to
shrink in size during 1997 and continues to do so in 1998 as repayments exceed
new loan originations. During the first half of 1998 the installment loan
portfolio has fallen nearly $2.4 million, or 15%.

     This rate of decrease is greater than management had anticipated partly due
to the incentives recently offered by various auto manufacturers on the purchase
of new cars. These incentives have made it difficult for the Bank to compete for
new cars and have encouraged consumers who would typically purchase used cars to
look toward new car purchases. Thus, both new and used car lending have been
negatively impacted. During the second quarter of 1998 the Bank did more
aggressively seek used car loans, however. As a result, the number of loans made
during May and June of 1998 equaled those made during the same time period in
1997.

     Mortgage lending continues to be the Bank's largest loan portfolio.  Total
mortgage loans of $59,011,000 at June 30, 1997 represent 69% of all loans and is
up approximately $2.6 million since year end 1997.  Most of this growth came in
the nonfarm, nonresidential portfolio as noted earlier.  Nonetheless,
traditional 1 to 4 family mortgages continue to be the Bank's largest source of
mortgage loans. Such loans totaled $39,762,000 at June 30, 1998 and $39,414,000
at December 31, 1997. The majority of these loans are one year adjustable rate
loans none of which are held for resale.

     The Bank's remaining portfolios, including construction and credit card
loans, are relatively small and do not have a major impact on the Company's
overall financial position.

     Company policy requires those loans which are past due 90 days or more be
placed on nonaccrual status unless they are both well secured and in the process
of collection. At June 30, 1998 the level of nonaccrual loans remained quite
low. The following table illustrates this by providing a summary of past due and
nonperforming assets.

                                        
              Summary of Past Due Loans and Nonperforming Assets
              --------------------------------------------------
                                (in thousands)

<TABLE>
<CAPTION>
                                         June 30         December 31
                                  ---------------------  -----------
                                     1998         1997      1997
                                        (Unaudited)       *
<S>                               <C>          <C>       <C>
Loans past due 90 or more days
  still accruing interest              $  27     $  16      $   9
                                       =====     =====      =====
                                                           
Nonperforming assets:                                      
  Nonaccruing loans                    $  41     $ 258      $   2
  Other Real Estate Owned                 42        62          0
                                       -----     -----      -----
                                       $  83     $ 320      $   2
                                       =====     =====      =====
</TABLE>
* From the Company's Form 10-K filing dated December 31, 1997


     All losses which may be reasonably anticipated are accounted for in the
allowance for loan losses.  Management makes this determination by its analysis
of overall loan quality, changes in the mix and size of the loan portfolio,
previous loss experience, general economic conditions, information about
specific borrowers and other factors.  At June 30, 1998, the allowance for loan
losses was $1,117,000, up $23,000 from $1,094,000 at December 31, 1997.  These
levels, which represented 1.31% and 1.25% of total loans outstanding, were
considered adequate and management is not aware of any trends, uncertainties or
other information relating to the loan portfolio which it expects will
materially impact future operating results, liquidity or capital resources.

                                       16
<PAGE>
 
     The provision for loan losses is a charge to earnings which is made to
maintain the allowance for loan losses at a sufficient level.  The provision
totaled $60,000 during the first half of 1998, down from $102,000 in the first
half of 1997.  This decrease is based upon the improvement in past-due and
nonperforming loans described above and its relation to the allowance for loan
losses.  During the first half of 1998 and 1997 net loan charge-offs totaled
$37,000, and $62,000, respectively as more fully illustrated in Note 4 to the
accompanying condensed financial statements.

SECURITIES PORTFOLIO AND FEDERAL FUNDS SOLD
-------------------------------------------

     The Bank's securities portfolio consists of available for sale and held to
maturity securities while no securities are maintained in a trading account. At
June 30, 1998, the held to maturity portfolio totaled $7,756,000 consisting
solely of tax-exempt municipal securities which are expected to be held until
they mature in order to benefit from their tax advantaged status. Management is
attempting to take full advantage of such tax saving opportunities when
available. Since year end 1997 the tax exempt portfolio has increased in size by
over 38%, or $2.1 million.

     Management also attempts to emphasize the available for sale portfolio due
to the flexibility it allows in managing the balance sheet structure and
addressing asset/liability issues. At June 30, 1998 this portfolio had an
estimated fair value of $33,958,000, $217,000 in excess of the amortized cost.
Such excess represents an unrealized gain. This portfolio, which represents
nearly 81% of the total securities portfolio, is invested primarily in U.S.
Treasury and agency obligations and investment grade corporate debt instruments.
At quarter-end the U.S. Treasury and agency component of the portfolio totaled
$15,443,000, or 45.5%, while the corporate component totaled $15,819,000 or
46.6%. The remainder of the portfolio, $2,696,000, consists of mortgage backed
securities, taxable municipal obligations, and stock which the Bank is required
to hold for membership in the Federal Reserve Bank and the Federal Home Loan
Bank.

     The Bank has traditionally favored investments with maturities of five
years or less which have known cash flow patterns. Such instruments typically
provide greater safety, less market value fluctuation and more simplified
asset/liability issues. However, future investments may include increased
holdings of callable and mortgage backed securities in order to improve yield.
Currently, callable securities total $3.3 million while mortgage backed
securities total just $582,000.

     The Bank generally tries to minimize its involvement in the overnight
federal funds sold market, instead relying on the continually maturing
securities portfolio to provide the liquidity needed to fund loans or meet
deposit withdraw demands. Nonetheless, at any given time the execution of
specific investing or funding strategies, or normal fluctuations in deposit and
loan balances, may require the bank to sell, or buy, funds on an overnight
basis.

     At June 30, 1998 and December 31, 1997 the balances of federal funds sold
were $100,000 and $200,000, respectively. The average federal funds sold balance
during the first half of 1998 was $1,104,000.

DEPOSITS AND OTHER FUNDING SOURCES
----------------------------------

     Like many banks, Citizens has had difficulty increasing its deposit base in
recent years as customers have placed a larger portion of their funds in
accounts which provide higher levels of dividend or interest income. However, an
increase in both deposits and borrowings during the first half of 1998 helped
produce a $3.4 million increase in average earning assets. Total deposits, which
increased $780,000 to $111,182,000 at June 30, 1998 averaged $109,888,000 during
the first half of the year. Borrowings increased $1,367,000 to $6,042,000 at
June 30, 1998 as the balances held by local governmental units in repurchase
agreements rose.

                                       17
<PAGE>
 
These balances, however, can change daily based on the needs of the governmental
entities. Total borrowings averaged approximately $4.9 million during the six
month period.

          Noninterest bearing deposits averaged $13,119,000 during the first six
months of 1998 and totaled $14,848,000 at quarter-end.  The quarter end total
represents 13.4% of total deposits.  This increased quarter end total, however,
is expected to be temporary.  Management believes the core level of noninterest
bearing deposits to more closely approximate the average.

          Interest bearing deposits totaled $96,334,000 at June 30, 1998,
$905,000 less than at year end 1997 and $435,000 less than the year to date
average of $96,769,000.  Among interest bearing deposits savings accounts
experienced the biggest change falling $2,009,000, or 7.3% to $25,682,000.
Savings accounts have averaged $25,880,000 throughout the first six months of
the year.  Included in the June 30 total are corporate sweep accounts of
$4,593,000.  These sweep accounts totaled $4,902,000 at year end 1997 and
averaged $3,917,000 during the first six months of 1998.

          Certificates of deposit continue to represent the Bank's largest
source of funds totaling $41,380,000 at June 30, 1998, up $1,001,000 from year
end.  This increase is due to a $2,376,000 increase in certificates of deposit
of $100,000 or more.  Total certificates of $100,000 or more are now
$10,184,000, or 24.6% of all certificates of deposit.  In addition, another $1.1
million of large certificates are held in individual retirement accounts (IRAs).
IRA CDs, however, have been fairly stable in the first half of the year
decreasing $373,000 to $10,032,000.

          The Bank does not actively seek these large deposits and manages their
pricing on a weekly basis.  Such parameters are used to ensure the Bank does not
engage in pricing practices which could be detrimental to earnings.  The Bank
does believe, however, that operating efficiencies may be gained when holders of
multiple certificates combine them into one instrument and encourages customers
to do so.  Such combinations have created approximately $1.2 million in large
certificates.  This is the primary cause of the $1,375,000 decrease in
certificates of deposit of under $100,000 during the first half of the year.

          The Banks' other types of deposits, including interest bearing
checking and money market accounts, have been very stable over the first half of
1998 totaling $18,923,000 at June 30, 1998 and $18,651,000 at December 31, 1997.

          In addition to deposits the Bank uses various forms of borrowings to
fund its assets.  The Bank's long term borrowings consist of several advances
from the Federal Home Loan Bank of Pittsburgh and are used to fund specific
loans or groups of loans.  No additional long term borrowings were obtained in
the first half of 1998.  Future borrowings are likely to depend on the existence
of beneficial loan opportunities.

          Short term borrowings consist of two repurchase agreements with local
governmental authorities.  Each of these accounts was acquired through
competitive bids.  The balances in these accounts fluctuate daily based on the
cash needs of the customers.  The June 30, 1998 balance of $4,996,000 is in
excess of the average balance for the six month period of $3,865,000.

CAPITAL RESOURCES
-----------------

          Total shareholders' equity of $16,216,000 at June 30, 1998 is $121,000
greater than at year end 1997 and represents 12.1% of total assets.  During the
first six months of 1998 net income of $805,000 and unrealized gains on
available for sale securities of $49,000 increased the capital base.  Conversely
dividends of $199,000, or $.30 per share, and the purchase of 19,250 shares of
treasury stock for $534,000, reduced capital.  The purchase of treasury stock is
conducted under

                                       18
<PAGE>
 
the company's stock repurchase policy and is not part of a specific repurchase
program. The Company has no specific plans for those shares now held in
treasury.

     The Bank continues to exceed all risk based capital requirements as shown
in the following table:

<TABLE>
<CAPTION>
 
                        Minimum Capital Standard Ratios
--------------------------------------------------------------------------------
                                             Citizens       Regulatory
                                           Financial Corp. Requirements
--------------------------------------------------------------------------------
<S>                                        <C>             <C>
Total capital to risk weighted assets             18.76%         8.0%
Tier I capital to risk weighted assets            17.54%         4.0%
Tier I capital to adjusted total assets           12.15%         3.0%
</TABLE>

     The Company is unaware of any trends or uncertainties, nor do any plans
exist, which may materially impair its capital position.

LIQUIDITY AND INTEREST RATE SENSITIVITY
---------------------------------------

          The objective of the Company's liquidity management program is to
ensure the continuous availability of funds to meet the withdrawal demands of
depositors and the credit needs of borrowers.  The basis of Citizens' liquidity
comes from the stability of its core deposits.  Liquidity is also available
through the available for sale securities portfolio, held to maturity securities
due within one year, and short-term funds such as federal funds sold.  At June
30, 1998 these sources totaled $41,814,000 or 31.1% of total assets.  In
addition, liquidity may be generated through loan repayments and over
$52,000,000 of available borrowing arrangements with correspondent banks.  Each
quarter management tests the Bank's ability to satisfy its anticipated liquidity
needs over the next twelve months.  At June 30, 1998 this test indicates the
bank is well positioned and has ample liquidity to satisfy those needs.  Details
on both the sources and uses of cash are presented in the Statements of Cash
Flows contained in the financial statements.

          The objective of the Company's interest rate sensitivity management
program, also known as asset/liability management, is to maximize net interest
income while minimizing the risk of adverse effects from changing interest
rates.  This is done by controlling the mix and maturities of interest sensitive
assets and liabilities. The Bank has established an asset/liability committee
for this purpose.

          One common interest rate risk measure is the gap, or difference
between rate sensitive assets and rate sensitive liabilities.  As of June 30,
1998, the Company's cumulative one year gap to total assets ratio was a negative
2.17% compared to a negative 9.51% at December 31, 1998.  This indicates the
Bank is now less sensitive to changes in interest rates than it was at year-end.
The primary reason for this change is the renewal of maturing 36 month
certificates of deposit.

          The Bank also utilizes financial modeling programs to measure and
control its interest rate risk.  In such programs changes in net interest income
are forecast under various interest rate scenarios.  Instantaneous shifts in
interest rates of up to 200 basis points are regularly tested.  At June 30, 1998
such tests indicate that for any given interest rate change of 100 basis points
the effect on net interest income is less than 5%.

YEAR 2000 COMPLIANCE
--------------------

          The Company has established a Year 2000 Committee to pursue solutions
to the Year 2000 Issue.  This committee has full senior and executive management
support. As noted in the discussion of noninterest expense this committee has
inventoried

                                       19
<PAGE>
 
all computer related or dependent hardware and software to assess compliance
with year 2000 needs. The committee is now in the process of identifying and
developing backup systems and testing of mission critical systems. Management's
current estimate of the cost to become 2000 compliance was disclosed in the
noninterest expense section of this discussion.

IMPACT OF INFLATION
-------------------

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

                                       20
<PAGE>
 
                         PART II -  OTHER INFORMATION


Item 1.  Legal Proceedings :
         -----------------  

          As of June 30, 1998 Citizens Financial Corp. was not involved in any
     material legal proceedings.  The Bank is currently involved, in the normal
     course of business, in various legal proceedings.  After consultation with
     legal counsel, management believes that all such litigation will be
     resolved without materially effecting on the financial position or results
     of operations.  In addition, there are no material proceedings known to be
     threatened or contemplated against the Company or the Bank.


Item 2.  Changes in Securities:    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 18, 1998.  The shareholders determined that the maximum
     number of directors shall be increased from nine to ten and that directors
     Chabut, DeMotto, Schoonover and Thompson will serve three year terms ending
     in April, 2001.  All of these directors were unopposed.

          The shareholders also approved an Amendment to the Certificate of
     Incorporation to increase the number of authorized shares of common stock
     from one million two hundred fifty thousand (1,250,000) to two million two
     hundred fifty thousand (2,250,000), the par value per share remaining two
     dollars ($2.00) by a vote of 470,024 shares for, 4,380 shares against with
     6,875 shares obstaining.  The Corporation's capital remained unchanged as a
     result of this amendment.

Item 5.  Other Information:     None.
         -----------------           

Item 6.  Exhibits and Reports on Form 8-K:
         -------------------------------- 

          (a)  Exhibits:  3(i) Articles of Incorporation, page 23

          (b)  Reports on Form 8-K:

          On April 21, 1998 the Company filed a Current Report on Form 8-K
     reporting the Amendment to the Certificate of Incorporation referred to in
     Part II, Item 4 above and exhibited in Exhibit 3(i) which follows.

                                       21
<PAGE>
 
                                  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:       7/31/98                         /s/ Robert J. Schoonover
      --------------------                 -------------------------------
                                           Robert J. Schoonover
                                           President
                                           Chief Executive Officer



Date:       7/31/98                         /s/ Thomas K. Derbyshire
      --------------------                 -------------------------------
                                           Thomas K. Derbyshire
                                           Treasurer
                                           Principal Financial Officer

                                       22