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                                  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 September 30, 2003

                                       or

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
                For the transition period from __________ to __________



                         Commission file number 0-20148


                         CITIZENS FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)


        Kentucky                                         61-1187135
(State of Incorporation)                    (I.R.S. Employer Identification No.)


               12910 Shelbyville Road, Louisville, Kentucky 40243
                    (Address of principal executive offices)

                                 (502) 244-2420
                         (Registrant's telephone number)


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
determined in Rule 12b-2 of the Securities  Exchange Act of 1934).  Yes ~~~~~ No
~~X~~

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date: Class A Stock - 1,685,228 as of
November 12, 2003.

The date of this Report is November 14, 2003.

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<PAGE>
Part I - Financial Information;  Item 1 - Financial Statements
<TABLE>
<CAPTION>


                                            Citizens Financial Corporation and Subsidiaries
                                            Condensed Consolidated Statements of Operations
                                                              (Unaudited)



Nine Months Ended September 30                                                         2003                 2002
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                             <C>                 <C>
   Premiums and other considerations                                            $27,088,830         $ 29,503,837
   Premiums ceded                                                                  (826,587)            (964,938)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                        26,262,243           28,538,899
   Net investment income                                                          4,332,680            4,308,775
   Net realized investment gains (losses)                                           760,829           (2,497,769)
   Other income                                                                     158,832              374,937
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                   31,514,584           30,724,842

Policy Benefits and Expenses:
   Policyholder benefits                                                         15,965,187           14,394,220
   Policyholder benefits ceded                                                     (766,275)          (1,039,057)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                               15,198,912           13,355,163
   Increase in net benefit reserves                                               5,979,186            9,796,081
   Interest credited on policyholder deposits                                       522,627              572,568
   Commissions                                                                    4,999,926            5,577,016
   General expenses                                                               5,217,787            5,017,477
   Interest expense                                                                 279,677              234,053
   Policy acquisition costs deferred                                             (1,623,450)          (2,080,972)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                   1,461,102            1,598,876
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                               32,035,767           34,070,262
------------------------------------------------------------------------ -------------------- --------------------
Loss before income tax                                                             (521,183)          (3,345,420)
Income Tax Benefit                                                                 (121,000)            (628,000)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                      $    (400,183)      $   (2,717,420)
------------------------------------------------------------------------ -------------------- --------------------

Net Loss Per Common Share                                                           $ (0.24)             $ (1.58)
------------------------------------------------------------------------ -------------------- --------------------
<FN>

See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>

<PAGE>
Part I; Item 1  (continued)

<TABLE>
<CAPTION>



                                            Citizens Financial Corporation and Subsidiaries
                                            Condensed Consolidated Statements of Operations
                                                              (Unaudited)



Three Months Ended September 30                                                        2003                 2002
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                             <C>                 <C>
   Premiums and other considerations                                            $ 8,765,717         $ 11,069,060
   Premiums ceded                                                                  (293,985)            (319,665)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                         8,471,732           10,749,395
   Net investment income                                                          1,580,841            1,412,132
   Net realized investment gains (losses)                                           925,557             (701,218)
   Other income                                                                      46,756              266,107
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                   11,024,886           11,726,416

Policy Benefits and Expenses:
   Policyholder benefits                                                          5,283,059            4,597,113
   Policyholder benefits ceded                                                     (210,423)            (189,383)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                                5,072,636            4,407,730
   Increase in net benefit reserves                                               2,022,373            4,096,554
   Interest credited on policyholder deposits                                       177,055              169,527
   Commissions                                                                    1,611,689            2,039,036
   General expenses                                                               1,792,592            1,742,364
   Interest expense                                                                  90,068               74,649
   Policy acquisition costs deferred                                               (486,134)            (797,187)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                     471,732              679,222
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                               10,752,011           12,411,895
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before income tax                                                     272,875             (685,479)
Income Tax Expense (Benefit)                                                         20,000             (213,000)
------------------------------------------------------------------------ -------------------- --------------------
Net Income (Loss)                                                               $   252,875          $  (472,479)
------------------------------------------------------------------------ -------------------- --------------------

Net Income (Loss) Per Common Share                                                    $ 0.15              $ (0.27)
------------------------------------------------------------------------ -------------------- --------------------
<FN>

See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
Part I; Item 1  (continued)



<TABLE>
<CAPTION>

                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition



                                                                                September 30,        December 31,
                                                                                         2003                2002
------------------------------------------------------------------------ -------------------- --------------------
ASSETS                                                                             (Unaudited)
<S>                                                                             <C>                   <C>
Investments:
   Securities available for sale, at fair value:
      Fixed maturities (amortized cost of $102,252,796
      and $101,161,174 in 2003 and 2002, respectively)                       $  106,902,419         $ 103,953,815
      Equity securities (cost of $12,553,529 and
      $7,108,735 in 2003 and 2002, respectively)                                 14,946,354             7,761,892
   Investment real estate                                                         3,189,618             3,252,424
   Policy loans                                                                   4,347,610             4,239,128
   Short-term investments                                                           632,381               632,381
------------------------------------------------------------------------ -------------------- --------------------
Total Investments                                                               130,018,382           119,836,640

Cash and cash equivalents                                                         4,007,597             6,699,171
Accrued investment income                                                         1,427,560             1,330,036
Reinsurance recoverable                                                           2,605,526             2,886,256
Premiums receivable                                                                 262,057               215,759
Property and equipment                                                            2,639,783             2,767,763
Deferred policy acquisition costs                                                10,366,836             9,915,288
Value of insurance acquired                                                       3,230,070             3,617,602
Goodwill                                                                            755,782               755,782
Federal income tax receivable                                                       310,158               250,158
Other assets                                                                         24,102               164,077
------------------------------------------------------------------------ -------------------- --------------------
Total Assets                                                                  $ 155,647,853         $ 148,441,532
------------------------------------------------------------------------ -------------------- --------------------
<FN>

See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
Part I; Item 1  (continued)
<TABLE>
<CAPTION>




                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition




                                                                               September 30,     December 31,
                                                                                        2003                 2002
------------------------------------------------------------------------ -------------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY                                               (Unaudited)

Liabilities:
Policy Liabilities:
<S>                                                                          <C>                   <C>
   Future policy benefits                                                    $  108,487,159        $  102,649,565
   Policyholder deposits                                                         15,505,662            15,743,293
   Policy and contract claims                                                     1,577,726             1,797,195
   Unearned premiums                                                                239,500               247,625
   Other                                                                            229,340               277,955
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Liabilities                                                        126,039,387           120,715,633

Note payable - bank                                                               4,462,502             5,779,168
Note payable - related party                                                      2,000,000             2,000,000
Accrued expenses and other liabilities                                            2,075,534             1,851,467
Deferred federal income tax                                                       1,408,030               337,632
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities                                                               135,985,453           130,683,900

Commitments and Contingencies

Shareholders' Equity:
   Common stock, 6,000,000 shares authorized;
      1,685,228 and 1,686,828 shares issued and outstanding
      in 2003 and 2002, respectively                                              1,685,228             1,686,828
   Additional paid-in capital                                                     7,170,321             7,176,480
   Accumulated other comprehensive income                                         4,536,469             2,223,759
   Retained earnings                                                              6,270,382             6,670,565
------------------------------------------------------------------------ -------------------- --------------------
Total Shareholders' Equity                                                       19,662,400            17,757,632
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities and Shareholders' Equity                                    $ 155,647,853         $ 148,441,532
------------------------------------------------------------------------ -------------------- --------------------
<FN>

See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>

Part I; Item 1  (continued)
<TABLE>
<CAPTION>




                                            Citizens Financial Corporation and Subsidiaries
                                            Condensed Consolidated Statements of Cash Flows
                                                              (Unaudited)



Nine Months Ended September 30                                                         2003                 2002
------------------------------------------------------------------------ -------------------- --------------------

Cash Flows from Operations:
<S>                                                                            <C>                  <C>
Net loss                                                                       $   (400,183)        $ (2,717,420)
Adjustments to reconcile net loss to cash from operations:
   Increase in benefit reserves                                                   5,824,530            9,701,374
   Increase (decrease) in claim liabilities                                        (219,469)             159,674
   Decrease in reinsurance recoverable                                              280,730              225,437
   Interest credited on policyholder deposits                                       522,627              572,568
   Provision for amortization and depreciation, net of deferrals                     59,851             (250,520)
   Amortization of premium and accretion of discount on
      securities purchased, net                                                      63,281               20,018
   Net realized investment (gains) losses                                          (760,829)           2,497,769
   Increase in accrued investment income                                            (97,524)              18,205
   Change in other assets and liabilities                                            66,404              166,587
   Decrease in deferred federal income tax liability                               (121,000)            (314,034)
   (Increase) decrease in federal income taxes receivable                           (60,000)           2,564,918
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided by Operations                                                   5,158,418           12,644,576

Cash Flows from Investment Activities:
Cost of securities acquired                                                     (61,311,997)         (48,773,836)
Investments sold or matured                                                      55,699,136           32,308,112
Investment management fees                                                          (12,552)             (45,618)
Additions to real estate                                                            (26,529)             (28,690)
Additions to property and equipment                                                 (12,195)              (1,657)
Other investing activities, net                                                    (101,172)               9,353
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Investment Activities                                           (5,765,309)         (16,532,336)

Cash Flows from Financing Activities:
Policyholder deposits                                                               417,888              588,023
Policyholder withdrawals                                                         (1,178,146)          (1,310,077)
Payments on notes payable - bank                                                 (1,316,666)            (987,500)
Repurchase of common stock                                                           (7,759)             (67,696)
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Financing Activities                                            (2,084,683)          (1,777,250)

------------------------------------------------------------------------ -------------------- --------------------
Net Increase (Decrease) in Cash and Cash Equivalents                             (2,691,574)          (5,665,010)
Cash and Cash Equivalents at Beginning of Period                                  6,699,171           18,433,626
------------------------------------------------------------------------ -------------------- --------------------
Cash and Cash Equivalents at End of Period                                     $  4,007,597         $ 12,768,616
------------------------------------------------------------------------ -------------------- --------------------
<FN>

See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>

Part I; Item 1  (continued)


                 Citizens Financial Corporation and Subsidiaries
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)



Note 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with the  instructions  to Form 10-Q in conformity  with
accounting  principles generally accepted in the United States. The accompanying
unaudited condensed  financial  statements reflect all adjustments which are, in
the opinion of management,  necessary to a fair  presentation of the results for
the interim periods.  All such adjustments are of a normal recurring nature. For
further  information,  refer to the  December  31, 2002  consolidated  financial
statements and footnotes included in the Company's annual report on Form 10-K.


Note 2 - COMPREHENSIVE INCOME

The components of comprehensive income (loss), net of related tax, for the three
and nine month periods ended September 30, 2003 and 2002 are as follows:
<TABLE>
<CAPTION>

                                           ---------------------------------- ----------------------------------
                                           Three Months Ended September 30,    Nine Months Ended September 30,
                                           ---------------------------------- ----------------------------------
                                           ---------------- ----------------- ---------------- -----------------
COMPREHENSIVE INCOME:                           2003              2002             2003              2002
------------------------------------------ ---------------- ----------------- ---------------- -----------------

<S>                                           <C>              <C>              <C>             <C>
Net Income (Loss)                             $   252,875      $  (472,479)     $   (400,183)   $  (2,717,420)
Net Unrealized gains (losses) on
securities                                       (526,373)         965,148         2,312,710          556,174
------------------------------------------ ---------------- ----------------- ---------------- -----------------
Comprehensive Income (Loss)                   $  (273,498)     $   492,669      $  1,912,527    $  (2,161,246)
------------------------------------------ ---------------- ----------------- ---------------- -----------------
</TABLE>


Note 3 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The   Company's   derivatives   outstanding   at  September   30,  2003  include
approximately  $195,000 of embedded options on convertible bonds and $134,000 of
other open option  positions.  Hedge accounting is not used for these securities
and changes in market value are reported currently as realized gains or losses.


Note  4 - NET REALIZED INVESTMENT GAINS (LOSSES), NET OF EXPENSES

The Company  recorded  pretax  reductions to the carrying value of available for
sale  securities  totaling  $135,000  and  $2,095,000  for the nine months ended
September 30, 2003 and 2002,  respectively,  relating to declines in value which
were  considered  by management  to be other than  temporary.  These amounts are
included  along with other net  realized  losses.  The Company also nets certain
direct,  incremental  investment management fees against net realized investment
gains  and  losses  presented  in  the  Condensed  Consolidated   Statements  of
Operations.  Such costs are based directly on or, are primarily  associated with
capital gains.  Costs netted against realized  investment gains and losses total
$236,000  and  $23,000 for the nine months  ended  September  30, 2003 and 2002,
respectively.


Note 5 - INCOME TAXES

Current taxes are provided based on estimates of the projected  effective annual
tax rate.  Deferred  taxes  reflect  the net  effects of  temporary  differences
between the carrying amount of assets and  liabilities  for financial  reporting
purposes and the amounts used for income tax purposes.

<PAGE>
Part I; Item 1  (continued)


Note 6 - SEGMENT INFORMATION

The Company's  operations  are managed along five  principal  insurance  product
lines: Home Service Life, Broker Life,  Preneed Life,  Dental, and Other Health.
Products in all five lines are sold through independent agency operations.  Home
Service Life consists  primarily of traditional life insurance  coverage sold in
amounts  of  $10,000  and under to middle  and lower  income  individuals.  This
distribution  channel is characterized by a significant  amount of agent contact
with customers  throughout the year. Broker Life product sales consist primarily
of simplified issue and graded-benefit policies in amounts of $10,000 and under.
Other  products in this segment  which are not  aggressively  marketed  include:
group life, universal life, annuities and participating life coverages.  Preneed
Life products are sold to individuals in connection with prearrangement of their
funeral and  include  single  premium  and  multi-pay  policies  with  coverages
generally in amounts of $10,000 and less.  These  policies are generally sold to
older individuals at increased premium rates. Dental products are term coverages
generally  sold to small and  intermediate  size employer  groups.  Other Health
products  include various  accident and health coverages sold to individuals and
employer groups.  Segment information as of September 30, 2003 and 2002, and for
the periods then ended is as follows:
<TABLE>
<CAPTION>

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------------------------- ----------------------------------
                                        ---------------- ----------------- ---------------- -----------------
REVENUE:                                     2003              2002             2003              2002
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                       <C>              <C>               <C>              <C>
Home Service Life                         $  2,267,969     $  2,405,316      $  6,815,681     $  7,035,222
Broker Life                                  1,485,946        1,485,669         4,317,588        4,531,884
Preneed Life                                 3,953,455        6,092,054        12,288,540       14,445,028
Dental                                       2,052,254        2,077,379         6,290,470        6,120,719
Other Health                                   339,705          367,216         1,041,476        1,089,758
--------------------------------------- ---------------- ----------------- ---------------- -----------------
Segment Totals                              10,099,329       12,427,634        30,753,755       33,222,611
Net realized investment gains (losses)         925,557         (701,218)          760,829       (2,497,769)
--------------------------------------- ---------------- ----------------- ---------------- -----------------
Total Revenue                             $ 11,024,886     $ 11,726,416      $ 31,514,584     $ 30,724,842
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>


Below are the net  investment  income  amounts which are included in the revenue
totals above.

<TABLE>
<CAPTION>
                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------------------------- ----------------------------------
                                        ---------------- ----------------- ---------------- -----------------
NET INVESTMENT INCOME:                       2003              2002             2003              2002
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                        <C>              <C>              <C>              <C>
  Home Service Life                        $   434,121      $   435,698      $  1,208,152     $  1,368,774
  Broker Life                                  580,429          527,574         1,633,080        1,669,919
  Preneed Life                                 537,241          425,155         1,413,597        1,190,448
  Dental                                         7,047            5,454            18,780           19,762
  Other Health                                  22,002           18,251            59,070           59,872
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                          $  1,580,840     $  1,412,132      $  4,332,679     $  4,308,775
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>


<PAGE>

Part I; Item 1  (continued)


The Company evaluates performance based on several factors, of which the primary
financial measure is segment profit.  Segment profit represents pretax earnings,
except net  realized  investment  gains and  interest  expense are  excluded.  A
significant  portion of the Company's  realized  investment  gains are generated
from investments in equity  securities.  The equities  portfolio  averaged (on a
cost basis) approximately $9,941,000 and $7,179,000 during the nine months ended
September 30, 2003 and 2002, respectively.
<TABLE>
<CAPTION>

                                         ---------------------------------- ----------------------------------
                                         Three Months Ended September 30,    Nine Months Ended September 30,
                                         ---------------------------------- ----------------------------------
                                         ----------------- ---------------- ----------------- ----------------
SEGMENT PROFIT (LOSS):                         2003             2002              2003             2002
---------------------------------------- ----------------- ---------------- ----------------- ----------------

<S>                                         <C>               <C>              <C>                <C>
  Home Service Life                         $  (122,951)      $   145,625      $   (36,241)       $   (2,227)
  Broker Life                                  (312,089)          (49,071)        (487,753)         (192,069)
  Preneed Life                                  (59,469)         (163,181)        (438,880)         (512,479)
  Dental                                        (10,726)          131,685          195,170           236,903
  Other Health                                  (57,379)           25,330         (234,631)         (143,726)
---------------------------------------- ----------------- ---------------- ----------------- ----------------
  Segment Totals                               (562,614)           90,388       (1,002,335)         (613,598)
  Net realized investment gains
(losses)                                        925,557          (701,218)         760,829        (2,497,769)
  Interest expense                               90,068            74,649          279,677           234,053
---------------------------------------- ----------------- ---------------- ----------------- ----------------
  Gain (Loss) before income tax              $  272,875       $  (685,479)     $  (521,183)     $ (3,345,420)
---------------------------------------- ----------------- ---------------- ----------------- ----------------
</TABLE>


Depreciation  and  amortization  amounts below consist of  depreciation  expense
along with  amortization of the value of insurance  acquired and deferred policy
acquisition costs.
<TABLE>
<CAPTION>

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------------------------- ----------------------------------
                                        ---------------- ----------------- ---------------- -----------------
DEPRECIATION AND AMORTIZATION:               2003              2002             2003              2002
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                         <C>              <C>               <C>              <C>
  Home Service Life                         $  196,679       $  250,420        $  548,657       $  531,330
  Broker Life                                  182,691          119,652           468,398          395,604
  Preneed Life                                 147,511          363,395           597,884          827,933
  Dental                                        15,759           13,946            44,284           43,638
  Other Health                                   7,918            9,542            24,080           31,952
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                            $  550,558       $  756,955       $ 1,683,303      $ 1,830,457
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>


Segment asset totals are determined based on policy  liabilities  outstanding in
each segment.

                                              ----------------- ----------------
                                               September 30,     December 31,
ASSETS:                                             2003             2002
--------------------------------------------- ----------------- ----------------

Home Service Life                               $ 40,533,336      $ 39,587,175
Broker Life                                       54,070,858        54,232,558
Preneed Life                                      58,511,130        51,991,206
Dental                                               586,657           658,963
Other Health                                       1,945,872         1,971,630
--------------------------------------------- ----------------- ----------------
Segment Totals                                  $155,647,853      $148,441,532
--------------------------------------------- ----------------- ----------------
<PAGE>

Part I; Item 1  (continued)


Note 7 - LITIGATION

United  Liberty Life Insurance  Company  ("United  Liberty"),  which the Company
acquired in 1998,  is defending an action in an Ohio state court  brought by two
policyholders.  The  Complaint  refers to a particular  class of life  insurance
policies that United  Liberty  issued over a period of years ending around 1971.
It alleges that United Liberty's  dividend  payments on these policies from 1993
through 1999 were less than the required amount.  It does not specify the amount
of the  alleged  underpayment  but  implies a  maximum  of about  $850,000.  The
plaintiffs  also allege that United  Liberty is liable to pay punitive  damages,
also in an unspecified  amount,  for breach of an implied covenant of good faith
and fair dealing to the plaintiffs in relation to the dividends.  The action has
been  certified as a class action on behalf of all  policyholders  who were Ohio
residents  and whose  policies were still in force in 1993.  United  Liberty has
denied the material  allegations  of the  Complaint  and is defending the action
vigorously. Pre-trial discovery is continuing. United Liberty has filed a motion
for  summary  judgment,  which has been  fully  briefed  and  argued  and awaits
decision by the Court. At United Liberty's request, an initial mediation session
has been completed and negotiations are continuing.  As a pre-requisite  for the
mediation,  United Liberty  offered to settle the matter for payments over time,
which would  include  attorneys'  fees,  and which would be  contingent  upon an
exchange or reformation of the insurance policies currently owned by the members
of the  class.  At this  stage of the  litigation,  the  Company  is  unable  to
determine  whether an  unfavorable  outcome of the action is likely to occur or,
alternatively,  whether the chance of such an outcome is remote.  Therefore,  at
this time,  management has no basis for estimating  potential losses, if any. In
addition,  the  Company  is party to other  lawsuits  in the  normal  course  of
business.  Management  believes that recorded claims liabilities are adequate to
ensure that these other suits will be resolved without material financial impact
to the Company.


NOTE 8 - RECENTLY ISSUED ACCOUNTING STANDARDS

In  January  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation  No.  46,   Consolidation  of  Variable  Interest  Entities,   an
Interpretation of Accounting Research Bulletin (ARB) No. 51 which states certain
criteria  for  use  in   consolidating   another   entity.   The  provisions  of
Interpretation No. 46 had no impact on the financial statements of the Company.

In May 2003,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial  Accounting  Standards  No.  150,  Accounting  for  Certain  Financial
Instruments  with  Characteristics  of Both  Liabilities  and Equity  (FAS 150),
effective for interim reporting periods beginning after June 15, 2003. Under the
new rules, certain financial  instruments  classified as equity will be required
to be presented as  liabilities.  The provisions of FAS 150 had no impact on the
financial statements of the Company.



<PAGE>
Part I;  Item 2 - Management's Discussion and Analysis


FINANCIAL POSITION.  Shareholders' equity totaled approximately  $19,662,000 and
$17,758,000  at September  30, 2003 and December 31, 2002,  respectively.  These
balances reflect an approximate 11% increase for the nine months ended September
30, 2003. As described above,  comprehensive income (loss) totaled approximately
$1,913,000  and  $(2,161,000)  for the nine months ended  September 30, 2003 and
2002,  respectively.  A significant  portion of  comprehensive  income (loss) is
attributable  to changes in the value of the Company's fixed maturity and equity
portfolios.  Fixed  maturity  portfolio  positions  increased  $1,092,000  on an
amortized cost basis and increased $2,949,000 on a market value basis during the
first  nine  months of 2003.  This gross  appreciation  of  $1,857,000  resulted
primarily  from  increasing  bond prices  during the period.  Equity  securities
comprised  approximately  9.6%  and 5.2% of the  Company's  total  assets  as of
September  30,  2003 and  December  31,  2002,  respectively.  Equity  portfolio
positions increased  $5,445,000 on a cost basis and $7,184,000 on a market value
basis, during the first nine months of 2003,  resulting in gross appreciation of
$1,739,000.  Cash and cash  equivalent  positions also  decreased  approximately
$2,692,000  during the nine months ended  September  30, 2003  primarily  due to
increased fixed maturity and equity security investments.

Equity markets  continue to be volatile but were much more favorable during 2003
than  results  experienced  during  the prior  three  years.  Late in the second
quarter of 2003, interest yields on fixed maturity  investments finally began to
rise.  Although this  adversely  impacts the market value of the Company's  bond
portfolio,  the  opportunity  to invest new money at higher  yields would have a
positive impact on the Company's  operating  earnings.  Additionally,  improving
economic  activity  and equity  valuations  have  resulted  in a lower  level of
securities  impairment writedowns during 2003. The 2003 environment as described
continues to generate a relatively  high level of qualitative  investment  risk.
However,  measures  of  quantitative  investment  risk are not  believed to have
changed significantly from those previously disclosed in the Company's 2002 Form
10-K.


OPERATIONS.  Net  premiums  and  other  considerations  decreased  approximately
$2,278,000,  or 21% during the three months ended September 30, 2003 compared to
the three months ended  September 30, 2002 and decreased  $2,277,000,  or 8% for
the first nine months of 2003  compared to the first nine months of 2002.  Below
is a summary of net  premiums  earned by  segment,  for the three and nine month
periods ended September 30, 2003, along with the change from the prior year.
<TABLE>
<CAPTION>

                                      ---------------------------------- ----------------------------------
                                      Three Months Ended September 30,    Nine Months Ended September 30,
                                      ---------------------------------- ----------------------------------
                                      ---------------- ----------------- ---------------- -----------------
NET PREMIUMS EARNED                        Total            Change            Total            Change
------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                     <C>                   <C>          <C>                 <C>
  Home Service Life                     $  1,821,080          (64,488)     $  5,563,237        $  15,895
  Broker Life                                888,522           32,821         2,624,641          (92,011)
  Preneed Life                             3,400,085       (2,191,979)       10,823,122       (2,327,869)
  Dental                                   2,044,997          (25,746)        6,271,002          171,764
  Other Health                               317,048          (28,271)          980,241          (44,435)
------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                        $  8,471,732    $  (2,277,663)    $  26,262,243    $  (2,276,656)
------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>

The Home Service Life growth for the year is attributable to a continuing  focus
on  providing  quality  service to existing  agents and  customers  along with a
moderate  level of new agent  recruiting,  although  some agents have  expressed
concern about a recent  premium rate  increase.  The Broker Life decline for the
year is primarily  attributable to competition  from other carriers in the final
expense  marketplace.  Preneed  life  premiums  are  lower,  due in  part to the
Company's  decision to emphasize the lower annual premium  "multi-pay"  policies
rather  than  "single-pay"  policies  and some  loss of volume  attributable  to
reducing  commission  levels and the rate of annual growth credited to policies.
During 2003,  Dental  premiums  were  favorably  impacted by  additional  broker
relationships  and  normal  inflationary  premium  increases.  The Other  Health
segment products are not being actively marketed.

The Company's Pretax Income (Loss) improved  approximately  $958,000 to $273,000
for  the  three  months ended  September  30, 2003,   and  improved   $2,824,000
to $(521,000) for   the  nine  months   ended   September  30,  2003,   compared
to  the  corresponding   periods   in   2002.   Most  of  this   improvement  is
attributable to improving  realized  investment  gains (losses).   Net  realized
investment gains totaled  $926,000  and $761,000  respectively,  for  the  three
<PAGE>

Part I;  Item 2 - Management's Discussion and Analysis, continued


and nine month periods ending September 30, 2003, compared to realized losses of
$701,000  and  $2,498,000  respectively,  for the three and nine  month  periods
ending September 30, 2002. Both the equity and fixed income  investment  markets
improved  significantly  during the first nine  months of 2003.  Segment  Profit
(Loss),  which  excludes net  realized  investment  gains  (losses) and interest
expense declined approximately $653,000 to $(563,000) for the three months ended
September 30, 2003, and declined  $389,000 to  $(1,002,000)  for the nine months
ended  September  30,  2003,  compared to the  corresponding  periods in 2002. A
significant  portion of the adverse  impact for the three and nine month periods
ended  September 30, 2003 relates to the  approximate  54 basis point decline in
investment  yields as shown  below.  However,  investment  yields  for the three
months ended September 30, 2003 were  approximately  46 basis points higher than
yields during the first six months of 2003.  Additionally,  for the three months
ended  September  30, 2003,  mortality was  unfavorable  in the Home Service and
Broker  Life lines and Dental  claim  rates were  higher,  compared to the three
months ended  September 30, 2002. For the nine months ended  September 30, 2003,
Preneed Life results were  somewhat  favorably  impacted by a variety of pricing
and agent  compensation  actions taken, while mortality and morbidity results in
the other business segment were relatively stable.

Below are pretax  investment  income and total  return,  along with  approximate
annualized yields for the nine months ended September 30, 2003 and 2002.

                                             ----------------- -----------------
Nine Months Ended September 30                         2003              2002
-------------------------------------------- ----------------- -----------------

  Investment Income                             $  4,332,680       $ 4,308,775
  Realized and Unrealized Gains (Losses)           4,357,479        (1,654,740)
-------------------------------------------- ----------------- -----------------
  Total Return                                  $  8,690,159       $ 2,654,035
-------------------------------------------- ----------------- -----------------

  Average Cash and Investments                 $ 130,248,047     $ 115,261,875

  Investment Income Yield - Annualized                4.44%             4.98%
  Total Return - Annualized                           8.90%             3.07%

The Company's  effective income tax rate differs from the statutory federal rate
primarily due to the effect of the small life insurance  company deduction which
allows  certain  companies  to reduce their  taxable  income by up to 60% before
computing provisions for regular and alternative minimum tax.


CASH FLOW AND LIQUIDITY.  Cash flow from operations  totaled  $5,158,000 for the
nine months ended September 30, 2003 compared to $12,645,000 for the same period
in the prior  year.  This  positive  cash  flow for both  periods  is  primarily
attributable  to growth in Preneed Life  business,  although the 2002 total also
includes an  approximate  $2,565,000  net  recovery of federal  income tax.  The
$5,765,000  of cash  used by  investing  activities  for the nine  months  ended
September 30, 2003  resulted  primarily  from  investing the proceeds of Preneed
Life sales. The $2,085,000 of cash used in financing activities during the first
nine months of 2003 is primarily  attributable to bank loan principal repayments
along with annuity and Universal  Life account  withdrawals.  The quarterly bank
loan payment due on October 1, 2003 was paid by September 30, 2003, accordingly,
the  outstanding  bank loan  balance  decreased by four  quarterly  installments
during 2003. Due to continued earnings pressure from lower yields on investments
and other  competitive  impacts on product margins,  the Company is completing a
strategic  review  of  its  products  and  operations.  A key  element  of  this
initiative is improving  profitability of the Preneed,  Home Service, and Broker
Life  segments by increasing  premiums,  strengthening  underwriting  practices,
modifying commissions, and where possible, lowering interest crediting or policy
growth rates.  Regarding the currently  scheduled debt  repayments,  the Company
believes its available  funds will be adequate to service 2003 debt  obligations
and,  with other  available  assets,  will  probably be adequate to service debt
obligations  through  2004. In addition,  the  Company's  Chairman has expressed
potential willingness to loan the Company an additional $3,000,000 if necessary,
which could  service  debt  obligations  through the  majority of 2006.  For the
quarter ended  September 30, 2003, the Company did not meet one of its bank debt
covenants  (debt  to  earnings  ratio),  however  the  lender  has  waived  this
violation.  In return for the waiver and  recognizing  the  Company may not meet
this  covenant  as of  December  31,  2003,  the  Company's  Chairman  agreed to
personally  guarantee the  outstanding  bank debt.  During the fourth quarter of
2003,  the Company  expects to negotiate an  appropriate  fee for this  personal
guarantee will attempt to renegotiate the debt to earnings ratio covenant.
<PAGE>

Part I;  Item 2 - Management's Discussion and Analysis, continued


FORWARD-LOOKING INFORMATION.

All statements,  trend analyses and other  information  contained in this report
relative  to markets  for the  Company's  products  and trends in the  Company's
operations or financial  results,  as well as other  statements  including words
such as "anticipate",  "believe",  "plan", "estimate",  "expect",  "intend", and
other  similar  expressions,  constitute  forward-looking  statements  under the
Private  Securities   Litigation  Reform  Act  of  1995.  These  forward-looking
statements  are  subject to known and  unknown  risks,  uncertainties  and other
factors  which may cause actual  results to be materially  different  from those
contemplated by the  forward-looking  statements.  Such factors  include,  among
other things:

|X|      the  market value of the Company's  investments, including stock market
         performance and prevailing interest rate levels;
|X|      customer and agent  response  to new  products,  distribution  channels
         and marketing initiatives, including exposure to unrecoverable advanced
         commissions;
|X|      mortality,  morbidity,  lapse rates, and other factors which may affect
         the profitability of the Company's insurance products;
|X|      regulatory  changes or  actions, including those relating to regulation
         of insurance products and insurance companies;
|X|      ratings  assigned  to the Company and its  subsidiaries  by independent
         rating organizations  which the  Company believes  are important to the
         sale of its products;
|X|      general economic conditions and increasing competition which may affect
         the Company's ability to sell its products;
|X|      the  Company's  ability  to  achieve  anticipated  levels of  operating
         efficiencies and meet cash requirements based upon  projected liquidity
         sources;
|X|      unanticipated adverse litigation outcomes; and
|X|      changes in the Federal income tax laws and regulations which may affect
         the relative tax advantages of some of the Company's products.

There can be no  assurance  that other  factors  not  currently  anticipated  by
management will not also materially and adversely  affect the Company's  results
of operations.


<PAGE>

Part I; Item 3 - Quantitative and Qualitative Disclosures about Market Risk


QUANTITATIVE  AND  QUALITATIVE  RISK.  Changes in  quantitative  and qualitative
market risks during the nine months ended  September  30, 2003 are  discussed in
Part I, Item 2 above.




Part I;  Item 4 - Controls and Procedures


EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  Management of the Company
conducted an  evaluation of its  disclosure  controls and  procedures,  with the
supervision and participation of its Chief Executive Officer and Chief Financial
Officer,  as of the end of the period  covered  by this  quarterly  report.  The
Company does not expect that its disclosure controls and procedures will prevent
all error and fraud.  Such a control  system,  no matter how well  conceived and
operated,  can  provide  only  reasonable,  not  absolute,  assurance  that  the
objectives  of the  control  system  are met.  Further,  the design of a control
system must  balance  the  constraint  of prudent  resource  expenditure  with a
judgmental  evaluation  of  risks  and  benefits.  Based on this  evaluation  of
disclosure  controls and procedures,  the Company's Chief Executive  Officer and
Chief Financial Officer have concluded that such controls and procedures provide
reasonable  assurance that material  information  required to be included in the
Company's  periodic SEC reports is made known on a timely basis to the Company's
principal executive and financial officers.

CHANGES IN INTERNAL CONTROLS. There has been no change in the Company's internal
control over financial  reporting  identified in connection with the evaluation,
that occurred during the fiscal quarter ended September 30, 2003 that materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.
<PAGE>

Part II - Other Information


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

   a).   Exhibit 11:            Statement re: computation of per share earnings.
         Exhibit 31.1:          Certification of Chief Executive Officer
         Exhibit 31.2:          Certification of Chief Financial Officer
         Exhibit 32.1:          Certification of Chief Executive Officer
         Exhibit 32.2:          Certification of Chief Financial Officer


   b).   Reports on Form 8-K:   On August 15, 2003  the Company filed a Form 8-K
                                to furnish, pursuant to Item 12, a press release
                                disclosing the Company's earnings for the second
                                quarter of 2003.




                                   SIGNATURES

In accordance with the  requirements of the Securities and Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                         CITIZENS FINANCIAL CORPORATION
                         BY:       /s/ Darrell R. Wells
                                   ---------------------------------------------
                                   Darrell R. Wells
                                   President and Chief Executive Officer

                         BY:       /s/ Brent L. Nemec
                                   ---------------------------------------------
                                   Brent L. Nemec
                                   Treasurer and Principal Accounting Officer
Date:  November 14, 2003
<PAGE>



                                  EXHIBIT INDEX



------------------ -------------------------------------------------------------
   Exhibit No.                     Description
------------------ -------------------------------------------------------------

       11          Statement re: computation of per share earnings

       31.1        Certification of Chief Executive Officer

       31.2        Certification of Chief Financial Officer

       32.1        Certification of Chief Executive Officer

       32.2        Certification of Chief Financial Officer