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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 March 31, 2002

                                       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 ~~~~~


                      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 - 1,716,815 as of
May 11, 2002.

The date of this Report is May 14, 2002.

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<PAGE>

<TABLE>
<CAPTION>

Part I - Financial Information;  Item 1 - Financial Statements

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

Three Months Ended March 31                                                            2002                 2001
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                             <C>                  <C>
   Premiums and other considerations                                            $ 8,595,976          $ 7,332,325
   Premiums ceded                                                                  (338,734)            (311,532)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                         8,257,242            7,020,793
   Net investment income                                                          1,467,823            1,684,933
   Net realized investment gains (losses)                                          (328,401)             171,896
   Other income                                                                      51,823               49,945
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                    9,448,487            8,927,567

Policy Benefits and Expenses:
   Policyholder benefits                                                          4,776,105            4,700,975
   Policyholder benefits ceded                                                     (491,128)            (283,840)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                                4,284,977            4,417,135
   Increase in net benefit reserves                                               2,286,494            1,003,010
   Interest credited on policyholder deposits                                       187,322              195,546
   Commissions                                                                    1,694,633            1,758,343
   General expenses                                                               1,500,883            1,623,807
   Interest expense                                                                  81,228              171,651
   Policy acquisition costs deferred                                               (570,895)          (1,058,813)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                     450,788              487,742
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                                9,915,430            8,598,421
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before income tax and cumulative effect                              (466,943)             329,146
   of a change in accounting principle
Income Tax Expense (Benefit)                                                        (70,000)              86,000
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before cumulative effect of a                                        (396,943)             243,146
   change in accounting principle
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                      ---             (311,211)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                        $  (396,943)         $   (68,065)
------------------------------------------------------------------------ -------------------- --------------------

Per Share Amounts:
Income (Loss) before cumulative effect of a
   change in accounting principle                                                    $ (0.23)             $  0.14
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                      ---                 (0.18)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                             $ (0.23)             $ (0.04)
------------------------------------------------------------------------ -------------------- --------------------
<FN>

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

Part I; Item 1  (continued)


                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition




                                                                                    March 31,        December 31,
                                                                                         2002                2001
------------------------------------------------------------------------ -------------------- --------------------
ASSETS                                                                             (Unaudited)

Investments:
<S>                                                                          <C>                   <C>
   Securities available for sale, at fair value:
      Fixed maturities (amortized cost of $79,857,559
      and $75,872,277 in 2002 and 2001 respectively)                          $  80,363,013         $  77,534,516
      Equity securities (cost of $6,981,538 and
      $7,055,402 in 2002 and 2001, respectively)                                  8,046,594             8,116,958
   Investment real estate                                                         3,414,614             3,438,345
   Mortgage loans on real estate                                                    156,000               156,000
   Policy loans                                                                   4,129,376             4,136,649
   Short-term investments                                                           652,192               652,192
------------------------------------------------------------------------ -------------------- --------------------
Total Investments                                                                96,761,789            94,034,660

Cash and cash equivalents                                                        16,203,267            18,433,626
Accrued investment income                                                         1,243,591             1,390,550
Reinsurance recoverable                                                           2,783,352             2,755,680
Premiums receivable                                                                 417,248               215,520
Property and equipment                                                            2,822,973             2,862,727
Deferred policy acquisition costs                                                 8,891,436             8,579,423
Value of insurance acquired                                                       4,042,191             4,177,907
Goodwill                                                                            755,782               755,782
Federal income tax receivable                                                     2,851,306             2,854,933
Other assets                                                                        385,050               536,275
------------------------------------------------------------------------ -------------------- --------------------
Total Assets                                                                  $ 137,157,985         $ 136,597,083
------------------------------------------------------------------------ -------------------- --------------------
<FN>

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

Part I; Item 1  (continued)



                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition




                                                                                   March 31,     December 31,
                                                                                        2002                 2001
------------------------------------------------------------------------ -------------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY                                               (Unaudited)

Liabilities:
Policy Liabilities:
<S>                                                                             <C>                   <C>
   Future policy benefits                                                     $  91,644,028         $  89,337,560
   Policyholder deposits                                                         15,922,845            15,917,731
   Policy and contract claims                                                     1,504,510             1,442,356
   Unearned premiums                                                                255,780               252,730
   Other                                                                            185,319               289,400
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Liabilities                                                        109,512,482           107,239,777

Notes payable                                                                     6,766,667             7,095,834
Accrued expenses and other liabilities                                            1,921,460             1,748,753
Deferred federal income tax                                                          89,321               510,236
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities                                                               118,289,930           116,594,600

Commitments and Contingencies

Shareholders' Equity:
   Common stock, 6,000,000 shares authorized;
      1,716,815 shares issued and outstanding
      in 2001 and 2000, respectively                                              1,716,815             1,716,815
   Additional paid-in capital                                                     7,285,938             7,285,938
   Accumulated other comprehensive income                                         1,019,620             1,757,105
   Retained earnings                                                              8,845,682             9,242,625
------------------------------------------------------------------------ -------------------- --------------------
Total Shareholders' Equity                                                       18,868,055            20,002,483
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities and Shareholders' Equity                                    $ 137,157,985         $ 136,597,083
------------------------------------------------------------------------ -------------------- --------------------
<FN>

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

Part I; Item 1  (continued)

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




Three Months Ended March 31                                                            2002                  2001
------------------------------------------------------------------------ -------------------- --------------------

Cash Flows from Operations:
<S>                                                                            <C>                  <C>
Net loss                                                                       $   (396,943)        $    (68,065)
Adjustments to reconcile net loss to cash from operations:
   Increase in benefit reserves                                                   2,316,777            1,007,411
   Increase (decrease) in claim liabilities                                          62,154             (123,041)
   (Increase) decrease in reinsurance recoverable                                   (27,672)              30,223
   Interest credited on policyholder deposits                                       187,322              195,546
   Provision for amortization and depreciation, net of deferrals                    (43,198)            (481,524)
   Amortization of premium and accretion of discount on
      securities purchased, net                                                      (7,394)             (14,340)
   Net realized investment (gains) losses                                           328,401             (171,896)
   Decrease in accrued investment income                                            146,959               93,904
   Change in other assets and liabilities                                            40,946             (135,152)
   Increase (decrease) in deferred federal income tax liability                     (41,000)             173,000
   Decrease in federal income taxes receivable                                        3,627            1,157,743
   Cumulative effect of a change in accounting principle                                ---              311,211
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided by Operations                                                   2,569,979            1,975,020

Cash Flows from Investment Activities:
Cost of securities acquired                                                      (8,961,804)          (2,992,896)
Investments sold or matured                                                       4,720,959            8,457,895
Investment management fees                                                          (41,968)            (151,753)
Additions to property and equipment, net                                            (13,423)             (18,311)
Other investing activities, net                                                       7,273               76,973
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided by (used in) Investment Activities                             (4,288,963)           5,371,908

Cash Flows from Financing Activities:
Policyholder deposits                                                               169,524              255,335
Policyholder withdrawals                                                           (351,732)            (548,928)
Payments on notes payable - bank                                                   (329,167)            (200,000)
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Financing Activities                                              (511,375)            (493,593)

------------------------------------------------------------------------ -------------------- --------------------
Net Increase (Decrease) in Cash and Cash Equivalents                             (2,230,359)           6,853,335
Cash and Cash Equivalents at Beginning of Period                                 18,433,626           20,093,774
------------------------------------------------------------------------ -------------------- --------------------
------------------------------------------------------------------------ -------------------- --------------------
Cash and Cash Equivalents at End of Period                                     $ 16,203,267         $ 26,947,109
------------------------------------------------------------------------ -------------------- --------------------
<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, 2001  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, net of related tax, for the three months
ended March 31, 2002 and 2001 are as follows:

                                            ----------------------------------
                                              Three Months Ended March 31,
COMPREHENSIVE INCOME:                             2002             2001
------------------------------------------- ----------------- ----------------
  Net Loss                                    $   (396,943)     $    (68,065)
  Net unrealized gain (loss) on securities        (737,785)           63,054
------------------------------------------- ----------------- ----------------
  Comprehensive Loss                          $ (1,134,728)    $      (5,011)
------------------------------------------- ----------------- ----------------


Note 3 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Effective  January 1, 2001, the Company adopted Financial  Accounting  Standards
Board  Statement  (SFAS) No. 133,  "Accounting  for Derivative  Instruments  and
Hedging  Activities",  as  amended  by SFAS  Nos.  137 and 138.  This  statement
requires that all  derivatives  be recognized as either assets or liabilities in
the balance sheet at their fair value,  and sets forth the manner in which gains
or losses thereon are to be recorded.  The treatment of such gains and losses is
dependent  upon the type of  exposure,  if any,  for  which  the  derivative  is
designed as a hedge.  Currently,  the Company has not designated any derivatives
as hedges.  In  accordance  with SFAS 133,  as of January 1, 2001,  the  Company
recorded a $311,211 transition  adjustment loss. This adjustment  represents the
cumulative  market  value  change  (since  January 1, 1999) of options  embedded
within  convertible  bonds, along with a recalculation of discount accretion for
the related host bonds and corresponding  income tax impacts. The net transition
adjustment  includes a $539,090 gross market value decline,  $67,558 of discount
accretion, and a $160,321 income tax benefit.



Note  4 - NET REALIZED INVESTMENT GAINS, NET OF EXPENSES

The Company  recorded  pretax  reductions to the carrying value of available for
sale  securities  totaling  $513,007 and $7,145 for the three months ended March
31,  2002 and 2001,  respectively,  relating  to  declines  in value  which were
considered by management to be other than temporary.  These amounts are reported
as reductions of net realized  investment  gains.  The Company also nets certain
direct,  incremental  investment management fees against net realized investment
gains presented in the Condensed  Consolidated  Statements of Income. Such costs
are based directly on or, are primarily associated with, realized capital gains.
Costs netted against realized  investment gains total $2,875 and $26,889 for the
three months ended March 31, 2002 and 2001, respectively.

<PAGE>

Part I; Item 1  (continued)


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.


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 March 31, 2002 and 2001, and for the
periods then ended is as follows:

                                             ----------------------------------
                                               Three Months Ended March 31,
REVENUE:                                           2002             2001
-------------------------------------------- ----------------- ----------------
Home Service Life                               $ 2,316,284       $ 2,338,761
Broker Life                                       1,553,223         1,791,298
Preneed Life                                      3,527,266         2,137,321
Dental                                            2,012,898         2,099,652
Other Health                                        367,217           388,639
-------------------------------------------- ----------------- ----------------
Segment Totals                                    9,776,888         8,755,671
Realized investment gains (losses)                 (328,401)          171,896
-------------------------------------------- ----------------- ----------------
Total Revenue                                   $ 9,448,487       $ 8,927,567
-------------------------------------------- ----------------- ----------------

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

                                           ----------------------------------
                                             Three Months Ended March 31,
INVESTMENT INCOME:                               2002             2001
------------------------------------------ ----------------- ----------------
  Home Service Life                          $    476,831      $    563,048
  Broker Life                                     587,537           712,522
  Preneed Life                                    375,560           374,771
  Dental                                            7,022             9,965
  Other Health                                     20,873            24,627
------------------------------------------ ----------------- ----------------
  Segment Totals                              $ 1,467,823       $ 1,684,933
------------------------------------------ ----------------- ----------------




<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  $7,018,000 and  $12,838,000  during the three months
ended March 31, 2002 and 2001, respectively.

                                             ----------------------------------
                                               Three Months Ended March 31,
SEGMENT PROFIT (LOSS):                             2002             2001
-------------------------------------------- ----------------- ----------------
  Home Service Life                             $    (3,604)        $ 169,668
  Broker Life                                        38,593           214,447
  Preneed Life                                     (216,053)         (174,235)
  Dental                                            156,757            95,498
  Other Health                                      (33,007)           23,523
-------------------------------------------- ----------------- ----------------
  Segment Totals                                    (57,314)          328,901
  Realized investment gains (losses)               (328,401)          171,896
  Interest expense                                   81,228           171,651
-------------------------------------------- ----------------- ----------------
  Income (Loss) before Federal Income Tax        $ (466,943)        $ 329,146
-------------------------------------------- ----------------- ----------------


Depreciation  and  amortization  amounts below consist of  depreciation  expense
along with  amortization of the value of insurance  acquired and deferred policy
acquisition costs. The first quarter of 2001 also includes approximately $29,000
and goodwill  amortization.  As further  described in Note 8, beginning in 2002,
goodwill amortization is no longer permitted.

                                             -----------------------------------
                                                  Three Months Ended March 31,
DEPRECIATION AND AMORTIZATION:                       2002              2001
-------------------------------------------- ----------------- -----------------
  Home Service Life                                 $ 159,270         $ 177,635
  Broker Life                                         160,706           158,680
  Preneed Life                                        180,950           206,380
  Dental                                               14,844            18,000
  Other Health                                         11,930            16,594
-------------------------------------------- ----------------- -----------------
  Segment Totals                                    $ 527,700         $ 577,289
-------------------------------------------- ----------------- -----------------


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

                                              ----------------- ----------------
                                                 March 31,       December 31,
ASSETS:                                             2002             2001
--------------------------------------------- ----------------- ----------------

Home Service Life                              $  44,533,792     $  44,818,038
Broker Life                                       54,383,735        54,954,194
Preneed Life                                      35,734,312        34,138,535
Dental                                               581,199           726,728
Other Health                                       1,924,947         1,959,588
--------------------------------------------- ----------------- ----------------
Segment Totals                                 $ 137,157,985     $ 136,597,083
--------------------------------------------- ----------------- ----------------

<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  whose policies
were issued in Ohio and 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 to which the plaintiffs  have not yet responded.  Although
United Liberty has requested  mediation of the action,  the plaintiffs would not
agree to the request for mediation  until United Liberty made an offer to settle
the case.  Consequently,  United  Liberty  has  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 for policies  with an increased  premium and a
set  dividend.  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 recorded claims liabilities are adequate to ensure
these other  suits will be resolved  without  material  financial  impact to the
Company.


Note 8 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


In June 2001,  the Financial  Accounting  Standards  Board issued  Statements of
Financial  Accounting Standards No. 141, "Business  Combinations",  and No. 142,
"Goodwill and Other  Intangible  Assets",  effective for fiscal years  beginning
after  December  15,  2001.  Under  the new  rules,  goodwill  will no longer be
amortized but will be subject to annual  impairment tests in accordance with the
Statements.  Other  intangible  assets will continue to be amortized  over their
useful lives.  The Company  adopted the new rules on accounting for goodwill and
other  intangible  assets  in the  first  quarter  of 2002.  Application  of the
nonamortization  provisions  of the Statement is expected to increase net income
approximately  $90,000 ($0.05 per share) per year. During 2002, the Company will
perform the first of the required  impairment tests of goodwill as of January 1,
2002 and has not yet  determined  what the effect of these  tests will be on the
earnings and financial position of the Company.



<PAGE>


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


FINANCIAL POSITION.  Shareholders' equity totaled approximately  $18,868,000 and
$20,002,000  at March  31,  2002 and  December  31,  2001,  respectively.  These
balances reflect an approximate 6% decrease for the three months ended March 31,
2002.  As  described  above,  the  comprehensive   loss  totaled   approximately
$1,135,000  and  $5,000  for the three  months  ended  March 31,  2002 and 2001,
respectively.   A  significant   portion  of  the  2002  comprehensive  loss  is
attributable  to changes in the value of the Company's fixed maturity and equity
portfolios.  Equity securities comprised approximately 6% of the Company's total
assets  as of March  31,  2002  and  December  31,  2001.  Accordingly,  as also
described below, the Company's financial position can be significantly  affected
by movements in the  equities  markets.  Equity  portfolio  positions  decreased
$74,000 on a cost basis and $70,000 on a market  value  basis,  during the first
three months of 2002. Fixed maturity portfolio positions increased $3,985,000 on
an amortized cost basis and increased  $2,828,000 on a market value basis during
the same period.  This difference  resulted  primarily from increasing  interest
rates during the quarter.  Cash and cash  equivalent  positions  also  decreased
approximately $2,230,000 during the quarter ended March 31, 2002.

The  Company  does  not  believe   significant  changes  have  occurred  in  the
qualitative or  quantitative  market risks for its investment  securities  since
December 31, 2001.  However,  an increasing interest rate environment would tend
to reduce the market value of existing  fixed  maturity  investments  while also
providing  the  opportunity  for  higher   reinvestment  yields  on  short  term
investments and new cash flow.

OPERATIONS.  Net  premiums  and  other  considerations  increased  approximately
$1,236,000,  or 18%  during  the first  quarter  of 2002  compared  to the first
quarter of 2001.  Preneed  Life and Home Service  Life  premium  increases  were
approximately $1,387,000 and $64,000, respectively, while Broker Life and Dental
each  experienced   modest  decreases.   The  Preneed  Life  segment  growth  is
attributable  primarily to continued  expansion into independently owned funeral
homes and a joint marketing  agreement with a casket  distributor.  Preneed Life
growth also accounts for more than  seventy-five  percent of the Increase in Net
Benefit Reserves for the quarter.  Broker Life and Dental premium reductions are
primarily  attributable to increased  competition in the broker market,  and the
mid-2001 loss of certain dental groups which had above average claim rates.  The
Other Health segment represents approximately 4% of total premium.

Pretax  earnings  (loss)  (before  the  cumulative  effect  of a new  accounting
principle) decreased  approximately  $796,000 to $(467,000) for the three months
ended March 31,  2002,  primarily  due to an  approximate  $500,000  decrease in
realized  investment  gains.  Pretax Segment Profit (Loss)  (excluding  realized
investment  gains and  interest  expense) for the first three months of 2002 was
approximately  $(57,000),  compared  to $329,000  for the first three  months of
2001. This decrease  resulted  primarily from a decline in investment yields and
increased  mortality rates,  partially offset by improved Dental  profitability.
Below are the approximate,  annualized pretax investment income and total return
yields for the three months ended March 31, 2002 and 2001.

                                             ----------------- -----------------
Three Months Ended March 31                            2002              2001
-------------------------------------------- ----------------- -----------------

  Investment Income                              $ 1,467,823        $1,684,933
  Realized and Unrealized Losses                  (1,481,686)         (511,128)
-------------------------------------------- ----------------- -----------------
  Total Return                                  $    (13,863)       $1,173,805
-------------------------------------------- ----------------- -----------------

  Average Cash and Investments                  $112,716,671      $113,070,808

  Investment Income Yield - Annualized                5.21%             5.96%
  Total Return - Annualized                          (0.05)%            4.15%

The change in the Company's  effective income tax rate is due to the lack of tax
loss carryback potential for a portion of the Company's operations.

CASH FLOW AND LIQUIDITY.  Cash flow from operations  totaled  $2,570,000 for the
quarter ended March 31, 2002  compared to $1,975,000  for the same period in the
prior year.  This increase is primarily  attributable  to growth in Preneed Life
business.  The  $4,289,000 of cash used by investing  activities for the quarter
ended March 31, 2002 resulted  primarily  from investing the proceeds of Preneed
Life sales in fixed maturity securities.  The $511,000 of cash used in financing
activities  during the first quarter of 2002 is primarily  attributable  to bank
loan  principal  repayments  along  with  annuity  and  Universal  Life  account
withdrawals.
<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.



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

The primary changes in  quantitative  market risks during the three months ended
March 31, 2002 are discussed in Part I, Item 2 above.


<PAGE>

Part II - Other Information




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

         a).   Exhibit 11.    Statement re: computation of per share earnings.


         b).   none
                                   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
                                    /s/ Darrell R. Wells
                           BY:
                                    --------------------------------------------
                                     Darrell R. Wells
                                     President and Chief Executive Officer
                                    /s/ Brent L. Nemec
                           BY:
                                    --------------------------------------------
                                      Brent L. Nemec
                                      Treasurer and Principal Accounting Officer

Date:  May 14, 2002
<PAGE>



                                  EXHIBIT INDEX



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

       11           Statement re: computation of per share earnings















<PAGE>
<TABLE>
<CAPTION>


                                                              EXHIBIT 11

                                            Citizens Financial Corporation and Subsidiaries
                                                   Computation of Per Share Earnings
                                                              (Unaudited)





Three Months Ended March 31                                                           2002             2001
--------------------------------------------------------------------------- ----------------- ----------------

Numerator(s):
<S>                                                                            <C>               <C>
   Income (Loss) before cumulative effect of
     a change in accounting principle                                          $  (396,943)      $  243,146
   Cumulative effect of a change in accounting principle                               ---         (311,211)
--------------------------------------------------------------------------- ----------------- ----------------
   Net Loss                                                                    $  (396,943)      $  (68,065)
--------------------------------------------------------------------------- ----------------- ----------------


Denominator:
   Weighted average common shares                                                1,716,815        1,758,215


Earnings Per Share:
   Income (Loss) before cumulative effect of
     a change in accounting principle                                         $ (0.23)          $  0.14
   Cumulative effect of a change in accounting principle                          ---             (0.18)
--------------------------------------------------------------------------- ----------------- ----------------
   Net Loss                                                                   $ (0.23)          $ (0.04)
--------------------------------------------------------------------------- ----------------- ----------------
</TABLE>