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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 June 30, 2001

                                       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 - 1,733,715 as of
August 6, 2001.


The date of this Report is August 8, 2001.

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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)

Six Months Ended June 30                                                               2001                  2000
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                            <C>                  <C>
   Premiums and other considerations                                           $ 14,499,491         $ 11,768,194
   Premiums ceded                                                                  (571,395)            (485,350)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                        13,928,096           11,282,844
   Net investment income                                                          3,341,497            2,965,696
   Net realized investment gains (losses), net of expenses                       (3,298,100)           6,324,889
   Other income                                                                     119,270              111,437
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                   14,090,763           20,684,866

Policy Benefits and Expenses:
   Policyholder benefits                                                          9,211,451            7,991,184
   Policyholder benefits ceded                                                     (551,088)            (422,577)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                                8,660,363            7,568,607
   Increase in net benefit reserves                                               2,773,707            1,048,683
   Interest credited on policyholder deposits                                       413,409              406,104
   Commissions                                                                    3,413,978            2,383,575
   General expenses                                                               3,331,683            3,180,856
   Interest expense                                                                 314,701              379,307
   Policy acquisition costs deferred                                             (2,030,361)            (787,671)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                     914,001              627,495
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                               17,791,481           14,806,956
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before Income Tax Expense                                          (3,700,718)           5,877,910
Income Tax Expense (Benefit)                                                       (857,000)           2,140,000
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before cumulative effect of a                                      (2,843,718)           3,737,910
   change in accounting principle
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                 (311,211)                 ---
------------------------------------------------------------------------ -------------------- --------------------
Net Income (Loss)                                                             $  (3,154,929)       $   3,737,910
------------------------------------------------------------------------ -------------------- --------------------

Per Share Amounts:
Income (Loss) before cumulative effect of a
   change in accounting principle                                                     $(1.62)               $2.12
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                     (0.18)
------------------------------------------------------------------------ -------------------- --------------------
Net Income (Loss)                                                                     $(1.80)               $2.12
------------------------------------------------------------------------ -------------------- --------------------
<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 June 30                                                             2001                  2000
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                              <C>                  <C>
   Premiums and other considerations                                             $7,469,404           $5,850,075
   Premiums ceded                                                                  (259,863)            (289,583)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                         7,209,541            5,560,492
   Net investment income                                                          1,656,564            1,541,113
   Net realized investment gains (losses), net of expenses                       (3,469,996)           1,530,931
   Other income                                                                      69,325               66,555
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                    5,465,434            8,699,091

Policy Benefits and Expenses:
   Policyholder benefits                                                          4,510,476            3,758,649
   Policyholder benefits ceded                                                     (267,248)            (158,476)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                                4,243,228            3,600,173
   Increase in net benefit reserves                                               1,943,644              813,390
   Interest credited on policyholder deposits                                       217,863              204,658
   Commissions                                                                    1,655,635            1,200,652
   General expenses                                                               1,707,876            1,554,836
   Interest expense                                                                 143,050              194,085
   Policy acquisition costs deferred                                               (971,548)            (427,734)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                     417,849              289,839
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                                9,357,597            7,429,899
------------------------------------------------------------------------ -------------------- --------------------
Income (Loss) before Income Tax Expense                                          (3,892,163)           1,269,192
Income Tax Expense (Benefit)                                                       (945,000)             440,000
------------------------------------------------------------------------ -------------------- --------------------
Net Income (Loss)                                                               $(2,947,163)          $  829,192
------------------------------------------------------------------------ -------------------- --------------------

Net Income (Loss) Per Common Share                                                    $(1.68)               $0.47
------------------------------------------------------------------------ -------------------- --------------------
<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




                                                                                     June 30,        December 31,
                                                                                         2001                2000
------------------------------------------------------------------------ -------------------- --------------------
ASSETS                                                                             (Unaudited)

Investments:
 <S>                                                                               <C>                   <C>
  Securities available for sale, at fair value:
      Fixed maturities (amortized cost of $67,337,719
      and $72,516,172 in 2001 and 2000 respectively)                           $ 67,690,504          $ 71,403,674
      Equity securities (cost of $10,951,281 and
      $13,677,303 in 2001 and 2000, respectively)                                11,830,773            12,577,874
   Investment real estate                                                         3,548,764             3,506,386
   Mortgage loans on real estate                                                    156,000               156,000
   Policy loans                                                                   4,228,579             4,270,588
   Short-term investments                                                           610,379               610,379
------------------------------------------------------------------------ -------------------- --------------------
Total Investments                                                                88,064,999            92,524,901

Cash and cash equivalents                                                        26,079,323            20,093,774
Accrued investment income                                                         1,351,929             1,328,491
Reinsurance recoverable                                                           2,511,546             2,686,747
Premiums receivable                                                                 287,204               212,089
Property and equipment                                                            2,895,336             2,959,744
Deferred policy acquisition costs                                                 8,068,023             6,511,948
Value of insurance acquired                                                       4,525,492             4,884,680
Goodwill                                                                            800,788               851,795
Federal income tax receivable                                                       740,758             1,364,502
Deferred federal income tax                                                       1,142,677             1,711,661
Other assets                                                                        586,221               407,674
------------------------------------------------------------------------ -------------------- --------------------
Total Assets                                                                   $137,054,296          $135,538,006
------------------------------------------------------------------------ -------------------- --------------------
<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




                                                                                    June 30,     December 31,
                                                                                        2001                 2000
------------------------------------------------------------------------ -------------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY                                               (Unaudited)
<S>                                                                               <C>                   <C>
Liabilities:
Policy Liabilities:
   Future policy benefits                                                     $  86,547,617         $  83,403,780
   Policyholder deposits                                                         16,320,623            16,381,247
   Policy and contract claims                                                     1,648,164             1,816,947
   Unearned premiums                                                                170,334               217,670
   Other                                                                            269,357               203,600
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Liabilities                                                        104,956,095           102,023,244

Notes payable                                                                     7,600,000             8,000,000
Accrued expenses and other liabilities                                            2,253,628             2,240,653
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities                                                               114,809,723           112,263,897

Commitments and Contingencies

Shareholders' Equity:
   Common stock, 6,000,000 shares authorized;
      1,733,715 and 1,758,215 shares issued and outstanding
      in 2001 and 2000, respectively                                              1,733,715             1,758,215
   Additional paid-in capital                                                     7,419,263             7,640,988
   Accumulated other comprehensive income (loss)                                    798,324            (1,573,294)
   Retained earnings                                                             12,293,271            15,448,200
------------------------------------------------------------------------ -------------------- --------------------
Total Shareholders' Equity                                                       22,244,573            23,274,109
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities and Shareholders' Equity                                     $137,054,296          $135,538,006
------------------------------------------------------------------------ -------------------- --------------------
<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)




Six Months Ended June 30                                                               2001                  2000
------------------------------------------------------------------------ -------------------- --------------------

Cash Flows from Operations:
<S>                                                                             <C>                   <C>
Net income (loss)                                                               $(3,154,929)          $3,737,910
Adjustments to reconcile net income to cash from operations:
   Increase in benefit reserves                                                   3,115,649              975,511
   Decrease in claim liabilities                                                   (168,783)            (134,916)
   Decrease in reinsurance recoverable                                              175,201              187,139
   Interest credited on policyholder deposits                                       413,409              406,104
   Provision for amortization and depreciation, net of deferrals                   (937,238)             (10,898)
   Amortization of premium and accretion of discount on
      Securities purchased, net                                                     (42,285)              26,435
   Net realized investment (gains) losses                                         3,298,100           (6,324,889)
   Increase in accrued investment income                                            (23,438)             (48,122)
   Change in other assets and liabilities                                          (124,023)            (190,835)
   Decrease in deferred federal income tax liability                               (236,000)            (967,000)
   Decrease in federal income taxes receivable                                      623,743              537,000
   Cumulative effect of a change in accounting principle                            311,211                  ---
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided (used in) by Operations                                         3,250,617           (1,806,561)

Cash Flows from Investment Activities:
Cost of securities acquired                                                      (9,002,909)         (52,508,753)
Investments sold or matured                                                      13,108,753           59,973,409
Investment management fees and margin interest                                     (170,395)            (677,848)
Additions to property and equipment, net                                           (157,092)             (66,007)
Other investing activities, net                                                      76,833                9,533
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided by Investment Activities                                        3,855,190            6,730,334

Cash Flows from Financing Activities:
Policyholder deposits                                                               511,638              425,556
Policyholder withdrawals                                                           (985,671)          (1,358,602)
Payments on notes payable - bank                                                   (400,000)            (100,884)
Brokerage account advances, net                                                         ---             (250,000)
Repurchase of common stock                                                         (246,225)             (66,463)
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Financing Activities                                            (1,120,258)          (1,350,393)

------------------------------------------------------------------------ -------------------- --------------------
Net Increase in Cash and Cash Equivalents                                         5,985,549            3,573,380
Cash and Cash Equivalents at Beginning of Period                                 20,093,774           18,696,401
------------------------------------------------------------------------ -------------------- --------------------
Cash and Cash Equivalents at End of Period                                      $26,079,323          $22,269,781
------------------------------------------------------------------------ -------------------- --------------------
<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, 2000  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
and six months ended June 30, 2001 and 2000 are as follows:
<TABLE>

                                                  ------------------------------- -------------------------------
                                                   Three Months Ended June 30,      Six Months Ended June 30,
------------------------------------------------- --------------- --------------- --------------- ---------------
COMPREHENSIVE INCOME:                                  2001            2000            2001            2000
------------------------------------------------- --------------- --------------- --------------- ---------------

<S>                                                  <C>            <C>              <C>              <C>
  Net Income (Loss)                                  $(2,947,163)   $    829,192     $(3,154,929)     $3,737,910
  Net unrealized gains (losses) on securities          2,308,564      (3,111,712)      2,371,618        (864,980)
------------------------------------------------- --------------- --------------- --------------- ---------------
  Comprehensive Income (Loss)                       $   (638,599)    $(2,282,520)    $  (783,311)     $2,872,930
------------------------------------------------- --------------- --------------- --------------- ---------------
</TABLE>


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 $2,715,000 and $2,762,000 for the six months ended June
30,  2001 and 2000,  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.  Changes in the fair value of
derivative instruments are also reported as realized gains (losses). 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
$23,000  and  $283,000  for the  six  months  ended  June  30,  2001  and  2000,
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 June 30, 2001 and 2000, and for the
periods then ended is as follows:
<TABLE>

                                                  ------------------------------- -------------------------------
                                                   Three Months Ended June 30,      Six Months Ended June 30,
------------------------------------------------- --------------- --------------- --------------- ---------------
REVENUE:                                               2001            2000            2001            2000
------------------------------------------------- --------------- --------------- --------------- ---------------

<S>                                                  <C>             <C>             <C>             <C>
  Home Service Life                                  $ 2,344,220     $ 2,178,382     $ 4,682,981     $ 4,544,798
  Broker Life                                          1,602,379       1,470,882       3,091,439       2,965,840
  Preneed Life                                         2,530,092       1,228,505       4,667,413       2,280,474
  Dental                                               2,073,328       1,950,207       4,172,980       3,835,510
  Other Health                                           385,411         340,184         774,050         733,355
------------------------------------------------- --------------- --------------- --------------- ---------------
  Segment Totals                                       8,935,430       7,168,160      17,388,863      14,359,977
  Net realized investment gains (losses)              (3,469,996)      1,530,931      (3,298,100)      6,324,889
------------------------------------------------- --------------- --------------- --------------- ---------------
  Total Revenue                                      $ 5,465,434     $ 8,699,091     $14,090,763     $20,684,866
------------------------------------------------- --------------- --------------- --------------- ---------------
<FN>


Below are the net investment income amounts which are included in the revenue totals above.
</FN>
</TABLE>
<TABLE>
<CAPTION>

                                                  ------------------------------- -------------------------------
                                                   Three Months Ended June 30,      Six Months Ended June 30,
------------------------------------------------- --------------- --------------- --------------- ---------------
NET INVESTMENT INCOME:                                 2001            2000            2001            2000
------------------------------------------------- --------------- --------------- --------------- ---------------

<S>                                                   <C>             <C>             <C>             <C>
  Home Service Life                                   $  549,316      $  537,315      $1,112,364      $1,029,043
  Broker Life                                            685,730         640,963       1,398,252       1,236,698
  Preneed Life                                           387,505         329,844         762,276         637,621
  Dental                                                   9,822          10,056          19,787          18,701
  Other Health                                            24,191          22,935          48,818          43,633
------------------------------------------------- --------------- --------------- --------------- ---------------
  Segment Totals                                      $1,656,564      $1,541,113      $3,341,497      $2,965,696
------------------------------------------------- --------------- --------------- --------------- ---------------
</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.  The
majority of the  Company's  realized  investment  gains and losses are generated
from investments in equity  securities.  The equities  portfolio  averaged (on a
cost basis)  approximately  $12,838,000  and  $19,721,000  during the six months
ended June 30, 2001 and 2000, respectively.  If these funds had been invested in
fixed-maturities  yielding 7%,  realized  investment  gains  (losses) would have
changed and the six month segment  profit  totals below would have  increased by
approximately $300,000 and $454,000 in 2001 and 2000, respectively.
<TABLE>
<CAPTION>

                                                  ------------------------------- -------------------------------
                                                   Three Months Ended June 30,      Six Months Ended June 30,
------------------------------------------------- --------------- --------------- --------------- ---------------
SEGMENT PROFIT (LOSS):                                 2001            2000            2001            2000
------------------------------------------------- --------------- --------------- --------------- ---------------

<S>                                                 <C>             <C>              <C>              <C>
  Home Service Life                                 $      3,820    $     52,708     $   173,488      $   94,948
  Broker Life                                           (202,945)         61,042          11,502         196,013
  Preneed Life                                           (75,283)       (228,571)       (387,219)       (555,223)
  Dental                                                 (10,800)        100,984          84,698         222,495
  Other Health                                             6,091         (53,817)         29,614         (25,905)
------------------------------------------------- --------------- --------------- --------------- ---------------
  Segment Totals                                        (279,117)        (67,654)        (87,917)        (67,672)
  Net realized investment gains (losses)              (3,469,996)      1,530,931      (3,298,100)      6,324,889
  Interest expense                                       143,050         194,085         314,701         379,307
------------------------------------------------- --------------- --------------- --------------- ---------------
  Income (Loss) before Federal Income Tax            $(3,892,163)     $1,269,192     $(3,700,718)     $5,877,910
------------------------------------------------- --------------- --------------- --------------- ---------------
</TABLE>


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

                                                  ------------------------------- -------------------------------
                                                   Three Months Ended June 30,      Six Months Ended June 30,
------------------------------------------------- --------------- --------------- --------------- ---------------
DEPRECIATION AND AMORTIZATION:                         2001            2000            2001            2000
------------------------------------------------- --------------- --------------- --------------- ---------------

<S>                                                     <C>            <C>            <C>              <C>
  Home Service Life                                     $115,131       $ 155,196      $  292,766       $ 304,565
  Broker Life                                            171,747         113,002         330,427         276,107
  Preneed Life                                           186,721          74,167         401,511         152,807
  Dental                                                  18,006          12,664          36,006          26,262
  Other Health                                            15,818           9,448          32,412          17,030
------------------------------------------------- --------------- --------------- --------------- ---------------
  Segment Totals                                        $507,423       $ 364,477      $1,093,122       $ 776,771
------------------------------------------------- --------------- --------------- --------------- ---------------
<FN>

Segment asset totals are determined based on policy liabilities outstanding in each segment.
</FN>
</TABLE>

<TABLE>
<CAPTION>

                                                ----------------- ----------------
-----------------------------------------------     June 30,       December 31,
ASSETS:                                               2001             2000
----------------------------------------------- ----------------- ----------------

<S>                                                <C>              <C>
Home Service Life                                  $45,441,758      $ 45,577,255
Broker Life                                         56,253,560        57,721,008
Preneed Life                                        32,661,505        29,421,677
Dental                                                 736,665           799,496
Other Health                                         1,960,808         2,018,570
----------------------------------------------- ----------------- ----------------
Segment Totals                                    $137,054,296      $135,538,006
----------------------------------------------- ----------------- ----------------
</TABLE>
<PAGE>

Part I; Item 1  (continued)


Note 7 - LITIGATION


United Liberty Life Insurance Company ("United"),  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  issued over a period of years  ending  around  1971.  It
alleges that United'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  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  residing  in Ohio
whose  policies  were still in force in 1993.  United  has  denied the  material
allegations of the Complaint and is defending the action  vigorously.  Pre-trial
discovery is continuing and will be followed by motions to dismiss or narrow the
plaintiffs' claims. At this early 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.


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  will  apply the new rules on  accounting  for  goodwill  and other
intangible  assets  beginning in the first quarter of 2002.  Application  of the
nonamortization provisions of the Statement is expected to result in an increase
in net income of $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  $22,245,000 and
$30,843,000 at June 30, 2001 and 2000,  respectively.  These balances reflect an
approximate  4% decrease and a 10% increase for the respective six month periods
then  ended.   As  described   above,   comprehensive   income  (loss)   totaled
approximately  $(783,000)  and $2,873,000 for the six months ended June 30, 2001
and 2000, respectively.  A significant portion of comprehensive income (loss) is
attributable to changes in the value of the Company's equity portfolios.  Equity
securities  comprised  approximately 9% and 17% of the Company's total assets as
of June 30, 2001 and 2000, respectively.  Accordingly,  as also described below,
the Company's  financial position can be significantly  affected by movements in
the equities markets.  Equity portfolio positions decreased $2,726,000 on a cost
basis and $747,000 on a market value basis, during the first six months of 2001.
The majority of this cost basis  decline is  attributable  to  recording  second
quarter impairments  (realized losses) which management believes are appropriate
due to the continued uncertainty in the equity markets. Fixed maturity portfolio
positions  decreased  $5,178,000  on  an  amortized  cost  basis  and  decreased
$3,713,000 on a market value basis during the same period. However, as described
in Note 3 above,  $497,000 of the change  between cost and market  values during
2001 is attributable to the SFAS 133 transition  adjustment  recorded at January
1,  2001.  Cash and  cash  equivalent  positions  also  increased  approximately
$5,986,000 during the six months ended June 30, 2001.


OPERATIONS.  Net  premiums  and  other  considerations  increased  approximately
$2,645,000, or 23% during the first six months of 2001 compared to the first six
months of 2000.  Preneed Life,  Dental,  and Home Service Life premium increases
were approximately $2,259,000, $336,000, and $54,000, respectively, while Broker
Life  experienced  a  modest  decrease.  The  Preneed  Life  segment  growth  is
attributable  primarily to competitive  marketing agreements signed with certain
independent  agency  groups  during  late 2000.  Dental  premium  growth is also
primarily  attributable to a key additional  independent  marketing  arrangement
signed during 2000.  The Other Health segment  represents  less that 6% of total
premium.

Pretax  earnings  (loss)  [before  the  cumulative  effect  of a new  accounting
principle] totaled approximately  $(3,701,000) for the six months ended June 30,
2001,  compared  to  $5,878,000  for the six  months  ended June 30,  2000.  The
majority of this change resulted from realized investment losses. Pretax Segment
(Loss) (excluding realized investment gains and losses and interest expense) for
the first six months of 2001 was approximately $(88,000),  compared to $(68,000)
for the first six months of 2000. This change  resulted  primarily from improved
Preneed  Life sales and  mortality  and  improved  Home  Service  Life sales and
persistency, offset by higher Broker Life and Dental claims.

The Company's lower effective income tax (benefit) rate for the six months ended
June 30, 2001 is due to the effect of the small life insurance company deduction
on taxes paid in prior years, for which loss carrybacks are available.


CASH FLOW AND LIQUIDITY.  Cash flow from operations  totaled  $3,251,000 for the
six months ended June 30, 2001 compared to  $(1,807,000)  for the same period in
the prior year. This increase is primarily attributable to growth in the Preneed
Life business.  The $3,855,000 of cash provided by investing  activities for the
six months  ended March 31,  2001  resulted  primarily  from  retaining  the net
proceeds from equity  investment  sales as cash.  The $1,120,000 of cash used in
financing   activities  during  the  first  six  months  of  2001  is  primarily
attributable  to annuity and Universal  Life account  withdrawals  and bank loan
principal repayments.

<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

There have been no material changes in quantitative or qualitative  market risks
during the six months ended June 30, 2001.
<PAGE>






Part II - Other Information


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

     The  2001  annual   meeting  of  shareholders  of the  Company was  held on
     May 24, 2001. At the meeting, eight incumbent  directors were re-elected to
     serve until  the 2002  annual  meeting  of  shareholders.  The names of the
     incumbent directors and shares  of  the  Company's  Class A Stock voted for
     each were as follows:

          Candidate                                       Votes
          ------------------------------------       -----------------

          John H. Harralson, Jr.                         1,370,143
          Lane A. Hersman                                1,281,719
          Frank T. Kiley                                 1,370,143
          Charles A. Mays                                1,338,068
          Earle V. Powell                                1,370,043
          Thomas G. Ward                                 1,370,143
          Darrell R. Wells                               1,313,556
          Margaret A. Wells                              1,313,556



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:  August  8, 2001
<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)





Six Months Ended June 30                                                              2001             2000
--------------------------------------------------------------------------- ----------------- ----------------

Numerator(s):
   <S>                                                                           <C>                <C>
   Income (Loss) before cumulative effect of a
      change in accounting principle                                           $(2,843,718)      $3,737,910
   Cumulative effect of a change in accounting principle                          (311,211)             ---
--------------------------------------------------------------------------- ----------------- ----------------
   Net Income (Loss)                                                          $ (3,154,929)      $3,737,910


Denominator:
   Weighted average common shares                                                1,753,884        1,762,943


Earnings Per Share:
   Income (Loss) before cumulative effect of a
      change in accounting principle                                               $ (1.62)          $ 2.12
   Cumulative effect of a change in accounting principle                             (0.18)             ---
--------------------------------------------------------------------------- ----------------- ----------------
   Net Income (Loss)                                                               $ (1.80)          $ 2.12
</TABLE>





<TABLE>
<CAPTION>



Three Months Ended June 31                                                            2001             2000
--------------------------------------------------------------------------- ----------------- ----------------

Numerator(s):
<S>                                                                            <C>                 <C>
   Net Income (Loss)                                                           $(2,947,163)        $829,192


Denominator:
   Weighted average common shares                                                1,749,600        1,761,672


Earnings Per Share:
   Net Income (Loss)                                                              $  (1.68)          $ 0.47

</TABLE>