================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


  X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 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 - 1,701,628 as of
November 11, 2002.

The date of this Report is November 12, 2002.

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<PAGE>

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

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

Nine Months Ended September 30                                                         2002                 2001
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                            <C>                  <C>
   Premiums and other considerations                                           $ 29,503,837         $ 22,453,896
   Premiums ceded                                                                  (964,938)            (868,582)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                        28,538,899           21,585,314
   Net investment income                                                          4,308,775            4,948,968
   Net realized investment losses                                                (2,497,769)          (6,398,998)
   Other income                                                                     374,937              196,669
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                   30,724,842           20,331,953

Policy Benefits and Expenses:
   Policyholder benefits                                                         14,394,220           13,459,724
   Policyholder benefits ceded                                                   (1,039,057)            (869,942)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                               13,355,163           12,589,782
   Increase in net benefit reserves                                               9,796,081            4,410,098
   Interest credited on policyholder deposits                                       572,568              643,148
   Commissions                                                                    5,577,016            4,903,230
   General expenses                                                               5,017,477            4,922,102
   Interest expense                                                                 234,053              442,205
   Policy acquisition costs deferred                                             (2,080,972)          (2,687,885)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                   1,598,876            1,588,433
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                               34,070,262           26,811,113
------------------------------------------------------------------------ -------------------- --------------------
Loss before income tax and cumulative effect                                     (3,345,420)          (6,479,160)
   of a change in accounting principle
Income Tax Benefit                                                                 (628,000)          (1,696,000)
------------------------------------------------------------------------ -------------------- --------------------
Loss before cumulative effect of a                                              $(2,717,420)          (4,783,160)
   change in accounting principle
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                      ---             (311,211)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                       $ (2,717,420)        $ (5,094,371)
------------------------------------------------------------------------ -------------------- --------------------

Per Share Amounts:
Loss before cumulative effect of a
   change in accounting principle                                                    $ (1.58)             $ (2.75)
Cumulative effect from prior years (since January 1, 1999) of
   accounting for embedded options                                                      ---                 (0.18)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                             $ (1.58)             $ (2.93)
------------------------------------------------------------------------ -------------------- --------------------
<FN>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>

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

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




Three Months Ended September 30                                                        2002                 2001
------------------------------------------------------------------------ -------------------- --------------------
Revenues:
<S>                                                                            <C>                  <C>
   Premiums and other considerations                                           $ 11,069,060         $  7,652,167
   Premiums ceded                                                                  (319,665)            (297,187)
------------------------------------------------------------------------ -------------------- --------------------
      Net premiums earned                                                        10,749,395            7,354,980
   Net investment income                                                          1,412,132            1,607,471
   Net realized investment losses                                                  (701,218)          (3,100,898)
   Other income                                                                     266,107               77,399
------------------------------------------------------------------------ -------------------- --------------------
Total Revenues                                                                   11,726,416            5,938,952

Policy Benefits and Expenses:
   Policyholder benefits                                                          4,597,113            4,248,273
   Policyholder benefits ceded                                                     (189,383)            (318,854)
------------------------------------------------------------------------ -------------------- --------------------
      Net benefits                                                                4,407,730            3,929,419
   Increase in net benefit reserves                                               4,096,554            1,635,664
   Interest credited on policyholder deposits                                       169,527              229,739
   Commissions                                                                    2,039,036            1,489,252
   General expenses                                                               1,742,364            1,590,419
   Interest expense                                                                  74,649              127,504
   Policy acquisition costs deferred                                               (797,187)            (657,524)
   Amortization of deferred policy acquisition costs,
      value of insurance acquired, and goodwill                                     679,222              690,644
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Benefits and Expenses                                               12,411,895            9,035,117
------------------------------------------------------------------------ -------------------- --------------------
Loss before Income Tax                                                             (685,479)          (3,096,165)
Income Tax Benefit                                                                 (213,000)            (810,000)
------------------------------------------------------------------------ -------------------- --------------------
Net Loss                                                                        $  (472,479)        $ (2,286,165)
------------------------------------------------------------------------ -------------------- --------------------

Net Loss Per Common Share                                                            $ (0.27)              $(1.32)
------------------------------------------------------------------------ -------------------- --------------------
<FN>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
Part I;  Item 1  (continued)
<TABLE>
<CAPTION>


                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition




                                                                                September 30,        December 31,
                                                                                         2002                2001
------------------------------------------------------------------------ -------------------- --------------------
ASSETS                                                                             (Unaudited)

Investments:
   Securities available for sale, at fair value:
  <S>                                                                        <C>                    <C>
      Fixed maturities (amortized cost of $88,791,034
      and $75,872,277 in 2002 and 2001 respectively)                          $  91,615,254         $  77,534,516
      Equity securities (cost of $8,231,002 and
      $7,055,402 in 2002 and 2001, respectively)                                  8,973,606             8,116,958
   Investment real estate                                                         3,280,652             3,438,345
   Mortgage loans on real estate                                                    156,000               156,000
   Policy loans                                                                   4,127,296             4,136,649
   Short-term investments                                                           652,192               652,192
------------------------------------------------------------------------ -------------------- --------------------

Total Investments                                                               108,805,000            94,034,660

Cash and cash equivalents                                                        12,768,616            18,433,626
Accrued investment income                                                         1,372,345             1,390,550
Reinsurance recoverable                                                           2,530,243             2,755,680
Premiums receivable                                                                 460,775               215,520
Property and equipment                                                            2,819,191             2,862,727
Deferred policy acquisition costs                                                 9,588,640             8,579,423
Value of insurance acquired                                                       3,748,105             4,177,907
Goodwill                                                                            755,782               755,782
Federal income tax receivable                                                       290,015             2,854,933
Other assets                                                                        315,837               536,275
------------------------------------------------------------------------ -------------------- --------------------
Total Assets                                                                  $ 143,454,549         $ 136,597,083
------------------------------------------------------------------------ -------------------- --------------------
<FN>

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

<TABLE>
<CAPTION>


                                            Citizens Financial Corporation and Subsidiaries
                                       Condensed Consolidated Statements of Financial Condition




                                                                               September 30,     December 31,
                                                                                        2002                 2001
------------------------------------------------------------------------ -------------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY                                               (Unaudited)

Liabilities:
Policy Liabilities:
<S>                                                                           <C>                   <C>
   Future policy benefits                                                     $  99,056,386         $  89,337,560
   Policyholder deposits                                                         15,768,245            15,917,731
   Policy and contract claims                                                     1,602,030             1,442,356
   Unearned premiums                                                                242,590               252,730
   Other                                                                            222,908               289,400
------------------------------------------------------------------------ -------------------- --------------------
Total Policy Liabilities                                                        116,892,159           107,239,777

Notes payable                                                                     6,108,334             7,095,834
Accrued expenses and other liabilities                                            2,197,799             1,748,753
Deferred federal income tax                                                         482,716               510,236
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities                                                               125,681,008           116,594,600

Commitments and Contingencies

Shareholders' Equity:
   Common stock, 6,000,000 shares authorized;
      1,701,628 and 1,716,815 shares issued and outstanding
      in 2002 and 2001, respectively                                              1,701,628             1,716,815
   Additional paid-in capital                                                     7,233,429             7,285,938
   Accumulated other comprehensive income                                         2,313,279             1,757,105
   Retained earnings                                                              6,525,205             9,242,625
------------------------------------------------------------------------ -------------------- --------------------
Total Shareholders' Equity                                                       17,773,541            20,002,483
------------------------------------------------------------------------ -------------------- --------------------
Total Liabilities and Shareholders' Equity                                    $ 143,454,549         $ 136,597,083
------------------------------------------------------------------------ -------------------- --------------------
<FN>

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

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

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




Nine Months Ended September 30                                                         2002                  2001
------------------------------------------------------------------------ -------------------- --------------------

Cash Flows from Operations:
<S>                                                                             <C>                  <C>
Net loss                                                                        $(2,717,420)         $(5,094,371)
Adjustments to reconcile net loss to cash from operations:
   Increase in benefit reserves                                                   9,701,374            4,432,309
   Increase (decrease) in claim liabilities                                         159,674             (465,280)
   Decrease in reinsurance recoverable                                              225,437              152,973
   Interest credited on policyholder deposits                                       572,568              643,148
   Provision for amortization and depreciation, net of deferrals                   (250,520)            (830,755)
   Amortization of premium and accretion of discount on
      securities purchased, net                                                      20,018             (129,103)
   Net realized investment losses                                                 2,497,769            6,398,998
   (Increase) decrease in accrued investment income                                  18,205              (38,440)
   Change in other assets and liabilities                                           166,587             (210,473)
   Increase (decrease) in deferred federal income tax liability                    (314,034)             300,000
   (Increase) decrease in federal income taxes receivable                         2,564,918             (703,431)
   Cumulative effect of a change in accounting principle                                ---              311,211
------------------------------------------------------------------------ -------------------- --------------------
Net Cash provided by Operations                                                  12,644,576            4,766,786

Cash Flows from Investment Activities:
Cost of securities acquired                                                     (48,773,836)         (20,797,466)
Investments sold or matured                                                      32,308,112           20,603,453
Investment management fees                                                          (45,618)            (173,389)
Additions to property and equipment, net                                            (30,347)            (182,171)
Other investing activities, net                                                       9,353               79,122
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Investment Activities                                          (16,532,336)            (470,451)

Cash Flows from Financing Activities:
Policyholder deposits                                                               588,023              725,417
Policyholder withdrawals                                                         (1,310,077)          (1,596,451)
Payments on notes payable - bank                                                   (987,500)            (600,000)
Repurchase of common stock                                                          (67,696)            (246,225)
------------------------------------------------------------------------ -------------------- --------------------
------------------------------------------------------------------------ -------------------- --------------------
Net Cash used in Financing Activities                                            (1,777,250)          (1,717,259)

------------------------------------------------------------------------ -------------------- --------------------
Net Increase (decrease) in Cash and Cash Equivalents                             (5,665,010)           2,579,076
Cash and Cash Equivalents at Beginning of Period                                 18,433,626           20,093,774
------------------------------------------------------------------------ -------------------- --------------------
------------------------------------------------------------------------ -------------------- --------------------
Cash and Cash Equivalents at End of Period                                      $12,768,616          $22,672,850
------------------------------------------------------------------------ -------------------- --------------------
<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
<TABLE>
<CAPTION>

The components of comprehensive income, net of related tax, for the three months
and nine months ended September 30, 2002 and 2001 are as follows:

                                            ---------------------------------- ----------------------------------
                                            Three Months Ended September 30,    Nine Months Ended September 30,
                                            ---------------- ----------------- ---------------- -----------------
COMPREHENSIVE INCOME:                            2002              2001             2002              2001
------------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                            <C>            <C>               <C>              <C>
Net Loss                                       $  (472,479)   $  (2,286,165)    $  (2,717,420)   $  (5,094,371)
Net Unrealized gains (losses) on securities        965,148         (227,430)          556,174        2,144,188
------------------------------------------- ---------------- ----------------- ---------------- -----------------
Comprehensive Income (Loss)                    $   492,669    $  (2,513,595)    $  (2,161,246)   $  (2,950,183)
------------------------------------------- ---------------- ----------------- ---------------- -----------------
</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 AND LOSSES, NET OF EXPENSES

The Company  recorded  pretax  reductions to the carrying value of available for
sale  securities  totaling  $2,095,000  and $2,634,000 for the nine months ended
September 30, 2002 and 2001,  respectively,  relating to declines in value which
were  considered  by management  to be other than  temporary.  These amounts are
reported as  additions  to net  realized  investment  losses.  The Company  also
includes  certain  direct,  incremental  investment  management  fees  with  net
realized investment losses presented in the Condensed Consolidated Statements of
Income.  Such costs are based  directly on or, are  primarily  associated  with,
realized  capital gains and losses.  Costs  included  with  realized  investment
losses totaled  $23,000 and $54,000 for the nine months ended September 30, 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 September 30, 2002 and 2001, and for
the periods then ended is as follows:
<TABLE>
<CAPTION>

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------- ----------------- ---------------- -----------------
REVENUE:                                     2002              2001             2002              2001
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                       <C>              <C>               <C>              <C>
Home Service Life                         $  2,405,316     $  2,346,090      $  7,035,222     $  7,029,071
Broker Life                                  1,485,669        1,684,895         4,531,884        5,078,572
Preneed Life                                 6,092,054        2,763,516        14,445,028        7,430,929
Dental                                       2,077,379        1,884,305         6,120,719        6,057,285
Other Health                                   367,216          361,044         1,089,758        1,135,094
--------------------------------------- ---------------- ----------------- ---------------- -----------------
Segment Totals                              12,427,634        9,039,850        33,222,611       26,730,951
Net realized investment losses                (701,218)      (3,100,898)       (2,497,769)      (6,398,998)
--------------------------------------- ---------------- ----------------- ---------------- -----------------
Total Revenue                             $ 11,726,416     $  5,938,952      $ 30,724,842     $ 20,331,953
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>



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

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------- ----------------- ---------------- -----------------
NET INVESTMENT INCOME:                       2002              2001             2002              2001
--------------------------------------- ---------------- ----------------- ---------------- -----------------

  Home Service Life                        $   435,698      $   526,394      $  1,368,774     $  1,638,758
  Broker Life                                  527,574          661,800         1,669,919        2,060,052
  Preneed Life                                 425,155          388,358         1,190,448        1,150,634
  Dental                                         5,454            7,907            19,762           27,694
  Other Health                                  18,251           23,012            59,872           71,830
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                          $  1,412,132     $  1,607,471      $  4,308,775     $  4,948,968
--------------------------------------- ---------------- ----------------- ---------------- -----------------
<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 that net realized  investment gains and interest expense are excluded.  A
significant  portion of the Company's  realized  investment gains and losses are
generated from investments in equity securities. The equities portfolio averaged
(on a cost  basis)  $7,179,000  and  $11,370,000  during the nine  months  ended
September 30, 2002 and 2001, respectively.

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------- ----------------- ---------------- -----------------
SEGMENT PROFIT (LOSS):                       2002              2001             2002              2001
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                        <C>               <C>               <C>             <C>
  Home Service Life                        $   145,625       $   42,374        $   (2,227)     $   215,862
  Broker Life                                  (49,071)         181,013          (192,069)         192,515
  Preneed Life                                (163,181)        (101,278)         (512,479)        (170,774)
  Dental                                       131,685           81,070           236,903          165,768
  Other Health                                  25,330          (70,942)         (143,726)         (41,328)
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                                90,388          132,237          (613,598)         362,043
  Net realized investment losses              (701,218)      (3,100,898)       (2,497,769)      (6,398,998)
  Interest expense                              74,649          127,504           234,053          442,205
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Loss before income tax
    and cumulative effect of a change
    in accounting principle                $  (685,479)    $ (3,096,165)     $ (3,345,420)    $ (6,479,160)
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>


Depreciation  and  amortization  amounts below consist of  depreciation  expense
along with  amortization of the value of insurance  acquired and deferred policy
acquisition costs. Goodwill amortization of $23,000 and $74,000 is also included
for the three months and nine months, respectively, ended September 30, 2001. As
further  described in Note 8,  beginning in 2002,  goodwill  amortization  is no
longer permitted.
<TABLE>
<CAPTION>

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------- ----------------- ---------------- -----------------
DEPRECIATION AND AMORTIZATION:               2002              2001             2002              2001
--------------------------------------- ---------------- ----------------- ---------------- -----------------

<S>                                         <C>              <C>                 <C>            <C>
  Home Service Life                         $  250,420       $  352,726          $531,330       $  645,492
  Broker Life                                  119,652          158,360           395,604          488,787
  Preneed Life                                 363,395          240,451           827,933          625,750
  Dental                                        13,946           18,005            43,638           54,011
  Other Health                                   9,542           10,677            31,952           43,089
--------------------------------------- ---------------- ----------------- ---------------- -----------------
  Segment Totals                            $  756,955       $  780,219        $1,830,457       $1,857,129
--------------------------------------- ---------------- ----------------- ---------------- -----------------
</TABLE>


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

                                              ----------------- ----------------
                                               September 30,     December 31,
ASSETS:                                             2002             2001
--------------------------------------------- ----------------- ----------------

Home Service Life                                $44,606,794     $  44,818,038
Broker Life                                       53,422,217        54,954,194
Preneed Life                                      42,941,370        34,138,535
Dental                                               558,511           726,728
Other Health                                       1,925,657         1,959,588
--------------------------------------------- ----------------- ----------------
Segment Totals                                  $143,454,549     $ 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.  At United
Liberty's  request,   an  initial  mediation  session  has  been  completed  and
negotiations  are  continuing.  As a  pre-requisite  for the  mediation,  United
Liberty offered to settle the matter for payments over time, which would include
attorneys'  fees, and which would be contingent  upon an exchange or reformation
of the insurance  policies  currently owned by the members of the class. At this
stage  of the  litigation,  the  Company  is  unable  to  determine  whether  an
unfavorable outcome of the action is likely to occur or, alternatively,  whether
the chance of such an outcome is remote. Therefore, at this time, management has
no basis for estimating  potential losses,  if any. In addition,  the Company is
party to other  lawsuits in the normal course of business.  Management  believes
that recorded  claims  liabilities are adequate to ensure that these other suits
will be resolved without material financial impact to the Company.


Note 8 - RECENTLY ISSUED ACCOUNTING 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
completed the first step in evaluating the potential impairment of its goodwill.
Based on the results of this test, there was no impairment.

Below is a proforma  illustration of  earnings adjusted to  exclude the goodwill
amortization recorded during 2001.
<TABLE>
<CAPTION>

                                        ---------------------------------- ----------------------------------
                                        Three Months Ended September 30,    Nine Months Ended September 30,
                                        ---------------- ----------------- ---------------- -----------------
DESCRIPITON:                                 2002              2001             2002              2001
--------------------------------------- ---------------- ----------------- ---------------- -----------------
<S>                                        <C>            <C>                <C>              <C>
Net Loss excluding goodwill
  amortization                             $  (472,479)    $ (2,263,661)     $ (2,717,420)     $(5,020,861)
Goodwill amortization                              ---           22,504               ---           73,510
--------------------------------------- ---------------- ----------------- ---------------- -----------------
Net Loss - as reported                     $  (472,479)   $  (2,286,165)     $ (2,717,420)    $ (5,094,371)
--------------------------------------- ---------------- ----------------- ---------------- -----------------

Net Loss per Share:
  Excluding goodwill amortization              $ (0.27)         $ (1.31)          $ (1.58)         $ (2.87)
  As reported                                  $ (0.27)         $ (1.32)          $ (1.58)         $ (2.93)
<FN>

Total goodwill outstanding at September 30, 2002 is $756,000 with $304,000 allocable to Broker Life, $270,000 to Home Service Life,
and $182,000 to Preneed Life.
</FN>
</TABLE>

<PAGE>
Part I;  Item 1  (continued)


Note 9 - DEBT

The Company did not meet a bank loan covenant relating to a ratio of outstanding
bank debt to adjusted  earnings as of September 30, 2002.  The Company has begun
an  evaluation of strategic  alternatives  necessary for returning to compliance
and has implemented  certain  measures  designed to increase product margins and
reduce operating expenses. In addition, the Company plans to raise approximately
$2 million of cash from subordinated debt or other sources,  with the funds used
as a  capital  contribution  to its  principal  insurance  subsidiary,  Citizens
Security Life Insurance Company.  Based on these actions,  the lender has waived
the covenant violation for the third quarter of 2002.

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


FINANCIAL POSITION.  Shareholders' equity totaled $17,774,000 and $20,002,000 at
September 30, 2002 and December 31, 2001, respectively. These balances represent
a 2.5% increase and an 11.1% decrease for the three months and nine months ended
September  30, 2002,  respectively.  As described  above,  comprehensive  income
(loss) totaled  $492,000 and  $(2,514,000)  for the three months ended September
30, 2002 and 2001,  respectively.  For the nine months ended  September 30, 2002
and  2001   comprehensive   losses  totaled   $(2,161,000)   and   $(2,950,000),
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.  As of September 30, 2002 and December 31, 2001,  equity  securities
comprised  approximately  6% of the  Company's  total  assets,  and 50% and 41%,
respectively of shareholders' equity.  Accordingly, as also described below, the
Company's  financial position can be significantly  affected by movements in the
equities  markets.  Equity portfolio  positions  increased  $1,176,000 on a cost
basis and  $857,000  on a market  value  basis,  during the first nine months of
2002. Fixed maturity portfolio positions  increased  $12,919,000 on an amortized
cost basis and $14,081,000 on a market value basis during the same period.  Cash
and cash equivalent positions decreased by $5,665,000, to $12,769,000 during the
nine months ended September 30, 2002 and comprise  approximately  8.9% and 13.5%
of total assets at September 30, 2002 and December 31, 2001, respectively.

Equity markets continue to be highly volatile and have declined during 2002 to a
greater extent than  previously  anticipated.  In addition,  interest  yields on
fixed maturity  investments  have also declined  during 2002 to a greater extent
than previously  anticipated.  Accordingly,  although the Company had maintained
significant  cash and cash  equivalent  balances in  anticipation of potentially
rising interest  rates,  the  significant  decline in short-term  rates has and,
continues to  adversely  impact the  Company's  investment  portfolio  yield and
operating earnings. The Company's 2002 investment impairments include writedowns
of  certain  highly  publicized   companies  such  as  Cablevision   ($362,000),
MCI/Worldcom  ($348,000) and Adelphia ($145,000).  Due to continuing  accounting
investigations  at a wide range of companies and the generally  adverse economic
environment,  the Company  cannot  predict the  potential  of future  investment
impairments. The 2002 environment described above has produced a higher level of
qualitative investment risk. However,  measures of quantitative risk per unit of
investment are not believed to have changed  significantly from those previously
disclosed in the Company's 2001 Form 10-K


OPERATIONS.  Net premiums and other  considerations  increased $3,394,000 or 46%
during the three months ended  September  30, 2002  compared to the three months
ended September 30, 2001 and increased $6,954,000,  or 32% during the first nine
months of 2002  compared  to the first nine  months of 2001.  For the first nine
months of 2002,  Preneed Life,  Home Service Life, and Dental premium  increases
were  $6,888,000,   $222,000,  and  $71,000,  respectively,  while  Broker  Life
experienced a modest  decrease.  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  approximately  eighty-five  percent of the Increase in Net Benefit
Reserves  for nine  months  ended  September  30,  2002.  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)  improved  $2,411,000  to  $(685,000)  for  the  three  months  ended
September 30, 2002  compared to the third  quarter of 2001,  primarily due to an
approximate  $2,400,000  decrease  in  realized  investment  losses  along  with
improved  segment  results.  Pretax  Segment Profit (Loss)  (excluding  realized
investment gains and interest  expense) for the three months ended September 30,
2002 was $90,000, compared to $132,000 for 2001. This change is due primarily to
higher Broker Life  mortality and lower  interest  yields,  partially  offset by
improved  Home Service Life  mortality  and Other Health  morbidity.  The Pretax
Segment Profit (Loss) for the nine months ended September 30, 2002 and 2001 were
$(614,000) and $362,000,  respectively.  This decrease  resulted  primarily from
lower interest and higher  disability  claim levels.  Below are the approximate,
annualized  pretax investment income and total return yields for the nine months
ended September 30, 2002 and 2001.
<PAGE>
Part I;  Item 2  (continued)


                                             ----------------- -----------------
Nine Months Ended September 30                       2002              2001
-------------------------------------------- ----------------- -----------------

  Investment Income                              $ 4,308,775       $ 4,948,968
  Realized and Unrealized Losses                  (1,654,740)       (3,821,408)
-------------------------------------------- ----------------- -----------------
  Total Return                                   $ 2,654,035       $ 1,127,560
-------------------------------------------- ----------------- -----------------

  Average Cash and Investments                 $ 115,261,875     $ 113,278,571

  Investment Income Yield - Annualized                4.98%             5.82%
  Total Return - Annualized                           3.07%             1.33%

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, LIQUIDITY AND RATINGS.  Cash flow from operations totaled $12,645,000
for the nine months ended September 30, 2002 compared to $4,767,000 for the same
period in the prior year.  This increase is primarily  attributable to growth in
Preneed Life business.  The $16,532,000 of cash used by investing activities for
the nine months ended  September 30, 2002 resulted  primarily from investing the
proceeds of Preneed Life sales and  $5,665,000 of cash and short term funds into
fixed maturity  securities.  The $1,777,000 of cash used in financing activities
during the first three quarters of 2002 is primarily  attributable  to bank loan
principal  repayments along with annuity and Universal Life account withdrawals.
Due to continued  investment  losses and earnings  pressure from lower yields on
investments and cash  equivalents,  and in consideration of bank loan covenants,
the Company has begun evaluating options for strengthening its overall financial
position,  including  reassessing the strategic value of its business  segments.
Initial  steps have been taken to improve  product  pricing  margins  and reduce
operating  costs.  Continuation  of existing  earnings  trends could also prompt
state insurance department regulatory action and/or rating agency reevaluations.
However,  in an effort to maintain its  existing  rating,  the Company  plans to
contribute  approximately  $2 million  of  statutory  capital  to its  principal
insurance  subsidiary,  Citizens  Security Life Insurance  Company.  The Company
expects to obtain these funds from a subordinated borrowing or other sources.


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 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  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;
<PAGE>
Part I;  Item 2   (continued)


|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 nine months ended
September 30, 2002 are discussed in Part I, Item 2 above.





Part I;  Item 4 - Controls and Procedures


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  Based on an evaluation of the
Company's  disclosure  controls  and  procedures  within  the past 90 days,  the
Company has  concluded  that such  controls and  procedures  provide  reasonable
assurance  that  material  information  relating to the Company,  including  its
consolidated  subsidiaries,  is made known to the Company's  principal executive
and financial officers.


CHANGES IN  INTERNAL  CONTROLS.  There have been no  significant  changes in the
Company's internal controls or changes in other factors that could significantly
affect  these  controls  subsequent  to their  evaluation,  nor has the  Company
implemented  any  corrective  actions  regarding  significant   deficiencies  or
material weaknesses in internal controls.

<PAGE>
Part II - Other Information


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

         a).   Exhibits:                  See Exhibit Index enclosed.

         b).   Reports on Form 8-K:       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:  November 12, 2002
<PAGE>
Part II - Other Information  (continued)


                  Certification of Principal Executive Officer
                 Certification for Quarterly Report on Form 10Q



I, Darrell R. Wells, certify that:

1)   I have  reviewed  this quarterly  report on Form 10-Q of Citizens Financial
     Corporation;

2)   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material  fact necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements were made, not misleading with respect to the  period covered by
     this quarterly report;

3)   Based  on  my  knowledge,  the  financial  statements  and  other financial
     information  included  in  this  quarterly  report, fairly  present in  all
     material respects the financial condition,  results of operations  and cash
     flows  of  the  registrant  as  of, and for, the periods  presented in this
     quarterly report;

4)   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the  effectiveness of  the registrant's  disclosure  controls
         and procedures as of a date within 90 days prior to the  filing date of
         this quarterly report (the "Evaluation Date"); and

     c)  presented   in  this   quarterly  report  our   conclusions  about  the
         effectiveness  of the disclosure  controls and procedures based  on our
         evaluation as of the Evaluation Date;

5)   The registrant's  other  certifying officers and I have disclosed, based on
     our most  recent evaluation, to  the  registrant's  auditors and  the audit
     committee of  registrant's  board  of  directors (or persons performing the
     equivalent function):

     a)  all  significant  deficiencies  in the  design or operation of internal
         controls  which could  adversely  affect the  registrant's  ability  to
         record,  process,   summarize  and   report  financial  data  and  have
         identified  for the  registrant's  auditors any  material weaknesses in
         internal controls; and

     b)  any fraud, whether or not  material, that involves  management or other
         employees who  have a significant  role  in  the  registrant's internal
         controls; and

6)   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or  in other factors  that  could  significantly  affect internal
     controls subsequent to the date of our  most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




 Signature and Title:  /s/ Darrell R. Wells - CEO              Date:  11/12/2002
                       --------------------------              -----------------


<PAGE>

Part II - Other Information  (continued)


                  Certification of Principal Financial Officer
                 Certification for Quarterly Report on Form 10Q



I, Brent L. Nemec, certify that:

1)   I have reviewed  this quarterly  report on  Form 10-Q of Citizens Financial
     Corporation;

2)   Based on  my  knowledge,  this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material  fact necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements were made, not misleading  with respect to the period covered by
     this quarterly report;

3)   Based  on  my  knowledge,  the  financial  statements  and  other financial
     information  included  in  this  quarterly  report,  fairly present  in all
     material respects the financial condition,  results of operations  and cash
     flows  of  the  registrant  as of,  and for, the periods  presented in this
     quarterly report;

4)   The  registrant's  other  certifying  officers  and I  are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed  such  disclosure  controls  and  procedures  to  ensure  that
         material   information   relating  to  the  registrant,  including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c)  presented   in   this   quarterly  report  our  conclusions  about  the
         effectiveness of the disclosure controls and  procedures based   on our
         evaluation as of the Evaluation Date;

5)   The registrant's other certifying officers and I have  disclosed,  based on
     our most recent  evaluation,  to the  registrant's   auditors and the audit
     committee  of registrant's  board of  directors (or persons  performing the
     equivalent function):

     a)  all significant  deficiencies  in  the  design or operation of internal
         controls  which  could  adversely  affect  the  registrant's ability to
         record,  process,  summarize   and  report  financial   data  and  have
         identified  for the  registrant's  auditors any  material weaknesses in
         internal controls; and

     b)  any  fraud,  whether  or not  material,  that  involves  management  or
         other  employees  who  have  a  significant  role  in  the registrant's
         internal controls; and

6)   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls or in  other factors  that  could  significantly  affect  internal
     controls  subsequent  to the date of our most  recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




 Signature and Title:  /s/ Brent L. Nemec - CFO                Date:  11/12/2002
                      -----------------------------            -----------------



<PAGE>



                                  EXHIBIT INDEX



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

      11           Statement re: computation of per share earnings

     99.1          Certification of Chief Executive Officer

     99.2          Certification of Chief Financial Officer





<PAGE>
<TABLE>
<CAPTION>

                                                              EXHIBIT 11

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




Nine Months Ended September 30                                                        2002             2001
--------------------------------------------------------------------------- ----------------- ----------------
<S>                                                                           <C>              <C>
Numerator(s):
   Loss before cumulative effect of a
      change in accounting principle                                          $ (2,717,420)    $ (4,783,160)
   Cumulative effect of a change in accounting principle                               ---         (311,211)
--------------------------------------------------------------------------- ----------------- ----------------
   Net Loss                                                                   $ (2,717,420)    $ (5,094,371)


Denominator:
   Weighted average common shares                                                1,716,477        1,747,087


Earnings Per Share:
   Loss before cumulative effect of a
      change in accounting principle                                          $  (1.58)         $  (2.75)
   Cumulative effect of a change in accounting principle                           ---             (0.18)
--------------------------------------------------------------------------- ----------------- ----------------
   Net Loss                                                                   $  (1.58)         $  (2.93)
</TABLE>



<TABLE>
<CAPTION>




Three Months Ended September 30                                                       2002             2001
--------------------------------------------------------------------------- ----------------- ----------------

Numerator:
<S>                                                                             <C>            <C>
   Net Loss                                                                     $ (472,479)    $ (2,286,165)


Denominator:
   Weighted average common shares                                                1,715,811        1,733,715


Earnings Per Share:
   Net Loss                                                                     $  (0.27)      $  (1.32)
</TABLE>



<PAGE>
                                  EXHIBIT 99.1
                 Citizens Financial Corporation and Subsidiaries
                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350


                  In  connection  with  the  Quarterly  Report  on  Form 10-Q of
Citizens Financial Corporation  (the "Company") for the  quarterly  period ended
September 30, 2002, as filed with the Securities and Exchange  Commission on the
date hereof (the "Report") I, Darrell R. Wells,  Chief Executive  Officer of the
Company, certify  pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906
of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

                1. The Report  fully  complies with the  requirements of section
        13(a) or 15(d) of the Securities Exchange Act of 1934; and

                2. The information contained  in the Report fairly  presents, in
        all material respects, the financial condition and results of operations
        of the Company.


                 By:       /s/ Darrel R. Wells
                           -----------------------------------------------------
                           Darrell R. Wells
                           Chief Executive Officer

Date: November 12, 2002


--------------------------------------------------------------------------------


                                  EXHIBIT 99.2
                 Citizens Financial Corporation and Subsidiaries
                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350


                  In  connection  with  the  Quarterly  Report  on  Form 10-Q of
Citizens Financial Corporation  (the "Company")  for the quarterly  period ended
September 30, 2002, as filed with the Securities and Exchange  Commission on the
date hereof (the "Report") I, Brent L. Nemec, Vice President and Chief Financial
Officer of the  Company,  certify  pursuant  to  18 U.S.C. ss. 1350, as  adopted
pursuant  to ss. 906 of the Sarbanes-Oxley  Act of 2002, that, to the best of my
knowledge:

                1. The Report fully complies  with the  requirements of  section
        13(a) or 15(d) of the Securities Exchange Act of 1934; and

                2. The information contained in the Report fairly  presents,  in
        all material respects, the financial condition and results of operations
        of the Company.


                 By:       /s/ Brent L. Nemec
                           -----------------------------------------------------
                           Brent L. Nemec
                           Chief Financial Officer

Date: November 12, 2002