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


                   U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549


                                 FORM 10-QSB


           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934
             For the quarterly period ended June 30, 1999

                                     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 small business issuer 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
                         (Issuer's telephone number)



Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to filing requirements for the past 90 days.
Yes X   No


                    APPLICABLE ONLY TO CORPORATE ISSURERS

State the number of shares outstanding of each issuer's classes of common
equity, as of the latest practicable date:  Class A Stock - 1,789,715 as of
August 10, 1999.

Transitional Small Business Disclosure Format (Check one):   Yes   No  X

The date of this Report is August 16, 1999.

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

                                       1
<PAGE>



Part I - Financial Information;  Item 1 - Financial Statements




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


Six Months Ended June 30                                  1999           1998
------------------------------------------------------------------------------
Revenues:
  Premiums and other considerations               $ 10,623,599   $  9,312,068
  Premiums ceded                                      (459,238)      (452,586)
------------------------------------------------------------------------------
  Net premiums earned                               10,164,361      8,859,482
  Net investment income                              3,114,506      2,280,744
  Net realized investment gains, net of expenses     3,954,078      2,069,029
  Other income                                          95,090          8,254
------------------------------------------------------------------------------
Total Revenues                                      17,328,035     13,217,509

Policy Benefits and Expenses:
  Policyholder benefits                              7,964,573      6,416,566
  Policyholder benefits ceded                         (632,594)      (574,795)
------------------------------------------------------------------------------
  Net benefits                                       7,331,979      5,841,771
  Increase in net benefit reserves                     566,305        326,061
  Interest credited on policyholder deposits           451,561        443,030
  Commissions                                        2,101,436      1,906,588
  General expenses                                   2,789,182      2,368,900
  Interest expense                                     251,674        192,067
  Policy acquisition costs deferred                   (640,883)      (544,871)
  Amortization of deferred policy acquisition
  costs and value of insurance acquired                682,821        524,077
------------------------------------------------------------------------------
Total Policy Benefits and Expenses                  13,534,075     11,057,623
------------------------------------------------------------------------------
Income before Federal Income Tax                     3,793,960      2,159,886
Federal Income Tax Expense                           1,095,000        478,000
------------------------------------------------------------------------------
Net Income                                           2,698,960      1,681,886
Dividends on Redeemable Convertible Preferred
Stock                                                    ---          202,950
------------------------------------------------------------------------------
Net Income Applicable to Common Stock             $  2,698,960   $  1,478,936
------------------------------------------------------------------------------
Net Income Per Common Share:
  Basic                                                  $1.50          $1.37
  Diluted                                                $1.50          $0.93
------------------------------------------------------------------------------

See Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>

Part I; Item 1  (continued)




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


Three Months Ended June 30                                1999           1998
------------------------------------------------------------------------------
Revenues:
  Premiums and other considerations                $ 5,493,912    $ 4,733,218
  Premiums ceded                                      (275,787)      (228,404)
------------------------------------------------------------------------------
  Net premiums earned                                5,218,125      4,504,814
  Net investment income                              1,604,611      1,357,739
  Net realized investment gains, net of expenses     2,412,242      1,041,514
  Other income                                          83,182          7,576
------------------------------------------------------------------------------
Total Revenues                                       9,318,160      6,911,643

Policy Benefits and Expenses:
  Policyholder benefits                              3,917,139      3,684,180
  Policyholder benefits ceded                         (420,054)      (468,570)
------------------------------------------------------------------------------
  Net benefits                                       3,497,085      3,215,610
  Increase in net benefit reserves                     692,030         61,215
  Interest credited on policyholder deposits           204,210        229,063
  Commissions                                        1,106,811        938,770
  General expenses                                   1,554,602      1,262,174
  Interest expense                                     124,575        113,998
  Policy acquisition costs deferred                   (332,815)      (264,217)
  Amortization of deferred policy acquisition
  costs and value of insurance acquired                265,258        295,223
------------------------------------------------------------------------------
Total Policy Benefits and Expenses                   7,111,756      5,851,836
------------------------------------------------------------------------------
Income before Federal Income Tax                     2,206,404      1,059,807
Federal Income Tax Expense                             670,000        238,000
------------------------------------------------------------------------------
Net Income                                           1,536,404        821,807
Dividends on Redeemable Convertible Preferred
Stock                                                    ---          101,200
------------------------------------------------------------------------------
Net Income Applicable to Common Stock              $ 1,536,404    $   720,607
------------------------------------------------------------------------------

Net Income Per Common Share:
  Basic                                                  $0.85          $0.66
  Diluted                                                $0.85          $0.46
------------------------------------------------------------------------------

See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>


Part I; Item 1  (continued)



               Citizens Financial Corporation and Subsidiaries
          Condensed Consolidated Statements of Financial Condition




                                                    June 30        December 31
                                                     1999             1998
------------------------------------------------------------------------------
ASSETS                                                   (Unaudited)

Investments:
Securities available for sale, at fair value:

 Fixed maturities (amortized cost of $72,060,467
 and $75,235,199 in 1999 and 1998, respectively)  $ 72,784,687   $ 77,582,742

 Equity securities (cost of $22,051,976 and
 $14,733,876 in 1999 and 1998, respectively)        26,553,208     17,208,338

Investment real estate                               3,495,789      3,618,698
Mortgage loans on real estate                          161,621        164,757
Policy loans                                         4,033,464      4,034,152
Short-term investments                                 594,805        594,805
------------------------------------------------------------------------------
Total Investments                                  107,623,574    103,203,492

Cash and cash equivalents                            5,949,030      8,301,999
Accrued investment income                            1,345,266      1,263,898
Reinsurance recoverable:
  Paid benefits and losses                              69,156         85,299
  Unpaid benefits, losses and IBNR                   3,385,849      3,379,063
Premiums receivable                                    335,605        407,571
Property and equipment                               1,923,984      1,846,768
Deferred policy acquisition costs                    4,347,812      4,120,215
Value of insurance acquired                          5,696,663      6,135,132
Goodwill                                               491,737        513,325
Other assets                                           471,236        242,361
------------------------------------------------------------------------------
Total Assets                                     $ 131,639,912  $ 129,499,123
------------------------------------------------------------------------------

See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>

Part I; Item 1


               Citizens Financial Corporation and Subsidiaries
          Condensed Consolidated Statements of Financial Condition



                                                    June 30,     December 31,
                                                      1999          1998
------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY                     (Unaudited)

Liabilities:
Policy liabilities:
  Future policy benefits                         $  78,122,771  $  77,665,183
  Policyholder deposits                             15,973,533     16,323,652
  Policy and contract claims                         1,367,440      1,259,459
  Unearned premiums                                    211,842        208,524
  Other                                                254,416        187,779
------------------------------------------------------------------------------
Total Policy Liabilities                            95,930,002     95,644,597

Notes payable                                        6,255,000      6,510,000
Accrued expenses and other liabilities               2,550,956      3,627,214
Federal income tax payable                             937,363        667,013
Deferred federal income tax                          1,402,043      1,305,018
------------------------------------------------------------------------------
Total Liabilities                                  107,075,364    107,753,842

Commitments and Contingencies

Shareholders' Equity:
  Common stock, 6,000,000 shares authorized;
    1,793,715 and 1,802,615 shares issued and
    outstanding in 1999 and 1998, respectively       1,793,715      1,802,615
  Additional paid-in capital                         8,007,425      8,091,825
  Accumulated other comprehensive income             3,293,223      3,079,616
  Retained earnings                                 11,470,185      8,771,225
------------------------------------------------------------------------------
Total Shareholders' Equity                          24,564,548     21,745,281
------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity       $ 131,639,912  $ 129,499,123
------------------------------------------------------------------------------

See Notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>


Part I; Item 1  (continued)

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


Six Months Ended June 30                                1999           1998
------------------------------------------------------------------------------

Cash Flows from Operations:
Net income                                         $ 2,698,960    $ 1,681,886
Adjustments to reconcile net income to cash
from operations:
  Increase in benefit reserves                         538,789        295,947
  Increase (decrease) in claim liabilities             107,981       (279,439)
  (Increase) decrease in reinsurance recoverable         9,357         (4,596)
  Interest credited on policyholder deposits           451,561        443,030
  Provision for amortization and depreciation,
  net of deferrals                                     197,938        109,349
  Amortization of premium and accretion of
  discount on securities purchased, net                 83,155         36,508
  Net realized investment gains                     (3,954,078)    (2,069,029)
 (Increase) decrease in accrued investment income      (81,368)        36,657
  Change in other assets and liabilities              (102,987)      (162,529)
  Increase (decrease) in deferred federal
  income tax liability                                 (13,014)        94,425
  Increase in federal income taxes payable             270,350        178,575
------------------------------------------------------------------------------
Net Cash provided by Operations                        206,644        360,784

Cash Flows from Investment Activities:
Cost of securities acquired                        (31,785,122)   (22,575,973)
Investments sold or matured                         32,018,397     21,249,385
Investment management fees and margin interest        (233,349)      (359,396)
Additions to property and equipment, net               (88,719)       (97,206)
Purchase of United Liberty Life Insurance
Company, net of cash acquired                            ---       (3,848,387)
Other investing activities, net                          7,401         56,623
------------------------------------------------------------------------------
Net Cash used in Investment Activities                 (81,392)    (5,574,954)

Cash Flows from Financing Activities:
Policyholder deposits                                 368,808         322,361
Policyholder withdrawals                           (1,170,488)       (947,220)
Brokerage account advances, net                    (1,328,241)      1,702,393
Proceeds from note payable - bank                       ---         3,400,000
Payments on notes payable - bank                     (255,000)       (200,000)
Repurchase of common stock                            (93,300)          ---
Dividends on redeemable convertible preferred
stock                                                   ---          (203,500)
------------------------------------------------------------------------------
Net Cash provided by (used in) Financing
Activities                                         (2,478,221)      4,074,034

------------------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents          (2,352,969)     (1,140,136)
Cash and Cash Equivalents at Beginning of Period    8,301,999       6,180,576
------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period        $ 5,949,030     $ 5,040,440
------------------------------------------------------------------------------

See Notes to Condensed Consolidated Financial Statements.

                                       6
<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-QSB  in
conformity with generally accepted  accounting  principles.  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, 1998
consolidated  financial  statements  and footnotes  included in the Company's
annual report on Form 10-KSB.



Note 2 - COMPREHENSIVE INCOME

The components of comprehensive income, net of related tax, for the three
months and six months ended June 30, 1999 and 1998 are as follows:

                                  -------------------------------------------
                                   Three Months Ended        Six Months Ended
                                        June 30,                 June 30,
                                  -------------------------------------------
COMPREHENSIVE INCOME:                1999     1998          1999     1998
-----------------------------------------------------------------------------

  Net Income                    $1,536,404   $821,807   $2,698,960  $1,681,886
  Net  unrealized  gains (losses)
  on securities                   (543,028)   764,175      213,607   1,882,915
-----------------------------------------------------------------------------
  Comprehensive Income           $ 993,376 $1,585,982   $2,912,567  $3,564,801
-----------------------------------------------------------------------------


Note 3 - 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, 1999 and 1998, and for the periods then ended is as follows:


                                       7
<PAGE>








Part I; Item 1  (continued)

                              -------------------------------------------
                               Three Months Ended      Six Months Ended
                                   June 30,                June 30,
                              -------------------------------------------
REVENUE:                          1999       1998         1999      1998
-----------------------------------------------------------------------------

  Home Service Life          $ 2,290,329   $2,154,139   $4,427,256  $4,261,451
  Broker Life                  1,533,610    1,399,850    3,087,760   2,523,982
  Preneed Life                 1,022,484      406,528    1,808,055     406,528
  Dental                       1,721,092    1,567,147    3,397,389   3,259,147
  Other Health                   338,403      342,465      653,497     697,372
-----------------------------------------------------------------------------
  Segment Totals               6,905,918    5,870,129   13,373,957  11,148,480
  Net realized investment gains,
  net of expenses              2,412,242    1,041,514    3,954,078   2,069,029
-----------------------------------------------------------------------------
  Total Revenue              $ 9,318,160   $6,911,643  $17,328,035 $13,217,509
-----------------------------------------------------------------------------


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

                                  -------------------------------------------
                                   Three Months Ended       Six Months Ended
                                        June 30,                June 30,
                                  -------------------------------------------
INVESTMENT INCOME:                   1999       1998         1999      1998
-----------------------------------------------------------------------------

  Home Service Life            $543,509    $506,513    $1,050,478    $974,969
  Broker Life                   680,843     605,609     1,324,446   1,031,331
  Preneed Life                  349,005     214,300       679,012     214,300
  Dental                          8,417       8,010        16,303      15,793
  Other Health                   22,837      23,307        44,267      44,351
-----------------------------------------------------------------------------
  Segment Totals              $1,604,611 $1,357,739    $3,114,506  $2,280,744
-----------------------------------------------------------------------------

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 are
generated from investment in equity  securities.  The equities  portfolio has
averaged (on a cost basis)  approximately  $19,500,000 and $14,000,000 during
the six months  ended June 30,  1999 and 1998,  respectively.  If these funds
had been invested in  fixed-maturities  yielding  6.5%,  realized  investment
gains would have  declined  and the six month  segment  profit  totals  below
would have  increased  by an  additional  $372,000  and  $286,000 in 1999 and
1998, respectively.

                                  -------------------------------------------
                                   Three Months Ended     Six Months Ended
                                        June 30,              June 30,
                                  -------------------------------------------
SEGMENT PROFIT (LOSS):               1999       1998       1999      1998
-----------------------------------------------------------------------------

  Home Service Life               $(10,841)   $74,264       $25,870   $118,792
  Broker Life                       23,180     40,575       195,739     93,755
  Preneed Life                    (122,174)   (47,399)     (301,366)   (47,399)
  Dental                            76,573     80,163       255,265    137,341
  Other Health                     (48,001)   (15,312)      (83,952)   (19,565)
-------------------------------------------------------------------------------
  Segment Totals                   (81,263)   132,291        91,556    282,924
  Net realized investment gains,
  net of expenses                2,412,242  1,041,514     3,954,078  2,069,029
  Interest expense                 124,575    113,998       251,674    192,067
-------------------------------------------------------------------------------
  Income before Federal Income
  Tax                           $2,206,404 $1,059,807    $3,793,960 $2,159,886
-------------------------------------------------------------------------------


                                       8
<PAGE>



Part I; Item 1  (continued)


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

                                  -------------------------------------------
                                   Three Months Ended     Six Months Ended
                                        June 30,              June 30,
                                  -------------------------------------------
DEPRECIATION AND AMORTIZATION:       1999       1998       1999      1998
-----------------------------------------------------------------------------

  Home Service Life               $  89,873  $ 156,992  $ 303,176  $ 331,085
  Broker Life                       147,074    133,697    286,283    231,200
  Preneed Life                       87,995     50,095    208,066     50,095
  Dental                             10,218     10,188     23,808     23,990
  Other Health                        8,097      9,322     17,488     17,850
-----------------------------------------------------------------------------
  Segment Totals                  $ 343,257  $ 360,294  $ 838,821  $ 654,220
-----------------------------------------------------------------------------


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

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

                                   June 30,    December 31,
ASSETS:                              1999         1998
------------------------------------------------------------


Home Service Life                $44,783,105   $43,299,037
Broker Life                       55,908,975    55,139,933
Preneed Life                      28,416,465    28,513,188
Dental                               692,274       674,728
Other Health                       1,839,093     1,872,237
------------------------------------------------------------
Segment Totals                   $131,639,91  $129,499,123
------------------------------------------------------------


Note 4 - NET REALIZED CAPITAL GAINS, NET OF EXPENSE

The Company nets certain direct, incremental investment management fees and
margin loan interest cost against net realized investment gains and losses
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 $296,700 and
$527,286 for the six months ended June 30, 1999 and 1998, respectively.



Note 5 - INCOME TAXES

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




                                       9
<PAGE>




Part I;  Item 2 - Management's Discussion and Analysis or Plan of Operations




                             FINANCIAL POSITION


Fixed maturities  decreased  $3,175,000  based on amortized cost,  during the
first six months of 1999.  Equity securities  increased  $7,318,000 on a cost
basis  and  increased  $9,345,000  on market  value  basis,  during  the same
period.   Gross   unrealized   appreciation  for   available-for-sale   fixed
maturities and equity  securities  increased  approximately  $403,000  during
the six months ended June 30, 1999.




                                 OPERATIONS


Net  premiums and other  considerations  increased  approximately  15% during
the  first  six  months of 1999  compared  to the  first six  months of 1998.
This  increase  is  primarily  attributable  to  the  acquisition  of  United
Liberty Life Insurance  Company (United  Liberty) during May 1998, along with
approximately  3% growth in the Company's  other product lines.  Preneed Life
premium  associated with the United Liberty  acquisition  generated growth of
approximately  12%  compared  to the  prior  year.  Premium  growth  for  the
Company's  primary,  previously  existing products - Broker Life, Dental, and
Home Service  Life,  totaled 5%, 4%, and 2%,  respectively.  The 37% increase
in  investment  income  compared to the first three  months of the prior year
is also primarily attributable to the United Liberty acquisition.

Total pretax earnings  increased  approximately 76% to $3,794,000 for the six
months  ended  June 30,  1999,  primarily  due to an  approximate  $1,885,000
increase  in realized  investment  gains,  net of  expenses.  Pretax  Segment
Profit  (excluding  realized  investment gains and interest  expense) for the
first six months of 1999 was  approximately  $92,000 compared to $283,000 for
the first  six  months  of 1998.  This  decrease  is  primarily  due to costs
associated  with  expanding  the  Company's  recently  acquired  Preneed Life
segment,  somewhat higher Home Service Life mortality,  and lower  investment
income   associated  with  increased   positions  in  the  favorable   equity
markets.  In addition,  Dental  profit  margins  continue to improve due to a
number of  profitability  initiatives,  including  selective  non-renewal  of
groups with excessive claim ratios.

The  Company's  increased  earnings has also  resulted in a higher  effective
income  tax rate  due to a  phasing-out  of  available  small-life  insurance
company  deductions  and full  utilization of previously  available  non-life
insurance net operating loss carryforwards.











                           CASH FLOW AND LIQUIDITY


Cash flow from  operations  totaled  $207,000  for the six months  ended June
30, 1999  compared to  $361,000  for the same period in the prior year.  This
change  is  principally   attributable  to  increased   claims  and  spending
associated with business acquired in the prior year.

The  $81,000  of  cash  used in  investing  activities  reflects  essentially
equivalent  purchases  and sales of  securities  during the six months  ended
June 30, 1999,  while the  $5,575,000  of cash used in  investing  activities
for the six months  ended June 30,  1998 was  primarily  attributable  to the
acquisition  of United  Liberty Life  Insurance  Company and growth in equity
security positions.

The  $2,478,000  of cash used in  financing  activities  during the first six
months of 1999 is  primarily  attributable  to a  decrease  in the  Company's
investment  margin account  advances,  which total $179,000 at June 30, 1999,
and somewhat higher annuity withdrawals.




                               YEAR 2000 ISSUE

Some of the Company's  older computer  programs were written using two digits
rather  than  four  to  define  the  applicable  year.  As  a  result,  those
computer  programs  could fail to properly  distinguish  between dates in the
1900's and 2000's.  This could  cause  system  failures  or  miscalculations,
creating  disruption  of  operations,   including,   among  other  things,  a
temporary  inability  to  process  insurance  transactions,  conduct  banking
activities,  or  engage  in other  normal  business  activities.  Also,  some
systems   and   equipment   that   are   not   typically    thought   of   as
"computer-related"  ("non-IT") contain imbedded hardware or software that may
not perform properly after 1999.

The Company has  completed an internal  assessment of the year 2000 issue and
implemented a program to install  updated  releases or modify its software so
that its computer  systems will  function  properly  with respect to dates in
the  year  2000  and   thereafter.   The  Company's  two  primary   insurance
administrative  systems  (Individual and Group) are vendor supplied  programs
which  have  been,  or are  being,  modified  as part of the  ongoing  vendor
maintenance  process.  Modification  of the  Individual  insurance  system is
complete.  Vendor  modifications  to the  Group  insurance  system  have been

<PAGE>                       10

Part I; Item 2  (continued)

installed  and are  being  tested  by the  Company.  Most of the  peripheral,
internally  developed  programs  associated with these systems have also been
modified,  and those  remaining  are  scheduled  to be completed by September
30, 1999.  The Company's  investment  accounting  and general  ledger systems
are also vendor  supplied  programs  which have been  properly  updated.  The
Company's  primary non-IT systems involve building  equipment control modules
at its home  office.  The Company has  verified  these  systems are year 2000
compliant.

The most  significant  third-parties  potentially  impacting  the Company are
banks,  investment  brokers,  and suppliers of utility and  telecommunication
services.   Their  critical   functions  include   safekeeping  and  managing
investment  portfolios,  processing  the Company's  operating  bank accounts,
and  supplying  utilities.  Assurances  of year  2000  compliance  have  been
received from the Company's  primary banking service  provider and many other
key providers.  Efforts are ongoing to obtain additional assurances.

The total year 2000  project cost is  estimated  at  approximately  $100,000,
which  is  primarily   internal   salary  cost  for  testing  and   modifying
peripheral  programs  associated  with the  Individual  and  Group  insurance
systems.  Approximately  half of this total has been  incurred  and  expensed
with  the  remaining  half to be  incurred  and  expensed  over  the next two
quarters.  The direct  cost of  modifying  the  Individual  and Group  system
vendor  programs  is  included  in  annual   maintenance   fees  which  total
approximately $25,000.

The Company has investments in publicly and privately  placed  securities and
loans.  The  Company  may be  exposed  to  credit  risk  to the  extent  that
related  borrowers  are  materially  adversely  impacted  by  the  year  2000
issue.  Portfolio  diversification  reduces the overall  risk.  Although  the
Company  expects its critical  systems to be compliant by September 30, 1999,
there is no guarantee  that these  results  will be  achieved.  Specifically,
from year 2000  problems,  the Company could  experience an  interruption  in
its  ability  to  collect  and  process  premiums,  process  claim  payments,
safeguard  and  manage  its  invested  assets and  operating  cash  accounts,
accurately   maintain   policyholder    information,    accurately   maintain
accounting  records,  issue new policies  and/or  perform  adequate  customer
service.  While the Company  believes the  occurrence  of such a situation is
unlikely,  a possible  worst case  scenario  might include one or more of the
Company's  significant  insurance systems being non-compliant.  Such an event
could result in a material  disruption  to the Company's  operations.  Should
the worst case scenario  occur, it could,  depending on its duration,  have a
material  impact on the  Company's  results of  operations  and liquidity and
ultimately on its financial position.

     With  respect  to  contingency  plans for the Group  insurance  system,  if
unforeseen delays are encountered  during the next few months,  the Company will
develop  supplemental  manual processing  procedures to assist with group claims
adjudication.  This is not  expected to be a  significant  issue,  as most group
insurance  processing  is  not  dependent  on  date  sensitive  data.  Regarding
third-party  systems,  the Company is continuing to assess their  compliance and
will  continue  to  reassess  the need for formal  contingency  plans,  based on
progress  of year 2000  efforts  by the  Company  and third  parties.


     FORWORD   -LOOKING   INFORMATION.   The   Company   makes   forward-looking
statementsfrom  time to time and desires to take  advantage of the "safe harbor"
which is afforded such statements under the Private Securities Litigation Reform
Act of 1995  when  they are  accompanied  by  meaningful  cautionary  statements
identifying  important  factors  that  could  cause  actual  results  to  differ
materially  from  those  in  the  forward-looking   statements.  The  statements
contained in this "Management's  Discussion and Analysis or Plan of Operations,"
and  statements  contained in future  filings with the  Securities  and Exchange
Commission and publicly disseminated press releases, and statements which may be
made  from  time  to  time  in  the  future  by  management  of the  Company  in
presentations to shareholders,  prospective investors,  and others interested in
the business and  financial  affairs of the  Company,  which are not  historical
facts, are forward-looking  statements that involve risks and uncertainties that
could  cause  actual  results to differ  materially  from those set forth in the
forward-looking   statements.   Any  projections  of  financial  performance  or
statements  concerning  expectations  as to future  developments  should  not be
construed in any manner as a guarantee  such results or  developments  will,  in
fact, occur. There can be no assurance that any  forward-looking  statement will
be realized or actual results will not be significantly different from those set
forth  in  such  forward-looking   statement.  In  addition  to  the  risks  and
uncertainties of ordinary business operations, the forward-looking statements of
the Company referred to above are also subject to risks and uncertainties.



                                       11
<PAGE>


Part II - Other Information


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

            The 1999 annual meeting of shareholders of the company was
            held on May 20, 1999.  At the meeting:

      a). Eight incumbent directors were re-elected to serve until the 2000
          annual meeting of shareholders.
          The names of the incumbent directors and shares of the Company's
          Class A Stock voted were as follows:

       Candidate                        For          Withheld
       -------------------------    ------------    ------------

       John H. Harralson, Jr.       1,429,273          14,771
       Lane A. Hersman              1,420,573          23,471
       Frank T. Kiley               1,429,273          14,771
       Charles A. Mays              1,404,073          39,971
       Earle V. Powell              1,429,273          14,771
       Thomas G. Ward               1,429,273          14,771
       Darrell R. Wells             1,429,273          14,771
       Margaret A. Wells            1,429,098          14,946


      b). The Citizens Financial Corporation 1999 Stock Option Plan, as
          described in the Proxy Statement for the meeting, was adopted
          with 1,439,213  votes for adoption;  1,345 votes against; and
          3,486 votes withheld.



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

      a). Exhibit 11.  Statement re: computation of per share earnings.
          Exhibit 27.  Financial Data Schedule.


      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

                               BY:    /S/ Darrell R. Wells
                                     -------------------------------------
                                     Darrell R. Wells
                                     President and Chief Executive
                                     Officer

                               BY:    /S/ Brent L. Nemec
                                     -------------------------------------
                                     Brent L. Nemec
                                     Treasurer and Principal Accounting
                                     Officer

Date:  August 11, 1999


                                       12
<PAGE>


                               EXHIBIT INDEX



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

      11       Statement re: computation of per share earnings

      27       Financial Data Schedule (electronic filing only)




                                       13
<PAGE>













                                 EXHIBIT 11

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





Six Months Ended June 30                                  1999           1998
------------------------------------------------------------------------------

Numerator:
  Diluted:  Net income                              $2,698,960     $1,681,886
  Less: Preferred stock dividends                       ---          (202,950)
------------------------------------------------------------------------------
  Basic: Net income applicable to common stock      $2,698,960     $1,478,936
------------------------------------------------------------------------------

Denominator:
  Basic: Weighted average common shares              1,799,116      1,076,670
  Plus: Assumed conversion of preferred
        stock                                           ----         (202,950)
------------------------------------------------------------------------------
  Diluted:  Weighted average shares assuming
  preferred conversion                               1,799,116      1,816,029
------------------------------------------------------------------------------

Basic Earnings Per Share                                 $1.50          $1.37

Diluted Earnings Per Share                               $1.50          $0.93





Three Months Ended June 30                                1999           1998
------------------------------------------------------------------------------

Numerator:
  Diluted:  Net income                              $1,536,404       $821,807
  Less: Preferred stock dividends                       ---          (101,200)
------------------------------------------------------------------------------
  Basic: Net income applicable to common stock      $1,536,404       $720,607
------------------------------------------------------------------------------

Denominator:
  Basic: Weighted average common shares              1,797,804      1,077,714
         Plus: Assumed conversion of preferred
stock                                                      ---        738,725
------------------------------------------------------------------------------
  Diluted:  Weighted average shares assuming
preferred conversion                                 1,797,804      1,816,439
------------------------------------------------------------------------------

Basic Earnings Per Share                                 $0.85          $0.66

Diluted Earnings Per Share                               $0.85          $0.46


                                       14
<PAGE>