Citizens Financial Services (CZFS) risk factors, FY2025 10-K

RISKS RELATED TO CHANGES IN MARKET INTEREST RATES

1. 01Changing interest rates may decrease our earnings and asset values

RISKS RELATED TO OUR LENDING ACTIVITIES

1. 02Activities related to the drilling for natural gas in the Marcellus and Utica Shale formations impacts certain customers of the Bank
2. 03Higher credit losses could require us to increase our allowance for credit losses through a charge to earnings
3. 04Our emphasis on commercial real estate, agricultural real estate, construction and other commercial loan lending may expose us to increased lending risks36% rewritten
4. 05Agricultural loans are dependent for repayment on the successful operation and management of the farm property, the health of the agricultural industry broadly, and on the location of the borrower in particular, and other factors outside of the borrower’s control32% rewritten
5. 06and disruptions in the supply chain and the processing of product and delivery to the final retail channel
6. 07Loan participations comprise a portion of our loan portfolio and a decline in loan participation volume could hurt profits and slow loan growth31% rewritten
7. 08Environmental liability associated with lending activities could result in losses

RISKS RELATED TO OUR INVESTMENT SECURITIES

1. 09The Company’s investment securities portfolio is subject to credit risk, market risk, and liquidity risk, and declines in value in its investment securities portfolio may require it to record impairment charges that could have a material adverse effect on its results of operations and financial conditionNew

RISKS RELATED TO OUR SECONDARY MORTGAGE OPERATIONS

1. 10Income from secondary mortgage market operations is volatile, and we may incur losses or charges with respect to our secondary mortgage market operations which would negatively affect our earnings

RISKS RELATED TO OUR MARKET AREA

1. 11The Company’s financial condition and results of operations are dependent on the economy in the Bank’s market area

RISKS RELATED TO LAWS AND REGULATIONS

1. 12Regulation of the financial services industry is significant, and future legislation could increase our cost of doing business or harm our competitive position
2. 13Our ability to pay dividends is limited by law
3. 14Federal and state banking laws, our articles of incorporation and our by-laws may have an anti-takeover effect

RISKS RELATED TO COMPETITION

1. 15Strong competition within the Bank’s market areas could hurt profits and slow growth
2. 16Disintermediation of BanksNew

RISKS RELATED TO OUR OPERATIONS

1. 17We rely on our management and other key personnel, and the loss of any of them may adversely affect our operations
2. 18We are periodically subject to examination and regulation by a number of banking agencies and, depending upon the findings and determinations of these agencies, we may be required to make adjustments to our business that could adversely affect us
3. 19We are subject to certain risks in connection with our use of technology
4. 20Our risk management framework may not be effective in mitigating risks and/or losses to us

RISKS RELATED TO OUR MERGER AND ACQUISITION ACTIVITY

1. 21Impairment of goodwill could require charges to earnings, which could result in a negative impact on our results of operations
2. 22We may fail to realize all of the anticipated benefits of entering new markets