Exhbit 99.1

Contact:	Kathleen Campbell, Marketing Director	First Citizens National Bank
	570-662-0422	15 S. Main Street
	570-662-8512 (fax)	Mansfield, PA 16933

Citizens Financial Services, Inc. Reports Record 2006 Earnings

MANSFIELD, PENNSYLVANIA— January 19, 2007 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the fourth quarter of 2006.

Net income for the twelve months ended December 31, 2006 was $5,800,000 which compares to $5,274,000 last year, an increase of $526,000 or 10.0%. Earnings per share for the year are $2.04 compared with $1.83 last year, representing an increase of 11.5%. Our net income for the three months ended December 31, 2006 was $1,490,000, which compares to $1,376,000 for the same period last year. This represents an increase of 8.3%.

Return on equity for the twelve months ended December 31, 2006 and 2005 was 13.21% and 12.63%, respectively. For the three months ended December 31, 2006, return on equity was 13.30% compared with 12.92% for the same period in 2005.

CEO and President Randall E. Black stated, “Although the banking environment remains difficult, we will look back at 2006 as a memorable year for our organization. The yield curve remained inverted based upon the Federal Reserve’s reluctance to decrease short-term interest rates. This has negatively impacted our net interest margin, as well as most financial institutions across the country and within our service area. The goods news is that despite the difficult interest rate environment, we have recorded record earnings of $5.8 million. These results reflect our continued focus on cost savings and tax planning to offset the impact of our decreased interest margins. In fact, our non-interest expenses for the twelve months ended December 31, 2006 totaled $15,027,000 compared with $15,387,000 for 2005, a decrease of $360,000. For that same period, the provision for income taxes has decreased $209,000 even though income before taxes has increased $317,000.”

Since last year, total assets have increased $43.0 million, or 8.1%. At the end of December, total assets were $572.2 million compared to $529.2 million last December. Net loans have increased $31.8 million since last December, an increase of 8.4%. Deposits have increased $16.7 million and borrowed funds have increased $23.1 million to fund the overall growth in assets.

Stockholders’ Equity, excluding accumulated other comprehensive income, has increased $2.1 million, or 5.0% since last December. Book value per share at December 31, 2006 was $16.04 compared with $15.00 last year, an increase of 6.9%. In December, a cash dividend of $.22 per share was declared and will be paid to shareholders on January 26, 2007 to record holders as of January 12, 2007. This represents an increase of 4.8% over 2005’s fourth quarter dividend.

Mr. Black also noted that “54,239 shares of treasury stock have been repurchased during 2006 since the Board of Directors approved the stock repurchase plan on January 17, 2006. This plan provides an avenue for our shareholders to adjust their individual portfolios as needed from time to time.”

Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 16 offices are located.

Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.

CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
	December 31			December 31
(in thousands except share data)	2006			2005
ASSETS:
Cash and cash equivalents:
Noninterest-bearing	$	10,007		$	8,498
Interest-bearing		8			111
Total cash and cash equivalents		10,015			8,609
Available-for-sale securities		109,743			102,602
Loans (net of allowance for loan losses:
2006, $3,876; December 31, 2005, $3,664)		410,897			379,139
Premises and equipment		12,892			12,305
Accrued interest receivable		2,458			2,164
Goodwill		8,605			8,605
Bank owned life insurance		8,047			7,743
Other assets		9,511			8,074
TOTAL ASSETS	$	572,168		$	529,241
LIABILITIES:
Deposits:
Noninterest-bearing	$	48,509		$	50,600
Interest-bearing		398,006			379,199
Total deposits		446,515			429,799
Borrowed funds		75,775			52,674
Accrued interest payable		2,287			1,862
Commitment to purchase investment securities		-			752
Other liabilities		4,091			2,593
TOTAL LIABILITIES		528,668			487,680
STOCKHOLDERS' EQUITY:
Common Stock $1.00 par value; authorized
10,000,000 shares; issued 2,992,896 and
2,965,257 shares in 2006 and 2005, respectively		2,993			2,965
Additional paid-in capital		11,933			11,359
Retained earnings		34,007			31,251
TOTAL		48,933			45,575
Accumulated other comprehensive loss		(1,737	)		(1,540	)
Less: Treasury Stock, at cost
172,954 and 118,715 shares for 2006 and 2005, respectively		(3,696	)		(2,474	)
TOTAL STOCKHOLDERS' EQUITY		43,500			41,561
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	572,168		$	529,241

CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
(in thousands, except per share data)	2006		2005		2006		2005
INTEREST INCOME:
Interest and fees on loans	$	7,461	$	6,525	$	28,101	$	24,911
Interest-bearing deposits with banks		-		-		-		3
Investment securities:
Taxable		978		739		3,526		2,979
Nontaxable		224		202		903		596
Dividends		98		54		321		210
TOTAL INTEREST INCOME		8,761		7,520		32,851		28,699
INTEREST EXPENSE:
Deposits		3,295		2,532		11,685		9,373
Borrowed funds		880		487		3,268		1,627
TOTAL INTEREST EXPENSE		4,175		3,019		14,953		11,000
NET INTEREST INCOME		4,586		4,501		17,898		17,699
Provision for loan losses		105		30		330		60
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		4,481		4,471		17,568		17,639
NON-INTEREST INCOME:
Service charges		799		762		3,140		2,965
Trust		115		106		487		474
Brokerage		23		45		166		183
Insurance		6		55		94		260
Investment securities gains, net		-		-		4		-
Earnings on bank owned life insurance		80		74		304		294
Other		157		186		521		512
TOTAL NON-INTEREST INCOME		1,180		1,228		4,716		4,688
NON-INTEREST EXPENSES:
Salaries and employee benefits		1,948		1,757		8,026		7,645
Occupancy		278		295		1,123		1,142
Furniture and equipment		151		167		593		658
Professional fees		180		128		551		536
Amortization		36		145		252		578
Other		1,108		1,397		4,482		4,828
TOTAL NON-INTEREST EXPENSES		3,701		3,889		15,027		15,387
Income before provision for income taxes		1,960		1,810		7,257		6,940
Provision for income taxes		470		434		1,457		1,666
NET INCOME	$	1,490	$	1,376	$	5,800	$	5,274
Earnings Per Share	$	0.53	$	0.48	$	2.04	$	1.83
Cash Dividends Paid Per Share	$	0.22	$	0.21	$	0.86	$	0.82
Weighted average number of shares outstanding		2,826,065		2,874,181		2,844,125		2,884,232

FINANCIAL HIGHLIGHTS
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
	2006			2005
Twelve Months Ended December 31
Net Income	$	5,800		$	5,274
Comprehensive Income		5,603			3,570
Per common share data:
Earnings per share	$	2.04		$	1.83
Cash dividends paid per share	$	0.86		$	0.82
Performance Ratios:
Return on average assets (annualized)		1.05	%		1.04	%
Return on average equity (annualized)		13.21	%		12.63	%
Three Months Ended December 31
Net Income	$	1,490		$	1,376
Per common share data:
Earnings per share	$	0.53		$	0.48
Cash dividends paid per share	$	0.22		$	0.21
Performance Ratios:
Return on average assets (annualized)		1.05	%		1.06	%
Return on average equity (annualized)		13.30	%		12.92	%
At December 31
Assets	$	572,168		$	529,241
Investment securities:
Available for sale		109,743			102,602
Loans (net of unearned income)		414,773			382,803
Allowance for loan losses		3,876			3,664
Deposits		446,515			429,799
Stockholders' Equity		43,500			41,561
Non-performing assets		4,116			2,854
Average Leverage Ratio		7.82	%		8.04	%
Per common share data:
Book value (excluding other comprehensive income)	$	16.04		$	15.00
Market value (average of bid/ask price)	$	22.75		$	20.90
Market price to book value ratio		141.82	%		139.33	%
Per share calculations give retroactive effect to stock dividends declared by the Company.

					Cash Dividends
Common Stock Information:	Bid		Ask		Paid
Quarter Ended:
December 31, 2006	$	22.00	$	23.50	$	0.220
September 30, 2006	$	22.00	$	23.00	$	0.215
June 30, 2006	$	21.60	$	23.00	$	0.215
March 31, 2006	$	21.35	$	23.25	$	0.210
December 31, 2005	$	20.80	$	21.00	$	0.210
September 30, 2005	$	20.10	$	20.50	$	0.205
June 30, 2005	$	21.00	$	21.70	$	0.205
March 31, 2005	$	23.50	$	24.25	$	0.200