DEF: Citizens Financial Services, Inc. Announces Annual Meeting of Shareholders and Proxy Statement

Citizens Financial Services, Inc. sets date for annual shareholder meeting and outlines key proposals including director elections, auditor ratification, and executive compensation advisory vote.

Summary

• Citizens Financial Services, Inc. will hold its Annual Meeting of Shareholders on April 15, 2025, at First Citizens Community Bank in Wellsboro, Pennsylvania.
• Shareholders of record as of February 24, 2025, are eligible to vote.
• The meeting will address the election of directors, ratification of the independent accounting firm (S.R. Snodgrass, P.C.), and an advisory vote on executive compensation.
• The Board of Directors recommends voting in favor of all proposals.
• The proxy statement and annual report are available online, reducing paper and mailing costs.
• The company's Board consists of thirteen members, with all but three considered independent.
• The Board has several committees including Audit and Examination, Compensation/Human Resource, and Governance and Nominating.
• The company has a Code of Ethics for directors, officers, and employees.
• The company is committed to environmental, social, and governance (ESG) initiatives.
• The company has a clawback policy to recover excess incentive compensation in the event of an accounting restatement.
• The company has a hedging policy that prohibits officers, employees, and directors from hedging against decreases in the company's stock value.
• The company has an insider trading policy.
• The company's directors receive compensation in the form of fees, stock awards, and other benefits.
• The company's Audit and Examination Committee oversees the company's accounting and financial reporting processes.
• The company's Compensation/Human Resource Committee develops compensation policies for executive officers.
• The company's Governance and Nominating Committee identifies and recommends individuals for Board membership.
• The company's Board conducts an annual self-evaluation to measure and improve director effectiveness.
• The company's Board seeks qualified nominees from a variety of backgrounds, including candidates of age, gender and ethnic diversity.
• The company's Board has appointed and/or nominated four new directors in the last five years.
• The company's Board is committed to strengthening the communities it serves through associate volunteerism and corporate philanthropy, as well as environmental responsibility and sustainability, serving as a cornerstone of the local community, and maintaining transparency in governance.
• The company's Board is dedicated to being a financial industry leader in corporate governance and business ethics.
• The company's Board is composed of Directors with diverse professional and business experience.
• The company's Board shares a commitment to fostering an effective risk environment coupled with a strong internal audit structure.
• The company's Code of Ethics reflects the Companys expectation for the conduct of our directors, officers and associates.
• The company's Board attended a commercial real estate presentation by the Federal Reserve Bank on January 22, 2024.
• The company's Board participated in capital planning discussions on July 16, 2024 and October 15, 2024.
• The company's Board was invited to the FDIC Directors College with interactive educational sessions focused on redlining, liquidity contingency planning and risk mitigation, risk assessments, regulators, and economics on November 14, 2024.
• The company's Board received goodwill impairment training on December 17, 2024.
• The company's Board participated in various FinPro virtual learning webinars.
• The company's Audit and Examination Committee recommended to the Board of Directors that the Companys audited financial statements be included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for filing with the SEC.
• The company's Audit and Examination Committee and the Board have also recommended the selection of S.R. Snodgrass, P.C. as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2024.
• The company's Audit fees for 2024 were $311,088.
• The company's Tax service fees for 2024 were $18,268.
• The company's All other fees for 2024 were $79,364.
• The company's BlackRock, Inc. beneficially owns 281,347 shares or 5.9% of the company's stock.
• The company's The Vanguard Group beneficially owns 238,583 shares or 5.0% of the company's stock.
• The company's Board of Directors has nominated John P. Painter II for election as a Class 1 director to hold office for a two-year term to expire at the 2027 Annual Meeting of Shareholders or when his successor is duly elected and qualified.
• The company's Board of Directors fixed the number of directors in Class 2 at four and has nominated Thomas E. Freeman, Christopher W. Kunes, Terry B. Osborne, and David Z. Richards, Jr. for election as Class 2 directors to hold office for three-year terms to expire at the 2028 Annual Meeting of Shareholders or until their successors are duly elected and qualified.
• The company's Director Alletta Schadler, whose term expires in 2025, will retire at the 2025 Annual Meeting and therefore will not be standing for election.
• The company's Board unanimously recommends that you vote FOR the election of the Boards nominees.
• The company's Board unanimously recommends that you vote FOR ratification of the appointment of S.R. Snodgrass, P.C. as the Companys independent registered public accounting firm for fiscal year 2025.
• The company's Board unanimously recommends a vote FOR approval of the compensation of the named executive officers.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The company highlights its commitment to corporate governance, ethics, and ESG, which is viewed positively.

Positives

• The company is committed to corporate governance, ethics, and ESG initiatives.
• The company has a clawback policy for executive compensation.
• The company provides online access to proxy materials to reduce costs.
• The company's Board is composed of Directors with diverse professional and business experience.
• The company's Board shares a commitment to fostering an effective risk environment coupled with a strong internal audit structure.
• The company's Board is dedicated to being a financial industry leader in corporate governance and business ethics.

Future Outlook

The company expects to receive the peer group data necessary to calculate the incentive awards (if any) by the end of June 2025.

Management Comments

• The Board of Directors concluded that Mr. Black continues to exhibit strong business and leadership skills and is moving the Company in a direction that continues to enhance long-term shareholder value.
• Mr. Black conducted a performance review of our other named executive officers and determined that the officers continue to contribute greatly to the success of the Company and its affiliates.

Industry Context

This proxy statement is typical for publicly traded companies, providing shareholders with information necessary to make informed decisions on key governance matters. The focus on ESG and executive compensation is consistent with current industry trends.

Comparison to Industry Standards

• The company's board structure, with a majority of independent directors, aligns with Nasdaq listing standards and common corporate governance practices.
• The company's compensation policies, including the use of peer groups and performance-based incentives, are consistent with industry practices for attracting and retaining executive talent.
• The company's ESG initiatives, such as promoting environmental awareness and supporting community development, reflect a growing trend among financial institutions to address social and environmental concerns.
• The company's clawback policy and hedging policy are in line with best practices for corporate governance and risk management.
• The company's director compensation, including fees, stock awards, and other benefits, is comparable to that of other community banks of similar size and complexity.

Management Changes

Corporate Governance

Related Party Transactions

• The Bank makes loans to persons affiliated with the Company and the Bank in the normal course of its business.
• During 2024, all Bank loans to related persons (as defined under Securities and Exchange Commission rules) were made in the ordinary course of business, made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with other persons not related to the Bank and did not involve more than the normal risk of collectability or present other unfavorable features.

Stakeholder Impact

• Shareholders are provided with information to make informed voting decisions.
• Employees are subject to a Code of Ethics and various policies related to trading and hedging.
• The company's ESG initiatives aim to benefit the communities it serves.

Next Steps

• Shareholders should review the proxy materials and vote on the proposals.
• The company will hold its Annual Meeting of Shareholders on April 15, 2025.
• The company will determine the Annual Incentive Plan awards for 2024 by the end of June 2025.

Key Dates