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CITIZENS FINANCIAL SERVICES, INC.

(CZFS)
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CITIZENS FINANCIAL SERVICES INC : Entry into a Material Definitive Agreement, Other Events (form 8-K)

04/16/2021 | 04:34pm EDT
Item 1.01.             Entry into a Material Definitive Agreement.
On April 16, 2021, Citizens Financial Services, Inc. (the "Company") entered
into a Subordinated Note Purchase Agreement (the "Purchase Agreement") with
certain qualified institutional buyers (the "Purchasers") pursuant to which the
Company issued and sold, at 100% of their principal amount, $10 million
aggregate principal amount of the Company's 4.00% fixed-to-floating rate
subordinated notes due 2031 (the "Notes").
The Notes have a stated maturity of April 16, 2031, and bear interest (i) at a
fixed rate of 4.00% per year, from and including the original issue date to but
excluding April 16, 2026 or the earlier redemption date, computed on the basis
of a 360-day year consisting of twelve 30-day months and payable semiannually in
arrears on June 30 and December 30 of each year, beginning June 30, 2021 and
(ii) from and including April 16, 2026 to but excluding the maturity date or
earlier redemption date, at the rate per year, reset quarterly, equal to the sum
of a base rate equal to the then current 90-day average secured overnight
financing rate, determined on the determination date of the applicable interest
period, plus 323 basis points, computed on the basis of a 360-day year and the
actual number of days elapsed and payable quarterly in arrears on March 30, June
30, September 30 and December 30 of each year. The Notes are redeemable, in
whole or in part, on or after April 16, 2026, and at any time upon the
occurrence of certain events.
The Purchase Agreement contains customary representations, warranties and
covenants made by the Company, on the one hand, and the Purchasers, severally
and not jointly, on the other hand. The Notes were offered and sold by the
Company to eligible purchasers in a private offering in reliance on the
exemption from the registration requirements of Section 4(a)(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and the provisions of
Rule 506 of Regulation D thereunder.
The payment of the principal on the Notes may only be accelerated upon the
occurrence of certain bankruptcy or receivership related events relating to the
Company or a major subsidiary depository institution of the Company, in which
case, the principal of all of the Notes shall become due and payable.
The Company expects to use the net proceeds of the offering for general
corporate purposes, which may include working capital, the funding of organic
growth or potential acquisitions, and the repurchase of the Company's common
stock, par value $1.00 per share.
The Purchase Agreement is attached as Exhibit 10.1 to this Current Report on
Form 8-K and is incorporated herein by reference. The description herein of the
Purchase Agreement is a summary and is qualified in its entirety by reference to
the form of the Purchase Agreement.
The foregoing description of the Notes does not purport purport to be complete
and is qualified in its entirety by reference to the form of Subordinated Note
which is attached as Exhibit 4.1 hereto and is incorporated herein by reference.
Item 2.03.             Creation of a Direct Financial Obligation or an

Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03. --------------------------------------------------------------------------------



Item 8.01.             Other Events.

In connection with the closing of the offering of the Notes, the Company issued a press release pursuant to Rule 135c under the Securities Act. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Item 9.01.

             Financial Statements and Exhibits
(d)      Exhibits
Exhibit
 Number                                  Description
  4.1         Form of 4.00% Fixed-to-Floating Rate Subordinated Note due 2031
            (included as Exhibit A to the Purchase Agreement filed as Exhibit 10.1
            hereto)
  10.1        Form of Subordinated Note Purchase Agreement, dated April 16, 2021,
            by and among Citizens Financial Services, Inc. and the Purchasers
            identified therein
  99.1        Press Release of Citizens Financial Services, Inc., dated April 16,
            2021
104         Cover Page Interactive Data File (embedded within the Inline XBRL
            document)

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