Citizens Financial Services, Inc. CZFS Net Affordable Housing Tax Unfunded Commitments

The general partner or managing member of each entity has both the power to direct the activities which most significantly affect the performance of each entity and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. Therefore, the Company has determined that it is not the primary beneficiary of any LIHTC entity. The Company uses the effective yield method to account for its pre-2015 investments in these entities. Beginning January 1, 2015, any new investments that meet the requirements of the proportional amortization method are recognized using the proportional amortization method. The Company’s net affordable housing tax credit investments were $7,139,000 and $7,915,000 as of December 31, 2025 and 2024, respectively, and are included in other assets in the consolidated balance sheet. The Company’s net affordable housing tax credit unfunded commitments were $1,539,000 and $5,997,000 as of December 31, 2025 and 2024, respectively, and are included in other liabilities in the consolidated balance sheet. All partnerships entered into prior to 2015 were fully amortized as of December 31, 2022.