Financial Performance - Net income for Q3 2025 was $6,551,000, or $0.42 per diluted share, compared to $6,365,000, or $0.41 per diluted share in Q3 2024, reflecting a 2.9% increase in net income year-over-year [132]. - Net income for the three months ended September 30, 2025, was $6,551,000, up from $6,365,000 in the same period of 2024 [140]. - For the nine months ended September 30, 2025, net income was $18,961,000, or $1.22 per diluted share, compared to $17,784,000, or $1.16 per diluted share for the same period in 2024 [134]. Interest Income and Expenses - Net interest income for Q3 2025 was $22,263,000, an increase of $2,107,000 from Q3 2024, with a net interest margin rising to 3.62% from 3.29% [133]. - Interest income totaled $33,868,000 in 2025, an increase of $576,000 (1.7%) from 2024 [149]. - Interest expense decreased by $1,544,000 to $11,387,000 in 2025 from $12,931,000 in 2024, with interest expense on deposits decreasing by $956,000 [154]. - The average yield on earning assets was 5.40% in 2025, which is 0.09% higher than in 2024, while the average rate on interest-bearing liabilities decreased to 2.57% [157]. Credit Losses and Allowances - The provision for credit losses was $2,163,000 in Q3 2025, up from $1,207,000 in Q3 2024, with net charge-offs totaling $94,000, or 0.02% of average loans receivable [133]. - The allowance for credit losses as a percentage of gross loans receivable increased to 1.21% at September 30, 2025, up from 1.08% at September 30, 2024 [133]. - The allowance for credit losses (ACL) was $23,474,000, representing 1.21% of gross loans receivable as of September 30, 2025, up from 1.06% at December 31, 2024 [198]. - Provision for credit losses for the three months ended September 30, 2025, was $2,163,000, an increase of 79.5% from $1,207,000 in the same period of 2024 [198]. Deposits and Assets - Average total deposits increased by $41,554,000 in Q3 2025, despite a decrease in average brokered deposits of $53,846,000 [133]. - Total deposits reached $2,165,735,000 at September 30, 2025, reflecting a growth of $71,826,000 or 3.4% from $2,093,909,000 at December 31, 2024 [218]. - Total assets of Susquehanna at the time of merger were reported at $587 million, including gross loans of $400 million and total deposits of $501 million [130]. Merger and Related Expenses - The total purchase consideration for the merger with Susquehanna was valued at approximately $44.6 million based on the stock price on October 1, 2025 [130]. - Management estimates total pre-tax merger-related expenses associated with the Susquehanna transaction will be approximately $7.5 million, primarily incurred in Q4 2025 [131]. Nonperforming Assets - Total nonperforming assets increased to $27,189,000, up from $24,142,000 at December 31, 2024, reflecting a rise of 12.6% [203]. - Nonperforming loans totaled $26,787,000 as of September 30, 2025, compared to $23,961,000 at December 31, 2024, indicating an increase of 11.5% [211]. Capital Ratios and Stockholder Equity - Total stockholders' equity increased to $287,860,000 as of September 30, 2025, from $268,387,000 in 2024 [168]. - The Corporation's capital ratios as of September 30, 2025, exceeded the Board policy threshold levels, indicating strong capital adequacy [225]. - As of September 30, 2025, the consolidated total capital to risk-weighted assets ratio is 16.01%, exceeding the minimum requirement of 11% [226]. Interest Rate Risk Management - The Corporation's interest rate risk management includes simulations for potential changes in net interest income and economic value of equity [235]. - The modeling results indicate that net interest income and economic value of equity are projected to decrease under both rising and falling interest rate scenarios [239]. - A hypothetical increase of 400 basis points in interest rates would result in a net interest income of $78,241, reflecting a decrease of 16.4% [242]. Future Outlook - Future dividend payments and stock repurchases will depend on maintaining a strong financial condition and regulatory requirements [230]. - The economic value of equity at September 30, 2025, is estimated at $493,628,000, reflecting an 11.7% decrease with a +400 basis point change in interest rates [244].

Financial Performance - Net income for Q3 2025 was $6,551,000, or $0.42 diluted earnings per share, compared to $6,117,000, or $0.40 per diluted share in Q2 2025[4] - Adjusted earnings (non-GAAP) for Q3 2025 were $7,248,000, or $0.47 per diluted share, excluding merger-related expenses of $697,000[4] - Net income for Q3 2025 was $6,551,000, representing a 2.92% increase from $6,365,000 in Q3 2024[19] - Adjusted net income for Q3 2025 was $7,248,000, reflecting a 13.87% increase from $6,365,000 in Q3 2024[22] - Net income for the nine months ended September 30, 2025, was $1.22 per share, a 5.17% increase from $1.16 in 2024[23] Revenue and Income Sources - Noninterest income for the first nine months of 2025 was $22,454,000, an increase of $792,000 from the same period in 2024, with trust revenue increasing by $268,000 to $6,125,000[12] - Noninterest income for the three months ended September 30, 2025, was $7,304, compared to $7,133 in the same period of 2024, marking a 2.39% increase[26] - Total interest income for Q3 2025 reached $33,868,000, compared to $32,674,000 in Q2 2025 and $33,292,000 in Q3 2024, with a nine-month total of $98,462,000 versus $95,351,000 last year[36] Assets and Liabilities - Total assets amounted to $2,664,033,000 at September 30, 2025, up from $2,610,875,000 at June 30, 2025, but down from $2,670,822,000 at September 30, 2024[13] - Total liabilities increased to $2,337,287 thousand as of September 30, 2025, from $2,309,485 thousand at the end of June 2025[38] - Total stockholders' equity was $293,959,000 at September 30, 2025, up from $286,357,000 at June 30, 2025, and $277,305,000 at September 30, 2024[16] Loans and Credit Quality - Total loans receivable increased by $25,849,000 from June 30, 2025, with average loans receivable up 5.2% (annualized) in Q3 2025[4] - Nonperforming assets totaled $27,189,000, or 1.02% of total assets, at September 30, 2025, up from 0.98% at June 30, 2025[4] - The provision for credit losses was $2,163,000 in Q3 2025, down from $2,354,000 in Q2 2025, but up from $1,207,000 in Q3 2024[4] - Total nonperforming loans amounted to $26,787,000, which is 1.38% of total loans as of September 30, 2025, compared to 1.32% on June 30, 2025[31] Merger and Related Expenses - C&N completed its merger with Susquehanna Community Financial, Inc. on October 1, 2025, with shareholders exchanging shares at a ratio of 0.80[6] - Pre-tax merger-related expenses incurred in the first nine months of 2025 were $1,049,000, with total estimated expenses expected to reach approximately $7.5 million[7] - The company incurred merger-related expenses of $882,000 in Q3 2025, contributing to an adjusted net income that reflects these costs[35] Capital and Funding - C&N maintained highly liquid sources of available funds totaling $1.147 billion at September 30, 2025, which is 164.6% of uninsured deposits[13] - Highly liquid available funding was $1,146,789 as of September 30, 2025, showing a slight increase from $1,140,248 as of June 30, 2025[45] - The Tier 1 risk-based capital ratio improved to 13.48% as of September 30, 2025, compared to 13.31% in 2024, indicating stronger capital position[23] Efficiency and Cost Management - The efficiency ratio improved to 65.66% for the nine months ended September 30, 2025, down from 69.00% in 2024, indicating better cost management[23] - Total noninterest expense for the three months ended September 30, 2025, was $19,389, a slight decrease from $19,398 in the previous quarter[43] - Salaries and employee benefits increased to $11,293 for the three months ended September 30, 2025, compared to $11,067 in the previous quarter, reflecting a growth of 2.0%[43]

Core Viewpoint - Citizens & Northern (CZNC) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1][3]. Earnings Expectations - The consensus EPS estimate for the upcoming report is $0.51 per share, reflecting a year-over-year increase of +24.4% [3]. - Revenues are anticipated to reach $28.9 million, which is a 5.1% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 47.17%, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.92%, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Citizens & Northern was expected to post earnings of $0.47 per share but only achieved $0.40, resulting in a surprise of -14.89% [13]. - The company has only beaten consensus EPS estimates once in the last four quarters [14]. Predictive Indicators - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Citizens & Northern currently holds a Zacks Rank of 3, which does not strongly support the likelihood of an earnings beat [12][17].

Core Points - Citizens & Northern has received all necessary regulatory and shareholder approvals for the acquisition of Susquehanna Community Financial [1] - The all-stock transaction is valued at $44.3 million and was initially announced in May [1] - The merger is anticipated to close on October 1 [1]

Group 1: Stock Recommendations - Citizens & Northern Corp (CZNC) has seen a 1.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and offers a dividend yield of 5.6%, significantly higher than the industry average of 2.6% [1] - Embecta Corp. (EMBC) has experienced a 4.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days, with a dividend yield of 4%, compared to the industry average of 0.0% [2] - First Financial Bancorp (FFBC) has reported a 6.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and has a dividend yield of 3.9%, above the industry average of 2.9% [3]

Group 1: Company Performance - Citizens & Northern (CZNC) shares increased by 5.2% to $20.49 in the last trading session, with a higher-than-average trading volume [1] - The bank is expected to report quarterly earnings of $0.53 per share, reflecting a year-over-year increase of 29.3%, and revenues are projected to be $28.5 million, up 3.7% from the previous year [3] - The consensus EPS estimate for CZNC has been revised 8.2% higher in the last 30 days, indicating a positive trend that may lead to price appreciation [4] Group 2: Industry Context - Federal Reserve Chair Jerome Powell indicated a potential rate cut as early as September, which could lower funding and deposit costs, positively impacting the banking sector [2] - The banking sector's positive response to the Fed's shift from a "higher-for-longer" stance has contributed to the recent increase in CZNC stock [2] - Citizens & Northern is part of the Zacks Banks - Northeast industry, which includes Bank OZK, also showing a positive performance with a 4.6% increase in its last trading session [4]

Core Viewpoint - Citizens & Northern (CZNC) reported quarterly earnings of $0.4 per share, missing the Zacks Consensus Estimate of $0.47 per share, representing an earnings surprise of -14.89% [1][2] Financial Performance - The company posted revenues of $29.5 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.62%, compared to $27.5 million in the same quarter last year [2] - Over the last four quarters, Citizens & Northern has surpassed consensus EPS estimates just once [2] Stock Performance - Citizens & Northern shares have lost about 1.1% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.53 on revenues of $28.5 million, and $1.88 on revenues of $110 million for the current fiscal year [7] - The estimate revisions trend for Citizens & Northern was favorable ahead of the earnings release, resulting in a Zacks Rank 1 (Strong Buy) for the stock [6] Industry Context - The Banks - Northeast industry, to which Citizens & Northern belongs, is currently in the top 11% of over 250 Zacks industries, indicating a favorable outlook [8]

Part I. Financial Information This section presents the unaudited consolidated financial statements and management's discussion and analysis for Citizens & Northern Corporation [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and notes for the periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)%20%E2%80%93June%2030,%202025%20and%20December%2031,%202024) Unaudited consolidated balance sheets detailing assets, liabilities, and stockholders' equity for June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (Thousands) | December 31, 2024 (Thousands) | | :-------------------------------- | :-------------------------- | :---------------------------- | | **Assets** | | | | Total cash and due from banks | $99,619 | $126,174 | | Available-for-sale debt securities | $406,052 | $402,380 | | Loans, net | $1,897,559 | $1,875,813 | | TOTAL ASSETS | $2,610,875 | $2,610,653 | | **Liabilities** | | | | Total deposits | $2,109,776 | $2,093,909 | | Total borrowings | $180,240 | $207,669 | | TOTAL LIABILITIES | $2,324,518 | $2,335,369 | | **Stockholders' Equity** | | | | TOTAL STOCKHOLDERS' EQUITY | $286,357 | $275,284 | - Total assets remained relatively stable at **$2.61 billion** from December 31, 2024, to June 30, 2025[8](index=8&type=chunk) - Total stockholders' equity increased by **$11.07 million**, or **4.0%**, from **$275.28 million** to **$286.36 million** during the six-month period[8](index=8&type=chunk) [Consolidated Statements of Income (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)%20%E2%80%93%20Three-month%20and%20Six-month%20Periods%20Ended%20June%2030,%202025%20and%202024) Unaudited consolidated statements of income for the three-month and six-month periods ended June 30, 2025, and 2024 | Metric (Thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total interest and dividend income | $32,454 | $31,326 | $64,163 | $61,662 | | Total interest expense | $11,312 | $11,881 | $23,046 | $23,176 | | Net interest income | $21,142 | $19,445 | $41,117 | $38,486 | | Provision for credit losses | $2,354 | $565 | $2,590 | $1,519 | | Noninterest income | $8,142 | $7,854 | $15,150 | $14,529 | | Noninterest expense | $19,398 | $19,255 | $38,441 | $37,559 | | NET INCOME | $6,117 | $6,113 | $12,410 | $11,419 | | EARNINGS PER COMMON SHARE - BASIC AND DILUTED | $0.40 | $0.40 | $0.80 | $0.74 | - Net income for the three months ended June 30, 2025, was **$6.117 million**, a slight increase from **$6.113 million** in the same period of 2024[10](index=10&type=chunk) - For the six months ended June 30, 2025, net income increased by **$0.991 million**, or **8.7%**, to **$12.410 million** compared to **$11.419 million** in 2024[10](index=10&type=chunk) - Basic and diluted EPS remained flat at **$0.40** for the three-month period but increased to **$0.80** from **$0.74** for the six-month period[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)%20%E2%80%93%20Three-month%20and%20Six-month%20Periods%20Ended%20June%2030,%202025%20and%202024) Unaudited consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2025, and 2024 | Metric (Thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $6,117 | $6,113 | $12,410 | $11,419 | | Other comprehensive income (loss), net | $2,016 | $(655) | $6,087 | $(2,924) | | Comprehensive income | $8,133 | $5,458 | $18,497 | $8,495 | - Comprehensive income significantly increased for both the three-month and six-month periods ended June 30, 2025, primarily driven by a positive shift in other comprehensive income (loss) from available-for-sale debt securities[12](index=12&type=chunk) - For the six-month period, other comprehensive income, net, was **$6.087 million** in 2025, a substantial improvement from a loss of **$2.924 million** in 2024[12](index=12&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)%20%E2%80%93%20Six-month%20Periods%20Ended%20June%2030,%202025%20and%202024) Unaudited consolidated statements of cash flows for the six-month periods ended June 30, 2025, and 2024 | Cash Flow Activity (Thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net Cash Provided by Operating Activities | $10,096 | $14,362 | | Net Cash Used in Investing Activities | $(20,709) | $(37,065) | | Net Cash (Used in) Provided by Financing Activities | $(15,692) | $66,487 | | (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $(26,305) | $43,784 | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $97,269 | $96,562 | - Net cash provided by operating activities decreased by **$4.266 million** in the first six months of 2025 compared to 2024[14](index=14&type=chunk) - Investing activities used less cash in 2025, while financing activities shifted from providing **$66.487 million** in cash in 2024 to using **$15.692 million** in 2025, primarily due to a net decrease in deposits and FHLB advances[14](index=14&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)%20%E2%80%93%20Three-month%20and%20Six-month%20Periods%20Ended%20June%2030,%202025%20and%202024) Unaudited consolidated statements of changes in stockholders' equity for the three-month and six-month periods ended June 30, 2025, and 2024 | Equity Component (Thousands) | Balance, Dec 31, 2024 | Net Income (6M 2025) | Other Comprehensive Income, net (6M 2025) | Cash Dividends Paid (6M 2025) | Balance, June 30, 2025 | | :----------------------------- | :-------------------- | :------------------- | :---------------------------------------- | :----------------------------- | :--------------------- | | Common Stock | $16,030 | - | - | - | $16,030 | | Paid-in Capital | $14

[Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's consolidated earnings and balance sheet data, highlighting key financial performance and position changes over recent periods [Condensed, Consolidated Earnings Information](index=1&type=section&id=Condensed,%20Consolidated%20Earnings%20Information) The company reported a slight increase in net income for Q2 2025 compared to Q2 2024, while net income for the six months ended June 30, 2025, showed an 8.68% increase year-over-year. Net interest income grew, but was partially offset by a significant increase in the provision for credit losses | Metric | 2nd Quarter 2025 ($, Thousands) | 2nd Quarter 2024 ($, Thousands) | $ Incr. (Decr.) | % Incr. (Decr.) | | :----------------------------------- | :------------------------------ | :------------------------------ | :-------------- | :-------------- | | Net Interest Income | 21,142 | 19,445 | 1,697 | 8.73 % | | Provision for Credit Losses | 2,354 | 565 | 1,789 | 316.64 % | | Net Income | 6,117 | 6,113 | 4 | 0.07 % | | Net Income Attributable to Common Shares | 6,068 | 6,066 | 2 | 0.03 % | | Net Income - Basic and Diluted (Per Share) | 0.40 | 0.40 | 0.00 | 0.00 % | | Dividends Per Share | 0.28 | 0.28 | 0.00 | 0.00 % | | Metric | Six Months Ended June 30, 2025 ($, Thousands) | Six Months Ended June 30, 2024 ($, Thousands) | $ Incr. (Decr.) | % Incr. (Decr.) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------- | :-------------- | | Net Interest Income | 41,117 | 38,486 | 2,631 | 6.84 % | | Provision for Credit Losses | 2,590 | 1,519 | 1,071 | 70.51 % | | Net Income | 12,410 | 11,419 | 991 | 8.68 % | | Net Income Attributable to Common Shares | 12,310 | 11,333 | 977 | 8.62 % | | Net Income - Basic and Diluted (Per Share) | 0.80 | 0.74 | 0.06 | 8.11 % | | Dividends Per Share | 0.56 | 0.56 | 0.00 | 0.00 % | [Condensed, Consolidated Balance Sheet Data](index=2&type=section&id=Condensed,%20Consolidated%20Balance%20Sheet%20Data) Total assets increased modestly by 0.68% year-over-year, driven primarily by growth in loans and deposits. Borrowed funds decreased significantly, while stockholders' equity saw a healthy increase | Metric | June 30, 2025 ($, Thousands) | June 30, 2024 ($, Thousands) | $ Incr. (Decr.) | % Incr. (Decr.) | | :----------------------------------- | :--------------------------- | :--------------------------- | :-------------- | :-------------- | | TOTAL ASSETS | 2,610,875 | 2,593,122 | 17,753 | 0.68 % | | Loans, Net | 1,897,559 | 1,872,825 | 24,734 | 1.32 % | | Deposits | 2,109,776 | 2,059,309 | 50,467 | 2.45 % | | Borrowed Funds | 144,427 | 202,523 | (58,096) | (28.69)% | | TOTAL LIABILITIES | 2,324,518 | 2,329,901 | (5,383) | (0.23)% | | TOTAL STOCKHOLDERS' EQUITY | 286,357 | 263,221 | 23,136 | 8.79 % | | Net Unrealized Losses on Available-for-sale Debt Securities | (31,017) | (41,710) | 10,693 | (25.64)% | [Financial Highlights and Key Ratios](index=3&type=section&id=Financial%20Highlights%20and%20Key%20Ratios) This section provides an overview of the company's key financial performance metrics, balance sheet highlights, and critical safety and soundness ratios [Earnings Performance](index=3&type=section&id=Earnings%20Performance) Net income for the three months ended June 30, 2025, remained stable, while the six-month period saw an 8.68% increase. Return on average assets and equity showed mixed trends, with a slight decline for the quarter but an improvement for the six-month period | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | | Net Income ($, Thousands) | 6,117 | 6,113 | 0.07 % | | Return on Average Assets (Annualized) | 0.94 % | 0.96 % | (2.08)% | | Return on Average Equity (Annualized) | 8.66 % | 9.46 % | (8.46)% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net Income ($, Thousands) | 12,410 | 11,419 | 8.68 % | | Return on Average Assets (Annualized) | 0.96 % | 0.90 % | 6.67 % | | Return on Average Equity (Annualized) | 8.85 % | 8.79 % | 0.68 % | [Pre-Tax, Pre-Provision Net Revenue (PPNR) (Non-GAAP)](index=3&type=section&id=Pre-Tax,%20Pre-Provision%20Net%20Revenue%20(PPNR)%20(Non-GAAP)) Pre-Tax, Pre-Provision Net Revenue (PPNR) showed strong growth for both the three-month and six-month periods, indicating improved underlying operational performance before credit loss provisions and taxes | Metric | Three Months Ended June 30, 2025 ($, Thousands) | Three Months Ended June 30, 2024 ($, Thousands) | % Increase (Decrease) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | PPNR | 10,273 | 8,246 | 24.58 % | | PPNR (Annualized) as a % of Average Assets | 1.59 % | 1.29 % | 23.26 % | | PPNR (Annualized) as a % of Average Equity | 14.54 % | 12.76 % | 13.95 % | | Metric | Six Months Ended June 30, 2025 ($, Thousands) | Six Months Ended June 30, 2024 ($, Thousands) | % Increase (Decrease) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | PPNR | 18,424 | 15,853 | 16.22 % | | PPNR (Annualized) as a % of Average Assets | 1.43 % | 1.25 % | 14.40 % | | PPNR (Annualized) as a % of Average Equity | 13.14 % | 12.20 % | 7.70 % | [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) The balance sheet showed modest growth in total assets, loans, and deposits. The allowance for credit losses increased, reflecting a more conservative approach to potential loan defaults | Metric | June 30, 2025 | June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Total Assets ($, Thousands) | 2,610,875 | 2,593,122 | 0.68 % | | Available-for-Sale Debt Securities ($, Thousands) | 406,052 | 401,145 | 1.22 % | | Loans, Net ($, Thousands) | 1,897,559 | 1,872,825 | 1.32 % | | Allowance for Credit Losses on Loans (%) | 21,699 | 20,382 | 6.46 % | | Deposits ($, Thousands) | 2,109,776 | 2,059,309 | 2.45 % | [Stockholders' Value (Per Common Share)](index=3&type=section&id=Stockholders'%20Value%20(Per%20Common%20Share)) Key per-share metrics showed positive trends, with basic and diluted net income per share increasing by 8.11% and common book value growing by 7.83%. Tangible common book value also saw a significant increase | Metric | June 30, 2025 | June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :------------ | :------------ | :-------------------- | | Net Income - Basic and Diluted ($) | $ 0.80 | $ 0.74 | 8.11 % | | Dividends ($) | $ 0.56 | $ 0.56 | 0.00 % | | Common Book Value ($) | $ 18.46 | $ 17.12 | 7.83 % | | Tangible Common Book Value (Non-GAAP) ($) | $ 14.95 | $ 13.56 | 10.25 % | | Market Value (Last Trade) ($) | $ 18.94 | $ 17.89 | 5.87 % | | Common Shares Outstanding, End of Period (Shares) | 15,514,943 | 15,375,982 | 0.90 % | [Safety and Soundness Ratios](index=4&type=section&id=Safety%20and%20Soundness%20Ratios) Capital ratios improved across the board, indicating enhanced safety and soundness. However, nonperforming assets as a percentage of total assets increased, suggesting a slight deterioration in asset quality | Metric | June 30, 2025 | June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :------------ | :------------ | :-------------------- | | Tangible Common Equity / Tangible Assets (%) | 9.07 % | 8.21 % | 10.48 % | | Nonperforming Assets / Total Assets (%) | 0.98 % | 0.76 % | 28.95 % | | Allowance for Credit Losses / Total Loans (%) | 1.13 % | 1.08 % | 4.63 % | | Total Risk Based Capital Ratio (%) | 15.98 % | 15.50 % | 3.10 % | | Tier 1 Risk Based Capital Ratio (%) | 13.54 % | 13.10 % | 3.36 % | | Common Equity Tier 1 Risk Based Capital Ratio (%) | 13.54 % | 13.10 % | 3.36 % | | Leverage Ratio (%) | 10.22 % | 9.85 % | 3.76 % | [Efficiency Ratio (Non-GAAP)](index=4&type=section&id=Efficiency%20Ratio%20(Non-GAAP)) The efficiency ratio improved by 4.00% for the six months ended June 30, 2025, indicating better cost management relative to revenue generation | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Increase (Decrease) | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Efficiency Ratio (%) | 67.51 % | 70.32 % | (4.00)% | [Quarterly Financial Performance](index=5&type=section&id=Quarterly%20Financial%20Performance) This section details the company's financial performance and position on a quarterly basis, showing trends in income, expenses, assets, and liabilities [Quarterly Condensed, Consolidated Income Statement Information](index=5&type=section&id=Quarterly%20Condensed,%20Consolidated%20Income%20Statement%20Information) Net income showed some quarterly fluctuations, with Q2 2025 being stable compared to Q2 2024 but lower than Q1 2025 and Q4 2024. The provision for credit losses significantly increased in Q2 2025 | Metric ($, Thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Interest and dividend income | 32,454 | 31,709 | 33,329 | 33,087 | 31,326 | | Interest expense | 11,312 | 11,734 | 12,856 | 12,931 | 11,881 | | Net interest income | 21,142 | 19,975 | 20,473 | 20,156 | 19,445 | | Provision (credit) for credit losses | 2,354 | 236 | (531) | 1,207 | 565 | | Noninterest income | 8,142 | 7,008 | 7,547 | 7,133 | 7,854 | | Noninterest expense | 19,398 | 19,043 | 18,430 | 18,269 | 19,255 | | Net income | 6,117 | 6,293 | 8,174 | 6,365 | 6,113 | | Basic and diluted earnings per common share | 0.40 | 0.41 | 0.53 | 0.41 | 0.40 | [Quarterly Condensed, Consolidated Balance Sheet Information](index=6&type=section&id=Quarterly%20Condensed,%20Consolidated%20Balance%20Sheet%20Information) Total assets remained relatively stable across the quarters. Deposits showed a gradual increase, while borrowed funds consistently decreased. Stockholders' equity demonstrated a steady upward trend | Metric ($, Thousands) | June 30, 2025 | March 31, 2025 | Dec. 31, 2024 | Sept. 30, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | :------------- | :------------ | | TOTAL ASSETS | 2,610,875 | 2,609,228 | 2,610,653 | 2,670,822 | 2,593,122 | | Loans, Net | 1,897,559 | 1,878,260 | 1,875,813 | 1,872,322 | 1,872,825 | | Deposits | 2,109,776 | 2,102,141 | 2,093,909 | 2,135,879 | 2,059,309 | | Borrowed Funds | 144,427 | 154,994 | 167,939 | 186,043 | 202,523 | | TOTAL LIABILITIES | 2,324,518 | 2,327,397 | 2,335,369 | 2,393,517 | 2,329,901 | | TOTAL STOCKHOLDERS' EQUITY | 286,357 | 281,831 | 275,284 | 277,305 | 263,221 | | Brokered Deposits (Included in Total Deposits) | 5,005 | 22,022 | 24,021 | 45,051 | 59,501 | [Asset Portfolio and Quality](index=7&type=section&id=Asset%20Portfolio%20and%20Quality) This section analyzes the composition and quality of the company's asset portfolio, including debt securities, loan types, and credit loss provisions [Available-for-Sale Debt Securities](index=7&type=section&id=Available-for-Sale%20Debt%20Securities) The fair value of available-for-sale debt securities remained relatively stable across the quarters, with a slight increase from June 30, 2024, to June 30, 2025. Unrealized losses on these securities decreased significantly over the year | Metric ($, Thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Total Available-for-Sale Debt Securities (Amortized Cost) | 445,817 | 450,837 | 449,923 | 453,944 | | Total Available-for-Sale Debt Securities (Fair Value) | 406,052 | 408,463 | 402,380 | 401,145 | [Summary of Loans by Type](index=7&type=section&id=Summary%20of%20Loans%20by%20Type) The loan portfolio showed a slight increase in total gross loans year-over-year. Commercial real estate (non-owner occupied) and consumer loans experienced growth, while residential mortgage loans saw a decrease | Loan Type ($, Thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Commercial real estate - non-owner occupied | 757,961 | 733,704 | 739,565 | 723,964 | | Commercial real estate - owner occupied | 261,157 | 260,248 | 261,071 | 267,169 | | All other commercial loans | 430,499 | 436,179 | 423,277 | 431,106 | | Residential mortgage loans | 398,496 | 402,248 | 408,009 | 409,824 | | Consumer loans | 71,145 | 66,053 | 63,926 | 61,144 | | Total Gross Loans | 1,919,258 | 1,898,432 | 1,895,848 | 1,893,207 | | Less: allowance for credit losses on loans | (21,699) | (20,172) | (20,035) | (20,382) | | Loans, net | 1,897,559 | 1,878,260 | 1,875,813 | 1,872,825 | [Non-Owner Occupied Commercial Real Estate](index=9&type=section&id=Non-Owner%20Occupied%20Commercial%20Real%20Estate) Within non-owner occupied commercial real estate, office and retail sectors represent the largest portions of the portfolio, with office loans accounting for 24.2% of this category and 6.1% of total loans | Loan Type ($, Thousands) | June 30, 2025 ($, Thousands) | % of Non-owner Occupied CRE | % of Total Loans | | :----------------------------------- | :------------ | :-------------------------- | :--------------- | | Office | 118,007 | 24.2 % | 6.1 % | | Retail | 89,485 | 18.3 % | 4.7 % | | Industrial | 83,334 | 17.1 % | 4.3 % | | Hotels | 69,163 | 14.2 % | 3.6 % | | Mixed Use | 60,177 | 12.3 % | 3.1 % | | Other | 67,984 | 13.9 % | 3.5 % | | Total Non-owner Occupied CRE Loans | 488,150 | | | [Past Due Loans and Nonperforming Assets](index=9&type=section&id=Past%20Due%20Loans%20and%20Nonperforming%20Assets) Nonperforming assets and loans have shown an increasing trend over the past year, with nonperforming assets as a percentage of total assets rising from 0.76% to 0.98% | Metric ($, Thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :---------------- | :------------ | | Total nonaccrual loans | 25,190 | 24,106 | 23,842 | 19,579 | | Total nonperforming loans | 25,276 | 24,130 | 23,961 | 19,599 | | Total nonperforming assets | 25,678 | 24,329 | 24,142 | 19,780 | | Total nonperforming loans as a % of total loans | 1.32 % | 1.27 % | 1.26 % | 1.04 % | | Total nonperforming assets as a % of assets | 0.98 % | 0.93 % | 0.92 % | 0.76 % | | Allowance for credit losses as a % of total loans | 1.13 % | 1.06 % | 1.06 % | 1.08 % | [Analysis of the Allowance for Credit Losses on Loans](index=9&type=section&id=Analysis%20of%20the%20Allowance%20for%20Credit%20Losses%20on%20Loans) The allowance for credit losses on loans increased to $21.7 million by June 30, 2025, driven by a higher provision for credit losses, despite an increase in net charge-offs | Metric ($, Thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Balance, beginning of period | 20,172 | 20,023 | 20,035 | 19,208 | | Net charge-offs | (548) | (207) | (639) | (352) | | Provision for credit losses on loans | 2,075 | 566 | 2,303 | 1,526 | | Balance, end of period | 21,699 | 20,382 | 21,699 | 20,382 | | Net charge-offs as a % of average gross loans (annualized) | 0.12 % | 0.04 % | 0.07 % | 0.04 % | [Analysis of the Provision for Credit Losses](index=10&type=section&id=Analysis%20of%20the%20Provision%20for%20Credit%20Losses) The total provision for credit losses significantly increased for both the three-month and six-month periods ending June 30, 2025, primarily due to higher provisions for loans receivable | Metric ($, Thousands) | 3 Months Ended June 30, 2025 ($, Thousands) | 3 Months Ended June 30, 2024 ($, Thousands) | 6 Months Ended June 30, 2025 ($, Thousands) | 6 Months Ended June 30, 2024 ($, Thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Loans receivable | 2,075 | 566 | 2,303 | 1,526 | | Off-balance sheet exposures | 279 | (1) | 287 | (7) | | Total provision for credit losses | 2,354 | 565 | 2,590 | 1,519 | [Interest Income and Expense Analysis](index=11&type=section&id=Interest%20Income%20and%20Expense%20Analysis) This section provides a detailed analysis of the company's interest income and expenses, including net interest income and profitability metrics [Comparison of Interest Income and Expense](index=11&type=section&id=Comparison%20of%20Interest%20Income%20and%20Expense) Total interest income increased for both the three-month and six-month periods, primarily driven by higher interest from loans receivable. Total interest expense decreased for the three-month period but remained stable for the six-month period, leading to an increase in net interest income | Metric ($, Thousands) | 3 Months Ended June 30, 2025 ($, Thousands) | 3 Months Ended June 30, 2024 ($, Thousands) | 6 Months Ended June 30, 2025 ($, Thousands) | 6 Months Ended June 30, 2024 ($, Thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Interest Income | 32,674 | 31,528 | 64,594 | 62,059 | | Total Interest Expense | 11,312 | 11,881 | 23,046 | 23,176 | | Net Interest Income (GAAP) | 21,142 | 19,445 | 41,117 | 38,486 | | Net Interest Income (Fully Taxable-Equivalent Basis) | 21,362 | 19,647 | 41,548 | 38,883 | [Analysis of Average Daily Balances and Rates](index=12&type=section&id=Analysis%20of%20Average%20Daily%20Balances%20and%20Rates) Average earning assets increased, primarily due to growth in loans receivable. The interest rate spread and net interest income to earning assets both improved for the three-month and six-month periods, indicating better profitability from interest-earning activities | Metric | 3 Months Ended 6/30/2025 | 3 Months Ended 6/30/2024 | 6 Months Ended 6/30/2025 | 6 Months Ended 6/30/2024 | | :----------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Total Earning Assets ($, Thousands) | 2,432,500 | 2,385,593 | 2,426,188 | 2,370,098 | | Total Interest-bearing Liabilities ($, Thousands) | 1,782,056 | 1,765,318 | 1,785,073 | 1,756,208 | | Interest Rate Spread (%) | 2.84 % | 2.61 % | 2.77 % | 2.62 % | | Net Interest Income/Earning Assets (%) | 3.52 % | 3.31 % | 3.45 % | 3.30 % | | Cost of Interest-bearing deposits (%) | 2.34 % | 2.46 % | 2.40 % | 2.41 % | | Cost of Total borrowed funds (%) | 4.27 % | 4.25 % | 4.27 % | 4.26 % | [Noninterest Income and Expense Analysis](index=16&type=section&id=Noninterest%20Income%20and%20Expense%20Analysis) This section examines the company's noninterest income and expense components, highlighting trends in operational revenue and costs [Comparison of Noninterest Income](index=16&type=section&id=Comparison%20of%20Noninterest%20Income) Total noninterest income increased for both the three-month and six-month periods, primarily driven by growth in 'Other noninterest income' and interchange revenue from debit card transactions | Metric ($, Thousands) | 3 Months Ended June 30, 2025 ($, Thousands) | 3 Months Ended June 30, 2024 ($, Thousands) | 6 Months Ended June 30, 2025 ($, Thousands) | 6 Months Ended June 30, 2024 ($, Thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total noninterest income | 8,142 | 7,854 | 15,150 | 14,529 | | Trust revenue | 1,967 | 2,014 | 4,069 | 3,911 | | Brokerage and insurance revenue | 554 | 527 | 1,052 | 1,066 | | Service charges on deposit accounts | 1,422 | 1,472 | 2,862 | 2,790 | | Interchange revenue from debit card transactions | 1,218 | 1,089 | 2,254 | 2,102 | | Net gains from sales of loans | 312 | 235 | 517 | 426 | | Other noninterest income | 2,030 | 1,943 | 3,162 | 2,960 | [Comparison of Noninterest Expense](index=16&type=section&id=Comparison%20of%20Noninterest%20Expense) Total noninterest expense remained relatively stable for the three-month period and saw a modest increase for the six-month period. Salaries and employee benefits continued to be the largest component, while merger-related expenses were incurred in Q2 2025 | Metric ($, Thousands) | 3 Months Ended June 30, 2025 ($, Thousands) | 3 Months Ended June 30, 2024 ($, Thousands) | 6 Months Ended June 30, 2025 ($, Thousands) | 6 Months Ended June 30, 2024 ($, Thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total noninterest expense | 19,398 | 19,255 | 38,441 | 37,559 | | Salaries and employee benefits | 11,067 | 11,023 | 22,826 | 22,585 | | Net occupancy and equipment expense | 1,403 | 1,333 | 2,862 | 2,783 | | Data processing and telecommunications expenses | 1,981 | 2,003 | 4,052 | 3,995 | | Other noninterest expense | 3,401 | 3,437 | 5,755 | 5,299 | | Merger-related expenses | 167 | 0 | 167 | 0 | [Liquidity Information](index=17&type=section&id=Liquidity%20Information) This section details the company's liquidity position, including available credit facilities and the coverage of uninsured deposits [Available Credit Facilities and Uninsured Deposits](index=17&type=section&id=Available%20Credit%20Facilities%20and%20Uninsured%20Deposits) The company maintains substantial available credit facilities, totaling over $1 billion, providing robust liquidity. While uninsured deposits increased, highly liquid available funding significantly exceeded uninsured and uncollateralized deposits, indicating a strong liquidity position | Metric ($, Thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Total credit facilities | 1,038,164 | 1,041,401 | 1,037,459 | | Total Deposits - C&N Bank | 2,127,673 | 2,120,521 | 2,074,806 | | Estimated Total Uninsured Deposits | 649,184 | 621,542 | 605,765 | | Uninsured and Uncollateralized Deposits | 515,563 | 483,364 | 447,497 | | Uninsured and Uncollateralized Deposits as a % of Total Deposits | 24.2 % | 22.8 % | 21.6 % | | Highly Liquid Available Funding | 1,140,248 | 1,135,357 | 1,051,981 | | Highly Liquid Available Funding as a % of Uninsured Deposits | 175.6 % | 182.7 % | 173.7 % | | Highly Liquid Available Funding as a % of Uninsured and Uncollateralized Deposits | 221.2 % | 234.9 % | 235.1 % |

Core Viewpoint - Citizens & Northern Corporation (C&N) and Susquehanna Community Financial, Inc. (SQCF) have announced a merger agreement, with both boards unanimously approving the plan, which will see SQCF merge into C&N [1][3]. Company Overview - C&N is the bank holding company for Citizens & Northern Bank, operating 28 banking offices and one loan production office, with consolidated assets of $2.6 billion as of March 31, 2025 [4]. - SQCF is the financial holding company for Susquehanna Community Bank, which operates 7 banking offices and had assets of $598 million as of March 31, 2025 [4]. Merger Details - The merger will create a combined entity with approximately $3.2 billion in assets, enhancing C&N's market presence in central and southeast Pennsylvania [4][5]. - SQCF shareholders will receive 0.80 shares of C&N common stock for each share of SQCF, implying a total consideration of $44.3 million [6]. - Post-merger, SQCF shareholders will own about 13% of C&N's common stock [6]. Strategic Benefits - The merger is expected to be approximately 17% accretive to earnings per share in 2026, while resulting in single-digit tangible book value dilution at close [6]. - This strategic combination will enhance C&N's service capabilities and diversify its loan portfolio and funding base, increasing overall resiliency and efficiency [5]. Leadership Changes - Chris Trate, current SQCF Board Chairman, will join the C&N and C&N Bank boards, while Dave Runk will become an EVP and Strategic Advisor at C&N Bank [7]. - Jeffrey Hollenbach, President and COO at Susquehanna, will lead the Susquehanna market as Region President [7]. Transaction Timeline - The merger is subject to customary closing conditions, including regulatory approvals and SQCF shareholder approval, with an expected closing in the fourth quarter of 2025 [8].