Citizens & Northern(US:CZNC)2025-05-09 15:03Financial Performance - Net income for Q1 2025 was $6,293,000, or $0.41 per diluted share, compared to $5,306,000, or $0.35 per diluted share in Q1 2024, representing a 18.6% increase in net income [127]. - Noninterest income for Q1 2025 was $7,008,000, an increase of $333,000, or 5.0%, from Q1 2024 [130]. - The income tax provision for Q1 2025 was $1,411,000, or 18.3% of pre-tax income, an increase from $1,152,000, or 17.8% of pre-tax income in Q1 2024 [132]. - The effective tax rate for the first quarter of 2025 was 18.3%, up from 17.8% in the first quarter of 2024, correlating with an increase in pre-tax income of $1,246,000 [153]. Interest Income and Expenses - Net interest income increased to $19,975,000 in Q1 2025, up $934,000 from Q1 2024, with a net interest margin rising to 3.38% from 3.29% [127]. - Fully taxable equivalent net interest income for Q1 2025 was $20,186,000, an increase of $950,000 (4.9%) compared to Q1 2024 [136]. - Interest income totaled $31,920,000 in 2025, reflecting an increase of $1,389,000 (4.5%) from 2024 [137]. - Interest expense increased by $439,000 to $11,734,000 in 2025 from $11,295,000 in 2024 [141]. - Interest expense on deposits rose by $701,000, with the average rate increasing to 2.45% in 2025 from 2.35% in 2024 [142]. Loans and Deposits - Average total loans receivable rose by $40,187,000, or 2.2%, while average total deposits increased by $59,904,000, or 3.0% [127]. - Total gross loans increased to $1,898,432,000 as of March 31, 2025, compared to $1,895,848,000 at December 31, 2024, reflecting a slight growth [175]. - Total deposits increased to $2,102,141,000 as of March 31, 2025, up $8,232,000 (0.4%) from $2,093,909,000 at December 31, 2024 [197]. - Average total deposits for Q1 2025 were $2,061,182,000, representing a 3.0% increase compared to $2,001,278,000 for Q1 2024 [197]. Credit Quality and Losses - The provision for credit losses was $236,000 in Q1 2025, down from $954,000 in Q1 2024, with net charge-offs totaling $91,000 compared to $145,000 in the prior year [127]. - The allowance for credit losses (ACL) as a percentage of gross loans receivable was 1.06% at March 31, 2025, compared to 1.07% at March 31, 2024 [177]. - Total nonperforming assets were $24,329,000 at March 31, 2025, up from $24,142,000 at December 31, 2024 [182]. - Total nonperforming loans were $24,130,000, representing 1.27% of total loans as of March 31, 2025, compared to 1.26% at December 31, 2024 [191]. Capital and Equity - The total stockholders' equity, excluding accumulated other comprehensive loss, increased to $312,427,000 as of March 31, 2025, compared to $301,032,000 in the previous year, reflecting a growth of 3.66% [148]. - As of March 31, 2025, the consolidated total capital to risk-weighted assets ratio was 16.02%, exceeding the minimum requirement of 11% [204]. - C&N Bank's Tier 1 capital to risk-weighted assets ratio was 14.15%, above the minimum requirement of 9% [204]. - The capital conservation buffer for C&N Bank was 7.23% as of March 31, 2025, allowing for no payout limitations on dividends [205]. Acquisitions and Mergers - The corporation announced a pending acquisition of Susquehanna Community Financial, Inc. with assets of $598 million, expected to close in Q4 2025 [124][126]. - Following the merger, holders of Susquehanna's common stock will own approximately 13% of the corporation's common stock outstanding [126]. Risk Management - The Corporation's interest rate risk management includes simulations for potential changes in net interest income and economic value of equity [212]. - 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 [216]. - The fair value of available-for-sale debt securities has decreased due to rising interest rates, impacting the Corporation's stockholders' equity [217]. Stock Repurchase and Dividends - The Corporation announced a treasury stock repurchase program allowing for the repurchase of up to 750,000 shares, with 723,966 shares available as of March 31, 2025 [206]. - Future dividend payments and stock repurchases will depend on maintaining a strong financial condition and regulatory requirements [207].