Citizens & Northern(US:CZNC)2021-05-06 16:00Financial Performance - Net income for the first quarter of 2021 was $8,787,000, representing an increase of 83.3% compared to $4,166,000 in the first quarter of 2020[155]. - Earnings per diluted share for the first quarter of 2021 were $0.55, up 27.9% from $0.43 in the fourth quarter of 2020 and 77.4% higher than $0.31 in the first quarter of 2020[155]. - Net interest income for Q1 2021 was $20,083,000, an increase of $5,801,000 compared to Q1 2020, driven by growth from the Covenant acquisition[164]. - Noninterest income for Q1 2021 increased by $1,501,000 compared to Q1 2020, with net gains from sales of loans rising by $749,000[166]. - The income tax provision for Q1 2021 was $2,110,000, up from $816,000 in Q1 2020, reflecting higher pre-tax income[174]. - Fully taxable equivalent net interest income increased by $5,850,000 (40.3%) to $20,356,000 in 2021 compared to 2020[187]. - Total interest income increased by $4,766,000, a rise of 28.4% compared to the previous year[207]. Capital Ratios and Financial Health - C&N Bank's leverage ratio at March 31, 2021, was 10.66%, significantly above the well-capitalized threshold of 5%, with an excess capital amount of $122.3 million[153]. - The total capital to risk-weighted assets ratio at March 31, 2021, was 16.51%, exceeding the well-capitalized threshold of 10%, with an excess capital amount of $95.6 million[153]. - The Corporation's capital ratios demonstrate the capacity to absorb significant losses while continuing to meet well-capitalized requirements[152]. - The Corporation's capital ratios as of March 31, 2021, exceeded the Board policy threshold levels, indicating strong capital adequacy[262]. - The consolidated total capital to risk-weighted assets ratio was 18.03%, while C&N Bank's ratio was 16.51%[263]. - The Tier 1 capital to risk-weighted assets ratio for the consolidated entity was 16.08%, and for C&N Bank, it was 15.68%[263]. - C&N Bank's capital conservation buffer was 8.51% as of March 31, 2021, exceeding the minimum requirement of 2.5%[266]. Loan and Asset Management - Average outstanding loans increased by $466.1 million, and average total deposits rose by $570.9 million in Q1 2021[164]. - Total loans receivable rose to $1,634,586,000, up from $1,168,485,000, marking an increase of 39.8%[205]. - Total commercial loans amounted to $997,437,000 as of March 31, 2021, a decrease of 1.3% from $1,007,751,000 in 2020[226]. - Residential mortgage loans totaled $601,253,000, down from $620,172,000 in 2020, reflecting a decline of 8.8%[226]. - Total loans, net of allowance for loan losses, were $1,602,926,000 as of March 31, 2021, compared to $1,632,824,000 in 2020[226]. - Total assets increased to $2,242,686,000 from $1,637,165,000, representing a growth of 37% year-over-year[205]. Loan Loss Provisions and Credit Quality - Provision for loan losses decreased to $259,000 in Q1 2021 from $1,528,000 in Q1 2020[165]. - The total provision for loan losses across all segments was $259,000 for the three months ended March 31, 2021, significantly lower than $1,528,000 for the same period in 2020[248]. - The allowance for loan losses was $2,305,000 as of March 31, 2021, an increase from $2,154,000 at December 31, 2020[213]. - Total nonperforming loans as a percentage of outstanding loans was 1.45% at March 31, 2021, up from 1.42% at December 31, 2020[241]. - Total impaired loans increased to $18,158,000 at March 31, 2021, up $340,000 from $17,818,000 at December 31, 2020[242]. - The allowance for loan losses represented 0.72% of gross loans outstanding at March 31, 2021, up from 0.69% at December 31, 2020[233]. Paycheck Protection Program (PPP) and COVID-19 Impact - The recorded investment in Paycheck Protection Program (PPP) loans as of March 31, 2021, was $137.8 million, which included a first draw amount of $71.7 million and a second draw amount of $66.1 million[151]. - The first draw PPP loans decreased by $60.6 million from $132.3 million at December 31, 2020, due to loans forgiven and repaid by the SBA[151]. - Most loan modifications under the COVID-19 program provided a deferral of interest or principal for 90 to 180 days, with many loans returning to full payment status prior to March 31, 2021[148]. Management and Strategic Initiatives - The Corporation's Pandemic Committee has been active in providing communication and support to employees and clients since March 2020, adapting to health and safety mandates[142]. - Management believes the Corporation is well-positioned to meet its short-term and long-term funding obligations[258]. - Management continues to monitor commercial loan relationships for possible credit losses and will adjust estimates of loss as necessary[245].