Press Releases

Wellsboro, PA – Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC) announced its unaudited, consolidated financial results for the three-month period ended March 31, 2026. C&N’s principal activity is community banking, and its largest subsidiary is Citizens & Northern Bank (“C&N Bank”).

    Brad Scovill, C&N’s President and CEO, commented, “Our first quarter net income of $0.02 per share was well below expectations, mainly due to a significant charge related to one of our largest loans. Having said that, our fundamentals remain very strong, with solid PPNR performance highlighted by 14 basis points of net interest margin expansion and strong capital and liquidity profiles. While our non-performing asset level is somewhat elevated in comparison to that of our peers, we maintain a comparatively higher allowance for credit losses as a percentage of total loans, and we continue to make methodical progress in executing prudent workout strategies for all of our larger nonperforming loans. Looking forward, we remain confident in our ability to execute our strategy for profitable growth.”     

Highlights:

• Net income was $273,000, or $0.02 diluted earnings per share for the first quarter of 2026 as compared to $4,466,000, or $0.25 diluted earnings per share for the fourth quarter 2025, and $6,293,000, or $0.41 per diluted share in the first quarter 2025. As described in more detail below, first quarter 2026 earnings were negatively impacted by an elevated provision for credit losses and earnings for the fourth quarter 2025 were impacted by merger-related expenses resulting from C&N’s acquisition of Susquehanna Community Financial, Inc. (“Susquehanna”) effective October 1, 2025. Excluding merger-related expenses, net of taxes, adjusted earnings (non-GAAP) totaled $9,966,000 or $0.56 per diluted share for the fourth quarter of 2025. See Table 13 for additional information.
• Pre-tax, pre-provision net revenue (“PPNR”) was $14,142,000 for the first quarter 2026 as compared to $14,445,000 for the fourth quarter 2025 and $8,151,000 for the first quarter 2025. PPNR measures the strength of C&N’s core earnings from recurring operations independent of credit volatility. The higher PPNR results in the two most recent quarters include the net impact of growth in net interest income, noninterest income and noninterest expense resulting from C&N’s acquisition of Susquehanna on October 1, 2025. PPNR includes net interest income and noninterest income, net of noninterest expense, but excludes the provision for credit losses, realized gains or losses on securities, merger-related expenses and other nonrecurring items included in earnings. See Table 12 for additional information.
• The provision for credit losses was $13,602,000 in the first quarter 2026 as compared to $1,320,000 in the fourth quarter 2025 and $236,000 in the first quarter 2025. The increase in the first quarter 2026 provision was primarily driven by the impact on the allowance for credit losses (“ACL”) of an increase in net charge-offs to $10,808,000 as compared to $884,000 in the fourth quarter of 2025 and $91,000 in the first quarter of 2025. 
• The significant increase in charge-offs in the first quarter of 2026 is due to a non-owner occupied, commercial real estate loan originated in 2022 in the amount of $24 million of which $7,200,000 was participated with another financial institution.  The loan is secured by a first lien on the leasehold interests of an approximately 190,000 square foot Class A office property with multiple buildings and tenants, located in Bucks County, PA.  The loss of a large tenant  as well as cash flow requirements of the borrower’s other properties (which C&N has not financed) caused the loan to be downgraded to substandard and placed in nonaccrual status as of March 31, 2026.  C&N obtained an updated appraisal in April 2026 which was significantly lower than the original appraisal when the loan was originated, resulting in a charge-off of $10,056,000.  At March 31, 2026, the amortized cost basis of the loan, net of the partial charge-off, is $5,836,000. Management believes the property’s location and condition provide an opportunity for recovery of value in the future.
• The ACL was 1.42% of gross loans receivable at March 31, 2026, up from 1.32% at December 31, 2025 and 1.06% at March 31, 2025, as the higher level of net charge-offs in the first quarter 2026 impacted the portion of C&N’s ACL determined based on historical loss experience.
• Total nonperforming assets were 1.33% of total assets at March 31, 2026, up from 1.06% at December 31, 2025 and 0.93% at March 31, 2025. The increase in nonperforming assets in the first quarter 2026 included the impact of classifying the nonowner occupied commercial real estate loan referenced above as nonaccrual at March 31, 2026.  
• Net interest income for the first quarter 2026 decreased $19,000 from the total for the fourth quarter 2025 and increased $8,479,000 over the total for the first quarter 2025. The net interest margin increased 14 basis points to 3.98% in the first quarter 2026 from 3.84% for the fourth quarter 2025 and increased 60 basis points from 3.38% for the first quarter 2025. 
• Total loans receivable were $30,485,000 higher at March 31, 2026 compared to December 31, 2025. Average loans receivable increased 0.8% during the first quarter 2026 from the fourth quarter 2025. Average loans receivable were higher by 24.5% for the first quarter 2026 as compared to the first quarter 2025. 
• Deposits totaled $2,600,053,000 at March 31, 2026, up $35,337,000 from December 31, 2025. Average total deposits decreased 2.6% during the first quarter 2026 from the fourth quarter 2025, mainly due to a seasonal reduction in balances held by municipal customers. Average total deposits were 24.2% higher for the first quarter 2026 as compared to the first quarter 2025.
• At March 31, 2026, C&N’s highly liquid sources of available funds totaled $1.363 billion, or 159.3% of uninsured deposits and 199.1% of uninsured and uncollateralized deposits.

First Quarter 2026 as Compared to Fourth Quarter 2025
Net income was $273,000, or $0.02 per diluted share, for the first quarter 2026 as compared to $4,466,000, or $0.25 per diluted share, for the fourth quarter 2025. As described in the Highlights section, first quarter 2026 earnings were negatively impacted by an elevated provision for credit losses and fourth quarter 2025 earnings were impacted by merger-related expenses resulting from the acquisition of Susquehanna. Excluding merger-related expenses, net of taxes, adjusted earnings (non-GAAP)   totaled $9,966,000 or $0.56 per diluted share for the fourth quarter of 2025.  See Table 13 for additional information. Other significant variances were as follows:

• Net interest income of $28,454,000 in the first quarter 2026 decreased $19,000 from the fourth quarter 2025 result. Average total earning assets decreased $36,883,000 from the prior quarter, as average interest-bearing due from banks decreased $57,255,000. Average total deposits decreased $68,657,000 while average total borrowed funds increased $33,777,000 in the first quarter 2026 as compared to the total for the prior quarter. The net interest margin was 3.98% in the first quarter 2026, up 0.14% from 3.84% in the fourth quarter 2025. Accretion of purchase accounting valuation adjustments related to the Susquehanna merger had a net positive impact on net interest income of $765,000 in the first quarter 2026 and $789,000 in the fourth quarter. The net interest spread increased 0.14%, as the average yield on earning assets increased 0.08% and the average rate on interest-bearing liabilities decreased 0.06%.
• Noninterest income excluding realized gains on available-for-sale securities, of $8,169,000 in the first quarter 2026 decreased $191,000 from the fourth quarter 2025. Significant variances included the following:
  • Other noninterest income of $1,586,000 increased $269,000 including a conversion assistance payment of $241,000 received related to merger integration of the wealth management platform.
  • Net gains from sale of loans of $370,000 decreased $188,000 reflecting a decrease in volume of residential mortgage loans sold.
  • Brokerage and insurance revenue of $588,000 decreased $183,000 due to a decrease in sales volume.
  • Loan servicing fees, net, of $108,000 decreased $117,000, as the fair value of servicing rights decreased $172,000 in first quarter 2026 as compared to a decrease of $58,000 in fourth quarter 2025.
• Noninterest expense of $22,712,000 in the first quarter of 2026 decreased $7,447,000 from the fourth quarter 2025 total. The fourth quarter 2025 included merger-related expenses of $6,891,000 related to the Susquehanna acquisition and also included professional fees totaling $757,000 related to contract renegotiations with technology core system and operations providers with no comparable amounts in first quarter of 2026. In the first quarter 2026, net occupancy and equipment expense was $229,000 higher than in fourth quarter 2025, including increases of $151,000 in snow removal and $55,000 in light and power expenses while data processing and telecommunications expenses was $302,000 lower than in fourth quarter 2025 reflecting lower software license expense. 
• The income tax provision of $62,000, or 18.5% of pre-tax income for the first quarter 2026, decreased $864,000 from $926,000, or 17.2% of pre-tax income, for the fourth quarter 2025 reflecting a decrease in pre-tax income for the quarter. 

First Quarter 2026 as Compared to First Quarter 2025
First quarter 2026 net income was $273,000, or $0.02 per diluted share, as compared to $6,293,000, or $0.41 per diluted share, in the first quarter 2025. As described in the Highlights section, first quarter 2026 earnings were impacted by an elevated provision for credit losses. Other significant variances were as follows:

• Net interest income of $28,454,000 in the first quarter 2026 was $8,479,000 higher than in the first quarter 2025, including the benefit of income from growth in net earning assets resulting from the Susquehanna merger. The net interest margin increased to 3.98% in the first quarter 2026 from 3.38% in the first quarter 2025. The interest rate spread increased 0.76%, as the average yield on earning assets increased 0.31% while the average rate on interest-bearing liabilities decreased 0.45%. Average total earning assets increased $505,810,000 from the first quarter 2025, as average total loans receivable increased $465,531,000, including the impact of loans acquired from Susquehanna, and average available-for-sale debt securities increased $81,543,000 while average interest-bearing due from banks decreased $42,380,000. Average total deposits increased $499,043,000, including the impact of deposits assumed from Susquehanna, while average brokered deposits decreased $24,333,000. 
• Noninterest income, excluding gains on available-for-sale debt securities, of $8,169,000 in the first quarter 2026 increased $1,161,000 from the first quarter 2025 result. Significant variances included the following:
  • Other noninterest income of $1,586,000 increased $454,000, including a conversion assistance payment of $241,000 received related to the merger integration of the wealth management platform, an increase of $94,000 in tax credit income and an increase of $78,000 in dividends on Federal Home Loan Bank of Pittsburgh stock.
  • Interchange revenue from debit card transactions of $1,267,000 increased $231,000, including an increase in volume-related incentive income. 
  • Service charges on deposit accounts of $1,650,000 increased $210,000 reflecting an increase in volume of fees.
  • Net gains from sale of loans of $370,000 increased $165,000, reflecting an increase in volume of residential mortgage loans sold and includes the impact of $133,000 in net gains from sale of loans resulting from the Susquehanna acquisition.
• Noninterest expense of $22,712,000 in the first quarter 2026 increased $3,669,000 from the first quarter 2025 result, reflecting the impact of the Susquehanna acquisition. Other significant variances included the following:
  • Salaries and employee benefits expense of $13,201,000 increased $1,442,000, including the impact of the Susquehanna acquisition while cash and stock-based incentive compensation decreased $219,000.
  • Other noninterest expense of $3,364,000 increased $1,010,000 from the first quarter 2025. Within this category, significant variances included the following:
    • Core deposit intangible amortization expense increased $708,000, related to core deposits assumed from Susquehanna.
    • FDIC insurance expense increased $243,000 from the first quarter of 2025, reflecting the impact of the Susquehanna acquisition.
    • Legal fees unrelated to merger activity decreased $104,000 from the first quarter of 2025.
  • Net occupancy and equipment expense was $432,000 higher than in first quarter 2025, including $337,000 related to the Susquehanna acquisition and increases in snow removal, light and power and repairs and maintenance expenses.
  • Data processing and telecommunications expenses were $378,000 higher than in the first quarter 2025 reflecting higher software license expense of $179,000 and higher internet banking expenses of $170,000, related to the Susquehanna acquisition.
• The income tax provision of $62,000, or 18.5% of pre-tax income for the first quarter 2026 decreased $1,349,000 from $1,411,000, or 18.3% of pre-tax income, for the first quarter 2025 reflecting a decrease in pre-tax income for the quarter.

Other Information:
Changes in other unaudited financial information were as follows:

• Total assets were $3,164,340,000 at March 31, 2026 up from $3,132,469,000 at December 31, 2025 and $2,609,228,000 at March 31, 2025. 
• Cash and due from banks totaled $54,798,000 at March 31, 2026, up from $46,056,000 at December 31, 2025 and down from $114,738,000 at March 31, 2025. 
• The fair value of available-for-sale debt securities at March 31, 2026 was lower than the amortized cost basis by $32,175,000 or 6.1%. In comparison, the aggregate unrealized loss position was $29,685,000 or 5.5% lower than the amortized cost basis at December 31, 2025 and $ 42,374,000 or 9.4% lower than the amortized cost basis at March 31, 2025. The volatility in the fair value of the portfolio has resulted from changes in interest rates. Management reviewed the available-for-sale debt securities as of March 31, 2026 and concluded, as of such date, that there were no credit-related declines in fair value and no allowance for credit losses was recorded as of March 31, 2026.
• Gross loans receivable totaled $2,384,850,000 at March 31, 2026, up $30,485,000 from total loans at December 31, 2025 and $486,418,000 from total loans at March 31, 2025. On October 1, 2025, $393,587,000 of gross loans receivable, net of purchase accounting adjustments were recorded pursuant to the acquisition of Susquehanna. In comparing outstanding balances at March 31, 2026 and 2025, total commercial loans were up $393,876,000 or 27.5%, total outstanding consumer loans increased $48,879,000 or 74.0% and total residential mortgage loans increased $43,663,000 or 10.9%. The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $451,162,000 at March 31, 2026, up $121,401,000 from the total at March 31, 2025, reflecting the impact of servicing obligations assumed on such loans that had been sold by Susquehanna prior to the merger. 
• At March 31, 2026, the recorded investment in non-owner occupied commercial real estate loans for which the primary purpose is utilization of office space by third parties was $109,404,000, or 4.6% of gross loans receivable. At March 31, 2026, within this segment there were three loans with a total recorded investment of $8,600,000 in nonaccrual status with no individual allowances, including the loan referred to in the Highlights section with a partial charge-off of $10,056,000 in the first quarter 2026 and an amortized cost basis at March 31, 2026 of $5,836,000.  The remainder of the non-owner occupied commercial real estate loans with a primary purpose of office space utilization were in accrual status with no individual allowance at March 31, 2026.
• Total nonperforming assets as a percentage of total assets was 1.33% at March 31, 2026, up from 1.06% at December 31, 2025 and 0.93% at March 31, 2025. Total nonperforming assets were $42,113,000 at March 31, 2026, up from $33,113,000 at December 31, 2025 and $24,329,000 at March 31, 2025, including the impact of classifying the non-owner occupied commercial real estate loan referenced above as nonaccrual at March 31, 2026 and also includes the impact of nonaccrual loans purchased with credit deterioration (“PCD loans”)  that were acquired as part of the Susquehanna merger with a total amortized cost basis of $8,566,000 at March 31, 2026. 
• Deposits totaled $2,600,053,000 at March 31, 2026, up $35,337,000 from December 31, 2025 and $497,912,000 from March 31, 2025. Deposits of $501,488,000 were assumed from Susquehanna, effective October 1, 2025. Average total deposits decreased 2.6% during the first quarter 2026 from the fourth quarter 2025, mainly due to a seasonal reduction in balances held by municipal customers. Average total deposits were 24.2% higher for the first quarter 2026 as compared to the first quarter 2025.
• C&N maintained highly liquid sources of available funds totaling $1.363 billion at March 31, 2026, including unused borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $948.3 million, unused availability on the Federal Reserve Bank of Philadelphia’s discount window of $24.6 million, available federal funds lines with other banks of $75 million and available-for-sale debt securities with a fair value in excess of collateral obligations of $315.4 million. At March 31, 2026, available funding from these sources totaled 159.3% of uninsured deposits, and 199.1% of uninsured and uncollateralized deposits. 
• The outstanding balance of borrowed funds, including Federal Home Loan Bank advances, repurchase agreements, senior notes and subordinated debt, totaled $193,046,000 at March 31, 2026, up $3,574,000 from December 31, 2025 and down $1,725,000 from March 31, 2025.
• Total stockholders’ equity was $335,564,000 March 31, 2026, down from $341,714,000 at December 31, 2025 and up from $281,831,000 at March 31, 2025. Effective October 1, 2025, C&N recorded a net increase in stockholders’ equity of $44,388,000 from the issuance of common stock to the former Susquehanna stockholders. Within stockholders’ equity, the portion of accumulated other comprehensive loss related to available-for-sale debt securities was $25,096,000 at March 31, 2026, $23,154,000 at December 31, 2025 and $33,050,000 at March 31, 2025. The volatility in stockholders’ equity related to accumulated other comprehensive loss from available-for-sale debt securities has been caused by fluctuations in interest rates including overall increases in rates as compared to market rates when most of C&N’s securities were purchased. Accumulated other comprehensive loss is excluded from C&N’s regulatory capital ratios.
• Tangible common book value per share, a non-GAAP financial measure, was $14.73 at March 31, 2026 as compared to $15.11 at December 31, 2025 and $14.71 at March 31, 2025. The Corporation’s tangible common equity ratio was 8.53% at March 31, 2026 compared to 8.80% at December 31, 2025 and 8.91% at March 31, 2025. See Non-GAAP Reconciliation for additional information.
• Citizens & Northern Corporation and Citizens & Northern Bank are subject to various regulatory capital requirements. At March 31 2026, Citizens & Northern Corporation and Citizens & Northern Bank maintained regulatory capital ratios that exceeded all capital adequacy requirements and were classified as well-capitalized.
• On September 25, 2023, C&N announced a treasury stock repurchase program with no expiration that can be suspended or terminated by the Board of Directors, in its sole discretion. Under this program, C&N is authorized to repurchase up to 750,000 shares of its common stock. There were no shares repurchased during the three-month period ended March 31, 2026. At March 31, 2026, there were 723,465 shares available to be repurchased under the program.
• Trust assets under management by C&N’s Wealth Management Group were $1,473,084,000 at March 31 2026, up from $1,468,691,000 at December 31, 2025, and up 10.2% from $1,336,737,000 at March 31, 2025. Fluctuations in values of assets under management reflect the impact of market volatility.
• Under U.S. GAAP, interest income on tax-exempt securities and loans is reported at applicable nominal amounts, with the tax benefit accounted for as a reduction in the income tax provision. C&N presents certain analyses and ratios with net interest income determined on a fully taxable-equivalent basis, which are non-GAAP financial measures as presented. C&N believes presentation of net interest income on a fully taxable-equivalent basis provides investors with meaningful information for purposes of comparing the returns on tax-exempt securities and loans with returns on taxable securities and loans. The excess of net interest income on a fully taxable-equivalent basis over the amounts reported under U.S. GAAP was $231,000, $233,000 and $211,000 for the first quarter 2026, fourth quarter 2025 and first quarter 2025, respectively. 

Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania, which operates 35 banking offices located in Bradford, Bucks, Cameron, Chester, Lancaster, Lycoming, McKean, Northumberland, Potter, Snyder, Sullivan, Tioga, Union and York Counties in Pennsylvania and Steuben County in New York, as well as a loan production office in Elmira, New York. Citizens & Northern Corporation trades on NASDAQ under the symbol “CZNC.” For more information about Citizens & Northern Bank and Citizens & Northern Corporation, visit www.cnbankpa.com.

Safe Harbor Statement: Except for historical information contained herein, the matters discussed in this release are forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions that are intended to identify forward-looking statements.  Investors are cautioned that all forward-looking statements involve risks and uncertainty, and are not guarantees of future performance.  Actual results may differ materially from those expressed in forward-looking statements. Factors that may affect future financial results include, without limitation, the following: changes in monetary and fiscal policies of the Federal Reserve Board and the U.S. Government, particularly related to changes in interest rates; changes in general economic conditions; the potential for adverse developments in the banking industry that could have a negative impact on customer confidence, sources of liquidity and capital funding, and regulatory responses to such developments; C&N’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses; legislative or regulatory changes; downturn in demand for loan, deposit and other financial services in C&N’s market area; increased competition from other banks and non-bank providers of financial services; technological changes and increased technology-related costs; information security breach or other technology difficulties or failures; changes in accounting principles, or the application of generally accepted accounting principles; fraud and cyber malfunction risks as usage of artificial intelligence continues to expand; the integration of Susquehanna’s business and operations with those of C&N may divert the attention of the management teams of C&N and Susquehanna and cause a loss in the momentum of their ongoing businesses or have unanticipated adverse results on C&N’s or Susquehanna existing businesses, may take longer than anticipated and may be more costly than anticipated; the anticipated cost savings, operational efficiencies and other synergies of the Susquehanna merger may take longer to be realized or may not be achieved in their entirety, and attrition in key client, partner and other relationships relating to the Susquehanna merger may be greater than expected; success of C&N in Susquehanna’s geographic market area will require C&N to attract and retain key personnel in the market and to differentiate C&N from its competitors in the market; and Risk Factors identified in C&N’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Citizens & Northern disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.